Liabilities of the A/HB builders

[Tom-D]

how much should any builder worry about selling any home built EXP aircraft they built?

 

[PW_Plack]

Perhaps lawyers will weigh in, but I don't think there's ever been a successful lawsuit against an original builder by a subsequent owner.

It doesn't mean you couldn't be sued by some greedy widow who can't bear to think her late husband was capable of pilot error. But it probably means no law firm would take her case on a contingency basis.

 

[Geico266]

Perhaps lawyers will weigh in, but I don't think there's ever been a successful lawsuit against an original builder by a subsequent owner.

It doesn't mean you couldn't be sued by some greedy widow who can't bear to think her late husband was capable of pilot error. But it probably means no law firm would take her case on a contingency basis.

Paul has it right. None. Period.

This subject has brought up time and time again. Thousands of experimentals are bought and sold each year. There has never been a succesful law suit against a builder or their heirs for liability.

The EAA has many forms that, when used, will protect any seller / builder from being sued. In fact I believe if you use their forms ( bill of sale, liability waiver form) they will defend against law suits.

The bigger question is how many sellers of certified planes have been sued due to liability / misrepresentation of condition of the aircraft? I know of a 120 that was sold right after annual and it had corrosion so bad from mice crap it was grounded here until the skins and ribs could be replaced. Buyer sued A& P and won. A&P lost his license.

 

[Geico266]

The John Denver case is held up by many as "the case" in which a builder was sued and lost. Not true. The heirs of John Denver sued Aircraft Spruce and they settled out of court. That is not the same as "winning" a law suit in a court of law. There was no finding of fault or negligence on the part of the builder or parts supplier.

The facts are John Denver was a reckless pilot who did not know the new ( to him) airplane and how to operate the fuel control valve before heading out and flying over water.

Tom D, you know this, but you continually bring up the negativity and "liability scare" in a vain attempt to make certified planes more safe legally than experimentals. The facts are experimental are carrying piston GA, and will continue to do so as certified planes die a slow death. Maybe, you should look at experimentals as a way to improve your business and offer to do annuals for those who bought and did not build. Why not go with the flow?

 

[RotorAndWing]

Avweb has an interesting article on this subject.

 

[Geico266]

Avweb has an interesting article on this subject.

The article was written in 1999. I don't see the court rooms filling up with liability law suits in the nearly 15 years since this was written.

"Recently, a prominent insurance claims executive expressed an opinion at an Aviation Law and Insurance Symposium that homebuilt aircraft liability litigation will be a growth industry during the next decade because of the proliferation of amateur-built aircraft and the likelihood that there will be crashes"

Time to start reading newer more up to date info.

 

[weilke]

I wonder whether that will hold up the first time an Epic built by a serial builder and loaded with aspiring investment bankers spikes in.

The lady whose husband got killed by the Lancair IV-P on a beach in Hilton Head sued everyone in sight under a product liability argument. That included Continental, Hartzell, Penn Yan and the builder of the plane. Now, in this particular case, the builder also happened to be the pilot of the plane, but given the product liability argument of the suit, there is no doubt in my mind that the original builder would have been part of it had the pilot acquired the plane rather than built it.

You as the purchaser or seller of a plane can execute any EAA provided paper you want, it won't restrict an injured third party from suing the original manufacturer.

The reason this hasn't been much of an issue is that most experimentals are relatively lightweight pieces that dont have much potential to harm a third party. Usually when they crash, all they cause is fire damage to a quarter acre of corn or soybeans. With any of the larger turbine powered aircraft like Epics and CompAirs, this will become an issue eventually.

 

[poadeleted20]

The lady whose husband got killed by the Lancair IV-P on a beach in Hilton Head sued everyone in sight under a product liability argument. That included Continental, Hartzell, Penn Yan and the builder of the plane.

Did this case go to trial? How did it turn out?

 

[RotorAndWing]

The article was written in 1999. I don't see the court rooms filling up with liability law suits in the nearly 15 years since this was written.

