“As a matter of law, the house is haunted,” declared the New York Supreme Court majority opinion in Stambovsky v. Ackley and Ellis Real Estate. It was a shocking end to a contentious case after a young family demanded their down payment back, refusing to move into a house they discovered was inhabited by ghosts. The decision still draws attention to this day for its implications for New York home sellers.

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Written & Produced by R.J. Blake and Ray Tarara

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Special guests: 

Cynthia Kavanagh - KTransit

Richard Ellis - Ellis Sothebys Realty

M. Neil Browne - Celebrate Questions

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Sergey Cheremisinov

Kai Engle

Feslyian Studios

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“Not being a "local", plaintiff could not readily learn that the home he had contracted to purchase is haunted… defendant is estopped to deny their existence and, as a matter of law, the house is haunted.” 

It was the end of the road for one of the most unusual cases to wind its way through the New York Courts. A case where lawyers were more frightening than the spirits at the center of this strange phenomenon.

Richard: t was a big Victorian, three-stories high with a large cower on one side. It was asymmetrical and it had a big wrap around porch that faced the Hudson River.

It was on the dead end street and it looked like it was cared for through years. It looked like it needed some sprucing up.

RAY: Which was nothing out of the ordinary for Helen and George Ackley as Cynthia Kavanagh, one of their 4 children, told us: 

Cynthia: To begin with, my dad had always been a house flipper before he flipped houses.

[laughter]

He usually, and due to the fact that we moved around a lot since he worked for Martin Marietta, that usually gave him about enough time to go in, find a nice house, add onto it in some way or another and then we'd move on again. We went into this one, it was like, "Oh, we know what we're doing for the next umpteenth years."

Cynthia: … The only problems that were there were inherited because of a house that had sat with no maintenance, not because people had gone in and broken windows or graffitied the walls or anything like that. That in and of itself was like, the house was more or less sending out vibes that, if you don't want to respect me, I'm not going to respect you. You can just move on. 

RAY: It took no time for the history of the home to come to life for the Ackley’s. On their first day moving in, Helen was approached by a group of neighborhood children. 

“The neighborhood children broke up a lively ball game to question me.” Helen Ackley wrote, “Yes, we had bought the house. Yes, we did have children -- four -- although they wouldn’t arrive for another week. When I told them they could look through the house, two of the kids hung back. The others giggled. “They think there’s ghosts in there. They’re scared. Did you know you bought a haunted house?” 

RAY: When Helen spoke to a plumber working on the home that day, he did not want to leave her alone. He said that while he was in the house by himself, he had heard footsteps pacing the stairs and the room above him. Helen assured him everything was okay. But despite Helen’s calm nerves, something was causing others in the home to be on edge.

She wrote:

“That night I told George about the two conversations as we got ready for bed. He nodded his head gravely and pulled up the covers. Sliding in beside him, I realized the hall light was burning. With a groan I started up.

“Where are you going?” George demanded. 

“To turn off the light, of course.” 

“Leave it on.” 

I looked at him. “Since when have you slept with a light on?” 

“Since the first night I moved in here, and I don’t want to discuss it. Good night!” He turned over, his back to me.”

RAY: George would eventually be able to sleep with the light off again as the hauntings became a part of everyday life. 

Helen wrote, “Our ghosts have continued to delight us for nine years. When he’s home from college, our son, George, like Cynthia, is shaken awake each day. Son William has only had his bed shaken once (when he slept in Cynthia’s room), and daughter Cara Lee seldom, as she is an early riser. But Cara Lee is on the lookout for the presence that often makes her feel that someone is sitting on the empty living-room sofa. And, just recently, my husband saw a figure in the hall which disappeared as he came up the basement steps. Only the foot was in his line of vision -- clad in a soft moccasin-like slipper. “

HELEN: “I turned my head. The room was empty. I started working again. But the eerie feeling persisted, so I spoke out loud. “I hope you like the color. Hope you’re pleased with what we’re doing to the house. It certainly must have been lovely when it was first built.” 

As I talked I kept painting, but I felt the energy of those eyes, focused on the nape of my neck. I looked over my shoulder again. “He” sat there in midair, smiling at me from in front of the cold fireplace. Hands clasped around his crossed knees, he was nodding and rocking. He faded slowly, still smiling, and was gone. But I knew then that he approved of the work our family had lavished on our mutual home. 

