How about the previous annual inspections? Of course, they had direct responsibility to check for AD note compliance and apparently failed to do so. At least two annual inspections were performed on this aircraft after Sept. 5, 2000, the date of Emergency AD 2000-18-53 calling for replacement of the filter converter plate gasket, before further flight!
What can be done?
Get hold of the lawyer, (the mechanic did have insurance protection for completed operations) and tell him to tender the defense of this case to the people who performed the last annual inspection of the aircraft. Everyone knows that they are responsible for AD note review and compliance status along with the owner, during their inspection. If the AD was missed they could very well be held responsible for approving the return of this aircraft to service without complying with the AD. AD compliance review is mandatory during annual inspection. Indeed, this AD was classified emergency and should have been complied with by the owner on receipt of notice. (Usually by U.S. mail to the registered owner.)
If they refuse to defend the case then you have to cross complain against them for what's called indemnity. That is, you want them to reimburse you for any expenses and any judgment against you that may be lodged because of the lawsuit. This is commonly called a complaint for indemnity.
In addition, because the law is so clear in this case, I would consider a cross complaint for abuse of process, defamation, and any medical and general damages against the owner. You may have some difficulty with these causes of action, however, remember you must attack the frivolous lawsuit with a vigorous response. The threat of a judgment against a plaintiff can be a strong incentive to have him and his insurance company back off.
Our man did not perform any inspection on this aircraft and certainly was not instructed to, nor paid for such work. If the owner had specifically instructed him to review AD note compliance then the story would be different. But he did not!
The airworthiness directive
The AD concerned is Lycoming 2002-18-53. (September 2000). The note applied to a large number of engines, new, rebuilt, overhauled, or had the oil filter converter plate or gasket replaced. Lycoming Mandatory Service Instruction 543B dated Aug. 30, 2000, and Service Instruction 1453 dated May 9, 1991 are both referenced in the AD. Compliance with this emergency AD should have been completed long before the accident in this case.
One can easily get caught by the failure of the owner to comply with this AD. After speaking with numerous shops and individual mechanics who routinely change oil and filters on Lycoming engines it is apparent that none of them feel they have responsibility to check for compliance with this AD during an oil and filter change. The converter plate and associated stud is required to have a installation torque of 50 to 60 ft.-lbs. Removal and replacement of the filter involves a torque of less than 20 ft.-lbs. Hardly sufficient to have any effect on the converter plate and attached gasket.
Other steps you can take
I have always been concerned about mechanics' poor handling of paperwork. The matter of attending to detailed signed repair orders, logbooks, and maintenance records is always a pain in the neck for the average small shop. It would be nice to have one person in the shop take care of this but it is not always possible.
Remember, in the event you have a hard time with a customer, the repair order, signed by the customer, is your best defense. You can write (or have printed) anything you want on the form.
In my opinion, you must clearly spell out what you are going to do and what you are not going to do, where it seems appropriate.