This is perhaps more specific than a general debt, but I seem to remember that the IRS has something called an "innocent spouse" rule, which makes it possible (with the permission of the IRS, I would assume) to disavow tax debt due to fraud by one's spouse, if one claims to know nothing about it. A friend used this years ago to avoid debt incurred by a spouse who committed tax fraud while married to her, and as a result, the spouse was judged to be solely responsible for the tax debt. Comment on this, Steve?
That happened to my cousin. Husband had his business closed by IRS owing over a million dollars in back taxes fees etc. She had no idea he hadn’t paid taxes in years. She was released because she wasn’t involved and didn’t know.
I claimed Innocent Spouse after divorcing my first husband. In doing so, I had to document the abuse and coercion that happened in that marriage. It isn't an easy process.
@@DiscoCatsMeow - I've known too many married couples where one spouse has no idea what the business dealings of the other spouse were. Not saying it's right, but it happens.
I was sitting in a courtroom when the judge was starting arraignments he started talking about being extra careful on who you go into partnership with cause it was more risky than who you marry. With marriage you'll only lose half of your stuff with a partnership. You can lose it all.
Yep; dont marry someone you dont know fully. Don't go into business with someone you dont trust with your life. Both are equally as true. Fraudsters can harm you greatly...
Those are words of wisdom, had a doctor friend tell me one time in an elevator with just me and him do not ever have elective surgery ever while looking directly into my eyes, Joan Rivers died two days later…….
They never said that the husband was her "ex". It sounded to me like they just separated their finances in order to allow her to file bankruptcy on her own and cut the debt in half...... Of course, her marital status is pure speculation on our parts. I personally would have divorced him as well.
Imagine if murder worked that way..... Husband murders someone, wife not involved, but is equally responsible...... Gives a new meaning to partners in crime!
This entire system needs to be replaced! Same with credit scores. Car insurance being higher if your score is lower? BS! I even had a home refinance just days away and it was denied at the final credit check because my mom's credit card was delinquent. I called Citibank and tried to find out why it was affecting my credit? They said I was NOT a card holder on the account so they can not discuss why they did it to me. WTH?
Would you make a lone to someone if you didn't know their credit history? Would you lend money to a person with a history of defaulting on debt? If you made the loan, would you charge the same interest on a High risk loan, as on a Low risk loan? Also, the fact is, conscientious driving generally corresponds to conscientious debt repayment.
can't always know what your spouse is doing that's literally impossible with out being with them at all times 24/7. always a way for one to do stuff that can screw the other. there are those out there that do this kind of thing as a way of living
My mom has 2 credit cards going back to when I was 10. I caught a sliver after being torn up of the statement. It’s nothing life changing but my dad would never forgive her. She pays the minimum. It helps his credit and she will die before she pays it off. So im not worried about it. But I told her I was extremely disappointed. She hasn’t used the cars in decades. My exes mom got credit cards in her name when she was 9. At 18 she had 20k in debt but had to choose that or putting her mom in jail.. that’s really messed up.
Last time I checked, defrauding someone is a crime, spouse or not. Wouldn't the wife be a victim too? We're punishing crime victims now? No way that could ever snowball out of control. Also, if the language of any portion of a statute criminalizes any innocent party's exercise of their rights, isn't it the job of the SCOTUS to quash that statute in part or in its entirety? If the wife truly is an innocent party, where are all of the advocacy groups that should be chomping at the bit in defense of this woman?
This is analogous to 'partners in crime' where if one criminal shoots and kills someone in a robbery, then they are ALL culpable and charged with murder
If it was a company, they would have gotten away with it. Furniture stores are a prime example. Often go BK and reopen under a new corporate name. Interesting how some can defraud, intentionally not pay vendors, etc despite having funds to do so and yet still remain wealthy while the regular person can be relegated to a lifetime of insolvency.
All I got out of this, a few lawyers made a lot of money! The buyer probably will never get paid, the seller has spent every penny they have on legal fees...
A lot of comments seem to suggest that the woman shouldn't be liable for the house she jointly owned, jointly sold, and jointly got a ton of money for. That wasn't an issue in this case. She owed the money for sure. The only question is whether she can take care of it with bankruptcy. Of course if Congress had written the law a bit differently, people like this could get the relief from bankruptcy, but it would also make it even harder for victims of fraud to get their money back.
Those legally bound have a responsibility to assure that what benefits them is legally obtained. This is especially true if the means is ongoing and/or substantial. When they fail, they are each responsible for returning what was taken. SCOTUS got this one right.
$2,000,000 for a house in San Francisco? Due to the crime and governmental mismanagement and all the other problems in San Francisco Bay Area in general, I wouldn't give you two million dollars for the entire city .
The edits don't bother me (and I suspect most of the viewers as well). I am also very happy that you don't put any music in the videos. If I want music in a video, I watch a music video, not a channel about aviation or home repair (MentourPilot and ThisOldHouse, for examples). I really wish all those background-music channels would knock it off.
I normally just listen to your videos and not really watch them. Until you started talking about the edits I never noticed them. Now I watch for them, even will go back up a video if I think i hear one.
