Mechanics Lien

[poadeleted20]

You know maybe it's just me but, the dry cleaner example aside, I don't see doing an oil change on an airplane as being in "possession" of it.

If the owner gives you the plane to work on, and it remains on your premises, you have legal possession of the aircraft, and with a possessory lien on it for unpaid work, neither the owner nor any other recorded lienholder can legally remove it from your premises if you do not give permission. If you move it out of your hangar to a public ramp, then you no longer have possession and the owner can legally take it. And yes, there is case law on point.
Southern Jersey Airways v National Bank of Secaucus, CCH 11 AVI 17,463 (1970)
Carolina Aircraft v Commerce Trust, 289 So.2d 37 (1974)
...and many others.

 

[poadeleted20]

Specially when you are an independent service provider working in their hangar.

In that case, you never had possession, and there is no possessory lien, so you have to go through the legal process of recording a lien with the FAA and then obtaining judgment in state court based on that lien. Going through the state lien process in the Washington State law is unavailing -- the FAA lien system pre-empts any state system for aircraft and their components. See International Atlas Services v Twentieth Century Aircraft, 251 Cal. App. 2d 434, Civ. No. 29739. Second Dist., Div. Two. May 31, 1967.
However, if the plane goes into your shop (or even onto the ramp over which you have legal control as opposed to a pubic ramp), you have possession and thus a possessory lien for work you perform or parts you install until the are paid for. Just don't put a prop lock on the plane or otherwise disable it if it's on the ramp -- stick with padlocked tiedowns.

 

[bnt83]

The jet don't leave till the bill is paid or other arrangements have been made. PERIOD.

At midpoint during project, required 50% payment of the estimated total or all work stops.

This is on a signed contract at which time I believe a 10% estimated total is paid just to schedule the slot.

 

[Tom-D]

In that case, you never had possession, and there is no possessory lien, so you have to go through the legal process of recording a lien with the FAA and then obtaining judgment in state court based on that lien. Going through the state lien process in the Washington State law is unavailing -- the FAA lien system pre-empts any state system for aircraft and their components. See International Atlas Services v Twentieth Century Aircraft, 251 Cal. App. 2d 434, Civ. No. 29739. Second Dist., Div. Two. May 31, 1967.
However, if the plane goes into your shop (or even onto the ramp over which you have legal control as opposed to a pubic ramp), you have possession and thus a possessory lien for work you perform or parts you install until the are paid for.

No No Ron, you simply send it to collection.
Why should I wait until you sell your aircraft to get paid? then probably be told the legal statute of limitation on the lien has expired? Or why should I add misery to your estate during their period of morning to tell them I still hold your lien.

Really dumb way to collect the debt.

After legal consultation with our friend and customer (our lawyer) he has told me that when you want a lien in this state you must first have a work order that clearly states that will be the results of non payment. and it must have a block to initial that says they understand the results of non payment. Then if non payment has occurred you can't hold their property you give it back and pursue the legal court action.

He stated that he could tie that process up in court for years.

Liens --- very poor method of collection.

 

[JeffDG]

Liens --- very poor method of collection.

Alone, certainly.

But you file the lien and send to collection. That way the guy can't sell a valuable asset out from under the collection effort.

Just because you file a lien doesn't mean you can't pursue other paths to collecting the debt. It's another arrow in the quiver.

 

[poadeleted20]

No No Ron, you simply send it to collection.
Why should I wait until you sell your aircraft to get paid? then probably be told the legal statute of limitation on the lien has expired? Or why should I add misery to your estate during their period of morning to tell them I still hold your lien.

Really dumb way to collect the debt.

After legal consultation with our friend and customer (our lawyer) he has told me that when you want a lien in this state you must first have a work order that clearly states that will be the results of non payment. and it must have a block to initial that says they understand the results of non payment. Then if non payment has occurred you can't hold their property you give it back and pursue the legal court action.

And please don't tell me about a "handshake" way of doing business. Good fences make good neighbors, and good contracts make good business relationships.

He stated that he could tie that process up in court for years.

Liens --- very poor method of collection.

Commercial Darwinism: If you're foolish enough to let the customer have the aircraft without having paid for the work or made other secured, contractual means to pay, you deserve what you get (a lot of trouble and no money).

And please don't tell us about this "handshake" way of doing business being smart. Good fences make good neighbors, and good contracts make good business relationships.

 

[Silvaire]

I can't say it's the same everywhere but here, if you have a lien filed against you then you can't re-fi your house or get a loan of any sort without clearing it. There are other implications as well such as perhaps a job application. Point is, it may not bring the typical deadbeat to his knees but it can be a pesky thing that he can't get rid of without paying you.

Now if someone doesn't pay his bill and you've got his airplane in your hangar you can refuse to let him take it out but I think that would be sorted out by a judge whether or not you are legal in doing that. I don't see anything, anywhere saying I can take possession of someone's property - unless it was contracted as such when he brought it in there. Furthermore, do you really want to take on the chore and continued liability of storing and securing this person's property?

I wouldn't. For non-payment I would not sign the books or, if parts were replaced I'd take them back off, push it outside to a public spot with the cowls in the trunk, file a lien and let him know he's not welcome to ever come back here again.

