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[Topics] [Phillip Kolczynski's Biography]
This section of the Aviation Law Forum is devoted to issues related to General Issues:
Attorney-Client Privilege, Attorney Work Product, Aviation Tort Reform, International
Aviation Law, Aviation Insurance, Admiralty - Aircrashes At Sea, Transportation Accidents,
Aviation Contracts, Aircraft Sales, Warranties.
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In general, is there any (liability) benefit to owning a (non-busness) aircraft
through a corporation rather than as an individual? Would it be disadvantageous
to personally co-own an aircraft with the other co-owner being a corporation?
Some say there is little benefit to incorporation and one should rely on lots of
liability insurance! What do you think?
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I am of the school of thought that there are some benefits to
incorporation but that one should rely on lots of liability insurance.
(I have previously discussed the pros/cons of corporate ownership of
aircraft in response to other questions.)
The law school textbooks would point out, that incorporation should
protect shareholders from personal liability. While this may be true
with regard to large corporations, small closely held businesses may be
vulnerable to "piercing of the corporate veil" to get at the owner's
assets, when the owner of the corporation is also the owner/operator of
the aircraft.
Theoretically, it would be disadvantageous to co-own an aircraft with a
corporate partner because in theory, the corporation is exposed and not
its shareholders; whereas you the personal owner, have direct exposure.
However, this may be a distinction without a meaningful difference under
the laws of some states.
LAND WITH PEACE OF MIND - BUY A LOT OF INSURANCE. PHIL
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What does the FAA mean by 'good moral character' regarding qualifying for an ATP
certificate? If someone has an old misdemenor does that preclude and ATP
certificate?
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I do not know of any specific definition for the term, "good
moral character" in terms of qualification for an ATP certificate. I
anticipate that the FAA would interpret this to mean: no felony
convictions and no evidence of falsification or fraudulent
misrepresentation in the applicant's prior records.
A misdemeanor is not considered a crime of moral turpitude in most
states. A misdemeanor is usually viewed as an infraction of an
ordinance or law designed to provide order, discipline and safety in
society. I would not expect the FAA to deny an ATP certificate to
someone who merely had one old misdemeanor conviction.
If anyone ever locates a Federal Aviation Regulation or any Federal
Regulation, for that matter, defining "good moral character," please
advise me, I would like to compare that definition against the behavior
of some of our Federal officials.
AT LEAST I KNOW WHAT A GOOD LANDING IS. PHIL
[Topics]
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When the FAA files an incident report with basic factual errors, such as landing runway
and wind direction, what action should a pilot take? I have tried writing to the FAA
twice but the errors are still there, public information, on the internet. Is there any
kind of appeal procedure or anyone else that I can write to get these errors corrected?
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Trying to get a Federal agency to correct erroneous information
in a data base can be one of the most challenging of all human
endeavors. I know of no formal appeal procedures to rectify this
problem. A lawsuit seeking an injunctive order in order to compel a
correction, may only be successful if you can prove that you will suffer
immediate and irreparable harm from the erroneous information and that
you are suffering a hardship. Courts are reluctant to interfere in
internal agency business.
The key to getting a correction of any government records, is to find
out the name and phone number of the person responsible and then
persuade him or her to correct it. If unsuccessful, find out who that
person is supposed to be accountable to and write to his or her
supervisor.
LANDING IS EASY - IT'S THE PAPERWORK THAT DRIVES US CRAZY! PHIL
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Phil, I am a 350 hr. commercial pilot getting back into aviation after a 35 year
absence. If I rent an airplane after getting current and signed off and an accident
should occur will I be covered by the FBO's insurance or should I buy private
liability coverage. Thanks.
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When renting an airplane from an FBO (or Flying Club), it is
necessary to find out if the FBO's insurance policy has "Renter Pilots
Coverage." Check to see if it will include you as an "Additional
Insured" under the policy as one of a category of qualified renter
pilots. You need this kind of coverage as protection against the
subrogation lawsuit if you should have an accident and damage the
airplane or injure someone. Ask the Manager to show you in the policy
that you are covered in the event of an accident. If your FBO does not
provide this kind of coverage, you need to purchase "Aviation Non-Owner
Liability Insurance" which should pay for your defense and provide
indemnity coverage if you are sued as a result of an accident.
