Stambovsky v. Ackley, 169 A.D.2d 254, 572 N.Y.S.2d 672 (1991). This is (obviously) a New York case, but it is called theGhostbustersruling for good reason: it is all about a haunted house! It shows a playful side of the judiciary, which you will see from time to time in a number of cases. Typically, it is a lot more subtle than inStambovsky, but nonetheless, it exists.

read the case in its entirety and answer the following six questions:

1. What is thelegal questionpresented here? Is there more than one? (In other words, what does the court need to decide?)
2. What are the main arguments for and against it?
3. What case do you think helped the court with its decision?
4. Name a case that was distinguishedby the court, and for what reason(s). (In other words, what case did the court use to show how it was different than the case it was ruling on.)
5. Do you agree or disagree with this decision? Why?
6. What is your favorite quote or pun from this holding?

Stambovsky v. Ackley, 169 A.D.2d 254 (1991} 5T2 N.Y.S.2d 672, 60 USLW 2070 III KeyCile Yellow I-'lag - Negative 'l'rcatrnenl Superseded by Statute as Started in Bishop v. (iraziano. N.Y.l)ist.('t.. {klohcr IS. 2005 169 A.D.2d 254 Supreme Court, Appellate Division, First Department, New York. Jeffrey M. STAMBOVSKY, PlaintiffAppellant, V. Helen V. ACKLEY and Ellis Realty, DefendantsRespondents. [3] July 18, 1991. Synopsis Purchaser ofhome brought action against vendor and broker for rescission and damages. The Supreme Court. New York County, Lehner, J.. dismissed, and purchaser appealed. The Supreme Court, Appellate Division, Rubin, J., held that: (l) vendor was estopped to deny existence of poltergeists on the premises, so that house was haunted as a matter of law; [2) equitable remedy of rescission was available; {3] vendor who had undertaken to inform the public at large about the [4] existence of poltergeists had a duty to inform purchaser; (4} haunting is not a condition which can and should be ascertained by reasonable inspection of the premises; but (5) there was no cause of action against the broker, Afrmed as modied. Smith. J., dissented and led an opinion in which Milonas. J.P.. concurred. |5| Procedural Posture(s): On Appeal; Motion to Dismiss; Motion to Dismiss for Failure to State a Claim. West Headnotes {17) [l] Estoppel ".5 Representations l5] Homeowner who reported presence in her home of poltergeists or spectral apparitions in both national publication and local press was estopped to deny their existence so that, as a matter ol'law, house was haunted. 2 Cases that cite this headnote 'NicillAW' '."'i..': ';' i-I' -. Real Property (fonveyances 'v Misrepresentation and Fraud by Vendor Impact of reputation of house created by efforts of the vendor to publicize her close encounters with spirits in the home went to the very essence of the bargain between the parties and greatly impaired the value of the property and its potential for resale. Real Property Conveyances w Contracts for Sale or Transfer of Real Property Extent of impairment of value of property and its potential for resale resulting from vendor's prior ell'orts to publicize the fact that it was haunted would be presumed or review ot'molion to dismiss action for rescission and was an issue of fact for resolution oftrial. 1 Cases that cite this headnote Brokers 1;; Misrepresentation or fraud of broker Broker, as agent for seller, is under no duty to disclose to potential purchaser a phantasmal reputation of the premises, which are reputed to he possessed by poltergeists. 2 Cases that cite this headnote Real Property Conveyances lea Right to Rescind Equity would permit purchaser to rescind contract for sale of home and recover his down payment upon discovery of home's reputation as being haunted. Real Property Conveyances up Silence or concealment New York law does not recognize any remedy for damages incurred as result of vendor's mere silence, and the strict rule of caveat emptor applies. Stambovsky v. Ackley, 169 A.D.2d 254 (1991} 572 N.Y.S.2d 672,60 USLW 2070 be expected to even contemplate (see, Da Sitva v. Musso, 53 N.Y.2d 543, 551, 444 N.Y.S.2d 50, 428 N.E.2d 382). The case law in this jurisdiction dealing with the duty of a vendor of real property to disclose information to the buyer is distinguishable from the matter under review, The most salient distinction is that existing cases invariably deal with the physical condition of the premises (eg. London v. Conraittf supra [use as a landfill]; Perth v. Moraine Retaini (a. 5 A.