The House That Was Haunted As A Matter Of Law

March 14, 2016
Case Summaries

Sacramento County is no stranger to haunted buildings - from the California State Library to the old record store at 710 K Street. While cynics may claim that the existence of an elderly man in glasses perusing old books is more evidence of runaway imaginations than paranormal activity, believers assert with equal fervor that numerous reports of an old woman in Victorian attire calling for record store customers to keep down the noise indicates that we are not alone. If you think that no one has ever determined that a house has been haunted, you would not be alone. But technically, you would be wrong. 


Sixty miles away from the more well-known “Amityville Horror” house, another house - 1 LaVeta Place in Nyack, New York - had its own paranormal activity at about the same time as it more well-known "cousin."  The owner of the house in Nyack - originally built in 1890 - Helen Ackley (along with members of her family) began reporting the presence of ghosts that interacted with her family members in 1977.  On three occasions, the local newspaper reported Ackley’s haunted tales.  In addition, Ackley wrote the story of her haunted house and sent it to Readers Digest, who published “Our Haunted House on the Hudson" in May 1977 (four months before the publication of “The Amityville Horror”).        

Unlike the terrifying encounters related by the Lutz family, however, the ghostly meetings described by the Ackleys were almost friendly.  Helen Ackley reported how she would be woken every morning by a ghost shaking her bed.  One spring break she announced in a loud voice that she did need to get up early and wanted to sleep in.  Her invocation of the spectral snooze button worked and no shaking took place the next morning.      

In 1990, with property values declining and property taxes rising, Helen decided to sell the property and move to Florida.  Although the market was soft, she found a buyer from New York City, Jeffery Stambovsky and his wife Patrice.  Helen did not disclose to the Stambovskys that 1 LaVeta Place was haunted. [Let's be real - would you?] Helen and the Stambovskys agreed upon the price - $650,000.  The Stambovskys put up a $32,500 down payment.  Shortly thereafter, the Stambovskys started hearing rumors about the poltergeists at 1 LaVeta Place.  Although Jeffrey was a paranormal skeptic, Patrice was nervous and for both of them the thought of ghost hunters and curiosity hounds was as bad as actual ghosts.      

The Stambovskys pulled out from the deal and Ackley refused to return the down payment.  The Stambovskys filed a civil action for the return of their down payment based upon Ackley’s failure to disclose the house’s haunted state.  The lower court agreed with Ackley, applying New York’s “let the buyer beware” standard for purchase agreements of real estate - also known by the Latin phrase "caveat emptor".  The house was sold “as is” and the Stambovskys had breached the purchase agreement when they failed to follow through.  As a result, they had no claim on the return of the down payment.  So far, just another boring real estate deal that fell through.  Ah, but this is only where the story gets interesting. 


The Stambovskys appealed and the appellate court found in their favor, concluding "Where a condition which has been created by the seller materially impairs the value of the contract and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care with respect to the subject transaction, nondisclosure constitutes a basis for rescission as a matter of equity.” Stambovsky v. Ackley, 169 A.D.2d 254, 259 (App. Div. NY 1991).  Reading that sentence of legal gobbledygook probably gave you a headache; perhaps simple English would help.       

When the seller of a house creates a situation that lowers the value of the property, the failure to disclose that condition lets the buyer out of the contract - provide the existence of the condition is within the knowledge of the seller and unlikely to be discovered by a prudent buyer. The Court determined that this is precisely what happened here.  Because the result would be fundamentally unfair to the Stambovskys,  the Court would not enforce the contract and cause the Stambovskys to lose their security deposit.      

But why didn’t “Let the buyer beware” pass muster in this case?      

First, can you imagine the practical consequences if caveat emptor is strictly applied to a purchase agreement for a house allegedly haunted by poltergeists?  If the presence of ghosts and other things that go bump in the night are subject to being discovered by a reasonable inspection (a necessary element of caveat emptor), any sale of a home would need to include a “psychic or medium routinely accompanying the structural engineer and Terminix man on an inspection of every home subject to a contract of sale.”  Stambovsky, 169 A.D.2d at 257. To avoid the “transaction coming back to haunt him," the Court concluded, 

“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 and laid quietly to rest.” 


Who says that lawyers (or judges for that matter) don’t have a sense of humor?      

Ultimately a single fact drove the Court to its ultimate conclusion: Ackley had asserted to others on numerous occasions that the house was haunted. 

 “Whether the source of the spectral apparitions seen by defendant seller are parapsychic or psychogenic, having reported their presence in both a national publication (Readers’ Digest) and the local press (in 1977 and 1982, respectively), defendant is estopped to deny their existence and, as a matter of law, the house is haunted.”  

Stambovsky, 169 A.D.2d at 256 [emphasis added].      

As such, the house that Stambovsky contracted to buy included at least one ghost - as a matter of law. Thus, Stombovsky bought a house that contained at least one ghost more than he thought.  Although Ackley's failure to disclose the presence of a ghost to Stambovsky wasn't fraud, her failure to do so rendered enforcing the agreement fundamentally unfair.  The Court, therefore, refused to order the Stambovskys to lose their security deposit.        

As a side note, even if the language of the contract were construed broadly enough to encompass the reasonable expectation that Stambovsky knew of the presence of ghosts in the house, the result would have been the same.  Ackley failed to deliver the property to Stambovsky “vacant” as she was obliged to do under the provisions of the contract.  A house with a ghost is simply not vacant.        

The story has a happy ending for Helen Ackley, however.  Proving that one person's trash is another’s treasure, Ackley sold the house to another buyer in 1991.  Recently, according to public databases, the house was sold for $1.7 million in 2012.  No word on whether any of the proceeds were shared with the paranormal residents.

Randy Merritt

Randy Merritt has practiced law for nearly twenty years in Los Angeles and now in Elk Grove.  Always searching for new opportunities to learn, Randy spends much of his free time reading about a  broad variety of subjects, including history, communication, public policy, and anything written by Stephen King and Neil Gaiman.  When he isn't reading, writing, or spending time with his family, Randy enjoys another of his passions - baseball.  Click on the picture for more information about Randy.

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