Aircraft Non-Owner Liability Insurance should protect you against a
subrogation lawsuit for property damage by the owner/insurer of the
aircraft. Aircraft Non-Owner Liability Insurance should also protect
you in the event of a lawsuit by passengers or persons on the ground who
are injured. It also provides coverage against a lawsuit by anyone who
suffers damage to their aircraft or any property on the ground.
MAKE SURE YOU ARE COVERED WHEN LANDING A RENTAL AIRPLANE. PHIL
[Topics]
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Two Questions From Prospective Aviation Lawyers:
1) Dear Mr. Kolczynski: I am a mechanical engineer with a backgroung in construction. I was
recently admitted to practice law in PA and NJ (12/96 & 1/97 respectively).
(This became a little longer than planned, but there is a question at the end!)
I don't want to only practice construction law... I'd get bored. One of the areas of
practice I am interested in possibly practicing (if I can find an in), is aviation law.
As soon as I am able, I want to take flying lessons (not that is a prerequisite to
practicing aviation law, but I went to law school because most of the atty's I met
practicing construction law didn't know what they were talking about). I love everything
mechanical, planes, boats, cars, motorcycles (which I raced until law school made it
unaffordable), etc..
The QUESTION: If you have a few minutes, could you advise how to get into
Aviation Law?
2) Dear Mr. Kolczynski, I am a third-year law student at the University of
Kansas. Last summer I worked for an American law firm in Moscow,
Russia, but did not enjoy my experience with them. I just received by
Private Pilot's license in May 1997 and am beginning my instrument
rating.
My question: I would like to blend by love for aviation with
my desire to practice law, and was wondering if you had any suggestions.
Initially, I thought perhaps tying to get a job with the FAA in D.C.,
similar to what it seems you did. Do you have any suggestions?
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I frequently receive these questions and will offer you my
observations based on 20 years of experience in this field. Aviation
Law usually involves aviation accident law, FAA enforcement law or FAA
regulatory law. The transactional work associated with the formation of
aviation businesses and the acquisition of aircraft is really just
business law.
Most aviation lawyers handle crashes and defend pilots in enforcement
actions. As a result, most aviation legal work is litigation. To be
good at aviation litigation, one must be a good trial lawyer. To be a
good trial lawyer, one must gain trial experience. Lead counsel, big
case, trial experience is very hard to get outside of the Government.
Accordingly, I would strongly recommend anyone who wants a career in
aviation law to get a job with the FAA or the Justice Department
Aviation Unit so that they can gain experience trying substantial
aviation cases. Alternatively, you can start as an associate in a
plaintiff or defense aviation law firm, but plan on carrying bags and
working in the library for a number of years.
By definition, an aviation lawyer should have a thorough understanding
of the aviation industry. This usually means more than having a private
pilot's license. The typical private pilot does not have a
comprehensive grasp of the air traffic control system, in that he or she
does not have an IFR rating or commercial experience. Furthermore,
most private pilots have limited or no experience with aviation
manufacturing, air carrier operations or other commercial activities of
the aviation industry. Lawyers who practice aviation law full time,
work regularly on the commercial side of aviation involving operations
under Part 135 and Part 121. Thus, private pilot training is of some,
but little relevance to these matters. Indeed, there are many
successful aviation lawyers, who have no flight training whatsoever.
Through experience, they have learned the specialty and know the
industry well. (A private pilot's license, coupled with a law degree
can be very relevant for handling the defense of general aviation pilots
and FAA license revocation suspension proceedings.)
Some aviation lawyers have a technical background in engineering, which
is certainly helpful in product liability matters. But an aviation
lawyer usually has to hire an aviation accident reconstruction expert
with an engineering background to testify in complex cases. Also, many
aircrashes involve operational errors where engineering design is not a
genuine issue.