But I'm not gonna play Sheriff.

 

[Frank]

I can't say it's the same everywhere but here, if you have a lien filed against you then you can't re-fi your house or get a loan of any sort without clearing it. There are other implications as well such as perhaps a job application. Point is, it may not bring the typical deadbeat to his knees but it can be a pesky thing that he can't get rid of without paying you.

Now if someone doesn't pay his bill and you've got his airplane in your hangar you can refuse to let him take it out but I think that would be sorted out by a judge whether or not you are legal in doing that. I don't see anything, anywhere saying I can take possession of someone's property - unless it was contracted as such when he brought it in there. Furthermore, do you really want to take on the chore and continued liability of storing and securing this person's property?

I wouldn't. For non-payment I would not sign the books or, if parts were replaced I'd take them back off, push it outside to a public spot with the cowls in the trunk, file a lien and let him know he's not welcome to ever come back here again.

But I'm not gonna play Sheriff.

The area of law that gets into is bailments. What others were talking about earlier was hanging on to the plane when the owner comes to pick it up. That gets into lien law. What happens if the owner does not claim his plane is very different. You are now the bailee, although you can get a lien and foreclose on the plane. If you get into the situation where an owner does not claim a plane, you probably should have a chat with your attorney. In fact, if you are in the maintenance business, you probably should talk to an attorney to get a good contract to use in your work that addresses some of the situations we have discussed here. Then if the situations arise, you are well-covered. Whatever you do try very hard to avoid doing anything that will reduce the value of the aircraft/collateral. Pushing a plane into an exposed location with the cowl off is a terrible idea.

 

[poadeleted20]

Now if someone doesn't pay his bill and you've got his airplane in your hangar you can refuse to let him take it out but I think that would be sorted out by a judge whether or not you are legal in doing that.

It will be a pretty much open-and-shut case. The possessory mechanic's lien is, to my knowledge, recognized in all states.

I don't see anything, anywhere saying I can take possession of someone's property

You didn't take possession, you were given possession when the owner brought it in for repairs, and you have the legal right to retain possession until those repairs are paid for.

Furthermore, do you really want to take on the chore and continued liability of storing and securing this person's property?

Well, you've been storing and securing it while working on it, so I don't see that as a big deal.

I wouldn't.

That's your choice to make.

For non-payment I would not sign the books or, if parts were replaced I'd take them back off, push it outside to a public spot with the cowls in the trunk, file a lien and let him know he's not welcome to ever come back here again.

That's all a violation of either Federal regulations or civil law (see "bailment" in your legal dictionary regarding your duty to protect the vehicle once it is handed to you -- and I see Frank covered that, too), and you'd be the one in trouble, not the owner. BTW, you are also permitted to tack on storage charges if the owner fails to pick up or pay for the work once the job is done, and hold the plane until those are paid, too.

But I'm not gonna play Sheriff.

Nobody said you should, and you're not doing that if you retain possession of he aircraft until you are paid for doing the work. "Playing Sheriff" would be going to the owner's tiedown and towing the plane back to your hangar -- and that would land you in a heap of trouble.

 

[Silvaire]

Clarifications: When I say I wouldn't "sign the books" I'm talking about return to service, not details of maintenance performed.

I'm also talking about failure to pay the bill, not failure to reclaim property. The owner has reclaimed his property, it's outside with all the parts in whatever spot he wants to put it because it is back in his possession. Are you saying that if I give it back to him I am under obligation to put it all back together and sign it off as airworthy despite the fact that he hasn't paid or is refusing to pay his bill? Why would I put it back together if I haven't been paid yet for taking it apart?

Finally, I'm not interested in storing it.

 

[Tom-D]

Commercial Darwinism: If you're foolish enough to let the customer have the aircraft without having paid for the work or made other secured, contractual means to pay, you deserve what you get (a lot of trouble and no money).

And please don't tell us about this "handshake" way of doing business being smart. Good fences make good neighbors, and good contracts make good business relationships.

I do 99% of my work in the owner's hangar. I never take custody of their aircraft. I do every thing on a hand shake and cash, Simply because I don't work for low life's.

When I have no contract with them, they have no contract with me, it works both ways. Try and sue some one over what you thought they said, tell me how that works out.

Big FBO's must deal with this sh-- I don't.
You want to deal with lawyers and contracts, go to the big FBOs, see what all those lawyers and contracts cost ya.

My last customer was very pleased with my prices and was happy to pay the bill.

the OP's statement was liens are worthless in this state and he was right, no one uses them, there are other better ways. much simpler, and quicker.

 

[bluerooster]

And what do you do when a judge over-rides the lawyer's carefully-drafted opinion and decides in favor of the other party?

Appeal?

 

[Tom-D]

I wouldn't. For non-payment I would not sign the books or, if parts were replaced I'd take them back off, push it outside to a public spot with the cowls in the trunk, file a lien and let him know he's not welcome to ever come back here again.

But I'm not gonna play Sheriff.

there is a way of not signing the logs, when the owner calls FSDO and complains about you not completing your obligation to sign the maintenance off, they will call you and ask why, simply tell them what the reason the owner called. they will not get into what they think is going to be a pizzing contest and a civil court case.

