Fixed-based operators and other types of airport tenants (“Purveyor”) provide a variety of services and materials to aircraft owners. Unfortunately, sometimes aircraft owners do not pay the Purveyor for the services and/or materials that a Purveyor provides. When this happens, filing a lien against the owner’s aircraft is a powerful and effective tool to help the Purveyor get paid. When placing a lien on an aircraft, the Purveyor must be careful to meticulously satisfy the applicable legal requirements. Failure to do so could result in potential civil, and in some circumstances even criminal, liability to the Purveyor for filing an improper lien. This article examines those potential consequences.
Does Your State Have a Statute That Allows for Liens Specific to Aircraft?
When assessing your rights to place a lien on an aircraft, you should first identify whether your state has a statute that allows for liens specific to aircraft. This could be a specific statute like that of Connecticut (C.G.S. §49-92g), Florida (Fla. Stat. §329.51), Texas (Tex. Prop. Code §70.302), New Mexico (NM Stat. Ann. §48-3-29), Oklahoma (42 Okl. St. §91A), California (Cal. Code Civ. Proc. §1208.61), Idaho (ID Code §45-1102), and North Carolina (NC Code § 44A-55), which have lien statutes that specifically apply to aircraft. In other states, the right to place a lien on an aircraft is included within a broader statute allowing for mechanics liens in general. In New York, for instance, the right to place a lien on an aircraft is included in a statute protecting the bailee of motor vehicles, motorboats, and aircraft. See NY CLS Lien §184. In Maine, the right to place a lien on an aircraft is covered in a broader mechanics lien statute that protects those who perform labor and materials for storage and repair of vehicles, aircraft, and parachutes. See 10 M.R.S. §3801. Identifying the applicable state statutes and understanding the specific requirements is the first step to ensuring that your lien is valid.
Carefully Identify and Examine the Specific Bases for Which the Statute Allows you to Assert the Lien
Once you identify the law that applies to asserting a lien against an aircraft, you need to consider whether your specific facts provide you with a legitimate basis for asserting a lien under that law. Specifically, you need to ensure that the exact services and/or materials you provided, and for which you were not paid, provides you with a basis to assert a lien under that law.
For example, Connecticut’s lien law provides that “[a]ny person who stores, cares for, maintains, repairs, or furnishes any services, gasoline, accessories, materials or other supplies at the request of or with the consent of the owner, his agent or legal possessor of an aircraft, as defined in section 15-34, has a lien upon the aircraft until the sum due for any fees, expenses or charges for such storage, care, maintenance or repair or the furnishing of such services, gasoline, accessories, materials or other supplies has been paid.” (Emphasis added.) C.G.S. § 49-92g. Connecticut’s law is very broad and Purveyor friendly given that it allows a Purveyor to assert a lien against an aircraft owner (or the owner’s agent or other legal possessor of the aircraft) for furnishing any services or materials to an aircraft owner.
By comparison, Massachusetts’ lien law is not as broad as Connecticut’s. Specifically, Massachusetts’ lien law provides in relevant part that “[p]ersons, including but not limited to the commonwealth and any department, commission, division, agency, or branch thereof, maintaining public landing, parking, storage, and tie-down facilities for the landing, parking, storage, and tie-down of aircraft brought to their premises on an airport or placed in their care by or with the consent of the owners thereof, shall have a lien upon such aircraft for proper charges due them for the landing, parking, storage, and tie-down and care of the same.” Mass. Gen. Law, Part III, Title IV, Chapter 225, § 31E. Massachusetts’ lien law also allows a Purveyor to assert a lien for providing aircraft maintenance. Massachusetts’ lien law, unlike Connecticut’s, does not allow asserting a lien for any services or materials.
Some states specifically exempt certain types of Purveyors from asserting a lien. Indeed, California’s lien law provides that the right to assert an aircraft lien “shall not apply to aircraft operated exclusively by an air carrier or a foreign air carrier, as defined in subdivisions (2) and (19) of Section 1 of Chapter 601 of the Statutes of the Seventy-fifth United States Congress, Second Session (1938), engaged in air transportation as defined in subdivision (10) of the same section while there is in force a certificate by, or a foreign air carrier permit of, the Civil Aeronautics Board of the United States, or its successor, authorizing such air carrier to engage in such transportation.” Cal. Code Civ. Proc. § 1208.70.