I think the court fails to understand something important here. The buyer failed diligence and the original ruling is unlikely to actually be valid. My understanding is that the amount owed cannot gain more then 3x its original value as well. Something is VERY stinky about this case. The law quoted referencing the 3 partners isn't valid to apply because while both the owners were owners they were not incorporated or associated as business partners but simply share-owners of the home. I would be fairly certain a review of the entirety would prove that she should have the opportunity to sue against him to clear herself.
The fact that corsets historically weren't restrictive doesn't change the "famously restrictive" assertion. Many untruths are famous - as in commonly believed. Like "George Washington famously wore wooden teeth". Which doesn't alter the rest of your discussion ...
Honestly it seems pretty simple because it's essentially the legal definition of a conspiracy where one hand doesn't have to know what the other hand is doing. In either kind of case both parties are benefiting and if she didn't read what she was signing it's still on her because any reasonable person should know what they are selling, especially property.
It's pretty common for corporate guys to use their wives, and the wives go along because they trust their husbands. Was referred to as Sexually Transmitted Debt.
No. Unless a case was decided so recently that the party is still within the time limits to file additional appeals or motions, etc, then the prior judgment is final.
Now in bankruptcy Is there a different weight to be considered with the consideration of what type of fraud- Civil vs criminal ? Why not or civil lawsuits only and mainly claim fraud as one of the bases for the general wrongdoing of the other party ? Then the party in the first can’t escape monetary liability? Who or what triggers the dismissal of the term /part of fraud in a civil matter in civil court ?
Seems like it makes sense you can't erase it, but when she divorced she should have fought hard to have it all given to him/gotten more from the divorce. Then maybe she could have balanced it out...
I think I'd rule that the non-guilty parties should not be liable for an amount greater than the amount they benefited, and that if possible, the entire amount should be collected from the person who actually committed fraud. Of course, I think there should also be a fee tacked on for people who commit fraud, that should be put into a victims fund to help victims who aren't able to collect from whoever scammed them.
Property was sold and the was $$$$ The lawsuit was against the $$$$$ From the sale. And collected out if that $$$$$ She just doesn't want to give up any of her share of the $$$$$$ What's so hard to understand
It seems that without a criminal conviction for fraud (beyond reasonable doubt) that a civil declaration of fraud (preponderance of evidence) that there isn’t any actionable fraud and so they just used the wrong argument?
Would she potentially have some cause of action against her husband to recoup the money (if he actually had the money to pay)? Detrimental reliance, or something?
That's an issue for partnership law (the business entity known as "partnership"). Typically a partnership agreement is created with provisions for this situation. Without an agreement, you have to look at the State's partnership statute. If there is nothing there, then the partners have to find an action in equity (which most (all?) states have eliminated when chancery courts were abolished but kept the equity law by codifying the actions, i.e., equity is now statutory law). This situation is why states adopted Limited Liability Companies. The eventual husband and wife should have done the fixer-upper business as a LLC, not a partnership.
I should probably have also stated: in general partnerships, all partners are liable for the debts incurred by any partner. The agreement should describe how the partners add assets to the partnership to pay for liabilities.
It sounds like 200000 with 10% interest should be 600000 not 1.1 million. If you go to compounding continuously it would be more like $750000 but you're still well under 1.1 million.
Couple thoughts. Fraud money donated to a charity causes the charity unknowingly to profit from the fraud too. Anyone that received the money profited from it, not just the wife. So why wouldn't they be held accountable if that's the reasoning she's to be held accountable? Seems like the reasoning shouldn't actually hold. Also wondering could a statement in a prenup noting the husband agrees to take full responsibility for any fraud he commits during marriage without his spouse knowing about it - could that have protected the wife?
The charity would likely return it or face a lawsuit. Regarding the prenuptial agreement I suspect it would not as the wife would have to agree not to be able to profit from any transactions made by her partner unless she knows about it.
@@XFizzlepop-Berrytwist anything obtained by fraud is stolen from a victim be it money or goods. Edit- she entered into a contract and both parties names are on the documents, unless her signature was in disappearing ink, she is party to the contract and is responsible plus she pocketed the money from the transaction.
So, how is the couple going to pay, if they don't have the money to pay? My assumption is that they will garnish the couples wages. But what if there is no money there? It's odd that it was a couple who sold to a developer. It makes me wonder about the facts of the case.
I think the wife is still on the hook too because they are in a legal business together flipping houses. I’m still married to my estranged wife but we have separate finances so I have my money and she has hers. We’re also living apart. Wonder how the court would rule…🤔
I feel bad for her and don't agree with it. Being she had no knowledge of what happened she shouldn't have to pay. Should be all him. Which at the end of the day would hit him even harder. As she didn't lose out on anything and he has to pay all back. So if they split 50/50 she still got her 100k but he owes 200k. But that's my opinion on situations like this.
you can marry some one they seem normal but you never REALLY know them. you often just see what they want you to see. if they are smart yea and make no mistakes your boned
A really good Bankruptcy Attorney would review the actual debt and strip away all the portions of the amount that aren't part of the actual frauf judgment and get the non-fraud debt that's piggybacking and inflating and hindering repayment removed or reduced because certain parts (fees and interest) ARE subject to discharge or renegotiation.