 

[bluerooster]

The way it works here;

Mechanic/shop has in his possession, the_______________(fill in the blank, airplane, car, boat, bicycle, etc). Customer doesn't pay the bill, customer doesn't get the _____________. mechanic/shop must store, and secure the __________, so mechanic/shop get's to also charge a storage fee ($X/day), in addition to the bill for repairs.
If the bill and storage fees are not paid in 30 days, the ____________, can be sold to recoup those fees, plus the cost of advertizement to get it sold, any legal fees, and what ever costs are incurred by the mechanic/shop to deal with this. Any overage must be remited to the customer.
That's how it works here. I've had to do it a few times. (not very often, about twice in about 30 years)
And the ones I've had the most trouble with, have been ones with the greatest ability to pay.
But as long as I have the _________, I can get paid. As soon as I relenquish the ________ to the customer, I've lost any ability to collect, and it becomes a loss.

Thing is, I seldom have any trouble getting paid, and Most times I'll turn loose of a _________, with an agreement to be paid on....., and within a day or so they come in to pay me.
Very seldom do I perform work in someone elses hangar, but when I do, it's usually a small job for a couple hundred bucks.
There are a few folks that I can trust to pay me when the work is completed in their hangar to the tune of $10k. And I have never had any troubles from them.

I actually had the repo guy come to repo a vehicle that my customer had fallen behind on the payments. Repo guy didn't get it untill the shop bill, plus storage was paid. Bank hadda pay me 12K, before they could re-possess it.

 

[NineThreeKilo]

A lien is just a sign that someone F'd up

The shop didn't communicate (often the case)
Or the owner didn't understand
And seldom, owner just didn't have the money

In CA here is the law.

Another place people F' up is when the shop doesn't get a signed estimate, no estimate no lien in CA.

BUSINESS AND PROFESSIONS CODE
SECTION 9790-9798.4



9790. As used in this chapter, the following definitions apply:
(a) To the extent applicable, the definitions which are now or may
hereafter be set forth in Section 1301 of Title 49 of the United
States Code are incorporated herein by reference.
(b) To the extent applicable, the definitions which are now or may
hereafter be set forth in Sections 1.1, and 1.2 of Part 1 of Title
14 of the Code of Federal Regulations, are incorporated herein by
reference.
(c) To the extent applicable, the definitions which are now or may
hereafter be set forth in Chapter 2 (commencing with Section 1201)
of Division 1 of the Commercial Code are incorporated herein by
reference.
(d) "General aviation" means all aviation with the exception of
air carrier and military aviation.
(e) "Repairperson" means any person engaged in the business of
repairing general aviation aircraft.
(f) "Customer" means any person who requests a repairperson to do
work on a general aviation aircraft which is in the possession of
that person.
(g) "Certificated repair station" means a person or business
entity which is the duly authorized holder of a Federal Aviation
Administration certificated repair station designation pursuant to
the provisions of Part 145 of Title 14 of the Code of Federal
Regulations. A certificated repair station is a subcategory of a
"repairperson."
(h) "Certificated mechanic" means an individual person who is the
duly authorized holder of a Federal Aviation Administration Mechanic
Certificate, with either an "Airframe," a "Powerplant," or an
"Inspection Authorization" rating, which has been issued to that
person pursuant to the provisions of Part 65 of Title 14 of the Code
of Federal Regulations. A certificated mechanic is a subcategory of a
"repairperson."
(i) "Fixed base operator" means a person or business entity which
is the duly authorized holder of a business license issued by all
applicable state or local governmental entities, to engage in the
business of providing fuel, oil, storage, parking, cleaning, and
other products and services for use in general aviation aircraft, or
by customers utilizing general aviation aircraft. A fixed-base
operator is a subcategory of a "repairperson."
(j) A "noncertificated repairperson" means a repairperson that is
not a certificated repair station, a certificated mechanic, nor a
fixed-base operator. A noncertificated repairperson is a subcategory
of a "repairperson."
(k) The "FAA Aircraft Registry" means that particular system for
the recording of conveyances and other documents which affect the
title to, or any interest in, civil aircraft of the United States,
which was originally created pursuant to Section 503 of the Federal
Aviation Act of 1958 as set forth in Section 1403 of Title 49 of the
United States Code and which is more specifically identified in
Section 49.11 of Title 14 of the Code of Federal Regulations as:
FAA Aircraft Registry
Department of Transportation
P.O. Box 25504
Oklahoma City, OK 73125
or delivered to the Registry at:
6500 South MacArthur Boulevard
Oklahoma City, OK 73169




9791. This chapter applies only to work done on a general aviation
aircraft with either an estimated cost or an actual cost of one
hundred dollars ($100) or more.



9792. (a) It is the public policy of this state that parties to all
business transactions, including those transactions which are the
subject of this chapter, exhibit mutual financial responsibility with
respect to one another. Accordingly, the existence of liens, the
concurrence of liens, and the priorities of liens subject to this
chapter are determined so as to implement this public policy.
(b) In addition, it is the public policy of this state that all
persons engaged in the business of aviation be subject to the highest
level of certification by the Federal Aviation Administration of the
United States of America (hereafter "the FAA") available to those
persons, and further, that these certificated persons be subject to
the highest level of FAA surveillance activities and enforcement
proceedings. This certification and surveillance contributes
substantially towards the protection of the public by attempting to
assure continued and ongoing compliance with all applicable FAA
standards and certification criteria. Accordingly, the existence of
liens, concurrence of liens, and priorities of liens as set forth in
this chapter are determined so as to implement this public policy.