[).2d 685. 168 N.Y.S.2d s47 a'd. 6 N.Y.2d 020. 100 N.Y.S.2d 995, 161 N.li.2d 2|U |sewer line crossing adjoining property without owner's consent] ). defects in title (e.g.. Sands 1-: Ktssaae. 282 AppDiv. I40, 12] N.Y.S.2d I534 [remainderman] ], liens againstthe property {e.g., Noved Realty Corp. v. AA)? C0,. supra), expenses or income (e.g., Radars v. Manttaras, supra [gross receipts] ) and other factors affecting its operation. No case has been brought to this court's attention in which the property value was impaired as the result of the reputation created by information disseminated to the public by the seller (or, for that matter, as a result of possession by poltergeists). |13] Where a condition which has been created by the seller materially impairs the value of the contract and is peculiarly within the knowledge ofthe 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. Any other outcome places upon the buyer not merely the obligation to exercise care in his purchase but rather to be omniscient with respect to any fact which may affect the bargain. No practical purpose is served by imposing such a burden upon a purchaser. To the contrary, it encourages predatory business practice and offends the principle that equity will suffer no wrong to be without a remedy. IN] [151 lll sale. particularly the merger or \"as is" clause. bars recovery ofthe buyer's \"67'? depositis unavailing. liven an express disclaimer will not be given ett'ect where the facts are peculiarly within the knowledge of the party invoking it (Danann Reat'ty Corp. v. Harris, 5 N.Y.2d 3|7, 322, 184 N.Y.S.2d 599, IS? N.E.2d 597, Tahini toys, Ltd. v. Bobmwsky, supra ). Moreover, a fair reading of the merger clause reveals that it expressly *260 disclaims only representations made with respect to the physical condition ofthe premises and merely makes general reference to representations concerning \"any other matter or things Ila\": l' L' I It W Defendant's contention that the contract of affecting or relating to the aforesaid premises". As broad as this language may be, a reasonable interpretation is that its effect is limited to tangible or physical matters and does not extend to paranormal phenomena. Finally, if the language of the contract is to be construed as broadly as defendant urges to encompass the presence of poltergeists in the house, it cannot be said that she has delivered the premises \"vacant" in accordance with her obligation under the provisions ofthe contract rider. To the extent New York law may be said to require something more than \"mere concealment" to apply even the equitable remedy of rescission, the case of Janina Construction Corporation 1-: Cohen. 25? NY. 393, l't'8 NE. 672, supra, while not precisely on point, provides some guidance. In that case, the seller disclosed that an official map indicated two as yet unopened streets which were planned for construction at the edges of the parcel. What was not disclosed was that the same map indicated a third street which, if opened, would divide the plot in half. The court held that, while the seller was under no duty to mention the planned streets at all, having undertaken to disclose two of them, he was obliged to reveal the third [see also. Rosenschct'n v, McNaHy, I? A.D,2d 834, 233 N.Y.S.2d 254). |l't] In the case at bar, defendant seller deliberately fostered the public belief that her home was possessed. Having undertaken to inform the public at large. to whom she has no legal relationship, about the supernatural occurrences on her property, she may be said to owe no less a duty to her contract vendee. It has been remarked that the occasional modern cases which permit a seller to take unfair advantage of a buyer's ignorance so long as he is not actively misled are \"singularly unappetizing" {Prosser, Law of Torts 106, at 696 [4th ed. 19? l] ). 