Liabilities of the A/HB builders

wabower said:
Then maybe somebody who knows how to make those deals work might be handy to have around.
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Sure if they'll take the job for a percentage of the sale, sight unseen. ;)

My point was, just like certain things in my dad's Estate that were worthless, paying for an Attorney to work a deal, or an appraiser, before knowing if the sale will even pay their hourly rate, is a crap-shoot.

They would especially feel that way if they have no clue about aircraft.

One little BS story fabricated by someone close to them who says they might be liable for that "dangerous little airplane" in those circumstances, and they'd happily lock it in a barn and let birds poop on it for 20 years.

I suspect the right buyer with a touch of charisma and cash will still get the thing sooner or later. Maybe the poster. :)

Agreed with the other post where someone read the dates, too. That Estate is closed and through Probate after two years, most likely.

This type of thing used to make the sleaze bag aircraft broker I part-timed for, just drool.

Remember he was the guy who'd negotiate a price and then show up with a Cashier's check that was short $5K at the widow's front door.
 
Like most trades, a win-win is the simplest and most-likely solution. If the deal is truly worth-while for both, the problems can usually be overcome, assuming the buyer (in this case) is willing to devote a little time, energy and money to the project. If not, tire-kicking probably won't make it happen. ANFL.

denverpilot said:
Sure if they'll take the job for a percentage of the sale, sight unseen. ;)

My point was, just like certain things in my dad's Estate that were worthless, paying for an Attorney to work a deal, or an appraiser, before knowing if the sale will even pay their hourly rate, is a crap-shoot.

They would especially feel that way if they have no clue about aircraft.

One little BS story fabricated by someone close to them who says they might be liable for that "dangerous little airplane" in those circumstances, and they'd happily lock it in a barn and let birds poop on it for 20 years.

I suspect the right buyer with a touch of charisma and cash will still get the thing sooner or later. Maybe the poster. :)

Agreed with the other post where someone read the dates, too. That Estate is closed and through Probate after two years, most likely.

This type of thing used to make the sleaze bag aircraft broker I part-timed for, just drool.

Remember he was the guy who'd negotiate a price and then show up with a Cashier's check that was short $5K at the widow's front door.
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denverpilot said:
I suspect the right buyer with a touch of charisma and cash will still get the thing sooner or later. Maybe the poster. :).
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Well, hopefully but the trail grows colder by the minute.

The E-mails have been sent, the phone numbers are given, and no one calls.
 
..... I know of a woman who's husband passed away a couple of years ago having nearly completed a "cozy" kit. She and her son have been looking into selling the project but have come to the conclusion that they (her husband's estate) would be liable as the airplane's manufacturer for the life of the airplane. They are nearly final in their decision that their only "safe" alternative is to destroy the airplane. ....... I'd love to be able to help them "save" that airplane. .[/QUOTE said:
Tom.... Your endeavor is a wonderful thing....

Let's all of us put ourselves in the deceased persons position... You can bet he had a few thousand hours in the build and passed on with the thought on his mind of.. "what about my plane project,,,, what will happen to it."..If it were me on my deathbed I would LOVE to have someone continue it and get it flying....

To destroy it would be just like pi$$ing on his grave.... IMHO...

Ben.

Ps... Tom, if you need help in any way to gain possession of this project or to to load it up and ship it back to you to finish just let me know. I will help in a New York Minute...:yes::)
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What's the point of making an LLC the builder? If you're a sole member LLC the paper trail will eventually lead to you personally in the event the survivors of the buyer of your experimental decide to sue, right?

I'm no lawyer, I'm just trying to understand how these phantom incorporations insulate your personal financial lives from liability. I thought about incorporating my aircraft purchases but since I'm the sole operator of the airplane it became clear the creation of an LLC did not insulate me personally from liability if I crashed into something of value to someone else.
 
Hindsight, good question.

I think it's clear that, as you said, owning the plane through a corporation would provide you no liability protection if you are personally at the controls when you crash it. The corporation doesn't hold the yoke and throttle when the plane flies, you do.

I suppose that those who name a corporation as the builder of their amateur built planes are hoping that this problem would not apply. They aren't at the controls when a subsequent owner crashes it, but merely providing a service to the corporation that built the plane. Whether this protection is good enough, I don't know, but it seems to be a clever idea.
 
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NoHeat said:
Hindsight, good question.

I think it's clear that, as you said, owning the plane through a corporation would provide you no liability protection if you are personally at the controls when you crash it. The corporation doesn't hold the yoke and throttle when the plane flies, you do.

I suppose that those who name a corporation as the builder of their amateur built planes are hoping that this problem would not apply. They aren't at the controls when a subsequent owner crashes it, but merely providing a service to the corporation that built the plane. Whether this protection is good enough, I don't know, but it seems to be a clever idea.
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The IRS considers single-member LLCs as disregarded entities, which is to say they're not considered LLCs at all. This may or may not have probative value in product liability case, but from where I sit if the point of the legal move is to save me money, and I'd have to defend myself in the event of a lawsuit anyways, then the LLC formation didn't save me jack.