In addition to ensuring that the types of services and/or materials provided entitles you to assert a lien against an aircraft, you must also be sure to satisfy any and all other applicable requirements to perfect the lien including, but not limited to: (1) time limits to file the lien; (2) obligations to notify the aircraft owner or publish notice of the lien; (3) filing requirements; and (4) limits on the types and scope of amounts owed that can be claimed by the Purveyor.
Be sure to read the applicable lien laws very carefully. Failure to satisfy all of the applicable requirements could not only invalidate your lien, but it could potentially subject you to liability, as set forth in more detail below.
Civil Liability Risks Associated with Filing an Improper Aircraft Lien
If you file an improper lien on an aircraft, it could result in: (1) a civil lawsuit initiated by the aircraft owner to determine the legal rights to the aircraft or to quiet title to the aircraft; or (2) the assertion by the aircraft owner of successful legal defenses once you initiate the lien foreclosure proceeding that will invalidate the lien.
If the aircraft owner prevails in such litigation, the aircraft owner may have a successful claim against you for slander of title. In short, slander of title is where one party improperly encumbers another party’s title to property that results in harm to that party. A successful slander of title claim involving a successfully invalidated aircraft lien could result in the aircraft owner receiving the following damages: (1) costs expended to repair the title, including reasonable attorneys’ fees; (2) damages that the aircraft owner can prove are directly caused by the slander of title, such as a failed potential sale of the aircraft caused by the improper lien; and/or (3) punitive damages.
Criminal Liability Risks Associated with Filing an Improper Aircraft Lien
In addition to potential civil liability risks, the filing of an improper aircraft lien could potentially subject a Purveyor to criminal liability.
Virginia has a criminal statute providing that “[a]ny person who maliciously files a lien or encumbrance in a public record against the real or personal property of another knowing that such lien or encumbrance is false is guilty of a Class 5 felony.” Code of V.A. § 18.2-213.2.
Maryland’s criminal statute provides that “[a] person may not file a lien or an encumbrance in a public or private record against the real or personal property of another if the person knows that the lien or encumbrance is (1) false; or (2) contains or is based on a materially false, fictitious, or fraudulent statement or representation.” Mar. Code Crim. Law § 3-807. A Purveyor who violates this law for the first time is guilty of a misdemeanor and is subject to “imprisonment not exceeding 1 year or a fine not exceeding $10,000 or both.” Id.
Utah has a criminal statute that provides in relevant part that “[a]n actor commits the crime of wrongful lien if the actor knowingly makes, utters, records, or files a lien … having no objectively reasonable basis to believe that the actor has a present and lawful property interest in the property or a claim on the assets.” UT Code § 76-6-503.5. Filing a wrongful lien under this statute is a third-degree felony. Id.
Texas has a criminal statute provides in relevant part that “[a] person commits an offense if, with intent to defraud or harm another, the person … owns, holds, or is the beneficiary of a purported lien or claim asserted against … personal property or an interest in … personal property that is fraudulent.” TX Pen. Code § 32.49. An offense under this statute is a Class A misdemeanor. Id.
It is important to note that an aircraft lien being invalidated does not necessarily render the lien fraudulent, malicious, or knowingly false such that it will subject a Purveyor to criminal liability as outlined above. The aircraft owner will have a high burden of proof. That being said, however, given the significant risks outlined above, a Purveyor will want to avoid putting itself in the position of having to argue against criminal liability.
Conclusion
Although asserting an aircraft lien is a very effective tool for a Purveyor to collect outstanding payments from an aircraft owner, there are serious potential civil and criminal risks to the Purveyor if not done properly. The analysis will depend upon the specific facts as applied against the applicable law. Given the complexities and the risks if not done properly, you should contact aviation counsel to evaluate the issues and guide you through the process.
