The Ghost Clause: When a Haunted House Went to Court

In 2012, an unusual legal case emerged from the unassuming suburban sprawl of Toms River, New Jersey. It began, as so many stories of hauntings do, with the promise of a fresh start. Josue Chinchilla and his fiancée, Michele Callan, along with their two children, moved into a rented home at 100 Terrace Avenue. What they claimed to encounter there, however, would soon take them from unpacking boxes to packing their case for arbitration.

From the very beginning, the house seemed wrong. Lights flickered with no discernible electrical fault. Doors slammed shut when no one was nearby. Most chillingly, they began to hear voices—sometimes just whispers, but with an eerie clarity that suggested intent. On one occasion, the voices reportedly murmured the phrase “let it burn,” a sinister utterance that deepened the couple’s alarm. At first, they tried to dismiss it. These things, after all, could be explained: faulty wiring, a draught, the anxiety of adjusting to a new place. But the disturbances grew more persistent—and more personal.

One night, Chinchilla claimed the bedclothes were violently pulled from him while he slept. On another occasion, Callan reported seeing a shadowy figure—what she described as a dark apparition—lurking in the bedroom. The couple’s two children were also in the house during this time, and though their specific experiences were less publicised, the presence of children naturally raised the stakes. The fear wasn’t just unsettling—it was, in their view, unbearable. They fled the property after just a few weeks and made their next move not through a medium or a priest, but through the legal system.

Chinchilla and Callan filed a formal complaint seeking to break their lease and recover their $2,250 security deposit, arguing that the home was uninhabitable due to paranormal activity. It was, by any legal measure, an extraordinary claim. While “uninhabitable” usually refers to issues like mould, structural faults, or lack of heating, they argued that a spiritual threat rendered the property equally unsafe.

Their landlord flatly rejected the claim, suggesting the entire haunting was a fabrication. In his view, the couple simply couldn’t afford the rent and were now concocting an elaborate excuse to break the lease without penalty. He noted that he had rented the home out without issue for the past ten years, and no other tenants had reported any unusual disturbances. For him, it was a clear case of buyer’s remorse dressed up in bedsheet horror.

But Chinchilla and Callan were not alone in their belief. The case drew immediate attention from both local media and the wider public. The Asbury Park Press reported extensively on the unfolding story, documenting the couple’s allegations and the sceptical reaction of the landlord. The press painted a vivid picture of escalating fear: whispering voices, ghostly figures, and sleep disrupted by invisible hands. The haunting had all the hallmarks of a classic American ghost story—but now it was being tested against contract law.

Adding to the drama were two independent paranormal investigation groups: the Shore Paranormal Research Society and NJ Paranormal Investigators. Both groups inspected the property and came to a broadly similar conclusion—that there was indeed evidence of paranormal activity. One investigator declared it to be “the site of an active or intelligent haunting,” suggesting that whatever resided in the house was not residual energy or imagination, but something with intent.

Of course, that begged a further question—what if the ghost hadn’t been there before? What if, as some speculated, Chinchilla and Callan had brought the ghost with them? If the haunting was not tied to the property but to the tenants themselves, then the landlord could hardly be held responsible. The issue of origin took on legal weight, too. If the landlord knew the property was haunted—or had reason to suspect it—he might arguably have had a duty to disclose it, just as he would be required to reveal a history of flooding or a faulty boiler. But if he didn’t know, and especially if the house had never caused problems for previous tenants, then there was little basis for voiding the lease.

It was a classic case of legal responsibility meeting metaphysical uncertainty. How do you prove a ghost? And if you can’t prove it, can you still act upon your belief in one?

The case soon took an unexpected turn. Rather than proceeding through a traditional court, both parties agreed to resolve their dispute on the American television programme The People’s Court, where binding arbitration is carried out before a live audience. Though the format is designed for entertainment, the rulings are real and legally enforceable. The judge presiding over the matter was Marilyn Milian, a qualified attorney with a firm but sympathetic courtroom demeanour.

On national television, the couple laid out their experience in detail: the slamming doors, the flickering lights, the whispering voices, the shadow in the bedroom, and the terrifying moment when bedclothes were pulled from the sleeping Chinchilla. They also presented the now-famous video footage captured by ghost hunters, which showed bowling pins inexplicably toppling over—a kind of homegrown paranormal experiment meant to catch the spirit in the act.

Judge Milian listened patiently, even expressing sympathy for the couple’s fear. She made clear that she did not doubt their sincerity. They may well have experienced something deeply unsettling. But sincerity, she said, was not enough. The legal system requires objective, verifiable evidence when deciding whether a property is unfit for habitation. The video of the bowling pins, eerie though it may have been, was not sufficient proof. It could have been the result of vibration, a minor tilt in the floor, or even a staged event. Without measurable harm or physical defect, the lease could not be undone.

She ruled against the couple. The haunting, such as it was, did not constitute a legal reason to cancel the rental agreement or to return the deposit. The fear was real, perhaps—but fear alone, without proof, did not pass the threshold required by housing law.

The fallout was predictably divided. Some viewers sympathised with Chinchilla and Callan, pointing to their fear and the validation of paranormal investigators. Others dismissed the case as a frivolous attempt to escape financial obligations. The landlord, for his part, remained adamant that the whole affair had been a fabrication—an elaborate excuse built on flickering lights and the power of suggestion.

But beneath the media frenzy and late-night jokes, the case raised genuine legal and ethical questions. Should landlords be required to disclose a property’s ghostly reputation, if it exists? In some jurisdictions, like New York State, the answer is yes—especially if the home is widely known to be haunted, as established in the landmark “Ghostbusters ruling” (Stambovsky v. Ackley, 1991). In New Jersey, however, no such requirement exists. Unless a haunting has been officially recorded or the property has a documented history of supernatural claims, the landlord has no obligation to disclose what some might consider superstition.

And what of the investigators who supported the couple’s claims? Their findings were not enough to sway the legal process, but their presence underscored how many people take these experiences seriously. The suggestion that the haunting might have been “intelligent” introduced a narrative of sentience—something more than mere creaks and groans. And if true, it raised an even more troubling idea: that spirits could follow families, not houses, and that legal remedies might never be enough to stop the haunting.

Ultimately, the Toms River case remains a modern folktale wrapped in legal proceedings. It stands as a reminder of how difficult it is to litigate the invisible. For a justice system built on evidence, the spirit world presents a particularly vexing challenge. And for tenants who believe they are living alongside the dead, it’s a lonely battle between emotion and enforceable law.

In the end, the house at 100 Terrace Avenue was not declared haunted by any court. The deposit was not returned. The law, as ever, asked for proof—and the ghosts, as ever, refused to appear.

You can listen to the full episode Haunted Houses on Trial: Ghosts, Wills And Real Estate With Naomi Ryan here: 

https://www.podpage.com/haunted-history-chronicles/haunted-houses-on-trial-ghosts-wills-and-real-estate-with-naomi-ryan/ 

You can watch the episode featuring this case here : https://www.youtube.com/watch?v=PvNwvsCbDr0