As a generalization, an aviation lawyer should not only have good
litigation skills (succinct analysis, writing and advocacy), but should
also have a talent for learning technical things. (In their spare time,
they can be found tinkering with boats, clicking on computers or
building and repairing mechanical things, that is when not travelling to
depositions as passengers on the airlines).
One advantage aviation lawyers have, is that they work with interesting
people in the aviation industry. In my experience, most people who have
responsible positions in the aviation industry, got those positions, not
simply to make money or to have a job, but because they are fascinated
with aviation. Any time you share a fascination with your clients, your
practice will be more rewarding.
HAPPY LANDINGS! PHIL
[Topics]
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A few weeks ago we had a brake failure while landing and ran off the end
of the runway. Noboby was hurt and the damage was minimal. The company
fired both of us pilots even though there were service bulletins on
these brakes which were not done. We also have to take a ride with the
FAA on our own expenses. What would you suggest?
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There are a number of questions a lawyer would have to ask in
order to be able to answer your question with any specificity. First,
in order to determine whether the termination was proper, one would need
to know whether you were an employee "at will." Employment "at will"
is employment which can be terminated by either employer or employee
without cause. Employees "at will" need an employment contract or
assurances of long term employment from an employer to protect their
jobs. I cannot advise you as to whether your termination was wrongful
since laws vary from state to state as to what constitutes wrongful
termination. (See Aviation Law Disclaimer).
Were the Service Bulletins pertaining to the brakes directly related to
the problems that were the actual cause of the brake failure, in the
incident or accident that lead to your termination? If pilot error
contributed to an incident or accident, the existence of the
corresponding product or maintenance problem often does not completely
exonerate the pilot.
What is not disclosed by your question is whether the FAA conducted an
investigation and served you with a Notice of Proposed Certificate
Action? I would recommend that you contact an aviation attorney with
knowledge of employment law in your state to evaluate whether you have a
case. If you and your colleague are professional pilots, it is
particularly important to protect your record in that the "Pilot Records
Improvement Act of 1996" requires any airline to do a detailed
background check on a pilot before hiring him or her.
IT HELPS TO LAND WITH GOOD BRAKES! PHIL
[Topics]
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This question relates to airplane ownership where the owners formed a
corporation to own the airplane and the owners each hold stock in the
corporation.
If a new owner/shareholder buys into the corporation, must
any ownership change be registered with the FAA? The corporation
remains owner of the airplane. The change is the sole addition of a new
shareholder. My initial feeling is that the FAA need not be notified,
but a second opinion would be appreciated. Thanks.
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The FAA Aircraft Registration Application, Form 8050-1 does not
require the disclosure of each shareholder of a corporation seeking to
register an airplane, but I cannot determine whether the FAA must be
notified because your question does not reveal whether this aircraft
will be used in 135 operation, whether any of the owners are foreign
parties and other factors which could affect the analysis. I recommend
that you call the FAA Registration Division in Oklahoma City to get a
specific answer.
Besides FAA requirements, you should check with a local attorney as to
state corporate law in your jurisdiction. (See Aviation Law
Disclaimer). The legal status of the corporation may be affected by a
change of shareholders depending on requirements of state law, including
the Articles of Incorporation, By Laws, the number of shares owned by
the new member and other factors. Moreover, any co-ownership,
maintenance and use agreements may need revision to be binding on the
new shareholder.
AFTER ALL IS SAID AND DONE, WHY SHOULDN'T ANOTHER SHAREHOLDER ENJOY
LANDINGS? PHIL
[Topics]
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Phil, There was an article published in the Arizona
Republic newspaper this morning stating that the city of Mesa, AZ had
an ordinance on the books prohibiting aircraft flight below 1000 ft AGL
within city limits. The article further stated that this airspace was
reserved for "low flying helicopter operations" ie, police helicopter.
Does a municipality have the authority to legislate and enforce
statutes within (what I believe is) federal airspace? Thanks.
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The Federal Government, specifically the FAA, has exclusive
regulatory control over all navigable air space in the United States.