I guess the better question is, is there any legal precedent where an amateur builder has been sued because the airplane he sold crashed and survivors sued? If so, did he prevail? If so, was the formation of an LLC relevant in any way to that outcome?
 
This doesn't sound like the time for emails, IMO. Somebody needs to be sitting in somebody else's kitchen or conference room.

Tom-D said:
Well, hopefully but the trail grows colder by the minute.

The E-mails have been sent, the phone numbers are given, and no one calls.
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hindsight2020 said:
The IRS considers single-member LLCs as disregarded entities, which is to say they're not considered LLCs at all. This may or may not have probative value in product liability case, but from where I sit if the point of the legal move is to save me money, and I'd have to defend myself in the event of a lawsuit anyways, then the LLC formation didn't save me jack.
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They don't have to be single member, they also don't have to be owned by natural persons.

The builder would act as an employee or agent of the LLC and would be just as much or little liable as a Ford assembly line worker is personally liable for exploding fuel tanks on their pickup trucks.

I guess the better question is, is there any legal precedent where an amateur builder has been sued because the airplane he sold crashed and survivors sued? If so, did he prevail? If so, was the formation of an LLC relevant in any way to that outcome?
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As product liability suits on homebuilts are apparently uncommon enough that so far we have only come up with one that settled, I doubt that this case law exists yet.

Starting to set up entities may not be worth it to build a flybaby in your garage , if you set out to build a couple of 1.5mil turboprops for resale, it may well be worth to create some paperwork. There may also be some tax angle to it if you pay for hired labor and want to roll it into the price.
I rent an apartment near my place of work, my check goes to JPR#142,LLC, the folks who built the complex are hardly amateurs, if there was no benefit to dicing up something into serial entities, I doubt they would be doing it.
 
weilke said:
The builder would act as an employee or agent of the LLC and would be just as much or little liable as a Ford assembly line worker is personally liable for exploding fuel tanks on their pickup trucks.



.....
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Those were Chevrolet pick ups,,, not Fords:nonod:
 
wabower said:
This doesn't sound like the time for emails, IMO. Somebody needs to be sitting in somebody else's kitchen or conference room.
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If I knew where the kitchen or conference room was I'd not be typing this .
 
Tom-D said:
Not the case here and it is sad that you'd think I'd do that. this whole thread was started in response to the post in a different web page
quote:
August 22, 2013, 17:58:04

I know of a woman who's husband passed away a couple of years ago having nearly completed a "cozy" kit.

She and her son have been looking into selling the project but have come to the conclusion that they (her husband's estate) would be liable as the airplane's manufacturer for the life of the airplane. They are nearly final in their decision that their only "safe" alternative is to destroy the airplane.

As I think this through, they may be correct, although I'd suggest that they CAN safely sell certain components such as the engine, instruments and avionics.

But in a sense, the same liability issue would apply to anyone who builds and sells an airplane.

By the same token that PIPER gets sued when a Cherokee crashes, the builder of a kit-plane could be pursued.

I suspect that in most cases when experimentals are sold, this issue is simply ignored.

Am I correct? Or is there some limitation that protects builders?

Is insurance available?

I'd love to be able to help them "save" that airplane.

end quote

You see, I don't always post just to please folks here, most times there is a reason. This is a widely used web page with lots of knowledgable people here with opinions that real carry credibility, unlike the post you placed.
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Contact EAA and ask for the forms needed to release the seller from their "perceived" liability.

There is none, but you'll never convince them of that. Stupid is as stupid does.

In all actuality, they increase their liability by disassembling the plane and selling parts. This senerio was brought up at the EAA's conference on legal questions. The lawers said it was a bad idea. Sell the plane "as is, where is" using the EAA sales forms.

Here is some info from the EAA, if you are a member their liability release forms are free.

http://members.eaa.org/home/homebui... & Releases Buying & Selling a Homebuilt.html
 
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Geico266 said:
Contact EAA and ask for the forms needed to release the seller from their "perceived" liability.
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Looking through the EAA pages that you mentioned, it's clear that the release form does nothing to protect you from the children of a pilot who kills himself in the plane you built. The children don't sign away their right to sue.

The EAA pages don't say it, but it seems to me that part of the strategy in selling a homebuilt plane should be (1) to sell the plane you built only to a low-income person no minor children and (2) to be poor when you sell the plane. The worst thing to do would be to have deep pockets and to sell to a young pilot who has a high income and young children.
 
Geico266 said:
Contact EAA and ask for the forms needed to release the seller from their "perceived" liability.