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 ofcaveat emptor set forth herein, is entirely appropriate to relieve the unwitting purchaser from the consequences ofa most unnatural bargain. Accordingly, the judgment of the Supreme Court, New York *26] County {Edward H. Lehner, l), entered April 9, 1990, which dismissed the complaint pursuant to CPLR 321 1(a) (7), should be modified, on the law and the facts and in the Stambovsky v. Ackley, 169 A.D.2d 254 (1991) 572 N. Y.S.2d 672, 60 USLW 2070 Village of Nyack. Not being a "local," plaintiff could not [16] Real Property Conveyances Particular readily learn that the home he had contracted to purchase Conditions and Provisos is haunted. Whether the source of the spectral apparitions Vendor of house which was possessed by seen by defendant seller are parapsychic or psychogenic, poltergeists did not deliver the premises "vacant" having reported their presence in both a national publication in accordance with her obligation under the ("Readers' Digest") and the local press (in 1977 and 1982, provisions of contract rider. respectively), defendant is estopped to deny their existence and, as a matter of law, the house is haunted. More to the point, however, no divination is required to conclude Real Property that it is defendant's promotional efforts in publicizing her Conveyances Misrepresentation and Fraud close encounters with these spirits which fostered the home's by Vendor reputation in the community. In 1989, the house was included Vendor who had undertaken to inform the public in a five-home walking tour of Nyack and described in a at large, to whom she had no legal relationship, November 27th newspaper article as "a riverfront Victorian about supernatural occurrences on her property (with ghost)." The impact of the reputation thus created goes owed the same duty to the purchaser. to the very essence of the bargain between the parties, greatly impairing both the value of the property and its potential for resale. The extent of this impairment may be presumed for the purpose of reviewing the disposition of this motion to dismiss the cause of action for rescission (Harris v. City of New York, Attorneys and Law Firms 147 A.D.2d 186, 188-189, 542 N. Y.S.2d 550) and represents merely an issue of fact for resolution at trial. **674 *255 William M. Stein, of counsel (Hood & Stein, attorneys), Haverstraw, for plaintiff-appellant. 141 15] [6] While I agree with Supreme Court that the real estate broker, as agent for the seller, is under no Andrew C. Bisulca, of counsel (Mann, Mann & Lewis, P.C., duty to disclose **675 to a potential buyer the phantasmal attorneys), Nyack, for defendant-respondent Helen V. Ackley. reputation of the premises and that, in his pursuit of a legal Jeffrey J. Ellis, of counsel (Quirk & Bakalor, P.C., attorneys), remedy for fraudulent misrepresentation against the seller, New York City, for defendant-respondent Ellis Realty. 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 Before MILONAS, J.P., and ROSS, KASSAL, SMITH and the contract of sale and recovery of his downpayment. New RUBIN, JJ. York law fails to recognize any remedy for damages incurred as a result of the seller's mere silence, applying instead the Opinion strict rule of caveat emptor. Therefore, the theoretical basis for granting relief, even under the extraordinary facts of this RUBIN, Justice. case, is elusive if not ephemeral. Plaintiff, to his horror, discovered that the house he had recently contracted to purchase was widely reputed to *257 "Pity me not but lend thy serious hearing to what I be *256 possessed by poltergeists, reportedly seen by shall unfold" (William Shakespeare, Hamlet, Act I, Scene V defendant seller and members of her family on numerous [Ghost] ). occasions over the last nine years. Plaintiff promptly commenced this action seeking rescission of the contract 17] From the perspective of a person in the position of of sale. Supreme Court reluctantly dismissed the complaint, plaintiff herein, a very practical problem arises with respect holding that plaintiff has no remedy at law in this jurisdiction. to the discovery of a paranormal phenomenon: "Who you gonna' call?" as the title song to the movie "Ghostbusters" [1] [21 13] The unusual facts of this case, as disclosed asks. Applying the strict rule of caveat emptor to a contract by the record, clearly warrant a grant of equitable relief to involving a house possessed by poltergeists conjures up the buyer who, as a resident of New York City, cannot be visions of a psychic or medium routinely accompanying the expected to