@@scottmcshannon6821 They sold a million dollar house, maybe they've blown the lot and have no assets at all remaining or maybe they have tried to move the money to somewhere it is protected, declare bankruptcy to discharge the debt, then seek to bring the money back from wherever it is. Bring back the good old days of debtors jail, can't pay your debts, off to prison with you.
@@scottmcshannon6821 She can apparently afford a lawyer to plead her case to the Supreme Court, though. From what I've heard, that starts at about a million dollars and goes up pretty quickly...
@@TheRealScooterGuy I think the point is that declaring bankruptcy doesn't have a lot of drawback in many circumstances, just a good way to avoid paying back creditors. A little more incentive to not go bankrupt might be good. Even more obnoxious when you see people start a company and go bankrupt owing millions, then the next day they start another company and buy the assets of the old one from the administrator and carry on like nothing happened just without the debts, only to repeat it again 6 months time etc etc.
"You can't just insert words into a statute you don't like." Well, you and I can't. Judges do it all the damn time. Especially when it comes to adding exceptions/limits/etc. to the bill of rights. Seemingly with the purpose/intent to erode our rights and to give cops and the gov the very powers the US constitution intended them not to have.
They are legally both responsible for the sale as they were both listed owners. They jointly bought a home and were not married at the time. It would have been different if he was the only owner and, remember, she did not have to agree to anything as they were not married.
My wife wasn't on the roof when I re-shingled it last summer... She doesn't follow me into the crawl space either. Nor is she looking over my shoulder while I'm installing windows.
The 2 million sounds a bit excessive since it initially was a $200,000. I know there is interest to pay, but that seems like an awfully high rate. Also if there was a divorce in the process of all this I would expect the husband to have a higher debt burden in this situation.
@@jamessimms415 On the other hand, I was married to a very sweet, loving, reliable, honest woman for over 30 years before she passed from cancer. A good marriage is a true blessing. Careful who you partner with. But being single for an entire life doesn't sound like much of a blessing to me. To each their own.
Thanks for editing the videos to remove stuff we don't need to see (or hear). It makes a difference and is one of the things that I especially like about your channel.
When I read the headline I thought "That's not fair!" After I read the article (yes, I read this a couple of days ago), I thought "Yeah, that makes sense." (With Sotomayor's caveat)
Why was this case even heard by SCOTUS when the code for bankruptcy already has such a clean cut, clear and obvious exception for what cannot be discharged in bankruptcy proceedings? I thought they only heard cases where the only facts in question involve their constitutionality
It sounds like the applicable law in this area was not uniformedly settled. There was disparity among several circuits, and that is quite often a trigger for SCOTUS to grant certiorari.
No. SCOTUS hears cases that arise under federal law, or the constitution, cases between states, and certain cases between foreign countries and officers
As Darryl said in another reply, and as Steve said in the video, this was a "circuit split" situation. When the various circuit courts have ruled in contradictory ways, SCOTUS will sometimes take up a case in order to resolve the split. Moving forward, all of the circuit courts will follow this case when hearing appeals that raise the same questions of law.
Maybe, but if I were the buyer's I would have dumped the property immediately. Also, there is the possibility that the house would have been condemned by now, or even be "cheaper" to tear down and rebuild. The value might not have gone up, it might've even fallen because the house depreciated the value of the land.
Here in Australia you can sell without disclosing critical information if you are a qualified legal worker. I lost the unlosable case, which is what my barrister called it. The seller worked in the legal profession. My legal team were so dismayed they never sent me a bill just an apology. Goes to show what can happen when you got mates in the right place.
I do question the justice in this type of verdict, because this wasn't a business issue this was a husband and wife , there's a long standing of spouse's hiding stuff from the other especially potentially criminal issues. If this theory is to be followed then every criminal act by a spouse would automatically be also the fault of the other?
She was liable because she signed the paper that said all material facts had been disclosed, and she was a part-owner of the home. It is unclear what she actually knew.
You fall victim to a fraud - pay up? God, that is just wrong on so many levels. What's next? Victims of theft won't be able to get back stolen property?!
One thing though. You said the case was $200,000 in 2012 with a 10% annual interest. Unless my math and an online interest calculator are both wrong, that is around $570,000. How is it over a million? Or was that including all attorney fees already?
Maybe there is a better common law reference, but it seems that under the principle of Vicarious Liability the wife bears responsibility. The bankruptcy code cannot be used to back door yourself out of civil liability.
So her credit report is permanently broken, but she herself has no criminal conviction for fraud. I believe she likely knew about it so I'm not against her paying in some way. But if she has no convictions and has technically committed no crime herself, I'm not very comfortable with that. It's proxy conviction, guilt by proxy. I'm not exactly ok with that. She herself should have been charged and then her credit history would be on the table. Until she's guilty of a crime I don't agree forcing this on her. But I do believe she's guilty....
I'll admit, I definitely think this ruling is more damaging in general. I can think of several situations already that can exploit this at an innocent partners expense. That said, since this specific case was about property and the lack of due diligence by the seller, it makes sense. Ignorance to negligence is never a good excuse for anything. It's sad she chose to trust her husband and got screwed by that choice but this is why you need to be part of everything that comes with selling a house. I just hope this definitive ruling doesn't comeback to affect those in abusive relationships because this seems like an excellent thing for abusers to use to get off the hook for a large portion of the debt if caught. And thats for any debt, not just property. Thats the scary part in my opinion.