There is none, but you'll never convince them of that. Stupid is as stupid does.

In all actuality, they increase their liability by disassembling the plane and selling parts. This senerio was brought up at the EAA's conference on legal questions. The lawers said it was a bad idea. Sell the plane "as is, where is" using the EAA sales forms.

Here is some info from the EAA, if you are a member their liability release forms are free.

http://members.eaa.org/home/homebui... & Releases Buying & Selling a Homebuilt.html
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Let me just quote from the resource you cited:

The real problem in selling homebuilt aircraft is that if the buyer dies in an accident, the buyer’s minor children could bring a lawsuit against the seller for wrongful death. The children wouldn’t have been a party to the contract and, therefore, the release would not extend to them or other members of the family who had not signed the release. Further, a parent generally cannot sign to release a legal right of a minor child.

Another major deficiency with the release is that if an aircraft were to crash in the middle of a neighborhood and cause injuries, death, or property damage to others, the agreement would most likely afford no protection.

I think adding this would also still fall under fair use:

The use of a release from liability may be a beneficial document in deterring a lawsuit for damages against the seller of an experimental homebuilt aircraft, but it can also be frustrating to the seller because no one can predict or guarantee the results of using it.
(emphasis added)


This a far cry from 'there is no liability and EAA legal says so and everyone who says that there may be some liability is stupid'.
 
Geico's enthusiasm for EAB gets in the way of his objectivity and facts.
weilke said:
Let me just quote from the resource you cited:

The real problem in selling homebuilt aircraft is that if the buyer dies in an accident, the buyer’s minor children could bring a lawsuit against the seller for wrongful death. The children wouldn’t have been a party to the contract and, therefore, the release would not extend to them or other members of the family who had not signed the release. Further, a parent generally cannot sign to release a legal right of a minor child.

Another major deficiency with the release is that if an aircraft were to crash in the middle of a neighborhood and cause injuries, death, or property damage to others, the agreement would most likely afford no protection.

I think adding this would also still fall under fair use:

The use of a release from liability may be a beneficial document in deterring a lawsuit for damages against the seller of an experimental homebuilt aircraft, but it can also be frustrating to the seller because no one can predict or guarantee the results of using it.
(emphasis added)


This a far cry from 'there is no liability and EAA legal says so and everyone who says that there may be some liability is stupid'.
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The real defense is "You purchased an experimental aircraft built by joe scmoe in his garage. That airplane came with two different warning labels inside the cockpit plus registration documents which clearly pointed out that it was an experimental aircraft and didn't meet the FAA's requirements."

Also, if I was a seller, I'd sell the airplane out of inspection so the new owner's mechanic would need to inspect and sign the logbooks prior to flight. It might even be worthwhile to include in the contract that the new owner is required to receive a ridiculous number of hours of in-type training before soloing the airplane or flying it with passengers. I wouldn't care if the owner actually did those hours, but if s/he didn't fulfill those requirements, that would be another layer of defense. Also, if s/he did the training, s/he would be a much better pilot in the airplane, reducing my liability by eliminating some of the pilot induced risk.
 
kyleb said:
The real defense is "You purchased an experimental aircraft built by joe scmoe in his garage. That airplane came with two different warning labels inside the cockpit plus registration documents which clearly pointed out that it was an experimental aircraft and didn't meet the FAA's requirements."
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All of these arguments mean nothing if your counterpart in a suit is not the buyer but the parents of one of his daughters friends who perished in the back of the Epic you built.

The labels on most experimentals are a farce, printed in tiny typeface, stuck where you can't see them while the door is open and have no binding effect on the guy whose house your plane fell on (e.g. in the Turbo Commander crash in East Haven last month, yes it happens, and if you are facing the family that lost two kids in court, talk of how some sticker insulates you from liability is going to be somewhat misplaced).
 
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Im suprised the builder on the John Denver case didn't get sued. Even the fuel selector people got sued, and lost.
 
hindsight2020 said:
Im suprised the builder on the John Denver case didn't get sued. Even the fuel selector people got sued, and lost.
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He did. that was Adrian Davis. He lost, also.
The idea that you don't have liability is full of cr_p.
 
John Denver would be a worst-case buyer. He was survived by a young child, and he had a history of high earnings.
 
Aren't people with money the best prospects for airplane purchases? None of my clients have been living at the city mission.

FWIW, many corporate and high-end individual owners insist that their plane be sold to a aircraft dealer rather than an end user. They believe that breaking the ownership chain by a sale to a presumably knowledgeable party whose business is the buy-sell of aircraft is worth the hair-cut.

NoHeat said:
John Denver would be a worst-case buyer. He was survived by a young child, and he had a history of high earnings.
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NoHeat said:
Looking through the EAA pages that you mentioned, it's clear that the release form does nothing to protect you from the children of a pilot who kills himself in the plane you built. The children don't sign away their right to sue.