However, states have territorial sovereignty over the air above the land
in the state. If state, county or municipal ordinances conflict with
Federal Aviation Regulations regarding specific air space and its use,
the Federal Regulations will normally preempt any state law on this
subject.
I cannot comment on the validity of Arizona laws. California, one of
the states that I am licensed to practice in, has a local statute which
declares that the State of California has sovereignty over the space
above its land. The California statute goes on to acknowledge that the
United States Government has exclusive sovereignty over National Air
Space. The purpose of such state laws is to establish jurisdiction and
resolve disputes over building height, obstruction of light,
transmission lines, antennae, etc., which do not protrude into
navigable air space. The FAA sets standards for obstruction to
navigable air space.
One other point - the FAA frequently negotiates "letters of agreement"
with various state and local agencies with regard to the delegated or
shared use of air space, including navigable air space. One valid
reason to justify the delegation of FAA sovereignty over navigable air
space is to assist local governments with police and rescue operations
which help protect the health, safety and welfare of the citizens.
LET'S SHARE THE SPACE WE NEED FOR LANDING. PHIL
[Topics]
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Will the "millennium" problem create any dangers for aviation
safety or issues in aviation law?
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The year 2000 (Y2K) problem may cause problems in those PC
computers used in air traffic control and other aviation safety related
services. The problem as I've been told is that PCs and PC software do
not recognize a "00" combination. Moreover, any aircraft or equipment
which are type certificated and rely upon computerization infected with
the Y2K problem, as a certification basis, could theoretically have
safety problems.
In order for an aircraft to be considered airworthy, it must "conform to
its type certificate" and be in a "condition for safe flight." Thus, if
the Type Certification Data Sheet contains specifications which will not
be satisfied for a reason connected with the year 2000 problem, the
aircraft or its equipment could arguably be rendered unairworthy as a
result of this flaw. For more information on the quality assurance of
software used in aircraft or related products, see FAA Advisory Circular
Nos. AC20-33 and AC20-115.
Parenthetically, I understand that Macintosh computers are not affected
by the year 2000 problem.
ARE YOU PROGRAMMED PROPERLY FOR LANDING IN THE YEAR 2000? PHIL
[Topics]
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Dear Sir, I am exploring the possibility of going to school to become an aviation
attorney. I currently have an AA and will be going back to get a bachelors
degree. What would you suggest the course of study be in order to prepare me for law
school. I am also planning tho take flight lessons in the next year. Thanks in
advance for any suggestions.
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I am in agreement with many authors of law school preparation
guides which suggest that you take a curriculum made up of courses which
force you to engage in logical and precise analytical thinking, such as
mathematics, science or certain rigorous liberal arts courses. It is
also my opinion, that a pre-law student should emphasize courses in
writing such as journalism or English composition. Contrary to the
image created by television lawyers, the practice of law today is
heavily dependent on precise and efficient writing.
Lawyers who specialize in aviation law are usually more than lawyer-
pilots. They have broad experience in the aviation industry, including
manufacturing, operations, maintenance, and regulation. It is very
helpful to have a thorough technical understanding of aviation
engineering, aeronautics, air traffic control, meteorology, navigation,
accident investigation and reconstruction. Aviation is one of the most
heavily federally-regulated industries in the United States and an in
depth knowledge of the inner workings of the FAA can be very valuable.
DO YOU REALLY WANT TO LAND IN LAW SCHOOL? PHIL
[Topics]
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This is one for the books. Recently,... very recently, a friend of mine found two (2)
WWII ERA Ryan PT22 basic trainers in a legally abandoned property. They are both
complete!... Yellow wings off... engines and props sitting in the aluminum bodies
all under the dust of ages. A squirrel... some squirrels... during the last 50+ years
had nearly filled one of the cockpits with half-eaten walnuts and shells. I mean, is
this wild or what?! She was excited as could be but is one of those rare individuals
who actually cares about honesty and correctness... even in such a situation. And
since her character has always seemed to demand my respect I want to do what I can to
help. She doesn't have a computer... but I do. And as a dedicated surfer, I've spent
a number of hours browsing through your swell site and so I came to you.