You mean lack of due diligence by the buyer. If you buy a defective product, you return it. End of story. You don't sue the seller and KEEP the product. Buyers should be required by law to have a certified home inspection as well. The buyer double dipped, period.
She would have wanted to assets to be “mutual” if she was divorcing him, however she wants their finances unattached when it comes to the mutual debt! I Am So Surprised!
I always watch your content, like and comment, even though I think I might not be interested. Always entertaining and I learn things I never knew. Thank you.
Of course she profited from it. She may not have known about the fraud, but she was part of the partnership that bought and then old the house. The buyer was looking to recover money the sellers never should have received. If she had paid it back when her finances would have ended up right where they should have been.
If a husband goes from $0 to a $billion, the wife "deserves" half of it (in community property states like California). So, if a husband gores from $0 to minus $billion, she deserves half of that as well. However, there is an "innocent spouse" law that says she only deserves the upside, but not the downside.
"innocent spouse" law is an IRS ruling. Which puts alot of burden on the alleged innocent spouse to penalties. The Innocent would still be required to pay the tax on the income but MAY get relief from the penalties.
That maybe true, but what does have to do with this case ? Corporations get away with a lot of things, but irrelevant here. I may not like the current weather, but I won't insert it in a comment, where it does not apply. "Woman's stuck with debt ... But its going to snow here for the next whole week !"
This is perhaps more specific than a general debt, but I seem to remember that the IRS has something called an "innocent spouse" rule, which makes it possible (with the permission of the IRS, I would assume) to disavow tax debt due to fraud by one's spouse, if one claims to know nothing about it. A friend used this years ago to avoid debt incurred by a spouse who committed tax fraud while married to her, and as a result, the spouse was judged to be solely responsible for the tax debt. Comment on this, Steve?
If men could only use this as well.
That happened to my cousin. Husband had his business closed by IRS owing over a million dollars in back taxes fees etc. She had no idea he hadn’t paid taxes in years. She was released because she wasn’t involved and didn’t know.
I claimed Innocent Spouse after divorcing my first husband. In doing so, I had to document the abuse and coercion that happened in that marriage. It isn't an easy process.
David, she was not an innocent spouse, she was a legal partner in a partnership. It's different than just claiming and/or separating debt.
@@DiscoCatsMeow - I've known too many married couples where one spouse has no idea what the business dealings of the other spouse were. Not saying it's right, but it happens.
I was sitting in a courtroom when the judge was starting arraignments he started talking about being extra careful on who you go into partnership with cause it was more risky than who you marry. With marriage you'll only lose half of your stuff with a partnership. You can lose it all.
Normally, it is men who lose it all. But hey, 2023, women wanted this.
Equal rights and wrongs, boo boo…
Yep; dont marry someone you dont know fully. Don't go into business with someone you dont trust with your life. Both are equally as true. Fraudsters can harm you greatly...
Those are words of wisdom, had a doctor friend tell me one time in an elevator with just me and him do not ever have elective surgery ever while looking directly into my eyes, Joan Rivers died two days later…….
In California marriage is a legally binding partnership so both can loose it all equally.
If the wife think she's got a legitimate claim, can't she sue her ex husband to recoup her losses from the original lawsuit?
Absolutely. But is he collectible?
You may have to pay his legal bill as well as yours.
The system always collects.
that is how she will have to handle it. Make sure the debt is paid, but then turn around and sue her ex husband. But the debt still needs to be paid.
They never said that the husband was her "ex". It sounded to me like they just separated their finances in order to allow her to file bankruptcy on her own and cut the debt in half......
Of course, her marital status is pure speculation on our parts.
I personally would have divorced him as well.
Imagine if murder worked that way..... Husband murders someone, wife not involved, but is equally responsible...... Gives a new meaning to partners in crime!
This entire system needs to be replaced! Same with credit scores. Car insurance being higher if your score is lower? BS! I even had a home refinance just days away and it was denied at the final credit check because my mom's credit card was delinquent. I called Citibank and tried to find out why it was affecting my credit? They said I was NOT a card holder on the account so they can not discuss why they did it to me. WTH?
Would you make a lone to someone if you didn't know their credit history?
Would you lend money to a person with a history of defaulting on debt?
If you made the loan, would you charge the same interest on a High risk loan, as on a Low risk loan?
Also, the fact is, conscientious driving generally corresponds to conscientious debt repayment.
Know what your spouse is doing as well. I’ve seen people get screwed by hidden debt by the other spouse.
can't always know what your spouse is doing that's literally impossible with out being with them at all times 24/7. always a way for one to do stuff that can screw the other. there are those out there that do this kind of thing as a way of living
My Lady Wife and I sit down together every so often and go over finances. No secrets between us, as it should be.
My mom has 2 credit cards going back to when I was 10. I caught a sliver after being torn up of the statement. It’s nothing life changing but my dad would never forgive her. She pays the minimum. It helps his credit and she will die before she pays it off. So im not worried about it. But I told her I was extremely disappointed. She hasn’t used the cars in decades. My exes mom got credit cards in her name when she was 9. At 18 she had 20k in debt but had to choose that or putting her mom in jail.. that’s really messed up.
