In Extremis: House on Haunted Hill and the Fine Print on Contests

Disclaimer: This review is for entertainment purposes only and contains no legal advice. If you find yourself holding a loaded gun locked in a haunted mansion with a prize on the line, bring a carrier pigeon to contact your lawyer for advice. This review also contains SPOILERS; so if you were not alive when either of these films were released, based on our demographics, kindly observe them before reading. Its the shiver and shake, quiver and quake picture of the year! [That was an actual tagline]

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House on Haunted Hill is a 1959 horror classic. Not to be confused with the 1999 or 1959 versions of The Haunting, both based on the novel The Haunting of Hill House, by Shirley Jackson. Maddening, isn’t it?

The film is also in the public domain, so you can watch the entire thing here for free:
 

A minute and a half into the film Vincent Price lights up the screen and I was buckled in for some thrills and chills. You have heard the plot in about every parody of a horror film. Five guests stay in a supposedly haunted mansion overnight. If they make it twelve hours they’ll receive $10,000!!! That may not sound like a lot, but it would be $86,594.16 with inflation.* Unlike in the remake, Price jokes that he will give the money to the guests next of kin in case they don’t survive. 

The film has creepy atmosphere, lots of Theremin, and some of the worst effects I have ever seen (they tried at least). It is also fairly upsetting to watch a film premised on the concept of a psychologist that diagnoses “Hysteria.” The American Psychiatric Association stopped using that term in 1952 when they published the Diagnostic and Statistical Manual of Mental Disorders.** That same doctor has the line “Nora I think you’re a little upset, would you care for a sedative?” It would take a whole team of sexists to write the amount of gas lighting in a movie like this!***

It also originally featured the “Emergo” effect in which a skeleton on a line would appear to audience members in real life, and look like it was being controlled by Vincent Price on screen.

UTTERLY TERRIFYING…

But you did not come for a film review… you came for the hot legal takes that no one cares to write. So first off – is this competition legal?

Maybe.

First you must determine if this is a contest, a sweepstakes, or an illegal lottery:

• In a Contest, the winner is determined on merit. Skill is required unlike in the other two types of promotions.

• In a Sweepstakes or Giveaway, the winner is chosen at random or by chance. There is no need to pay with time or money to enter. There is no skill necessary, and is all based on probability and odds.

• A Lottery is a sweepstakes where you pay to enter. If there is even a minimal fee to enter then it begins to look like a lottery. Only State agencies can run any kind of lottery. A promotion is a lottery if it has all three of the following:

1. Some type of consideration (monetary or non-monetary; this could include significant time or effort the contestant contributes to win the prize)

2. An element of randomness/ chance

3. A prize****

This is not a lottery, as there is no real element of chance. You do not need to pay to enter, as Frederick Loren (Vincent Price) chose these specific people to enter freely, however it can be argued that the time and effort of staying in a house overnight might meet the test for non-monetary consideration. There is a prize of $10,000 each. However, this is not random or chance; you decide to stay in the house overnight and you win.

You can’t even get out as you are locked in at midnight. This also suggests it is not a contest per se, as there is no element of skill, unless we consider staying alive the skill. (But, if you’ll recall, Mr. Loren says he will give the money to your next of kin). Finally, this is not a sweepstake as there is no element of randomness as discussed above. So, what is this?

I would argue that in the 1959 film it is a gift with conditions, called an “onerous gift.” Because there are conditions attached to receiving the gift it in fact looks more like a contract. To have a valid contract you need: an offer, acceptance, intention, and consideration. Also, the parties must have capacity to contract. 

A contract is however illegal if it involves committing a criminal act or a civil wrong or acting against the public interest. ***** In this case Mr. Loren is trying to contract with witnesses as an alibi, in aid of his plan to murder his wife. That is an illegal purpose. However, the guests do not know this. They think they are just in a contract to stay in the house, with the caveat that they must stay alive or their money is split with the other guests and/or their next of kin – there are conflicting lines about whether the families inherit the money or the other guests split the pot. It is not illegal to stay alive in a house, and their actions may not directly cause an illegality. The court may have a debate once the guests are given handguns in cute little coffins whether or not the contract took on an illegal nature; but we are in the United States…

 

We have only talked about one of our two films. We have a whole remake of troubles to discuss. I want to tell you about the “happy” ending of House on Haunted Hill (1999). This movie takes everything interesting about the first and reduces it to ghost ashes. The film has the same general premise: 5 people invited to a haunted house and if they can stay the night then each of the guests get 1 million dollars!

And that was 1999 money. But please if you have not seen the trailer, do watch it below, both for the PS2 graphics and the narrator getting the number of guests wrong:  

The movie also plays Marilyn Manson’s Sweet Dreams twice, VERY LOUDLY, to not so subtly express that the characters are desperate for money and that some people want to use them.

So, unlike the original where most of the cast survive, only two can make it out alive. The house is alive and trying to kill the descendants of the 5 survivors of a fire started by the patients of an asylum… did I mention we were in an asylum, so it isn’t really a house on haunted hill. Anyway, two of the cast survive and they happen to be one person who pretends she is one of the guests on the list and one person who was adopted. A fact he screams that out before being saved from the ghost hybrid of all the dead souls consumed by the house. This film is just as great as it sounds…

Note that I did not create this clip.

The two surviving guests find five checks made out to cash for 1 million dollars each. Wow, what luck?! They must be on cloud nine. If they can only get down from the top of the House/Asylum/Castle they are stuck on.