Can any of you Answer the questions:
1. What constitutes aircraft abandonment? In the legal sense?
2. Can an aircraft registration 'expire' or 'lapse' for any reason? I thought there
might be FAA rules about such things... I don't mean to be soliciting civil legal codes
from you (unless you know any)... just that you might be interested in the framework
of this particular story.
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Dear Sir, the answer to your question will depend on the state
property laws where the aircraft were found. First of all, an aircraft
is personal property. In many jurisdictions, state law, not simply
registration with the FAA, determines ownership of an aircraft.
Furthermore, you state that the real property on which the airplanes
were found has been legally abandoned. Is this the formal written
opinion of a licensed attorney in your state?
It is hard to visualize real property in the United States that is
without an owner, not even the federal government, your state or some
estate or trust? Has a title search been conducted concerning this
piece of real property on which these supposedly abandoned aircraft were
found? You will need to contact an attorney in your home state in order
to determine who has legal and equitable title to this property. Best
of luck.
HAVE YOU EVER LANDED ON LAND NOT OWNED BY SOMEBODY? PHIL
[Topics]
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Dear Phil: Would I be violating any FAR's if somewhere in my
airplane was an out-of-date sectional? There would be useful topographically
information on the sectional even if it was no longer current for navigation.
Can't I legally take-off with just my Airman's Certificate & Medical (besides
the ARROW documents) and no charts? Thanks in advance.
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Dear Sir:
I can't provide advice interpreting the FARs for pilots who write into
the Aviation Law Forum. There is value in your question however, from
the perspective of "What is an airman's liability exposure for using
Out-Of-Date charts when flying"?
Case Law I'm familiar with, requires that a general aviation pilot
exercise due care
under the circumsatances in pre-flight planning. This means that if you
have an accident, a question may arise as to whether you brought current
tools of the trade with you on the trip. This will only be relevant if
the use of an out-of-date chart caused or contributed to the crash.
Remember, prudence in pre-flight planning includes
forseeable emergencies that may require flight over, approaches to and
"Landings" at airports you didn't plan to go near. You may be considered
negligent if the old sectional doesn't have needed navigational information or reveal
a newly erected obstruction.
I can't render an opinion as to when you can "legally" take off because
it depends on alot of factors but I can envision local flights, in rural
areas, where you know the terrain and airport, such that charts may be
irrelevant to the short flight.
ALL SAFE LANDINGS START WITH A THOROUGH PREFLIGHT! PHIL
[Topics]
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Just bought my first airplane. I know the contract says "as is", but there
appear to be some things that were deliberately concealed. I can live with the small
stuff, but the seller was an A&P and signed off on his own annual. He
failed to certify the static system, altimeter or the ELT battery. I'm concerned that
no "real" annual was done. I got the aircraft in June.
Should I put it thru an early annual to make sure it is "really" safe.
I had a prebuy check and it came thru okay, but I'm still uncomfortable, based
on what I now know. Do I have any recourse?
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Please refer to another reply I gave on this topic, to a person
who purchased an aircraft without an adequate prebuy check (See also,
Aviation Law Forum Disclaimer). Now that you have that background
information, let me speculate. From the sound of it, someone may have
misrepresented the facts relative to the safety certification status of
the aircraft which you purchased. I recommend that you consult with an
attorney in your state. Provide the attorney with the facts which
suggest that there may have been misrepresentations and follow that
attorney's advice.
You ask whether you should put your aircraft through an early annual
inspection. That is not a legal question, but a question of judgment.
If there is any doubt in your mind that that airplane is safe,
definitely put it through an annual inspection. Have the inspector
review and prepare a written statement regarding the prior sign off and
current condition of the aircraft. Save this statement as evidence.
If your attorney advises you that there has been a misrepresentation,
and you bring a lawsuit, and if you prove that there has been a
misrepresentation, then in some states, any foreseeable expenses which
you incurred because of the misrepresentation may be recoverable in a
successful tort lawsuit. If you don't sue, you will still have the
piece of mind, knowing that your airplane is safe after it has been
thoroughly inspected.
