Federal court decision could affect mx liens
Members of the Florida Aviation Trades Association learned recently that the Third District Court (Miami) has issued a ruling that will significantly affect the recourse available to the maintenance industry when faced with a non-paying customer.
Previously, a repair facility could put a lien on the aircraft when it perceived the customer would not pay the bill regardless of who was in possession of the aircraft.
According to Commercial Jet versus U.S. Bank, Commercial Jet filed an action to foreclose a purported mechanic’s lien on a Boeing 767 for which it had provided maintenance and repairs. Despite an outstanding balance, Commercial Jet returned the aircraft to Silver Jet, its operator, which put it back into service.
After it relinquished possession of the aircraft, Commercial Jet recorded a claim of lien for the unpaid balance against Silver Jet and U.S. Bank, the aircraft’s owner. Since the purported lien is by legal definition a possessory lien and Commercial Jet was no longer in possession of the aircraft at the time it filed the lien, the trial court granted U.S. Bank’s motion for summary judgment.
The Third District court affirmed the trial court’s order and rejected Commercial Jet’s argument to eliminate the requirement that one must have possession of the property in order to claim a lien. Therefore, it will now be necessary to file a lien while the repair facility (lien holder) is in possession of the aircraft. If the facility releases the aircraft and then tries to file a lien, the lien will not be enforceable.
The problem is that aircraft owners frequently pick up their aircraft but don’t receive the final bill, sometimes not until several months later. Worse, there may be a significant chargeback for component core charges that causes customer dissatisfaction, resulting in reluctance to pay the bill. According to the recent decision, repair shops must obtain full payment, or at least a deposit, before releasing the aircraft, otherwise any lien they record might be worthless.