What did he look like? He was the most cheerful and solid-looking little person I’ve ever seen. A cap of white hair framed his round, apple-cheeked face, and there were piercing blue eyes under his thick white eyebrows. His light-blue suit was immaculate, the cuffs of the short unbuttoned jacket turned back over ruffles at his wrists. A white ruffled stock showed at his throat. Below breeches cut into his kneecaps he wore white hose and shiny black pumps with buckles.” 

No I wasn’t drinking that day. No, the paint fumes hadn’t got to me. No, I don’t know why I saw him then - and have never seen him since. But I do know that he seemed happy to be there, and I was proud to meet him. “ 

RAY: Cynthia even says she had her own personal ghost while staying at the house. 

Cynthia:... It was one evening I was staying up very, very late and watching something on TV I'm sure, and went to go-- There is a sun porch that has French doors from two rooms off the two separate rooms into the house. One of which, as I said, was our upstairs had been dining room. It was later turned into a TV room, kitchen, and then my bedroom. I went around to make sure that the French doors were locked because they had a habit of popping open unexpectedly when nobody else was around.

I made sure the TV room doors were closed and went in to go into my bedroom. The French doors had long clear glass in it. I looked in and there was a woman all dressed in white sitting on the edge of my bed looking into where my dresser mirror was brushing her hair. She turned and looked at me and nodded to me, and I just nodded back and went back into the TV room and got a glass of water and sat there for a few minutes.

Then out loud I said, "I think I need to go to bed now," and went back in using the hallway door rather than the French door. Nobody was in there then, so I just went to bed.

I saw her three times while I was in high school, but mostly from behind, she was walking away from me the other two times. Only once did I see her face to face. Then before we moved out here, my current husband and I, we weren't even in the same room, but he saw her. He described her the exact same way as I described her. I go, "Oh, you saw my ghost?" He goes, "I don't want to talk about it." [chuckles]

That's why I've always referred to her as my ghost is she was always keeping an eye on me.

None of us were really afraid. We startled with the way things would pop up and disappear and people would be around. Even when she saw the man sitting in mid-air, she wasn't afraid of him.

My youngest brother was getting ready to go to college, but we're all worried, "Well, are you going to be okay all by yourself?" She goes, "I'm never all by myself. I always fine in this house, but don't worry." She lived another 15 years in the house more or less alone.

RAY: For Helen, the company of spirits made their haunted house, a home. She wrote: “We have come to savor these happenings. They give a sense of the continuity of the past with the present and with the future. These elusive spirits seem gracious, thoughtful--only occasionally frightening -- and thoroughly entertaining. Now we wonder: if the time comes for us to move again, is there any way we can take our other-worldly friends with us?”

RAY: As the 80’s came to an end, the time had come for Helen to leave La Veta Place. Ellis Realty, owned by Richard’s family, handled the sale. 

Richard: It was time, she was a widow. She wanted to move to Florida. House has been on the market like I said earlier for a couple of years. Like any normal person, older, kids are older, out of the house, or almost out of the house, it was time to sell.

Cynthia: I can remember at the time she put the house on the market, I was living with her with my children and my new husband, Mark. There was quite a lot of interest in the house.

RAY: The interest spread to New York City, where it caught the eye of Jeffrey and Patrice Stambovsky.

Richard: They were living in New York City, the Cedar market for homes in our marketplace. I think he was in financial business and she had some business. They seem like a nice couple and they were qualified to purchase the house, that was lovely.

Cynthia: Oh, I was quite excited for mom because she had told me that they'd been through two or three times and they were expecting their first child. We thought the timing was wonderful.

RAY: As the deal was closing, it became obvious that something was strange in the neighborhood. 

Richard: A week or two had passed after the contract's were fully signed. My agent had gotten the call from Jeff Stambovsky. He said that they wanted to meet with the owner and talk a little bit more about the ghosts. I was not at that meeting, but my agent was. The Stambovsky's had come and they brought a woman with her, we can only described as a stereotype of what a gypsy woman might look like. With beads and a long dress and this thing on her head and that so she was described to me.