have any familiarity with the folklore of the structural engineer and Terminix man on an inspection of WESTLAW 2021 Thomson Reuters. No claim to original U.S. Government Works.Stambovsky v. Ackley, 169 A.D.2d 254 (1991) 572 N.Y.S.2d 672, 60 USLW 2070 1 Cases that cite this headnote [12] Real Property Conveyances Application of Doctrine of Caveat Emptor 171 Real Property Conveyances . Quality or Doctrine of caveat emptor requires that buyer act condition prudently to assess the fitness and value of his Haunting of home is not a condition which purchase, and operates to bar the purchaser who can and should be ascertained upon reasonable fails to exercise due care from seeking equitable inspection of the premises by the purchaser. remedy of rescission. 6 Cases that cite this hea 18] Real Property Conveyances Application of Doctrine of Caveat Emptor [13] Real Property Conveyances Misrepresentation and Fraud With respect to transactions in real estate, New by Vendor York law adheres to the doctrine of caveat emptor and imposes no duty on the vendor to disclose Where condition which has been created by any information concerning the premises unless vendor materially impairs the value of the there is a confidential or fiduciary relationship contract and is peculiarly within the knowledge between the parties or some conduct on the of the vendor or unlikely to be discovered by part of the seller which constitutes active a prudent purchaser exercising due care with concealment. respect to the subject transaction, nondisclosure constitutes a basis for rescission as a matter of 28 Cases that cite this headnote equity. 4 Cases that cite this headnote 191 Real Property Conveyances Misrepresentation and Fraud by Vendor [14] Contracts - Exclusion or limitation by contract, express warranty, or refusal to warrant Normally, some affirmative representation or partial disclosure is required to impose upon Even express disclaimer will not be given the vendor a duty to communicate undisclosed effect where the facts are particularly within the conditions affecting the premises. knowledge of the party invoking it. 11 Cases that cite this headnote [10] Real Property Conveyances Application of Doctrine of Caveat Emptor [15) Real Property Conveyances Misrepresentation and Fraud Caveat emptor is not so all-encompassing a by Vendor doctrine of common law as to render every act of nondisclosure immune from redress, whether Merger clause in contract for sale of home legal or equitable. which expressly disclaimed only representations made with respect to the physical condition of the premises and merely made a general reference to representations concerning "any [11] Common Law Application and operation other matter" affecting the premises did Common law is not moribund and, where not disclaim representations with respect to fairness and common sense dictate that an paranormal phenomena, such as the presence of exception should be created, evolution of law poltergeists. should not be stifled by rigid application of a legal maxim. 2 Cases that cite this headnote WESTLAW @ 2021 Thomson Reuters. No claim to original U.S. Government Works.Stambovsky v. Ackley, 169 A.D.2d 254 (1991) 572 N.Y.S.2d 672, 60 USLW 2070 exercise of discretion, and the first cause of action seeking concealment that is actionable as a fraud (see Perin v. Mardine rescission of the contract reinstated, without costs. Realty Co., Inc., 5 A.D.2d 685, 168 N.Y.S.2d 647, affd., 6 N. Y.2d 920, 190 N.Y.S.2d 995, 161 N.E.2d 210; Moser v. Judgment, Supreme Court, New York County (Edward H. Spizzirro, 31 A.D.2d 537, 295 N.Y.S.2d 188, aff'd., 25 N. Y.2d Lehner, J.), entered on April 9, 1990, modified, on the law 941, 305 N.Y.S.2d 153, 252 N.E.2d 632). The buyer has the and the facts and in the exercise of discretion, and the first duty to satisfy himself as to the quality of his bargain pursuant cause of action seeking rescission of the contract reinstated, to the doctrine of caveat emptor, which in New York State still without costs. applies to real estate transactions." London v. Courduff, 141 A.D.2d 803, 804, 529 N. Y.S.2d 874, app. dism'd., 73 N. Y.2d 809, 537 N. Y.S.2d 494, 534 N.E.2d 332 (1988). All concur except MILONAS, J.P. and SMITH, J., who dissent in an opinion by SMITH, J. The parties herein were represented by counsel and