In Creston Aviation v. Textron Financial Corporation, the Florida Court of Appeals affirmed a Broward County court’s grant of summary judgment holding Creston Aviation’s mechanic’s lien unenforceable. In Creston, the owner of the aircraft defaulted on his financing with Textron and ultimately returned the aircraft to Textron. However, at the time of surrender, Creston was in possession of the aircraft and claimed a mechanic’s lien for work it performed on the aircraft. Creston Aviation filed its notice of mechanic’s lien with the FAA Registry in Oklahoma City, Oklahoma, but did not file in Broward County, Florida.
In opposition to Textron’s motion for summary judgment, Creston argued that the filing requirement of 49 USC 44107 pre-empted Florida statute 329.51 which, in addition to the FAA Registry filing requirement, also requires that a mechanic lien claimant file in the county in which the work was performed. The circuit court granted summary judgment finding that the lien was invalid for failure to comply with state law.
On appeal, the court noted that “the federal recording statute preempts any state law which would give priority to a claim against an aircraft where that claim was not recorded with the FAA in Oklahoma City, and where the competing claim was recorded with the FAA.” It went on to state that “It is apparent that the supremacy of the federal regulation requiring recordation of interests in aircraft with the FAA is operative to the extent that if the title or lien interest is not recorded in the FAA Aircraft Registry, then it will not be valid as against third parties without notice, regardless of any state law to the contrary”. The court affirmed the grant of summary judgment by concluding that the federal requirement that notice of mechanic’s liens on aircraft be filed with the FAA did not preclude the State of Florida from imposing requirements which affect the “enforceability” of those liens in Florida.
Although this is an unfortunate outcome for Creston, especially since it filed its mechanic’s lien with the FAA Registry, we can learn something from this case. Aircraft mechanic’s liens are creatures of statute, both federal and state. If you want to assert a mechanic’s lien against an aircraft, you need to be familiar with both the federal and state laws that may affect your ability to perfect your aircraft mechanic’s lien and to protect the priority of your lien. Each state is different. Make sure you do your homework so you don’t end up empty handed.