9793. No repairperson shall commence work for compensation without
specific authorization from the customer or his or her agent, in
accordance with all of the following requirements:
(a) The repairperson shall give to the customer either of the
following:
(1) A written estimated price for labor and parts for a specific
job.
(2) A written estimate of the maximum cost for a specific job that
does not differentiate between labor and parts, but which shall not
be exceeded by the actual cost of the job, including labor and parts.
No work shall be done or parts supplied in excess of, or different
from, the original written estimate without the separate oral or
written consent of the customer. If the consent is oral, the
repairperson shall make a notation on the work order and on the
invoice of the date, time, name of person authorizing the additional
work or change in work, and the telephone number called, if any,
together with a specification of the additional parts and labor and
the total additional cost.
(b) If it is necessary to disassemble a general aviation aircraft
or its component in order to prepare a written estimated price for
required work, the repairperson shall first give the customer a
written estimated price for the disassembly and reassembly. The
estimate shall also include the cost of parts and necessary labor to
replace items such as gaskets and seals that are normally destroyed
by disassembling the component. If the disassembling might prevent
the restoration of the component to its former condition, the
repairperson shall write that information on the work order
containing the estimate before the work order is signed by the
customer.
The repairperson shall inform the customer orally, and
conspicuously in writing on the work order, of the maximum time it
will take the repairperson to reassemble the aircraft or its
component if the customer elects not to proceed with the work. The
repairperson shall not charge the customer for more time than the
specified maximum time if the customer elects not to proceed with the
work.



9794. Any repairperson who gives an original estimate in good
faith, shall not be obligated to complete a job within the quoted or
written estimated price if additional, unforeseen work is necessary
to complete the job and the customer refuses to consent to payment
for the cost of that additional work.



9795. All work done by a repairperson, including all warranty work,
shall be recorded on an invoice and shall describe all work done and
parts supplied.
Work and parts shall be listed separately on the invoice, which
shall also state separately the subtotal prices for work and for
parts, not including sales tax, and shall state separately the sales
tax, if any, applicable to each.
If any used, rebuilt, or reconditioned parts are supplied, the
invoice shall clearly state that fact. If a part of a component
system is composed of new and used, rebuilt, or reconditioned parts,
the invoice shall clearly state that fact.
One copy of the invoice shall be given to the customer and one
copy shall be retained by the repairperson.



9796. The invoice shall show the repairperson's business name and
address.
If the repairperson's telephone number is on the invoice, it shall
be the telephone number that appears in any advertisement or on an
advertising sign, and shall be the same number as that listed for the
repairperson's firm name and address in the telephone directory, or
on the telephone company records if the number is assigned to the
repairperson subsequent to the publication of the telephone
directory.



9797. Notwithstanding any provision to the contrary, upon
authorization from the customer as to a specific job, a repairperson
may work on an aircraft on a time and materials basis.



9798. (a) Sections 9793, 9794, 9795, and 9796 of this chapter shall
not apply to services provided to a general aviation aircraft in
distress which is in need of immediate work critical to its
preservation and safety, for which consent cannot be expeditiously
obtained. In all such instances, the work performed shall be done on
a time and material basis, notwithstanding the absence of consent by
the customer.
(b) In all instances in which the provisions of subdivision (a)
are applicable, Sections 9798.1, 9798.2, 9798.3, and 9798.4 shall
also be applicable.