@Rafael Torre
I'd pit mommy in jail without thinking twice.
Last time I checked, defrauding someone is a crime, spouse or not. Wouldn't the wife be a victim too? We're punishing crime victims now? No way that could ever snowball out of control. Also, if the language of any portion of a statute criminalizes any innocent party's exercise of their rights, isn't it the job of the SCOTUS to quash that statute in part or in its entirety? If the wife truly is an innocent party, where are all of the advocacy groups that should be chomping at the bit in defense of this woman?
This is analogous to 'partners in crime' where if one criminal shoots and kills someone in a robbery, then they are ALL culpable and charged with murder
If it was a company, they would have gotten away with it. Furniture stores are a prime example. Often go BK and reopen under a new corporate name. Interesting how some can defraud, intentionally not pay vendors, etc despite having funds to do so and yet still remain wealthy while the regular person can be relegated to a lifetime of insolvency.
Being a neat freak I love looking at clutter, especially when at other folk's houses.
All I got out of this, a few lawyers made a lot of money! The buyer probably will never get paid, the seller has spent every penny they have on legal fees...
A lot of comments seem to suggest that the woman shouldn't be liable for the house she jointly owned, jointly sold, and jointly got a ton of money for. That wasn't an issue in this case. She owed the money for sure. The only question is whether she can take care of it with bankruptcy. Of course if Congress had written the law a bit differently, people like this could get the relief from bankruptcy, but it would also make it even harder for victims of fraud to get their money back.
Ben putting a cap on number of raccoons, Steve's RHS
Have a great weekend
@@keithe2150 I am(1.09am Sat), same to you😉😊
Those legally bound have a responsibility to assure that what benefits them is legally obtained. This is especially true if the means is ongoing and/or substantial. When they fail, they are each responsible for returning what was taken. SCOTUS got this one right.
$2,000,000 for a house in San Francisco? Due to the crime and governmental mismanagement and all the other problems in San Francisco Bay Area in general, I wouldn't give you two million dollars for the entire city .
Women need to know everything about their husbands finances.
The edits don't bother me (and I suspect most of the viewers as well). I am also very happy that you don't put any music in the videos. If I want music in a video, I watch a music video, not a channel about aviation or home repair (MentourPilot and ThisOldHouse, for examples). I really wish all those background-music channels would knock it off.
I normally just listen to your videos and not really watch them. Until you started talking about the edits I never noticed them. Now I watch for them, even will go back up a video if I think i hear one.
While buyer beware may not be a legal term for this instance it is most certainly good advice.
I think the court fails to understand something important here. The buyer failed diligence and the original ruling is unlikely to actually be valid. My understanding is that the amount owed cannot gain more then 3x its original value as well. Something is VERY stinky about this case. The law quoted referencing the 3 partners isn't valid to apply because while both the owners were owners they were not incorporated or associated as business partners but simply share-owners of the home. I would be fairly certain a review of the entirety would prove that she should have the opportunity to sue against him to clear herself.
Sue him for what. He has no money either as they both filed for bankruptcy
Did buyer not get an professional inspection. YES, I watched the video
How are they going to collect something she does not have?
That's a lot of interest for the biggest bull market in history. I'm pretty sure rates were negative for a long time and 0% for five years in a row.
The fact that corsets historically weren't restrictive doesn't change the "famously restrictive" assertion. Many untruths are famous - as in commonly believed. Like "George Washington famously wore wooden teeth". Which doesn't alter the rest of your discussion ...
This certainly adds some comfort to my singledom...
Rookie mistake stealing from a rich person
She has two options leave the dump (shootings and homelesses) that U.S is anyway. Or be working in Pennsylvania and have a bank account in Delaware.
Honestly it seems pretty simple because it's essentially the legal definition of a conspiracy where one hand doesn't have to know what the other hand is doing. In either kind of case both parties are benefiting and if she didn't read what she was signing it's still on her because any reasonable person should know what they are selling, especially property.
It's pretty common for corporate guys to use their wives, and the wives go along because they trust their husbands. Was referred to as Sexually Transmitted Debt.
Insane.
I totally noticed all the coughing in that video. Good call editing them out.
Does this mean all the previously settled bankruptcy cases (in the defendant's favor) can be re-litigated?
No. Unless a case was decided so recently that the party is still within the time limits to file additional appeals or motions, etc, then the prior judgment is final.
Now in bankruptcy
Is there a different weight to be considered with the consideration of what type of fraud-
Civil vs criminal ?
Why not or civil lawsuits only and mainly claim fraud as one of the bases for the general wrongdoing of the other party ?
Then the party in the first can’t escape monetary liability?
Who or what triggers the dismissal of the term /part of fraud in a civil matter in civil court ?
Seems like it makes sense you can't erase it, but when she divorced she should have fought hard to have it all given to him/gotten more from the divorce. Then maybe she could have balanced it out...
I think I'd rule that the non-guilty parties should not be liable for an amount greater than the amount they benefited, and that if possible, the entire amount should be collected from the person who actually committed fraud.
Of course, I think there should also be a fee tacked on for people who commit fraud, that should be put into a victims fund to help victims who aren't able to collect from whoever scammed them.
