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The Ghostbusters Ruling

October 17, 2016

Most people, including lawyers, rarely get pure joy from reading a legal opinion. Bills fans may have gleamed with happiness as they read the Second Circuit’s opinion upholding Tom Brady’s “Deflategate” suspension. Even then, they probably were not enamored with reading eighteen pages of labor law before getting to the payout. 

However, in the spirit of Halloween, I wanted to share a piece of legal writing that breaks the tradition of rambling legalese: Stambovsky v Ackley. It is a phenomenal case, seminal for solving the oft-pondered question of what to do if you are stuck in a contract to purchase a haunted house, but infamous for Judge Israel Rubin’s levity in scattering ghost puns throughout the court’s opinion.

After signing a contract to purchase a lakefront home in Nyack, the buyer sought to back out of the deal when he discovered the house’s haunted reputation, which he believed to be a significant detriment to its resale value.

Unfortunately for the plaintiff, the court noted the strict rule of caveat emptor—let the buyer beware—holding that the real estate broker had no legal duty to disclose the “phantasmal” reputation of the premises. However, the court thought that in fairness the plaintiff should be relieved from the harsh result of the general rule:

In his pursuit of a legal remedy for fraudulent misrepresentation against the seller, plaintiff hasn’t a ghost of a chance, I am nevertheless moved by the spirit of equity to allow the buyer to seek rescission of the contract of sale…

Justice Rubin distinguished between home defects that a buyer would normally ascertain in a routine inspection, and those such as a haunted reputation, which the court did not expect a reasonable purchaser to discover:

[T]he 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.

As the court pointed out, if it were to compel the plaintiff to go through with the purchase of the house, it was not as if he would be able to hire an exterminator to solve the problem:

From the perspective of a person in the position of plaintiff herein, a very practical problem arises with respect to the discovery of a paranormal phenomenon:

“Who you gonna’ call?”