9798.1. (a) Subject to the provisions set forth in this chapter,
each repairperson shall have a special lien pursuant to Sections 2872
and 2875 of the Civil Code, upon the civil aircraft, engine, or
aircraft appliance upon which the repairperson has bestowed labor or
furnished material. The special lien shall be in an amount equal to
the agreed upon value of the labor and material furnished, or in the
absence of any agreement, for the reasonable value thereof.
(b) The statutory lien created pursuant to subdivision (a) is
applicable to any civil aircraft engine, aircraft propeller, or
aircraft appliance which is capable of having the ownership, or an
interest in the ownership, affected by a conveyance, recorded at the
FAA Aircraft Registry.
(c) The statutory lien created pursuant to subdivision (a) is not
dependent upon possession by the repairperson of the property which
is subject to the lien.
(d) The statutory lien created pursuant to subdivision (a) is
dependent upon the recordation of the lien at the FAA Aircraft
Registry in accordance with Section 9798.2.
(e) The statutory lien created pursuant to subdivision (a) is
created by written contract between the parties but only if the
written contract is signed by the customer, and predates the
commencement of work for which the lien is applicable.
(f) The statutory lien created pursuant to subdivision (a) is in
addition to the statutory lien created pursuant to Section 3051 of
the Civil Code if:
(1) The repairperson is a certificated repair station.
(2) The repairperson is a certificated mechanic.
(3) The repairperson is a fixed-base operator.
(g) The statutory lien created pursuant to subdivision (a) is in
addition to the statutory lien created pursuant to Chapter 5
(commencing with Section 1208.61) of Title 4 of Part 3 of the Code of
Civil Procedure if:
(1) The repairperson is a certificated repair station.
(2) The repairperson is a certificated mechanic.
(3) The repairperson is a fixed-base operator.
(h) The statutory lien created pursuant to subdivision (a) shall
not exist unless the repairperson has complied with all provisions of
Sections 9793, 9794, 9795, 9796, 9797, and 9798.
(i) The statutory lien created pursuant to subdivision (a) shall
not exist unless the repairperson complies with either of the
following:
(1) The repairperson is insured pursuant to a policy of liability
insurance predating the commencement of work for which the lien is
applicable, which was applicable and in full force and effect, and
contained no policy defenses with respect to the work for which the
lien is applicable.
(2) The repairperson is the duly authorized holder of a written
surety bond predating the commencement of the work for which the lien
is applicable, which obligates the surety to satisfy any and all
valid legal claims which may be asserted against the repairperson by
the customer in an amount up to and including the value of the
property to which the lien applies.
(j) Any statutory lien pursuant to Section 3051 of the Civil Code,
and any statutory lien pursuant to Chapter 5 (commencing with
Section 1208.61) of Title 4 of Part 3 of the Code of Civil Procedure,
and any lien created by the written agreement of the parties
pursuant to Section 2884 of the Civil Code, in addition to being
dependent upon possession, shall be subject to the applicability of
the Commercial Code and "financing statements" as described in
Division 9 (commencing with Section 9101) of the Commercial Code may
be filed in accordance with the provisions of the Commercial Code.




9798.2. (a) The statutory lien created pursuant to subdivision (a)
of Section 9798.1 is not valid unless and until it is recorded with
the FAA Aircraft Registry in the manner and in the form generally
required for the "Recording of Aircraft Titles and Security Documents"
pursuant to Part 49 of Title 14 of the Code of Federal Regulations.
(b) In addition to any requirements set forth in Part 49 of Title
14 of the Code of Federal Regulations, the statutory lien created
pursuant to subdivision (a) of Section 9798.1 is valid upon
recordation by the FAA Aircraft Registry of a written document
entitled "NOTICE OF LIEN (PURSUANT TO CHAPTER 19.5 OF THE CALIFORNIA
BUSINESS AND PROFESSIONS CODE)." This document shall be:
(1) Signed by the repairperson or by a duly authorized agent or
attorney of the repairperson.
(2) Verified by the person signing the notice of lien upon that
person's personal knowledge of the matters stated in the notice of
lien, and which shall affirmatively state: "Except as to those
matters asserted as being upon my information and belief, I declare
under penalty of perjury in accordance with the laws of the State of
California and of the laws of the United States of America that the
matters stated herein are true and correct; and, as to those matters
asserted as being upon my information and belief, I declare under
penalty of perjury in accordance with the laws of the State of
California and of the United States of America that, upon reasonable
inquiry, I honestly and genuinely believe these matters to be true as
stated."
(3) Contain the date, time, and place of signing of the notice of
lien.
(c) The notice of lien referred to in subdivision (b) shall
contain the following information:
(1) The United States Registration Number, make, model, and serial
number of the aircraft subject to the lien.
(2) The name of the manufacturer, the model, and the serial number
of all applicable engines, propellers, or appliances subject to the
lien, to the extent they are not otherwise identifiable merely by
reference to the Aircraft Registration Number.
(3) The name, address, and business telephone number of the
repairperson asserting the lien.
(4) The name, address, and business telephone number of the
registered owner of the civil aircraft or other property subject to
the lien.
(5) The name, address, and business telephone number of the person
consenting to the performance of the work giving rise to the lien.
(6) The amount of the lien, exclusive of prospective storage
costs.
(7) A narrative statement describing the nature of the work
accomplished.
(8) The affirmative statement that a copy of the notice of lien is
concurrently being sent by United States mail, certified, return
receipt requested with postage fully prepaid thereon, or by other
comparable or more expeditious delivery services, to both the
registered owner and to the person consenting to the work.
(9) The date of last services or materials provided.
(d) No notice of lien pursuant to subdivision (b) is valid unless
it is presented for recording at the FAA Registry within 180 days of
the completion of the work giving rise to the lien.