I would argue that plus inflation. Otherwise you benefit by dragging out resolution.
Property was sold and the was $$$$
The lawsuit was against the $$$$$
From the sale. And collected out if that $$$$$
She just doesn't want to give up any of her share of the $$$$$$
What's so hard to understand
She is a woman
It seems that without a criminal conviction for fraud (beyond reasonable doubt) that a civil declaration of fraud (preponderance of evidence) that there isn’t any actionable fraud and so they just used the wrong argument?
Would she potentially have some cause of action against her husband to recoup the money (if he actually had the money to pay)? Detrimental reliance, or something?
That's an issue for partnership law (the business entity known as "partnership"). Typically a partnership agreement is created with provisions for this situation. Without an agreement, you have to look at the State's partnership statute. If there is nothing there, then the partners have to find an action in equity (which most (all?) states have eliminated when chancery courts were abolished but kept the equity law by codifying the actions, i.e., equity is now statutory law).
This situation is why states adopted Limited Liability Companies. The eventual husband and wife should have done the fixer-upper business as a LLC, not a partnership.
I should probably have also stated: in general partnerships, all partners are liable for the debts incurred by any partner. The agreement should describe how the partners add assets to the partnership to pay for liabilities.
This is why you should never get married.
Great to know
lol equality at its finest.
It sounds like 200000 with 10% interest should be 600000 not 1.1 million. If you go to compounding continuously it would be more like $750000 but you're still well under 1.1 million.
Yep Ben still in the same place
Couple thoughts.
Fraud money donated to a charity causes the charity unknowingly to profit from the fraud too. Anyone that received the money profited from it, not just the wife. So why wouldn't they be held accountable if that's the reasoning she's to be held accountable? Seems like the reasoning shouldn't actually hold.
Also wondering could a statement in a prenup noting the husband agrees to take full responsibility for any fraud he commits during marriage without his spouse knowing about it - could that have protected the wife?
The charity would likely return it or face a lawsuit.
Regarding the prenuptial agreement I suspect it would not as the wife would have to agree not to be able to profit from any transactions made by her partner unless she knows about it.
So pay the bill $5-20 a month for forever?
I think the logic is the same as receiving stolen property. It doesn't matter that you didn't steal it. You still don't get to keep it.
That's a great analogy.
@@lanaj1107
Its a little bit different.
Though I dont get why the debt cant be put in only the husbands name?
@@XFizzlepop-Berrytwist anything obtained by fraud is stolen from a victim be it money or goods. Edit- she entered into a contract and both parties names are on the documents, unless her signature was in disappearing ink, she is party to the contract and is responsible plus she pocketed the money from the transaction.
Well I would wonder why cant that debt simply be put in the husbands name?
Or Ex I would assume, Ex after this.
So, how is the couple going to pay, if they don't have the money to pay?
My assumption is that they will garnish the couples wages. But what if there is no money there?
It's odd that it was a couple who sold to a developer. It makes me wonder about the facts of the case.
Wanna get married 😂
Should of reversed the sale of the house and sold it as is.
1885, when the person with the most debt in the world was 5c in the hole
Does this change in "Community Property" States like Washington versus separate marital property like Georgia?
I think the wife is still on the hook too because they are in a legal business together flipping houses.
I’m still married to my estranged wife but we have separate finances so I have my money and she has hers.
We’re also living apart.
Wonder how the court would rule…🤔
It may depend on the state but in Calif. you could get screwed.
What if she gives up her citizenship and goes to China or Russia. Could she discharge the debt through their courts system?
Only for debts incurred in China or Russia
Why didn't the wife get a divorce when the original suit was filed?
Ben on top of the raccoon
I feel bad for her and don't agree with it. Being she had no knowledge of what happened she shouldn't have to pay. Should be all him. Which at the end of the day would hit him even harder. As she didn't lose out on anything and he has to pay all back. So if they split 50/50 she still got her 100k but he owes 200k. But that's my opinion on situations like this.
Damn
This is why it REALLY MATTERS who you MARRY…..
you can marry some one they seem normal but you never REALLY know them. you often just see what they want you to see. if they are smart yea and make no mistakes your boned
Who cares? At the end of the day his debt is her debt because they are married.
Husbands get stuck paying cc debt from wives spending nothing wrong with her helping pay this debt that goes both ways ladies
One thing is for sure, if you can get a unanimous vote from THIS Supreme Court. the law must be undeniably clear
Or have zero political interest.
A really good Bankruptcy Attorney would review the actual debt and strip away all the portions of the amount that aren't part of the actual frauf judgment and get the non-fraud debt that's piggybacking and inflating and hindering repayment removed or reduced because certain parts (fees and interest) ARE subject to discharge or renegotiation.
So I should care because she is a woman???
@𝓝𝓸𝓕𝓻𝓮𝓮𝓭𝓸𝓶𝓼 Who mentioned women, here? Nobody.
So, the judgment stands. How do you collect from someone who is in bankruptcy? Does the bankruptcy court assign its priority, and if so, where?
"Hey Steve, how old are you?"
"I mean there was a case in 1885 I remember happening."
I bet that original $200 K judgement is looking mighty good to the defendants about now!
doesnt matter, they obviously cant afford a penny.