DON'T TAKE OFF AND LAND UNLESS EVERYTHING IS SAFE! PHIL
[Topics]
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I need to get a information on how to handle a city that got me off of there airport
because they now don't allow chemicals on city property.
22 years in business ag flying off of this airport and now they shut me down this way.
What is the answer? This is a federal funded airport. Thanks
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You are caught in the "twilight zone" between federal and
municipal law. Federally funded airports are supposed to allow equal
access for all types of aeronautical use, on reasonable terms and
without discrimination. On the other hand, municipalities have the
right to make and enforce ordinances to protect the health, safety and
welfare of the citizens and the environment. What may be lurking behind
the scenes are increased airport insurance premiums, if the city allows
toxic chemicals to be carried or stored on airport property.
Generally speaking, the obligation to provide non-discriminatory
aeronautical use of a Federally-funded airport is good for approximately
20 years form the date of the last acceptance of Federal aid. I note
that you have been flying off this airport for 22 years. It may be that
airport authorities feel that they now have the freedom to evict you.
Ask to see The Federal Grant Airport Agreement.
As you may note from The Aviation Law Forum "Disclaimer," I must
recommend that you contact a local attorney on the local question
regarding the city's power to evict you and whether they utilized proper
procedures in forcing you off of the airport.
You also have another option - You may file a written "Complaint of
Discrimination" with the local FAA Airport District Office. Formally
request that the FAA investigate whether the municipal airport owner is
in compliance with the Federal Grant Airport Agreement. If the FAA
determines that the airport proprietor is in violation it should
undertake its own enforcement action to force the proprietor to comply
with Federal laws if a violation is discovered.
AIRPORTS ARE FOR LANDING, NOT DECORATION! PHIL
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Phil, I am working on a problem concerning my local airport and I was hoping you
could answer my question or direct me to appropriate law. The FAA helped fund a
land aquisition for our airport many years ago. They paid 25% of the total cost.
In the past several years, the airport boundry has been changed (airport made smaller)
without FAA permission. The funds generated from the newly constructed industrial
park have been going into the general fund of the city that owns the airport.
The Industrial park property was previously airport property and I was told by
the FAA that since they helped pay for the property that all $$$$ generated
by said property was to remain in the airport fund and could not be
diverted to the general fund. Do you know anything about this specific law ??
Please help.
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The best way to research the issue of whether money generated by
an airport should remain in the airport fund versus the general fund of
the local community, would be obtain the FAA's regulations, Advisory
Circulars and any FAA Orders on this subject. You should also retain a
local attorney, who can research the municipal law that may explain
whether the city has the right to keep funds from an industrial park
that has been built where an airport used to be.
In order to research the FAA Guidelines on this issue, contact your
local Airport Regional District Office. In addition, you can find
names, numbers and specific airport finance information on the FAA's web
site at www.faa.gov/arp/51Ohome.htm.
If there is a conflict between federal law and municipal law on this
issue, you may want to call or write for assistance to:
Assistant Chief Counsel of the Airport and Environmental Law Division,
Office of the Chief Counsel, Federal Aviation Administration,
National Headquarters,
800 Independence Avenue, SW,
Washington, D.C. 20591
Try calling the branch chief in charge of the Airport Law Branch (AGC-610),
at (202)366-3199.
PRESERVE OUR AIRPORTS FOR LANDINGS! PHIL
[Topics]
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Would you know where on-line I can find the legal interpretations of the FAR's that are
handed down by the FAA Office of Chief Counsel? These were on-line some time ago, but I
am unable to locate them now. This is really useful stuff to read, since they provide
working definitions of the FAR's. If these are no longer on-line (but they should be!),
would you know how I can obtain them? Thanks.
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There are no on-line listings of legal interpretations of the
FARs. What most people want when they ask for a legal interpretation of
the FARs is a legal opinion about the application of the FARs to a
particular set of facts or circumstances. The FAA's Office of The Chief
Counsel, may be reluctant to post interpretations which could be
misunderstood.
