In a recent case, Flight Test Associates, Inc. v. NC Aerospace Corporation, the California Court of Appeals affirmed a trial court’s refusal to enforce a mechanic’s lien against an aircraft where the lien claimant failed to comply with the requirements of California’s Aircraft Repair Lien Law (“APLL”). The APLL requires that all work done by a repairperson be recorded on an invoice that describes all work done and parts supplied. Specifically, the law states that “[w]ork 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.”
In this case, the repairperson had a written agreement with the aircraft owner to perform certain work on the owner’s B737. Subsequently, after the repairperson had performed work on the aircraft, a dispute arose between the parties. The repairperson filed its lien with the FAA Aircraft Registry and then obtained an order to show cause hearing at which the repairperson sought court approval to sell the aircraft at auction to satisfy the debt owed to it by the aircraft owner. At the hearing, the court asked for proof that the repairperson had complied with the lien law’s invoice requirements.
The repairperson submitted the agreement between the parties that stated the services the repairperson “will provide” as well as an invoice for additional work that was performed, but not described in the parties’ agreement. However, the trial court rejected this proof as insufficient. It noted that the lien law requires the repairperson to describe in an invoice “all work done and parts supplied.” The court ruled that because there was no invoice describing all of the work done and parts supplied the repairperson had not complied with the lien law and, as a result, the repairperson’s lien was not valid.
On appeal, the Court agreed with the trial court. The Court observed that “[a]n agreement simply listing the work that the repairperson ‘will’ do does not suffice because it does not, and cannot, describe ‘work done’ when no such work has yet been done.” The Court then simply repeated, verbatim, the trial court’s ruling and rejection of the repairperson’s defenses, finding that the trial court had “thoroughly and painstakingly” analyzed the repairperson’s failure to comply with the lien law.
This case serves as a good example of the necessity of strictly complying with a lien statute’s requirements if you want to be able to enforce a lien against an aircraft. Although in some circumstances it may require substantially more paperwork and/or documentation, it is better to have more and know you have complied with a statute’s requirements, rather than having less and being in the less than enviable position of having to convince a court that you “substantially complied” with the statute.