"Recently, a prominent insurance claims executive expressed an opinion at an Aviation Law and Insurance Symposium that homebuilt aircraft liability litigation will be a growth industry during the next decade because of the proliferation of amateur-built aircraft and the likelihood that there will be crashes"

Time to start reading newer more up to date info.

There is interesting information in that article, apparently some of the info ruffles your feathers.

Only a fool would proclaim "There has never been a succesful law suit against a builder or their heirs for liability" and think that one couldn't be launched tomorrow. While a builder may prevail in such a lawsuit it still must be defended, and last time I checked lawyers don't work for free.

 

[Geico266]

There is interesting information in that article, apparently some of the info ruffles your feathers.

Only a fool would proclaim "There has never been a succesful law suit against a builder or their heirs for liability" and think that one couldn't be launched tomorrow. While a builder may prevail in such a lawsuit it still must be defended, and last time I checked lawyers don't work for free.

I could file a law suit against you tomorrow for posting that picture as your avitar. That is the country we live in. It will cost you money to defend yourself. That is our legal system.

What ruffles my feathers is the way our country has become paralyzed by the totally unfounded fear of liability law suits.

Lawers need to get paid, and they are not going to sue someone with little of no assets. The defendant will just to BK and sioe out the judpgement. If anyone is worried about a liability lawsuit get insurance.

 

[poadeleted20]

I could file a law suit against you tomorrow for posting that picture as your avitar.

Technically, I believe that is not true because you lack standing to do that. However, the party which holds the rights to that poster might be able to do it, and if that were to happen, yes....

It will cost you money to defend yourself.

 

[Geico266]

Technically, I believe that is not true because you lack standing to do that. However, the party which holds the rights to that poster might be able to do it, and if that were to happen, yes....

Wrong Ron. "Standing" can only be determined by a judge, in court, after the law suit has been filed.

The avitar law suit was an example Ron. I'm pretty use can extrapolate that example into other areas of aviation and get my point.

 

[RotorAndWing]

I could file a law suit against you tomorrow for posting that picture as your avitar. That is the country we live in. It will cost you money to defend yourself. That is our legal system.

What ruffles my feathers is the way our country has become paralyzed by the totally unfounded fear of liability law suits.

Lawers need to get paid, and they are not going to sue someone with little of no assets. The defendant will just to BK and sioe out the judpgement. If anyone is worried about a liability lawsuit get insurance.

OK, but one needs to be clear on that. Trying to say no one can win a lawsuit against a builder of an EAB is foolish at best. If someone wants to build an EAB then sell it they need to be aware that yes, they can be sued, and law suits are very expensive to defend. He may prevail but will be broke doing so.

 

[weilke]

Did this case go to trial? How did it turn out?

All I can tell from the dockets is that they are still peppering each other with 'motions to dismiss' and 'motions to stay', latest order was entered on 7/5/13, they are going on three years with this now including various appeals already.

The lady filed her suit in federal court in three jurisdictions. South Carolina where the tort happened, Delaware where one of the defendants is incorporated and Alabama where they actually have their operations.

The cost just to keep responding to motions in three different jurisdictions must be in the tens of thousands.

 

[Geico266]

OK, but one needs to be clear on that. Trying to say no one can win a lawsuit against a builder of an EAB is foolish at best. If someone wants to build an EAB then sell it they need to be aware that yes, they can be sued, and law suits are very expensive to defend. He may prevail but will be broke doing so.

True, but like I said anyone can file a law suit. Prevailing is another matter.

 

[weilke]

If anyone is worried about a liability lawsuit get insurance.

Is product liability insurance for experimental builders available ?

Serious question.

 

[RotorAndWing]

Lawers need to get paid, and they are not going to sue someone with little of no assets. The defendant will just to BK and sioe out the judpgement. If anyone is worried about a liability lawsuit get insurance.

Really??

What insurance is available to the builder of a EAB to protect himself for product liability?