9798.3. (a) Any repairperson having perfected his or her statutory
lien pursuant to Section 9798.2 shall be entitled to the ex parte
issuance of an order to show cause why the aircraft or other property
should not be sold at auction. The order to show cause shall be
issued by the Superior Court of the State of California upon the
filing in the superior court of a verified application for ex parte
order to show cause why the aircraft or other property should not be
sold at auction, which sets forth a true copy of the notice of lien
described in Section 9798.2. The order to show cause shall set a
hearing date not less than 20 days after the date of the order, upon
which the customer, the registered owner, or any other person having
an interest therein may present evidence to the court, by way of
declarations under penalty of perjury, or oral testimony as may be
authorized by the court, as to any reason why the aircraft or other
property subject to the lien should not be sold at auction in
accordance with the provisions pertaining to the enforcement of
judgments generally within this state.
(b) The order to show cause shall be personally served upon the
registered owner, the customer, and any other person then known to
the repairperson to have an interest in the aircraft or other
property subject to the lien within five days of the date of issuance
of the order to show cause; and concurrent with all attempts to
obtain personal service, a copy of the order to show cause shall be
sent by United States mail, certified, return receipts requested, to
each customer, the registered owner, and any other person or entity
then known to the repair person to have an interest in the aircraft
or other property subject to the lien or any other person who has
registered a lien upon, conveyance of, or other interest in, the
aircraft or other property subject to the lien with the FAA Aircraft
Registry.
(c) At the hearing, the court shall have in rem jurisdiction with
respect to the aircraft or other property subject to the lien, and
shall have personal jurisdiction over all persons or entities
appearing at the hearing, and may make orders and enter judgments in
accordance with applicable law.
(d) The registered owner or customer of the aircraft or other
property subject to the lien shall have a right of redemption in the
full amount of all amounts due to the repairperson, to be paid in
cash, or in the equivalent, to the repairperson at any time up to,
but not including, the entering of any judgment affecting the title
to the aircraft or other property subject to the lien.
(e) Any judgment entered by the court shall be deemed to be a
"conveyance" within the meaning of subdivision (17) of Section 1301
of Title 49 of the United States Code, and shall be recordable at the
FAA Aircraft Registry pursuant to Section 49.17 of Title 14 of the
Code of Federal Regulations.
(f) Upon payment to the repairperson by or on behalf of the
registered owner of the aircraft or other property subject to the
lien, or by the customer, the repairperson shall cause to be filed
with the FAA Aircraft Registry a notice of cancellation of lien. The
filing of the notice of cancellation of lien shall terminate all
interest of the repairperson that was otherwise subject to the notice
of lien.
(g) In any action for the enforcement of the statutory lien
provided by this chapter, the prevailing party or parties shall be
entitled to recover from the nonprevailing party or parties such
costs of suit and attorney fees as may be deemed by the court, in its
discretion, to be just and reasonable.



9798.4. (a) The priority of liens set forth in this section
supersedes the priority otherwise set forth in Section 2897 of the
Civil Code.
(b) The time of creation of the lien shall be the time that the
FAA Aircraft Registry actually records the notice of lien described
in Section 9798.2.
(c) With respect to the subcategory of "repairpersons" as
described in Section 9790, as between lien claimants of equal
subcategory, different liens upon the same property have priority
according to the time of their creation.
(d) With respect to the subcategories of "repairperson" as
described in Section 9790 as between different liens upon the same
property which are created within 30 days of one another:
(1) The lien of a certificated repair station has priority over
the liens of all other repairpersons.
(2) The lien of a certificated mechanic has priority over the
liens of all other repairpersons other than certificated repair
stations.
(3) The liens of a fixed-base operator have priority over all
other repairpersons other than certificated repair stations and
certificated mechanics.

 

[poadeleted20]

Clarifications: When I say I wouldn't "sign the books" I'm talking about return to service, not details of maintenance performed.

Doesn't matter. Per 43.9, your signature is authorization for return to service.

I'm also talking about failure to pay the bill, not failure to reclaim property. The owner has reclaimed his property, it's outside with all the parts in whatever spot he wants to put it because it is back in his possession. Are you saying that if I give it back to him I am under obligation to put it all back together and sign it off as airworthy despite the fact that he hasn't paid or is refusing to pay his bill? Why would I put it back together if I haven't been paid yet for taking it apart?

Just pushing it out of your shop doesn't return it to the owner's possession, and until that happens, you remain responsible for protecting the aircraft. Again, ask your attorney about "bailment".

Also, as an owner, there's no way I'd pay the bill until the work is completed, and if you refused to finish the work until I paid for things you had not yet done, you'd be the one facing a civil suit (and maybe even criminal charges). Of course, if I had signed a contract with you for like 10% down plus progress payments, and I failed to make the progress payments, you'd be entirely justified in stopping work until my payments were up to date. But pushing the opened-up airplane outside into the elements in the mean time? Not acceptable under the bailment laws.

Finally, I'm not interested in storing it.

What you're interested in doesn't matter once the bailment has been created. Again, ask your lawyer.

 

[poadeleted20]

I actually had the repo guy come to repo a vehicle that my customer had fallen behind on the payments. Repo guy didn't get it untill the shop bill, plus storage was paid. Bank hadda pay me 12K, before they could re-possess it.

Exactly according to the law -- possessory liens are superior to all recorded non-possessory liens even if the non-possessory lien was recorded before the possessory lien was established.

 

[Silvaire]

Doesn't matter. Per 43.9, your signature is authorization for return to service...

"Aircraft inspected IAW and annual inspection and found not to be in airworthy condition" signed and dated and you say that is return to service authorization?

Just pushing it out of your shop doesn't return it to the owner's possession

Not saying that, the owner is taking his aircraft out of my shop. If I put on a new starter and he doesn't want to pay me for it the starter's coming back off first and he can proceed from there however he wants. Just don't come back again.

 

[bnt83]

"Aircraft inspected IAW and annual inspection and found not to be in airworthy condition" signed and dated and you say that is return to service authorization?



Not saying that, the owner is taking his aircraft out of my shop. If I put on a new starter and he doesn't want to pay me for it the starter's coming back off first and he can proceed from there however he wants. Just don't come back again.

