LEGAL CORNER
long as the maintenance facility/bailee then provides an opportunity for the aircraft owner/bailor to present proof of title or right to possession. This rule is intended to protect the maintenance facility/bailee from being placed in the difficult position of risking a suit by the rightful owner of the aircraft for converting the aircraft when the maintenance facility/bailee gives the aircraft to another person who claims to be the owner of the aircraft. If the maintenance facility/bailee does not receive such proof, the maintenance facility/bailee will likely not be liable for conversion. Unfortunately, this can potentially
leave a maintenance facility/bailee in the unenviable position of having to decide to whom it should release the aircraft and to suffer the consequences if its decision turns out to be incorrect. In situations where the maintenance facility/bailee might be presented with multiple bills of sale or documents indicating security interests held by creditors, it might be difficult to figure out which party has the right to delivery and possession of the aircraft. Another situation that might impact the decision to deliver the aircraft could arise if the maintenance facility/ bailee has not been paid for its services. Depending upon the state in which the maintenance facility/bailee is located, it might be necessary for the maintenance facility/bailee to retain possession of the aircraft if it wants to assert a mechanic’s or artisan’s lien against the aircraft to secure payment of the amount owed for the work it performed. Retaining possession of the aircraft to perfect the lien would excuse the maintenance facility/ bailee from complying with the aircraft owner’s request for return of the aircraft. As long as the lien claim was valid, the maintenance facility/ bailee would likely not be liable for conversion of the aircraft. What can a maintenance facility do to protect itself from potential liability under a bailment relationship? The maintenance facility should ensure that it exercises reasonable
care with respect to the aircraft in its custody. Maintaining custody and control of the aircraft and taking reasonable precautions to minimize the opportunities for damage to aircraft will go a long way to avoiding claims. Another option is to include language in the work order or service request signed by the aircraft owner that limits the maintenance facilities liability for negligent damage to an aircraft. This could include exclusion of damages for loss of use or diminution of value and it could cap or limit the total amount of damages for which the maintenance facility could be liable. Other language could be included to require that the aircraft owner carry certain minimum insurance and that the maintenance facility be protected by the owner’s insurance. A bailment relationship will
often result when a maintenance facility accepts an aircraft owner’s aircraft for service. Maintenance facility staff should understand the duties and liability to which they might be exposed as a bailee in that relationship. With proper procedures and contractual planning, maintenance facilities can comply with their duties and limit their liability exposure in the bailment relationship.
Greg Reigel is an aviation attorney, author and pilot. He holds a commercial pilot certificate with an instrument rating and can fly single-engine land and sea, as well as
multi-engine land aircraft. His practice concentrates on aviation litigation, including insurance matters and creditor’s rights, FAA certificate actions and transactional matters. He represents clients throughout the country on aviation law matters. His also an adjunct professor at Minnesota State University-Mankato where he teaches aviation law and at William Mitchell College of Law where he is an instructor in the advocacy course. He can be reached via e-mail at
greigel@aerolegalservices.com.
© 2013 All rights reserved.
11.12 2013
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