 

[Geico266]

All I can tell from the dockets is that they are still peppering each other with 'motions to dismiss' and 'motions to stay', latest order was entered on 7/5/13, they are going on three years with this now including various appeals already.

The lady filed her suit in federal court in three jurisdictions. South Carolina where the tort happened, Delaware where one of the defendants is incorporated and Alabama where they actually have their operations.

The cost just to keep responding to motions in three different jurisdictions must be in the tens of thousands.[/QUOTE]


As it would be for any product liability law suit.

 

[RotorAndWing]

True, but like I said anyone can file a law suit. Prevailing is another matter.

Spending $100,000 to win is very likely. If you are sued you can either defend yourself or do nothing. Ask a lawyer what doing nothing will get for you.

 

[Geico266]

Spending $100,000 to win is very likely. If you are sued you can either defend yourself or do nothing. Ask a lawyer what doing nothing will get for you.

You are being trapped by the liability lawsuit hesteria, and perpetuating the myth and unfounded fear to future pilots and home builders that does not exist.

If you are concerned about liability claims against your estate get insurance. A million dollar liability rider costs me a whole $150 (I think) a year.

 

[weilke]

As it would be for any product liability law suit.

That is why the decision to get into producing a product has be a very deliberate one. If you are continental and you make money from selling engines, responding to those suits and filings is the cost of doing business. If you are a manufacturer of a single item of your product and you didn't make money on it in the first place, spending 10k here or 10k there to retain lawyers in different states just to avoid getting slapped with a default judgement adds up to real money pretty quickly.

If you dont have anything in your name, your kids college education is financed in their names and your retirement assets are judgement proof, well maybe you can assume a product liability risk.

 

[weilke]

If you are concerned about liability claims against your estate get insurance. A million dollar liability rider costs me a whole $150 (I think) a year.

Does your excess liability insurance policy include product liability ?

I would have to look at my policy, I do remember that it excludes any professional liability and liability from commercial activities.

 

[Geico266]

Spending $100,000 to win is very likely. If you are sued you can either defend yourself or do nothing. Ask a lawyer what doing nothing will get for you.

Like I said, you can be sued in this country for just about anything, and you would have to defend yourself. This fact is not exclusive to airplane liability, it is a fact of life living in this country.

 

[kyleb]

The annoying part of this thread is that Tom knows the answer and is trolling in hopes of starting an argument.

Must be a slow night on the West Coast.

 

[weilke]

Like I said, you can be sued in this country for just about anything, and you would have to defend yourself. This fact is not exclusive to airplane liability, it is a fact of life living in this country.

Most of those risks can be covered by insurance, often for little money. Product liability is expensive enough to insure for a commercial entity, for a private party I doubt that it is even available.

 

[Geico266]

Most of those risks can be covered by insurance, often for little money. Product liability is expensive enough to insure for a commercial entity, for a private party I doubt that it is even available.

Exactly, but the homebuilder would not be involved in a product liability, or at least be "excused" from a product liability suit.

 

[Geico266]

The annoying part of this thread is that Tom knows the answer and is trolling in hopes of starting an argument.

Must be a slow night on the West Coast.

Same old tired excuses, stories, and fear mongering.

 

[weilke]

Exactly, but the homebuilder would not be involved in a product liability, or at least be "excused" from a product liability suit.

How so ?

Is there any legal concept that ensures this ? Not examples of someone being dropped along the way (in favor of a deeper pocket), an actual legal rationale why someone who is an amateur at building aircraft can't be held liable although he is listed as the manufacturer on a certificate of airworthiness.

 

[wabower]

Numerous examples of "landmark cases" or changes of policy or law exist within our system. Like the claim that "the tax benefits offered by our investments have been audited by the IRS many times over the years and have always been sustained" that was true for many years, but then wasn't.

You can probably look back in GA history and find a time when very few product liability cases were brought against manufacturers, and the premiums for such coverage were cheap (or much cheaper) than today. And some screwball precedent case law that nobody has yet discovered could affect the outcome of future decisions in a heartbeat.