Exactly, signature doesn't necessarily mean RTS or airworthiness.

 

[Frank]

The Maryland law for lienors in possession can be found at http://statutes.laws.com/maryland/commercial-law/title-16/subtitle-2/16-207

If you have perfected your lien and there is a default (non-payment) you have the right to take possession of the property, and then once in possession, use the section above: http://statutes.laws.com/maryland/commercial-law/title-9/subtitle-6/9-609

 

[poadeleted20]

"Aircraft inspected IAW and annual inspection and found not to be in airworthy condition" signed and dated and you say that is return to service authorization?

I thought you were speaking of the performance of maintenance, not the results of an inspection. But if you put that "not airworthy" in the log, you'd better have also prepared that list of items which make it unairworthy, and be able to defend it against charges that you're holding the owner's plane for ransom on an unsubstantiated basis.

Not saying that, the owner is taking his aircraft out of my shop. If I put on a new starter and he doesn't want to pay me for it the starter's coming back off first and he can proceed from there however he wants.

If the owner has retaken possession of the aircraft (i.e., it's "out of [your] shop") you'd be in violation of Federal criminal law if you then remove that starter. And even if the plane is still in your possession, if you do take that new off, you'd better put the old one back on before you deliver it -- again, see "bailment."

 

[poadeleted20]

The Maryland law for lienors in possession can be found at http://statutes.laws.com/maryland/commercial-law/title-16/subtitle-2/16-207

If you have perfected your lien and there is a default (non-payment) you have the right to take possession of the property, and then once in possession, use the section above: http://statutes.laws.com/maryland/commercial-law/title-9/subtitle-6/9-609

Is a mechanic no longer in possession still a "secured party" if the mechanic has not perfected the lien (i.e., filed that lien on the aircraft with the FAA Civil Aircraft Registry)? I suspect not. Hence, my caution not to let the plane out of the shop without payment unless you've already filed that lien on the aircraft with the FAA Civil Aircraft Registry.

 

[poadeleted20]

I should say at this point that some of the discussion here is exemplary of why many small aviation businesses fail -- that while pilots and mechanics may have excellent technical knowledge of the business, they often lack the necessary basic business management skills and knowledge (including basic business law) to run a small business successfully. The value of the advice and assistance of competent legal, financial, tax, and accounting professionals to small business owners cannot be overemphasized in the avoidance of the sorts of problems which typically bring down small businesses.

 

[Silvaire]

I thought you were speaking of the performance of maintenance, not the results of an inspection. But if you put that "not airworthy" in the log, you'd better have also prepared that list of items which make it unairworthy, and be able to defend it against charges that you're holding the owner's plane for ransom on an unsubstantiated basis.

If the owner has retaken possession of the aircraft (i.e., it's "out of [your] shop") you'd be in violation of Federal criminal law if you then remove that starter. And even if the plane is still in your possession, if you do take that new off, you'd better put the old one back on before you deliver it -- again, see "bailment."

Nonsense, you can perform maintenance and log it to whatever extent it was completed and that may or may not constitute completion, airworthiness or release to service. A logbook entry is what it says, nothing. more, nothing less.

The starter example may be silly but I'm saying shop purchased and installed new part, customer won't pay, part comes off. It's not his property. But I concede, replace "starter" with "windshield" and yea, we've got a real problem.

 

[poadeleted20]

The starter example may be silly but I'm saying shop purchased and installed new part, customer won't pay, part comes off. It's not his property. But I concede, replace "starter" with "windshield" and yea, we've got a real problem.

I don't care what part it is -- if you return the plane to the owner's possession, you cannot then take the part back off the plane. And even if it's still in your shop, you will have to put the old part back on before returning it (perhaps just returning the part with the plane -- ask a lawyer in your state) -- otherwise, you're stealing the part from the owner.

 

[poadeleted20]

Nonsense, you can perform maintenance and log it to whatever extent it was completed and that may or may not constitute completion, airworthiness or release to service. A logbook entry is what it says, nothing. more, nothing less.

If you tell the owner the plane is ready to pick up, and the owner sees the logs do not show completion of the work and return to service, you've given the owner cause to refuse to pay. Now you're on the hook. If you tell the owner the work isn't complete, the owner says "call me when it is and then you'll get paid." If you say "pay up now or I won't finish the work," you have created a basis for a lawsuit by the owner, and maybe violated state business law. Either way, you end up as the bad guy.

 

[wabower]

And your understanding of how it works outside the beltway is far different than the way it actually works around here. Attempting to forecast how judges will rule on these issues is futile and a waste of keystrokes for those who see how they actually turn out. The issues that are introduced by one side or the other, or both, add layers of complexity that are beyond any concrete answers other than "we'll all find out at the courthouse."

I don't care what part it is -- if you return the plane to the owner's possession, you cannot then take the part back off the plane. And even if it's still in your shop, you will have to put the old part back on before returning it (perhaps just returning the part with the plane -- ask a lawyer in your state) -- otherwise, you're stealing the part from the owner.

 

[Tom-D]

Nonsense, you can perform maintenance and log it to whatever extent it was completed and that may or may not constitute completion, airworthiness or release to service. A logbook entry is what it says, nothing. more, nothing less.