The EAA pages don't say it, but it seems to me that part of the strategy in selling a homebuilt plane should be (1) to sell the plane you built only to a low-income person no minor children and (2) to be poor when you sell the plane. The worst thing to do would be to have deep pockets and to sell to a young pilot who has a high income and young children.
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Take it up with the EAA.
 
weilke said:
Let me just quote from the resource you cited:

The real problem in selling homebuilt aircraft is that if the buyer dies in an accident, the buyer’s minor children could bring a lawsuit against the seller for wrongful death. The children wouldn’t have been a party to the contract and, therefore, the release would not extend to them or other members of the family who had not signed the release. Further, a parent generally cannot sign to release a legal right of a minor child.

Another major deficiency with the release is that if an aircraft were to crash in the middle of a neighborhood and cause injuries, death, or property damage to others, the agreement would most likely afford no protection.

I think adding this would also still fall under fair use:

The use of a release from liability may be a beneficial document in deterring a lawsuit for damages against the seller of an experimental homebuilt aircraft, but it can also be frustrating to the seller because no one can predict or guarantee the results of using it.
(emphasis added)


This a far cry from 'there is no liability and EAA legal says so and everyone who says that there may be some liability is stupid'.
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Again, how many liability law suits have been successful in a court not law? Zero, zilch, Nada. This after tens of thousands of EAB sales, trade, crashes, and deaths. What is your pointto continually hold one case that was settled out of court? One ****ing case!!!

So with one case that was settled out of court you wennie boys are scared to death to sell an airplane?

Seriously, boys, stay on the porch is you can't run with the big dogs.
 
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bbchien said:
He did. that was Adrian Davis. He lost, also.
The idea that you don't have liability is full of cr_p.
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Still waiting for the court order saying either party lost the law suit. :dunno:

One case was settle out of court and you hang your hat on this as proof of increased liability of EAB? I hope you practice medicine with better judgment than that. ;)
 
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wabower said:
And your ongoing display of ignorance is incredible to behold.
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Now you resort to name calling? :rofl:

Call EAA and argue with them. I'll take my chances with the perceived huge risk you and the other "old guard" cling to. :mad2:

Tens of thousands of EABs bought and sold, one case settle out of court. :rofl::rofl::rofl:
 
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wabower said:
And your ongoing display of ignorance is incredible to behold.
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it is not clear to me what Geico is ignorant of..:dunno::dunno:..

There has been ONE out of court settlement pertaining to a experimental sale and crash......

Do you know something the rest of us don't?????:confused:
 
EAA is the apparent source of the disclosure of risk. Maybe you should call them and tell them why they're wrong so they can correct their position.

Geico266 said:
Now you resort to name calling? :rofl:

Call EAA and argue with them. I'll take my chances with the perceived huge risk you think there is. :mad2:
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wabower said:
EAA is the apparent source of the disclosure of risk. Maybe you should call them and tell them why they're wrong so they can correct their position.
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I'll get my information from them rather than an internet forum run by old farts who think GPS is a fad. :rolleyes:

Seriously, guys move over and let the next generation of pilots move GA forward. They are flying experimentals.... Get over it, or get use to it.
 
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The information they published has been reproduced here. Do you deny that they originated it or contend that it is wrong?

Why is Weilke's age an issue here?


Geico266 said:
I'll get my information from them rather than an internet forum run by old farts who think GPS is a fad. :lol:
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wabower said:
Aren't people with money the best prospects for airplane purchases? None of my clients have been living at the city mission.
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I am suggesting that if you are a builder, you want a buyer with money, but not with a future of high earnings. A retiree without minor children would be perfect. A young doctor with small children would be bad.

FWIW, many corporate and high-end individual owners insist that their plane be sold to a aircraft dealer rather than an end user. They believe that breaking the ownership chain by a sale to a presumably knowledgeable party whose business is the buy-sell of aircraft is worth the hair-cut.
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I can see that this could make sense for an owner. OTOH, if you are the builder and not just an owner, doesn't your name remain forever with the plane as its manufacturer, no matter who owned it last?
 
NoHeat said:
.......

I can see that this could make sense for an owner. OTOH, if you are the builder and not just an owner, doesn't your name remain forever with the plane as its manufacturer, no matter who owned it last?
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Yup.... You are listed in the database FORE EVER as the builder...:redface:
 
Geico266 said:
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. ;)
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Please forward the agent, company or contact info. You may PM if you wish. Thx.
 
Geico266 said:
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.
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Well, unless you can show me a case in which this was proven not to work, I'd have to say that the objections are vapor.

This has been done by countless property owners, contracting companies, shipowners, charter-tour operations, rural mail carriers, broadcast site owners and long-haul truck owner operators. It works for them, why wouldn't it work for EABs?
 
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