@@scottmcshannon6821 They sold a million dollar house, maybe they've blown the lot and have no assets at all remaining or maybe they have tried to move the money to somewhere it is protected, declare bankruptcy to discharge the debt, then seek to bring the money back from wherever it is.
Bring back the good old days of debtors jail, can't pay your debts, off to prison with you.
@@scottmcshannon6821 She can apparently afford a lawyer to plead her case to the Supreme Court, though. From what I've heard, that starts at about a million dollars and goes up pretty quickly...
@@mattc3581 So taxpayers can pay to house and feed debtors? No thanks.
@@TheRealScooterGuy I think the point is that declaring bankruptcy doesn't have a lot of drawback in many circumstances, just a good way to avoid paying back creditors. A little more incentive to not go bankrupt might be good.
Even more obnoxious when you see people start a company and go bankrupt owing millions, then the next day they start another company and buy the assets of the old one from the administrator and carry on like nothing happened just without the debts, only to repeat it again 6 months time etc etc.
"You can't just insert words into a statute you don't like." Well, you and I can't. Judges do it all the damn time. Especially when it comes to adding exceptions/limits/etc. to the bill of rights. Seemingly with the purpose/intent to erode our rights and to give cops and the gov the very powers the US constitution intended them not to have.
You beat me to it. Thinking the exact same thing.
I mean, if i was a lawyer, i'd be saying the same thing
They were married his debt is her debt.
I see we are of the same mind. We could drink beers together, engage in some Florida Man hijinks.
Maybe fight the tyrannical government later...?
ATF has entered the chat.... how that brace errr.... nfa stock violation
If we could make up rules as we go, we'd essentially be playing Calvinball.
Husband refurbishes home, wife not involved in any way, yeah right.
They are legally both responsible for the sale as they were both listed owners. They jointly bought a home and were not married at the time. It would have been different if he was the only owner and, remember, she did not have to agree to anything as they were not married.
My wife wasn't on the roof when I re-shingled it last summer... She doesn't follow me into the crawl space either. Nor is she looking over my shoulder while I'm installing windows.
@@cw6136 Did she sign papers making her legally a partner? Like it or not, she is half responsible in the profit or loss of your business.
If your husband gives you a car he stole without your knowledge, you don't get to keep the car.
and there is the charge of "receiving and/or concealing" that can be leveled against you as well....
No, you know have to pay for it and give it back as well!
They should have gotten the extended home warranty.
The warranty company would have just weaseled out of paying.
@@machintelligence that is the point. Everything is a scam.
The 2 million sounds a bit excessive since it initially was a $200,000. I know there is interest to pay, but that seems like an awfully high rate.
Also if there was a divorce in the process of all this I would expect the husband to have a higher debt burden in this situation.
Nobody forced them to appeal to the Supreme Court. It's been 18 years.
That's compounded interest.
Being a partner can be bad, whether by marriage or by contract. Careful who you partner with.
And that’s why I’ve never become involved w/anyone. 65 (nearly), Single, unattached, never married, no children.
@@jamessimms415 On the other hand, I was married to a very sweet, loving, reliable, honest woman for over 30 years before she passed from cancer. A good marriage is a true blessing. Careful who you partner with. But being single for an entire life doesn't sound like much of a blessing to me. To each their own.
Thanks for editing the videos to remove stuff we don't need to see (or hear). It makes a difference and is one of the things that I especially like about your channel.
My only heart burn is the interest rate the court set. No one has paid 10% in interest in many years before 2008.
When I read the headline I thought "That's not fair!" After I read the article (yes, I read this a couple of days ago), I thought "Yeah, that makes sense." (With Sotomayor's caveat)
Why was this case even heard by SCOTUS when the code for bankruptcy already has such a clean cut, clear and obvious exception for what cannot be discharged in bankruptcy proceedings? I thought they only heard cases where the only facts in question involve their constitutionality
It sounds like the applicable law in this area was not uniformedly settled. There was disparity among several circuits, and that is quite often a trigger for SCOTUS to grant certiorari.
That's because the courts try like he'll NOT to follow actual laws.
No. SCOTUS hears cases that arise under federal law, or the constitution, cases between states, and certain cases between foreign countries and officers
As Darryl said in another reply, and as Steve said in the video, this was a "circuit split" situation. When the various circuit courts have ruled in contradictory ways, SCOTUS will sometimes take up a case in order to resolve the split. Moving forward, all of the circuit courts will follow this case when hearing appeals that raise the same questions of law.
@The Scooter Guy Well said sir!
ok so the first thing i was thinking... didnt the guy buying it have a bloody inspection done?
Irrelevant. State law there requires a disclosure of known issues.
@The Scooter Guy ya but if he had gotten an inspection done then he would have known anyway.
Even if there were all those problems 18 years ago, I betcha the value of that house is many times more today than it was then.
Maybe, but if I were the buyer's I would have dumped the property immediately.
Also, there is the possibility that the house would have been condemned by now, or even be "cheaper" to tear down and rebuild. The value might not have gone up, it might've even fallen because the house depreciated the value of the land.
Here in Australia you can sell without disclosing critical information if you are a qualified legal worker.
I lost the unlosable case, which is what my barrister called it.