She was at the meeting with Mrs. Ackley, who I understand was her usual passion spoke about the ghosts in great detail. They sat down. They spoke about it. It was a polite meeting. My agent said everyone laughed, it was friendly.

Then the next day, we received the call from the seller's attorney that he had a call from the buyer's attorney that they wanted their money back. They were not going to proceed with the purchase of the house and it's because of the ghosts.

RAY: Not only was the sale not going to proceed, but the Stambovsky’s wanted the money they had put down returned. The Stambovsky’s claimed that they had never been informed of the home’s phantom tenets until it appeared on a walking tour of haunted Nyak Homes and “that the market value and resaleability of the property was greatly diminished.”

Richard: Stambovsky's by saying they wanted their money back and that they weren't going to close, they were defaulting on the contract. Not an attorney, but legally, the seller has the right to then keep the down payment. They're not closing. They agreed that they would close on the property, now they're saying they're not going to close on it. The Ackley's had every right to keep that money.

Cynthia: Actually, it was not a down payment, it was what was called earnest money. I don't know if New York has changed their laws since then, but earnest money from what I was told, was different than what most of the rest of the world in the financial world thought of it as a down payment.

Most of the time down, payments are considered fully refundable within a specified legal time. 7 working days, 30 working days, whatever. At the time earnest money was not necessarily refundable. It was to guarantee that, "I'm giving you this money because I am so earnest about buying this house that nothing's going to stop me." That's why she [chuckles] let it go to court and refuse to refund the money was because it was earnest money. If you had any doubts about it, why did you wait so long before you told me?

RAY: With the filing, Stambovsky, Helen Ackley, and Ellis Realty found themselves at the New York Supreme Court. 

M. Neil Browne Ph.D, co-author of The Legal Environment of Business, explained: 

Neil: The New York court system is strange. The first court you go to is the Supreme Court. So, we're accustomed to thinking the Supreme Court is that's the final court in the land. In New York, the actual court of first instance, in other words, the court you go to first is the Supreme Court.

Richard: We were involved, that was the lower court. The lower court, we were represented by an attorney. In fact, it was my brother, Jeff Ellis. The Ackley's were represented by their attorney. My brother's point of view in representing us was that we represented the property properly. We were dutiful with our obligations as a realtor. We disclosed everything legally that needed to be disclosed. We were not at fault with anything.

It was a little nerve-racking and it was also exciting because it was such an unusual case and there was tons of publicity that was started to be generated around this. It was kind of sitting at the edge of your seat waiting to see what was going to happen, what was going to come of it.

Richard: Well, my brother took a tack in defending us in stating that he went and quoted certain passages from the Reader's Digest article. One in particular was a description of the gentleman in the revolutionary war garb, and my brother, tongue in cheek said, "This could have been a description of George Washington, and who's to say that it wasn't him and the property could be worth more money," and the Stambovky's argued that it was devalued.

He had a lot of fun defending us, and we felt really good afterwards. We didn't think we did anything wrong anyway, so we weren't really concerned about being found guilty. It was an unusual situation, but we felt good after the first case.

RAY: Initially, the courts decided to dismiss the case based on the legal idea of “Buyer Beware” otherwise known as “Caveat Emptor”

Neil: What that means is, look, as a consumer, you're supposed to be a rational, intelligent chooser who does their due diligence, who checks out all of the relevant characteristics of whatever it is you're buying, whether you're talking about hamburger meat, whether you're talking about a house, or whether you're talking about 92 acres in upper New York State. Your job as a consumer is, is to be responsible as an individual and check it out.

RAY: Despite their initial loss, the Stambovsky’s stood their ground and appealed the decision. 

Neil: The Supreme Court of New York, who heard the Stambovsky case first dismissed it. They dismissed it in the large part because they said, "Why are you here? We don't understand the cause of action." They searched too in their legal records and they couldn't find any other cases as well. They're basically like, "I don't know. I'm not sure why you're in here." They dismissed it.

It's interesting because the judge who wrote the dismissal opinion said that he thought it didn't seems fair what happened to Stambovsky, but he didn't know of any law against what happened. He didn't know of any previous case law. That really suggested there may not well be other cases like Stambovsky.