 

[bbchien]

Paul has it right. None. Period.

This subject has brought up time and time again. Thousands of experimentals are bought and sold each year. There has never been a succesful law suit against a builder or their heirs for liability.

The EAA has many forms that, when used, will protect any seller / builder from being sued. In fact I believe if you use their forms ( bill of sale, liability waiver form) they will defend against law suits.

The bigger question is how many sellers of certified planes have been sued due to liability / misrepresentation of condition of the aircraft? I know of a 120 that was sold right after annual and it had corrosion so bad from mice crap it was grounded here until the skins and ribs could be replaced. Buyer sued A& P and won. A&P lost his license.

Terrible advice. You obviously get your legal advice from Sport Aviation, not an attorney. Uh. No. Ask the Adrian Davis Estate.

 

[Tom-D]

The annoying part of this thread is that Tom knows the answer and is trolling in hopes of starting an argument.

Must be a slow night on the West Coast.

Once in a while the topic comes up on a different web page and its pretty easy to link your opinions to them.

that is the reason for the question here I know there are a few sharp lawyers here. I do not pretend to be one, I do know that it has been discussed here many times.

Trolling? not really

 

[Dav8or]

Going forward into the future, the home builders need to concerned, but it's the kit manufacturers and the builder assist facilities that need to be scared. If I were Vans, I'd be doubling down on insurance right now. He may become the victim of his own success.

 

[poadeleted20]

You folks argue amongst yourselves to your hearts' content, but the lack of case law suggests it isn't a big risk for the average homebuilder, else there would be cases to be cited.

 

[Capt. Geoffrey Thorpe]

In October of 1998, Denver's children, along with his mother, Erma, filed a lawsuit in California Superior Court of Monterey County (Docket # M41378) against Imperial Eastman Corporation, Mark IV Industries, Gould Electronics, and Dayco Eastman, Wicks Aircraft Supply Company, Artcraft of Santa Maria and Van E. Snow. According to the complaint, Imperial, Mark IV and Dayco designed, manufactured, inspected, tested, produced, sold, distributed and provided warning, instruction, and after-sale product support of the systems, assemblies, parts or fuel selector valve on the Long-EZ. Wicks sold, distributed and supplied parts including selector valves. Artcraft painted and serviced the Long-EZ, while Van E. Snow and a number of "John Doe Defendants" were the prior owners and sellers of the plane, or were responsible for maintenance, service, inspection, modification and tests of the aircraft along with others. The case was settled in September of 2000.

Don't sell your airplane to a celebrity with a drinking problem and no medical. And, I suspect that it doesn't matters if your airplane is a homebuilt or type certified.

 

[wabower]

I'd argue that it suggests that pot hasn't been right to attract the players. Chris Ferguson doesn't play in neighborhood poker games for the same reason.

You folks argue amongst yourselves to your hearts' content, but the lack of case law suggests it isn't a big risk for the average homebuilder, else there would be cases to be cited.

 

[Geico266]

Terrible advice. You obviously get your legal advice from Sport Aviation, not an attorney. Uh. No. Ask the Adrian Davis Estate.

I get my legal advice on liability for selling experimentals aircraft from EAA.

First you tell me to check with John Denver's estate because you were sure there was a successful law suit there, and there was none. Now you want me to look up some other case to try and prove another point. Ain't biting,

There has never been a successful liability lawsuit by a buyer or their heirs for a experimental aircraft accident. Period.

 

[SoloEqs]

I am not a lawyer, and I don't play one on TV, but I see ways to mitigate your liability.

First, don't sell an Experimental aircraft in flyable condition -- take off a couple of major components, such as prop and an aileron, and NOTE IT IN THE LOGBOOK, then sell "as-is, no warranties implied." That forces the buyer to "make repairs" and log an inspection to get into the air.