If you have a question about the general regulatory meaning of Federal
Aviation Regulations, you could try to write to the:
Assistance Chief Counsel of the Regulations Division (AGC-200) Office of The Chief Counsel,
Federal Aviation Administration,
800 Independence Avenue, SW,
Washington, D.C. 20591.
Alternatively, if your question concerns new
regulations, contact The Associate Administrator For Regulation and
Certification (AVR-1) at the same address. Also, new regulations are
published in The Federal Register. The Office of The Chief Counsel
provides input to the introductory descriptions of new rules.
LAND BY THE RULES! PHIL
[Topics]
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Dear Phil, I purchased an aircraft without a prebuy inspection and came to find out
that all was not as I had been lead to believe it was. Is there legal recourse to the
seller, shop who did the annual, or mechanic who last worked on my plane.
Thanks, feeling foolish
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Dear Aircraft Purchaser - I cannot provide you with any specific
advice concerning your dilemma. The appropriate advice will depend on
many facts which have not been provided in your question. Proper advice
will require interpretation of the laws of the state or states where the
transaction has taken place (See Aviation Law Disclaimer). I will,
however, offer these general comments for all aircraft purchasers - Not
only should a pre-buy inspection be performed, but the purchase of a
used aircraft should be memorialized by an Aircraft Purchase Agreement.
At a minimum, use an FAA Bill of Sale (FAA Form 8050-1) which you can
obtain from any FAA FSDO.
A pre-buy inspection should include a check of any airworthiness
directives, service bulletins or service letters pertinent to the
aircraft and its equipment. Needless to say, all logbooks, repair
invoices, modification records, etc. should be inspected. Also, a Title
Search should be conducted with the FAA Aircraft Registry in Oklahoma
City and a determination should be made as to whether any Liens exist on
the aircraft. Consult with an attorney or accountant regarding your tax
obligations in the state of purchase and in the state in which you
eventually intend to hangar the airplane. If you intend to lease the
airplane, finance the purchase, or form a partnership for the ownership,
you should retain an attorney in the state in which the transaction is
to take place.
Let me explain some of the issues a lawyer would examine in the case of
a purchase where the buyer finds out that she or he has been misled by
the seller. A lawyer would investigate to determine whether a tort has
been committed due to fraud or misrepresentation associated with the
sale. A lawyer would examine whether there has been a breach of an oral
or written contract, including the violation of any express warranties
that may have been made. Inquiry would also include whether an implied
warranty of fitness for a particular purpose may have been conveyed
along with the sale. These legal causes of action vary from state to
state, but may be applicable if the purchaser has suffered out of pocket
expenses, loss of use or been denied the "benefit of their bargain" by
the seller.
A purchaser will normally not have recourse against tradesmen, or
aviation professionals who may have worked on the airplane prior to the
sale, unless they have committed fraud or misrepresentation or there has
been some direct dealing between the purchaser and these people, but
again, check with an attorney in your particular case.
USE A CHECKLIST BEFORE YOU LAND AND AN INSPECTION BEFORE YOU BUY! PHIL!
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Phil, Opinion please on a tax issue emanating from ownership of my airplane. I
bought my airplane 6 years ago while living in New Hampshire. Since then I moved
and started working in Virginia. Virginia just sent me a sales tax due notice on my
airplane despite the fact that I owned the plane for several years before I moved
here. It seems they just can't stand the idea that some states don't charge sales
tax and will try to extract money from anywhere they can. Since the plane has
appreciated in value since I bought it they want to tax me on current value rather
than what I paid for it as well. Is there any way out of this
state-sponsored larceny?
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Dear Virginian - I cannot answer your question in that you seek
specific advice on a specific tax problem, apparently under the laws of
the State of Virginia. (See Aviation Law Forum Disclaimer). Anyone
purchasing an airplane should check with an attorney in that state, to
find out of they have to pay sales tax. If they plan to move to another
state, they should also have an attorney check the laws of the new state
to find out if the new state will give credit for the sales tax paid in
the state of acquisition.
