Stambovsky v. Ackley

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"Stambovsky v. Ackley", 169 A.D.2d 254 (NY App. Div. 1991), is a notable New York Supreme Court, Appellate Division case that held that a house, which the owner had previously advertised to the public as haunted by ghosts, was legally haunted for the purpose of an action for rescission brought by a subsequent purchaser of the house. It is sometimes called the "Ghostbusters case", a reference to the author rhetorically asking "who you gonna call" to resolve a haunting. Because of the case's unique holding, it has been regularly printed in textbooks on the subject of property law and widely taught in U.S. law school classes, if not often cited or followed by other courts.

Facts and prior history

During the course of her ownership of the property at issue, which was located in Nyack, New York, Helen Ackley and members of her family had reported the existence of numerous poltergeists in the house. Ackley had reported the existence of ghosts in the house to both "Reader's Digest" [cite journal|author=Helen Herdman Ackley|title= Our Haunted House on the Hudson|journal=Reader's Digest|date= May 1977|pages= p. 217] and a local newspaper on three occasions between 1977 and 1989, when the house was included on a five-home walking tour of the city. Neither Ackley nor her realtor, Ellis Realty, revealed the haunting to Jeffrey Stambovsky before he entered a contract to purchase the house in 1989 or 1990. Stambovsky was from New York City and was not aware of the folklore of Nyack, including the widely known haunting story.

When Stambovsky learned of the haunting story, he filed an action requesting rescission of the contract of sale and for damages for fraudulent misrepresentation by Ackley and Ellis Realty. A New York Supreme Court (trial court) dismissed the action, and Stambovsky appealed.

The case

Majority opinion

Near the beginning of the majority opinion (three out of five justices) in its most well-known conclusion: "having reported [the ghosts'] presence in both a national publication . . . and the local press . . . defendant is estopped to deny their existence and, as a matter of law, the house is haunted." The court noted that whether the house was truly haunted or not, the fact that the house had been widely reported as being haunted greatly affected its value.

Notwithstanding these conclusions, the court affirmed the dismissal of the fraudulent misrepresentation action and stated that the realtor was under no duty to disclose the haunting to potential buyers. Thus, no damages were available to Stambovsky because New York, at the time, adhered to property law doctrine of "caveat emptor".

The appellate court reversed the trial court's decision regarding the rescission action, however, as it went on to note that "haunting" was not a condition that a buyer or potential buyer of real property can and should be able to ascertain upon reasonable inspection of the property. According to the court, though the doctrine of "caveat emptor" would normally operate to bar a rescission action, causing seller to have no duty to disclose information about the property to be sold (but also preventing the seller from affirmatively misrepresenting the condition of the property), the doctrine, in a merged law and equity system, can be modified to do justice to the parties. In this case, "the most meticulous inspection and the search would not reveal the presence of poltergeists at the premises or unearth the property's ghoulish reputation in the community," thus equity would allow Stambovsky the remedy of contract rescission against the seller, Ackley. The court held:

:"Where, as here, the seller not only takes unfair advantage of the buyer's ignorance but has created and perpetuated a condition about which he is unlikely to even inquire, enforcement of the contract (in whole or in part) is offensive to the court's sense of equity. Application of the remedy of rescission, within the bounds of the narrow exception to the doctrine of caveat emptor set forth herein, is entirely appropriate to relieve the unwitting purchaser from the consequences of a most unnatural bargain."

The opinion makes reference to a number of popular books and films featuring ghosts, including Shakespeare's "Hamlet" and the 1984 movie "Ghostbusters" and uses various words meaning "ghost" descriptively throughout (e.g., "in his pursuit of a legal remedy for fraudulent misrepresentation against the seller, plaintiff hasn't a ghost of a chance", "I am moved by the spirit of equity", and "the notion that a haunting is a condition which can and should be ascertained upon reasonable inspection of the premises is a hobgoblin which should be exorcised from the body of legal precedent").

Dissenting opinion

The dissenting opinion argued that the doctrine of "caveat emptor" should be strictly applied and would affirm the trial court's dismissal of all of the actions. Displeased by the majority's basis for its holding, the dissent said, "Finally, if the doctrine of caveat emptor is to be discarded, it should be for a reason more substantive than a poltergeist. The existence of a poltergeist is no more binding upon the defendants than it is upon this court."

See also

* Stigmatized property

References

External links

* [http://members.aol.com/schwenkler/wcc/stambov.htm Text of the decision]
* [http://home.comcast.net/~subwaymark/Ghost/ghost.htm Website about the house at issue in "Stambovsky"]