Except they have to pay taxes on that. We aren’t told where the movie takes place, but let’s pretend it takes place in California as most of the movie was filmed there. Assuming they split the money equally, each would have to pay 1.2 of their 2.5 million in Federal, Federal Insurance Contributions Act Tax, and State taxes. ****** That is because the money would be considered a prize and tasked as a portion of their regular gross income. There is no personal income tax in Florida, but only one scene was filmed there, and everyone seemed too sane for it to be Florida.

Also, outside of reporting to the IRS, there are reporting laws under the Bank Secrecy Act of 1970. ******* It is necessary for banks to report total daily transactions that exceed $10,000 and report suspicious activity that may signify money laundering, tax evasion, or other criminal activities. ********

These two characters are depositing five checks worth $1 million. We are told one of them is an ex-professional athlete, and the other character is an assistant to a Hollywood producer. While these could be people that make reasonable amounts of money, after the second transaction of $1 million an eyebrow or two might be raised.

While it is not illegal to deposit a large amount of money, the FBI or police may wish to investigate the source of that money, and upon finding that the Amusement Park mogul and his wife who issued the checks are missing and presumed dead, then I don’t have to tell you who the prime suspects are.

But can the government seize that money from you? Yes and No.

The Supreme Court of the US dealt with this issue in United States v. Bajakajian.********* In that case, a Syrian business person tried to take $345,000 out of the United States in his suitcases without declaring it to US customs. He plead guilty, however the customs agents attempted to seize the entire amount as proceeds of crime. The case went to the Supreme Court of the United States eventually, who determined it was grossly disproportionate to allow the seizure of the entire amount based on the offence. But in that case Mr. Bajakajian earned his money, and it was in no way connected to a crime. Our protagonists in this film won it from some mysteriously dead millionaires; and unless the house eats the police as well, they are going to find handguns inside that have been fired by our lead heroine. While not 100% proof she was involved in their murder, she might be a more believable suspect then bad CGI killing Mr. and Mrs. Price.

So how do the two films compare critically? Watch the original and skip the 1999, unless you get twinges of nostalgia from films like Thirteen Ghosts (2001). There is not one real scare (jump or atmospheric), Geoffrey Rush almost dies from how much of the scenery he ate, and the volume on the SFX and music are much higher than the dialogue, so you end up listening on max volume with subtitles, and every 5 minutes your downstairs neighbours scream at you because it sounds like Slipknot lit an axe body spray on fire at a dynamite factory. There was only one ridiculous death and it was a man stabbed through the neck with five pencils in the first five minutes of the film. I’d skip this one unless you are a Taye Diggs completest. If you do watch then please stay for the black and white torture scene after the credit... it is not worth it.

I give the 1959 film a 6/10 for legal realism (it has a few problems, but at least Vincent Price is alive to pay the guests) and an 8/10 for watchability. I give the 1999 film a 2/10 for legal realism (I did not even get into the issues with the asylum, the theme park, and the conspiracies to commit murder) and a 3/10 for watchability.

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* https://www.usinflationcalculator.com/
** Richard Webster, “Hysteria, medicine, and misdiagnosis”, from Why Freud Was Wrong: Sin, Science and Psychoanalysis (Revised edition, Harper Collins 1996). Published 2004, accessed online July 24th, 2018. <http://www.richardwebster.net/freudandhysteria.html>
*** Gaslighting as you may know is a term that developed from a play and later a film (Gaslight (1944)). It is the systematic psychological manipulation of a victim by a perpetrator to destroy another’s perception of reality. In this film, the psychiatrist, Dr. David Trent, and his lover, Annabelle Loren, gaslight Nora, the heroine, into shooting Frederick Loren (unfortunately for the two plotters, the gun was full of blanks).
**** Shannon Montgomery, “Social Media Giveaways: What Are the Rules?” November 20th, 2017, Accessed online July 24th, 2018. <https://montgomerypllc.com/social-media-giveaways-rules/>
***** American Bar Material, Chapter Nine Contracts and Consumer Law. Acces on July 24, 2018. <https://www.americanbar.org/content/dam/aba/migrated/publiced/practical/books/family/chapter_9.authcheckdam.pdf>
****** https://smartasset.com/taxes/california-tax-calculator#yvuEW6Gd95 – This was calculated using the 2017 tax year. Tax rates have definitely fluctuated since 1999. I found the following two tables for 1999, which I will not be calculating due to the fact I am not a tax professional: <https://www.irs.gov/pub/irs-prior/i1040tt--1999.pdf> ; <https://www.ftb.ca.gov/Archive/Forms/1999/99_rate.pdf>
******* Bank Secrecy Act - 31 USC 5311 - 5330 <https://www.gpo.gov/fdsys/pkg/USCODE-2012-title31/pdf/USCODE-2012-title31-subtitleIV-chap53-subchapII-sec5311.pdf>
******** RESTRICTIONS ON LAUNDERING OF UNITED STATES CURRENCY Pub. L. 100–690, title IV, §4702, Nov. 18, 1988, 102 Stat. 4291, as amended by Pub. L. 103–447, title I, §103(b), Nov. 2, 1994, 108 Stat. 4693, §  (f) “Definitions” (2) <https://www.gpo.gov/fdsys/pkg/USCODE-2012-title31/pdf/USCODE-2012-title31-subtitleIV-chap53-subchapII-sec5311.pdf>; 12 CFR 21.11 - Suspicious Activity Report
https://www.law.cornell.edu/cfr/text/12/21.11; Meltzer, P. E. (1991). "Keeping Drug Money from Reaching the Wash Cycle: A Guide to the Bank Secrecy Act". Banking Law Journal. 108 (3): 230–255
********* UNITED STATES v. BAJAKAJIAN, 524 U.S. 321 (1998); (96-1487) 84 F.3d 334, affirmed. <https://www.law.cornell.edu/supct/html/96-1487.ZO.html>