Generally speaking, if one acquires an airplane in one state, does not
pay sales tax there and then moves to a new state - the new state will
probably assess "use" tax. Sometimes, if the amount of "sales"
tax paid in the state of purchase is less than the amount of "use" tax due
in the new state of residence, the purchaser must pay their new home state the
difference as "use" tax. As you might expect, it doesn't work the other
way around. If the sales tax paid in the first state is higher than the
"use" tax that would be charged in the new state, one does not get a
refund by moving into the lower tax state. Also, many states charge
"personal property tax" on an annual basis, much the same as the annual
registration fee associated with automobile ownership.
State taxes are significant costs of ownership that must be evaluated
before purchasing an airplane. Be aware, that it is almost impossible
to hide the fact of such ownership from state taxing authorities.
Failure to pay appropriate taxes may result in fines, penalties and
liens for failure to comply with state tax laws.
HAPPY LANDINGS EVEN ON APRIL 15TH! PHIL!
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Your advice would be appreciated! What are the legal issues involved with recovering
a warbird off the coast of New Guinea? Thanks in advance.
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Dear Sir - I cannot give any advice on this question because
there are simply are not enough facts to even begin to give a useful
answer. (See Aviation Law Forum Disclaimer). You will need to hire an
attorney skilled in Aviation, Admiralty and International Law. Here is
just a sampling of some of the questions that your attorney will ask:
Who owned the aircraft?
How far off the coast of New Guinea did it sink?
Have local investigators begun recovery efforts?
What type of operation was it engaged in at the time of its loss?
Was the aircraft destined for New Guinea and being operated in full
conformity with the laws of New Guinea?
Were there any injuries or deaths?
The list goes on..........
LAND ON LAND! PHIL!
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Dear Phil: I hear Congress is considering tort reform legislation in the
field of product liability. I've read about this concept of abolishing
"joint and several liability." What's that all about? JOHN
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Dear John: Thanks for the good question. What the legislators mean when
they say that they are going to pass laws abolishing "joint and several
liability" is that they will create protections in the law to protect
deep pocket defendants from having to pay more than their proportionate
share of liability for certain types of damages.
Let's start out with the way it has been in most states in prior years.
If two defendants injured one plaintiff and the plaintiff won the case,
the plaintiff could collect from either of the two defendants. If the
plaintiff collected all of his damages from Defendant A, the plaintiff
would be made whole. But, what if Defendant A wasn't entirely at
fault? Defendant A could then, theoretically, collect indemnification
from Defendant B for that percentage of fault which Defendant A paid on
Defendant B's behalf. Here is the rub - sometimes Defendant B does not
have any money. Thus, Defendant A, from whom the plaintiff collected,
has paid more than its proportionate share of fault, with nobody to
collect indemnification from.
Manufacturers and public entities have frequently been sued in
situations where they only had 5% or 10 % liability. Thus, plaintiffs
would collect 100% of the damages from the deep pocket defendant who had
only 5% or 10% of the liability. This usually occurred because the
other defendants did not have sufficient insurance or assets to pay for
their liability.
California modified the "joint and several" liability laws over 10
years ago to prevent this injustice. Congress is attempting to copy
this tort reform legislation in the Product Liability and Tort Reform Bills.
Here's how it now works in California: Plaintiff sues Defendant A and
Defendant B. Defendant A is held, say only 10% at fault, Defendant B is
held 90% at fault. The Plaintiff can collect all of their "economic"
damages from Defendant A or Defendant B. (Economic damages are things
like lost wages, or medical expenses.) However, the Plaintiff can only
collect 10% of its "non-economic damages" from Defendant A. Plaintiff
must attempt to collect the other 90% of its non-economic damages from
Defendant B. (Non-economic damages are things like pain and suffering
or the loss of care, comfort and society when somebody has died.)
Non-economic damages are high ticket items and are frequently awarded by
juries in amounts larger than the actual economic damages the victim has
suffered. Thus, you can see that such Tort Reform measures provide an
important protection for defendants against paying more than their share
of the non-economic damages.
IMPROVE OUR LANDINGS! PHIL
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