The seller worked in the legal profession.
My legal team were so dismayed they never sent me a bill just an apology.
Goes to show what can happen when you got mates in the right place.
Maybe they were thrilled to find a new revenue stream!
I do question the justice in this type of verdict, because this wasn't a business issue this was a husband and wife , there's a long standing of spouse's hiding stuff from the other especially potentially criminal issues.
If this theory is to be followed then every criminal act by a spouse would automatically be also the fault of the other?
She was liable because she signed the paper that said all material facts had been disclosed, and she was a part-owner of the home. It is unclear what she actually knew.
You fall victim to a fraud - pay up? God, that is just wrong on so many levels.
What's next? Victims of theft won't be able to get back stolen property?!
One thing though. You said the case was $200,000 in 2012 with a 10% annual interest. Unless my math and an online interest calculator are both wrong, that is around $570,000. How is it over a million? Or was that including all attorney fees already?
Maybe there is a better common law reference, but it seems that under the principle of Vicarious Liability the wife bears responsibility. The bankruptcy code cannot be used to back door yourself out of civil liability.
So her credit report is permanently broken, but she herself has no criminal conviction for fraud. I believe she likely knew about it so I'm not against her paying in some way. But if she has no convictions and has technically committed no crime herself, I'm not very comfortable with that. It's proxy conviction, guilt by proxy. I'm not exactly ok with that. She herself should have been charged and then her credit history would be on the table. Until she's guilty of a crime I don't agree forcing this on her. But I do believe she's guilty....
I'll admit, I definitely think this ruling is more damaging in general. I can think of several situations already that can exploit this at an innocent partners expense. That said, since this specific case was about property and the lack of due diligence by the seller, it makes sense. Ignorance to negligence is never a good excuse for anything. It's sad she chose to trust her husband and got screwed by that choice but this is why you need to be part of everything that comes with selling a house. I just hope this definitive ruling doesn't comeback to affect those in abusive relationships because this seems like an excellent thing for abusers to use to get off the hook for a large portion of the debt if caught. And thats for any debt, not just property. Thats the scary part in my opinion.
You mean lack of due diligence by the buyer. If you buy a defective product, you return it. End of story.
You don't sue the seller and KEEP the product.
Buyers should be required by law to have a certified home inspection as well.
The buyer double dipped, period.
Um, it's not the ruling, it is the plain language of the Law.
She would have wanted to assets to be “mutual” if she was divorcing him, however she wants their finances unattached when it comes to the mutual debt!
I
Am
So
Surprised!
You remember 1885 like yesterday. Steve, is there something you haven't told us?
I always watch your content, like and comment, even though I think I might not be interested. Always entertaining and I learn things I never knew. Thank you.
Steve's voice and how he explains things makes his videos watchable.
Why is his fraud, HER responsibility? How is that justice?!
I hope they can start applying this logic of "it doesn't matter if you didn't know" to corporate malfeasance and the C suite employees.
She still benefited from the fraud, even if they didn't know.
IMHO it should also fall under unjust enrichment.
doesnt fraud supersede that?
I guess the buyer learned his own lesson to do his due diligence and to hire experts if he can't do the due diligence.
Ben lying lengthwise on top of the cylindrical object, second shelf beneath the WRIF 101 sticker; Steve’s right side
I would have never thought I could discharge that as I profited from it! I would however have tried to sue my partner.
Of course she profited from it. She may not have known about the fraud, but she was part of the partnership that bought and then old the house. The buyer was looking to recover money the sellers never should have received. If she had paid it back when her finances would have ended up right where they should have been.
If a husband goes from $0 to a $billion, the wife "deserves" half of it (in community property states like California). So, if a husband gores from $0 to minus $billion, she deserves half of that as well. However, there is an "innocent spouse" law that says she only deserves the upside, but not the downside.
"innocent spouse" law is an IRS ruling. Which puts alot of burden on the alleged innocent spouse to penalties. The Innocent would still be required to pay the tax on the income but MAY get relief from the penalties.
Is this a case where a corporation, instead of a partnership, would have have protected the wife?
I'm not sure it would, fraud generally "pierces the corporate veil". I could be wrong, please correct.
That would depend on other factors.
I would say the innocent partner should be on the hook for compensatory damages but not punitive damages.
She should have divorced him first and than went to bankruptcy court.
It's okay Steve...I remember 1885 as well. I still have a "Go Rutherford B Hays" bumper sticker, on my fliver.
I'd be curious to see the result if they were a large corporation that had benefitted from an employee's fraud...
Pointless. If a large corporation gets slapped with millions in fines, it's a drop in a bucket. To an individual, it's a burden until they die.
Bankruptcy is so loaded towards corporations. Its disgusting
That maybe true, but what does have to do with this case ?
Corporations get away with a lot of things, but irrelevant here. I may not like the current weather, but I won't insert it in a comment, where it does not apply. "Woman's stuck with debt ... But its going to snow here for the next whole week !"
@@michaelmoorrees3585 Pointing out a glaring double standard is far more relevant than your braindead comment.
@@michaelmoorrees3585 This is a comment section, sir. Logic is the thing you shouldn't try to insert.
In this case the husband and wife WERE the corporation
doing due diligence on your partners...