Richard: It went to the Appellate Division. It was troublesome that he had the right then to appeal it, he being Stambovsky. We were at the edge of our seats to see what would happen then. My brother was able to convince the court that we, the broker, were lawful with everything we did, and with respect to again, doing our job and disclosing, representing everything as we technically knew it. There was nothing on the books that ever said we had to disclose about a ghost or anything like that.

Cynthia: I was living out here and the fact that I knew that it was earnest money, not a down payment and they had lived with the knowledge they were moving in for longer than the period of time, any contract would give them per grace period, I was like, "Okay, mom, you don't have to return the money, don't worry about it."

Then when they decided to pursue it even further on up to the New York Supreme Court, it surprised me. It's like, "well, you kind of knew what you were getting into when you were told that by the first court that it's buyer beware. There was no damage done. Your reputation wasn't harmed in any way, your ability to move in wasn't harmed in any way. Why should you want to not move into the house?" 

RAY: Ellis Realty was released from the suit, but Stambovsky still pursued getting the money back from Helen Ackley. Insisting that he had never been informed of the spirits before closing, a claim which was disputed. 

Cynthia: Actually, I remember her telling them off hand. I don't think Mr. Ellis actually put anything out, but whether it was haunted or not. Like I said, a lot of people in Nyack especially have haunted houses. Mom's, this was the first one to get notarized, but Mrs. Stambovsky had said something to the effect that, "This is going to be a beautiful place to raise our family," and my mom's comment was, said something to the effect of, "I'm sure the ghosts will really love having young children here."

That was the only time that I know she mentioned ghost and it was just an offhanded remark and my two younger children were five and eight. They had all grown up, even my children grew up knowing there were ghosts in the house.

Richard: My father was the real estate broker in our office. Mrs. Ackley had called the office and he spoke to her. She told him she had heard the good news that the contracts of sale was signed by the Stambovsky's. The contracts and the down payment check were with Mrs. Ackley's attorney.

She called our office and spoken to my father that she was not going to sign her end of the contracts until the Stambovsky's were told about her ghosts. My father to spoke to me and I spoke to our agent about it. Our agent very cautiously called Jeff Stambovsky.

It was during the day, perhaps he was at work. She had told him that the owner claims that she has a ghost in her house. I remember distinctly she said that he laughed and said, "We'll have to call the Ghostbusters."

I remember that distinctly. I believe 100% that Jeff Stambovsky was told about the ghosts and he laughed about it. Then we told Mrs. Ackley that we told him about it and then she signed the contract. That was important to her and I don't know why, but that was important to her that we, her representatives, tell the Stambovsky's about the ghosts, and we did that.

RAY: We reached out to Jeffrey Stambovsky, but he declined to be interviewed for this episode.

“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?"

Applying the strict rule of caveat emptor to a contract involving a house possessed by poltergeists conjures up visions of a psychic or medium routinely accompanying the structural engineer and Terminix man on an inspection of every home subject to a contract of sale. 

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 be expected to even contemplate.”

Neil: The Stambovsky decision is really unusual. It's unusual because the majority of the judges said, "Okay, ordinarily, caveat emptor apply but in a spirit of fairness--" and the way lawyers say that is, "An equity court--" and what that is, is a reference to ancient courts that supplemented legal courts by taking certain kinds of Maxim's of fairness and some rules of fairness, and if you wanted to, you could have your case heard in equity court, or you could have it heard in a court of law.

Almost everybody's abandoned these equity courts now all over the world but when judges want to-- Remember, these judges are humans. They're going, "That's not fair. She sold him a house, but actually, what she really sold him was a house and a reputation of the house, and because she sold him the reputation as well as the house, she didn't say a damn thing about the reputation, she engaged in what the court called, active concealment. In the interest of fairness, following the principles of equity law, we saw that in this case, caveat emptor doesn't apply."