Second, SEPARATELY incorporate major property (home, airplane, etc), then rent the items from those corporations, so that everything is compartmentalized. If the plane you just landed in a swimming pool is owned by "N12345, Inc.," anyone who sues can only win the assets of the corporation (one each soggy airplane) and your personal property (the change in your pockets when you swam to the steps). Likewise, if someone trips on your sidewalk and sues "123 Maple St, Inc.," the plane you fly isn't on the block.

To really make it fun, if you're a Commercial pilot, N12345, Inc., can HIRE you to fly their plane.

It's even better if you incorporate in another state (Nevada, Delaware, etc). This will cost a few dollars each year, but for important things it's worth it. There are some (simple) rules that you have to follow -- such as NEVER saying that you own any of those assets -- but this is how people with a lot of expensive stuff protect it.

This is also a good way to avoid probate, just issue corporate stock to the person you want to inherit an item.

 

[SoloEqs]

Don't sell your airplane to a celebrity with a drinking problem and no medical. And, I suspect that it doesn't matters if your airplane is a homebuilt or type certified.

In Denver's case, IIRC, he was flying from the front cockpit in a plane which is supposed to be soloed from the rear cockpit, and when he sucked one tank dry had to reach into the rear cockpit to get to the fuel valve.

That's a pilot-error situation, not any fault of the plane.

 

[wabower]

YGBSM

I am not a lawyer, and I don't play one on TV, but I see ways to mitigate your liability.

First, don't sell an Experimental aircraft in flyable condition -- take off a couple of major components, such as prop and an aileron, and NOTE IT IN THE LOGBOOK, then sell "as-is, no warranties implied." That forces the buyer to "make repairs" and log an inspection to get into the air.

Second, SEPARATELY incorporate major property (home, airplane, etc), then rent the items from those corporations, so that everything is compartmentalized. If the plane you just landed in a swimming pool is owned by "N12345, Inc.," anyone who sues can only win the assets of the corporation (one each soggy airplane) and your personal property (the change in your pockets when you swam to the steps). Likewise, if someone trips on your sidewalk and sues "123 Maple St, Inc.," the plane you fly isn't on the block.

To really make it fun, if you're a Commercial pilot, N12345, Inc., can HIRE you to fly their plane.

It's even better if you incorporate in another state (Nevada, Delaware, etc). This will cost a few dollars each year, but for important things it's worth it. There are some (simple) rules that you have to follow -- such as NEVER saying that you own any of those assets -- but this is how people with a lot of expensive stuff protect it.

This is also a good way to avoid probate, just issue corporate stock to the person you want to inherit an item.

 

[Geico266]

I am not a lawyer, and I don't play one on TV, but I see ways to mitigate your liability.

First, don't sell an Experimental aircraft in flyable condition -- take off a couple of major components, such as prop and an aileron, and NOTE IT IN THE LOGBOOK, then sell "as-is, no warranties implied." That forces the buyer to "make repairs" and log an inspection to get into the air.

Second, SEPARATELY incorporate major property (home, airplane, etc), then rent the items from those corporations, so that everything is compartmentalized. If the plane you just landed in a swimming pool is owned by "N12345, Inc.," anyone who sues can only win the assets of the corporation (one each soggy airplane) and your personal property (the change in your pockets when you swam to the steps). Likewise, if someone trips on your sidewalk and sues "123 Maple St, Inc.," the plane you fly isn't on the block.

To really make it fun, if you're a Commercial pilot, N12345, Inc., can HIRE you to fly their plane.

It's even better if you incorporate in another state (Nevada, Delaware, etc). This will cost a few dollars each year, but for important things it's worth it. There are some (simple) rules that you have to follow -- such as NEVER saying that you own any of those assets -- but this is how people with a lot of expensive stuff protect it.

This is also a good way to avoid probate, just issue corporate stock to the person you want to inherit an item.

This is exactly what NOT to do. In doing so you now exposed yourself to liability you were trying to avoid. This is according to the legal staff at EAA, not me. Call them, don't flame me.