dealt at arm's length. This is evidenced by the contract of sale which, inter alia, contained various riders and a specific provision SMITH, Justice (dissenting). *262 that all prior understandings and agreements between I would affirm the dismissal of the complaint by the motion the parties were merged into the contract, that the contract court completely expressed their full agreement and that neither had relied upon any statement by anyone else not set forth Plaintiff seeks to rescind his contract to purchase defendant in the contract. There is no allegation that defendants, by Ackley's residential property and recover his down payment. some specific act, other than the failure to speak, deceived the Plaintiff alleges that Ackley and her real estate broker, plaintiff. Nevertheless, a cause of action may be sufficiently defendant Ellis Realty, made material misrepresentations of stated where there is a confidential or fiduciary relationship the property in that they failed to disclose that Ackley believed creating a duty to disclose and there was a failure to disclose a that the house was haunted by poltergeists. Moreover, Ackley shared this belief with her community and the general material fact, calculated to induce a false belief. County of **678 public through articles published in Reader's Digest Westchester v. Welton Becket Assoc., 102 A.D.2d 34, 50-51, (1977) and the local newspaper (1982). In November 1989, 478 N.Y.S.2d 305, aff'd., 66 N. Y.2d 642, 495 N.Y.S.2d 364, approximately two months after the parties entered into the 485 N.E.2d 1029 (1985). However, plaintiff herein has not contract of sale but subsequent to the scheduled October 2, alleged and there is no basis for concluding that a confidential 1989 closing, the house was included in a five-house walking or fiduciary relationship existed between these parties to an tour and again described in the local newspaper as being arm's length transaction such as to give rise to a duty to haunted. disclose. In addition, there is no allegation that defendants thwarted plaintiff's efforts to fulfill his responsibilities fixed Prior to closing, plaintiff learned of this reputation and by the doctrine of caveat emptor. See London v. Courduff, unsuccessfully sought to rescind the $650,000 contract of sale supra, 141 A.D.2d at 804, 529 N. Y.S.2d 874. and obtain return of his $32,500 down payment without resort to litigation. The plaintiff then commenced this action for that Finally, if the doctrine of caveat emptor is to be discarded, relief and alleged that he would not have entered into the it should be for a reason more substantive than a poltergeist. contract had he been so advised and that as a result of the The existence of a poltergeist is no more binding upon the alleged poltergeist activity, the market value and resaleability defendants than it is upon this court. of the property was greatly diminished. Defendant Ackley has counterclaimed for specific performance. Based upon the foregoing, the motion court properly dismissed the complaint "It is settled law in New York that the seller of real property is under no duty to speak when the parties deal at arm's All Citations length. The mere silence of the seller, without some act or conduct which deceived the purchaser, does not amount to a 169 A.D.2d 254, 572 N.Y.S.2d 672, 60 USLW 2070 End of Document 2021 Thomson Reuters. No claim to original U.S. Government Works. WESTLAW @ 2021 Thomson Reuters. No claim to original U.S. Government Works.Stambovsky v. Ackley, 169 A.D.2d 254 [1991} 572 N,Y.S.2d 672, 60 USLW 2070 every home subject to a contract of sale. It portends that the prudent attorney will establish an escrow account lest the subject of the transaction come back to haunt him and his clientor pray that his malpractice insurance coverage extends to supernatural disasters. In the interest of avoiding such untenable consequences, 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 oflegal precedent and laid quietly to rest. 181 I91 that the ancient rule which holds that mere non-disclosure does not constitute actionable misrepresentation \"finds proper application in cases where the fact undisclosed is patent. or the plaintiff has equal opportunities for obtaining information which he may be expected to utilize, or the defendant has no reason to think that he is acting under any misapprehension" (Prosser, Law of Torts 106, at 696 [4th ed., 1971] ). However, with respect to transactions in real estate, New York adheres to the doctrine of caveat emptor and imposes no duty upon the vendor to disclose any information concerning the premises (London v, Conrdu. 