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Home Ownership – Breaking Up Can Be Harder for Unmarried Couples

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In a decision  released this week, the Connecticut Appellate Court upheld a ruling by the trial court that the court did not have authority to allow one member of an unmarried couple to buy out the other in order to separate their interests in a jointly held home — a solution routinely applied in divorce cases.

Dean Fusco and Robbin Austin had been in an almost 40 year relationship and for many years had shared a home that they had purchased together.  When they broke up, Dean moved out of the home they had owned together for about 23 years and Robbin remained in the house but ultimately, like many estranged couples, they were unable to see eye-to-eye on a fair way of dividing their possessions including the equity in their house.

Since they were not married,  Dean and Robbin could not take advantage of the relatively short process of  divorce which typically takes between 5 and 12 months to accomplish except in the most hotly contested cases. Instead, they were relegated to the ordinary civil docket which often moves even more slowly.  In order to receive his share of equity in the house, Dean had to file an action for partition — a procedure designed to separate joint ownership in real estate.

Not only is the procedure more cumbersome and, in most cases, more drawn out than divorce litigation, the remedies available are also limited.

Because Robbin was living in the home and wanted to remain there, she asked the court simply to determine what the house was worth and to award Dean his share based on the evidence of what he had contributed over the years both financially and in labor and management.  That was, after all, what any divorce court could do and probably would if the parties were already separated.

The court said no.  Historically, partition in Connecticut can have only two results. One is called ‘partition in kind’ .  That means the property is literally divided up and each party walks away owning his or her part of the whole.  That may work fine with open land or a farm, but can hardly work in a single family home.

The other option is ‘partition by sale’.  This is used when the nature of the property doesn’t lend itself to a line drawn in the sand.  So, because this was a single family home, that is what the court ordered.

Robin, who didn’t want her house sold, appealed the trial court’s  decision.

There is a statute she pointed to that does allow the court to order one party the option of  buying out the other even when they are not married and must go the partition route.

The statute did not apply here.  The problem, according to the Appellate Court who denied the appeal, was that this third option only applies in a small class of cases in which the party to be bought out has an interest deemed to be “minimal”.

Even though Dean had contributed less than Robbin financially, he had worked on the house over the years and the trial court had not considered his interest  to be minimal.

The lesson of this case is not that anyone considering buying a house with a significant other outside of marriage or civil union should marry.  The lesson is  that partners in real estate purchases, whether or not they are in love, need to have a clear written agreement about how their interests will be determined in the event that their partnership some day ends.

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Alimony Order Against Unemployed Lawyer Overturned

In a decision to be released next week, Keller vs. Keller,  the Connecticut Appellate Court has overturned a hefty order of alimony and support entered by a Superior Court judge.

The Defendant husband held a law degree from Columbia University and was licensed to practice in two states.  After a brief practice, he had gone into finance and most recently had owned a hedge fund that had , at first, done very well but had later turned sour. At the time the order entered, the fund was closed. The evidence showed that  Attorney Keller had no income and the family was living on borrowed money and the last of their liquid assets.

In Connecticut and elsewhere, judges may make orders of alimony and support based on a finding that the payor has earning capacity even if he or she is unemployed or underemployed.  Tn the Keller case, the judge did just that, finding that Attorney Keller had a gross earning capacity of $25,000 per month.  Based on that finding, the court ordered him to pay combined alimony and support of $9,000 per month during the pendency of the case.

The Appellate Court overturned the order, not because the lower court did not have discretion to consider earning capacity but because the court failed make a finding as to Attorney Keller’s net earning capacity.   Under Connecticut law, orders of alimony and support must be based on net income whether that income is real or merely imputed.

The lesson for litigants hoping to obtain orders against their unemployed or underemployed spouse is to present evidence specifically on the subject of what they believe their spouse could earn after taxes.


CONTRACTORS IGNORE THE CONNECTICUT HOME IMPROVEMENT ACT AT THEIR PERIL

Last month the Connecticut Supreme Court issued a decision in favor of a fencing contractor who had failed strictly to comply with the terms of the Connecticut Home Improvement Act which provides a checklist which must be followed if a home improvement contract is to be enforceable in court.

In this case, the contractor was allowed to collect the last $11.000 or so the homeowner had originally agreed to pay for construction of a fence in 2004.  Almost from the beginning of the collection dispute, it had become clear that the construction contract was unenforceable because it lacked a beginning and ending date — one item on the short statutory checklist.  Walpole Woodworker’s only hope was that a court would find that fairness required that it be paid under a theory of fairness known as quantum meruit.

Before anyone in the business gets comfortable with the idea that the courts can and will step in to protect contractors who have been careless about their contracts, they should consider that it took almost 8 years  including a trial and two levels of appeals for the contractor finally to get the help he wanted from the courts.

Here’s what really happened: In 2004, Walpole Woodworkers, Inc. signed a contract with homewner, Sid Manning, to build a fence for $22,318. As soon as Walpole Woodworkers received a deposit of $11,000 the work was done.  When collection of the balance became a problem, they first tried to appease the homeowner by modifying the fence so it would better contain  his small dog.  Next came the lawsuit.  Now, almost 8 years from the signing of the defective contract — after the expenses of a trial in Superior Court, an appeal to the Connecticut Appellate Court and a review by the Connecticut Supreme Court —  the contractor has finally been awarded the “fair value” of the work completed in 2004 and 2005.  Faced with a number of tests for determining what fair value was, the Court chose a simple one — the balance that the parties had originally agreed to under the faulty contract.

The Supreme Court makes no mention of  interest or costs of collection probably because collection costs must be included in the contract, and, absent an enforceable contract, cannot be charged to the losing party.  We wonder whether the Plaintiff now believes that the “win” was worth the costs and efforts involved — costs and efforts that could have been avoided by simply checking his contract against the statute.