This is a true statement, You may stop the service at any time enter what you did, and not return the aircraft to service.

Example.
Diagnosed engine rough running problem, removed mags and found them unserviceable, maintenance stopped due to owner lack of funding.

Bag up the old parts, place them in the aircraft inform the owner that you are removing the aircraft from your hangar and what they owe you.

If they refuse to pay or make arrangements to do so, send it to collection.
Problem is, If they can't afford new mags, they can't afford to pay you either.

 

[Tom-D]

I don't care what part it is -- if you return the plane to the owner's possession, you cannot then take the part back off the plane. And even if it's still in your shop, you will have to put the old part back on before returning it (perhaps just returning the part with the plane -- ask a lawyer in your state) -- otherwise, you're stealing the part from the owner.

Now you know why I have the owner do the buying and have the parts drop shipped to me. I don't have any skin in the game other than the labor.

I don't stock or supply anything I can't afford to loose. When you use a part off my shelf, it is up to you to replace it. If you don't, the next guy won't have one to use, Then I tell them why and who wouldn't replace it.

 

[Tom-D]

If you tell the owner the plane is ready to pick up, and the owner sees the logs do not show completion of the work and return to service, you've given the owner cause to refuse to pay.

I think you got the horse before the cart, This guy already has refused to pay.

many shops I know won't sign the logs before payment.

If you tell them that you are not able to pay or won't, they will tell you to get out and not come back.

And if the think they can get away with it they will try to keep your logs.

 

[poadeleted20]

I think you got the horse before the cart, This guy already has refused to pay.

Well, if the work wasn't completed, I can understand that completely. But if the work was completed, then the logs must reflect that, and you can't then go diddling the logs to show otherwise. I suppose it's possible the shop would tell the owner the job is complete and then the owner doesn't pay, but the shop should still have possession of the aircraft (including the logs) at that point, although the logs at that point should have the work entered and signed.

many shops I know won't sign the logs before payment.

That's a violation of Federal law. In any event, absent prior agreement for progress payments on a major job, you can be sure I won't pay until the job is complete -- and the job ain't done until the paperwork's finished. That's not only a saying, it's the FAA's rule.

Now, in your case, where you do not take possession of the aircraft to do the work, you have a more difficult problem. I suspect any business attorney advising you would tell you to prepare a proper work order including an estimated cost and an agreement for a lien on the plane for the cost of labor and materials. That would make it a cinch for you to file a lien on the plane with the FAA (filing with the state does nothing for airplanes if they leave the state, and that state lien is still inferior to all liens flied with the FAA even if the others are filed later). Armed with that lien and the signed work order agreeing to the terms, you'd have no problem obtaining judgment in state court (probably with interest) if the owner failed to pay up.

Or you can just do what you do, working on a handshake and trusting your fellow man, and sometimes get hosed with little legal recourse. Personally, I believe that good fences make good neighbors, and good contracts make good business relationships, so I wouldn't be offended in the least if my mechanic handed me such a document to sign before working on my plane, but it's your business, not mine.

 

[Tom-D]

That's a violation of Federal law. In any event, absent prior agreement for progress payments on a major job, you can be sure I won't pay until the job is complete -- and the job ain't done until the paperwork's finished. That's not only a saying, it's the FAA's rule.

Many shops will take an advantage to the stupid owner that's not a quasi lawyer.

I simply won't play with stupid owners.

If you like playing games with payments, sign offs go use the big FBOs. When you want to use common sense and treat your mechanic with respect and make your payments in a reasonable fashion, find your local independent A&P.

you'll find life is a lot simpler

 

[Tom-D]

Well, if the work wasn't completed,

Does it really matter, If payment was due the owner should have made the payment.

many shops are working week to week to make payroll they can't wait until the job is done, they have invested cash in your project they need their money out quickly or they go broke.

 

[Tom-D]

That's a violation of Federal law.

No it's not, prove the job was done.

 

[Tom-D]

Now, in your case, where you do not take possession of the aircraft to do the work, you have a more difficult problem. I suspect any business attorney advising you would tell you to prepare a proper work order including an estimated cost and an agreement for a lien on the plane for the cost of labor and materials. That would make it a cinch for you to file a lien on the plane with the FAA (filing with the state does nothing for airplanes if they leave the state, and that state lien is still inferior to all liens flied with the FAA even if the others are filed later). Armed with that lien and the signed work order agreeing to the terms, you'd have no problem obtaining judgment in state court (probably with interest) if the owner failed to pay up.

That's what I said my lawyer advised me to do. then told me what he charged to make up that work order to meet the requirements to do what you suggest, considering that and the cost of getting a pad of those printed up, I decided that the case of oil that I have lost in all these year was a better deal.

Or you can just do what you do, working on a handshake and trusting your fellow man, and sometimes get hosed with little legal recourse. Personally, I believe that good fences make good neighbors, and good contracts make good business relationships, so I wouldn't be offended in the least if my mechanic handed me such a document to sign before working on my plane, but it's your business, not mine.

The only real loss I have incurred was a case of oil, the owner that used it died of a heart attack before he reordered it, I kinda felt that I didn't need to bother his widow over it.