141 A,D.2d 803, 529 N.Y,S.2d 824) unless there is a condential or duciary relationship between the parties (Maser v. Sptzr'rm. 31 A.D.2d 53?. 295 N.Y.S.2d 188. ad.. 25 N.Y.2d 941. 305 N.Y.S.2d 153, 252 N.Ii.2d 632; MM ('t'edtt Hit. Corp, 1'. Made Motor Mfg. (US/1) ('orp. 152 A.D.2d 451, 542 N.Y.S.2d 649} or some conduct on the part ofthe seller which constitutes \"active concealment" (see. t7 East 80th Realty Corp. v. 68th Associates. 173 A.D.2d 245, 569 N.Y.S.2d 647 [dummy ventilation system constructed by seller]; Haberman 1;. Greenspan, 82 Misc.2d 263, 368 N.Y.S.2d 717 [foundation cracks covered by seller] ). Normally, some affirmative misrepresentation (8g, Tahr'm' mus, Ltd. v. Bobmwsky, 99 A.D.2d 489, 420 N.Y.S.2d 431 [industrial waste on land allegedly used only as farm]; Jansen v, Kelly. 11 A.D.2d 587, 200 N.Y.S.2d 561 [land containing valuable minerals allegedly acquired for use as campsite] ) or *258 partial disclosure {Janito- ('onsnz ('m-p. v. Cohen. 25? NY. 393, 178 N.l-'.. 672 [existence of third unopened street concealedl; Naved Realty Corp. v. AJH'. (a. 250 AppDiv. I. 293 N.Y.S. 336 [escrow agreements securing lien concealed] ) is required to impose upon the seller a duty to communicate undisclosed conditions affecting the premises Youngv. Keith, 112 A.D.2d 625, 492 N.Y.S.2d 489 [defective water and sewer systems concealed] ). (contra. Wt 311 11W [t has been suggested by a leading authority [10] [ll] Caveat emptor is not so all-encompassing a doctrine of common law as to render every act of non- disclosure immune from redress, whether legal or equitable. \"In regard to the necessity of giving information which has not been asked, the rule differs somewhat at law and in equity, and while the law courts would permit no recovery of damages against a vendor, because of mere concealment of facts under certain circumstances. yet if the vendee refused \"676 to complete the contract because of the concealment of a material fact on the part of the other, equity would refuse to compel him so to do, because equity only compels the specific performance ofa contract which is fair and open, and in regard to which all material matters known to each have been communicated to the other" (Rathmt'tlet' 1-'. Stein. 143 NY. 581, 591592, 38 NE. 718 [emphasis added] ). Even as a principle of law, long before exceptions were embodied in statute law (see. e.g.. UCC 2312, 2313, 2314, 23 15; 3 417[2][e] ), the doctrine was held inapplicable to contagion among animals, adulteration of food, and insolvency of a maker of a promissory note and of a tenant substituted for another under a lease (see. Rottrmttter v. Stein, supra, at 592593, 38 NE. 718 and cases cited therein). Common law is not moribund. Exfacro jas orttur (law arises out of facts), Where fairness and common sense dictate that an exception should be created, the evolution of the law should not be stied by rigid application ol'a legal maxim. [12] The doctrine ol'caveat emptor requires that a buyer act prudently to assess the fitness and value ofhis purchase and operates to bar the purchaser who fails to exercise due care from seeking the equitable remedy of rescission (see, e.g., Rodas v. Manttaras, 159 A.D.2d 341, 552 N.Y.S.2d 618). For the purposes of the instant motion to dismiss the action pursuant to CPLR 3211(a)(7}, plaintiff is entitled to every favorable inference which may reasonably be drawn from the pleadings {Arrhtgron v. New York Times (70,. 55 N.Y.2d 433. 442, 449 N.Y.S.2d 941, 434 N.E.2d 1319; Rave!!!) r: Otona Rcatty ("(1. 4t) N.Y.2d 633, 634, 389 N.Y.S.2d 314. 357 N.li.2d 97(1), specically, in this instance. that he met his obligation to conduct an inspection of the premises and a search of available public records with respect *259 to title. It should be apparent, however. that 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. Therefore, there is no sound policy reason to deny plaintiff relief for failing to discover a state of affairs which the most prudent purchaser would not