Neil: We're not just going to say that the person responsibility to figure out what kind of house is this? What kind of reputation does it have? We're going to say, "Is it really realistic to expect a person to know what's in Reader's Digest and remember what the stories said even if they are familiar with the Reader's Digest? Is it really fair to expect a person from New York to know what's happening in Nyack?" [chuckles]

Incidentally, I think that this case just in terms of poltergeist, this case when the judges say, "As a matter of law, this house is haunted." What they mean by that is we're not going to allow a seller to say, "Well, we're just kidding." We're not because she took $3,000 from Reader's Digest. She's also had newspaper interviews and she's had these house tours in the community so she has behaved as if there are poltergeist. Therefore, we're going to hold her to it.

Therefore, as a matter of law, not because we're saying there are poltergeists in the house, but as a matter of law, we're going to base our decision on the fact that she was selling one kind of house to him given what he knew or at least claims to know. She actually had a different house. She had a house and she also had a house that was haunted. Haunted by reputation whether there's poltergeists, we leave it to you.

Neil: The reputation of that house is crucial to its value. Now, she says, and the court records I saw says they recognize that she said that we mentioned it to him. I don't think the court believed her. If the court believed her, then he has no case. The court didn't believe her.

Now, they don't say in the decision why they didn't believe her. I don't know. I think one thing that happens in a situation like that, she has every reason in the world after the fact to say, "Well, we told him." If she had had a diary and she had said, "On this date, we mentioned to him that this is a ghost house."

If she had any kind of evidence only other than just her saying that she remembers telling him, I think this case would've been decided very differently. 

Richard: It was ridiculous. As I've told you, I have reason to believe that ghosts may exist, but to hold a realtor responsible to having disclose that a seller, let's say, it's something that-- I'm not saying, Mrs. Ackley at all. If you had a listing, and there's some very eccentric person who claims they have a ghost, that you then have to make a big deal to a potential buyer and disclose that when it's something that you can't even measure for a fact exists, it was ridiculous.

That's why after that went into law that a realtor had to disclose a ghost as they would a leaky roof or faulty furnace. That was in law for about six months until Governor Mario Cuomo left office and when Governor Pataki became governor of New York state, that was thrown out. At that point then, realtors did not have to disclose ghosts again. I thought it was absurd to make that law.

Neil: You have to have some cajones to say that as a judge because you know that American Law is consistent with caveat emptor, so you're really sticking you're really sticking your nose out. One thing judges don't like, and that's to be overturned because when they're overturned, it's basically saying, "What are you smoking, judge? What are you doing?" It's going to be a rare judge who has the strength, the personality, that they're going to take a legal principle like caveat emptor and just say, "Well, in this case, it doesn't apply." That's what they did here.

RAY: But to Helen Ackley, ending up in law books didn’t spook her. 

Cynthia: She was proud that it was the first legally-haunted house. She put that as a sign that things are progressing in the world that there are things out there that we know nothing about. We shouldn't be so closed-minded as to to think just because we don't know anything about it, we should fear it.

She never feared living there, she didn't think and she'd admit that ghost stories and sometimes people have terrible problems with the supernatural, but if you go into it with a feeling that things can be worked out, they usually can. When she felt the presence when she was looking out the dining room window, talk it over, things can work out in the long run.

Richard: What happens after the lawsuit in the early '90s with the Ackley's and the house went back on the market, everyone knew of the lawsuit and whatnot and the house sold within a couple of months. Actually, it might've been four months. It sold very quickly after the publicity.

Richard: Houses may have a feeling that one gets when one goes into them and that may be from house that's run down might feel scary. A house that's bright and light and a lot of windows might feel very cheery. Sometimes, I think that one gets a feeling based on the structure and the way it's set up.

I think sometimes if you believe in ghosts, maybe you have to feel it, you have to be open to feeling it, certainly to yourself if not outwardly to others. If maybe you feel it, you're going to see that. I think that from a professional point of view, realtors have to be honest and fair, but I don't see any reason why one would have to disclose if a ghost exists in a house based on what a seller may say. I would just say caveat emptor. [laughs] Beware and ask a lot of questions. Think if you're going to buy a house. There you go.

Cynthia: It's hard to see if you can't make out any features or anything like, there's a real person standing there. You can just see shadows of hands and so, yes.

It's a mixed blessing of feeling towards it. It's like, "Well, it looks like everybody showed up to say goodbye to her, but did she gone in to live with them or did she go on to other places?" It's one of those things that you ponder and can never find the answer.