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Liability of Selling an Experimental Aircraft

Bob Dean

I'm New Here
I had lunch yesterday with a group of knowledgable and experienced RV builders. I brought up the subject of selling versus parting out an aircraft.

The general conclusion was that if you de-register you aircraft by either:

1) Selling the aircraft overseas.

2) Removing the engine/propeller and selling the "parts" to different parties ,

... the liability is removed.

I wanted to open up the question to the collective knowledge of the RV community and ask if anyone has anything to add to this discussion or has had (or knows of someone who has had) experience in this area.

Thanks,

Bob
 
Anyone can sue you for anything. There is NO way to remove your liability other than not participating in the activity in the first place.

Don't want liability for the airplane you built? Chop it up into little pieces and bury it in the backyard.
 
Not to put words into Bob's mouth, but to me it isn't specified in this scenario that the seller is necessarily the builder. The seller could be the builder, or the second or third (etc.) owner of the airplane.

I am curious to see what people have to say about this subject.
 
urban myth?

Can anyone point to an actual case where someone successfully sued someone who built and then sold an aircraft that was involved in an accident? I understand the fear but I have never heard any case actually cited...

In the spirit of learning...show me the data:D
 
After John Denver crashed, his wife and kids sued everyone in sight, including former owners and the original builder. I believe Aircraft Spruce, as the deep pockets here, ended up paying some amount even though they were pretty much blameless. I don't know what others may have paid but at the least they all had to hire lawyers.
 
After John Denver crashed, his wife and kids sued everyone in sight, including former owners and the original builder. I believe Aircraft Spruce, as the deep pockets here, ended up paying some amount even though they were pretty much blameless. I don't know what others may have paid but at the least they all had to hire lawyers.

The EAA said, several years ago, that no one had ever won a case that they brought against an experimental aircraft builder (settling out of court might not have been considered "winning in court") - but I have never seen any actual cases cited one way or another. That doesn't mean there haven't been lots of suits - but not a lot of us have enough money in our estates to be obvious targets....
 
I personally know of several cases where the builder was sued.
I know of none, nor have I heard of any being successful.

The builder is the builder, is the builder, forever and ever, Amen!

Parting out does NOT relieve the builder of any liability.
 
Mannan, I think what they call it is "Judgment Proof"!
I have considered placing my plane in an LLC for protection, but Im not really sure if that is needed or not. It may be worth it just for record keeping and removed from a private asset.
 
Local (CA) estate attorney told me an LLC would provide no protection to a builder, if the suit claimed negligent workmanship; nor to a PIC if the suit claimed pilot error. An LLC would help if I had a partner and he was PIC in a pilot error suit. LLC also makes it easy to change partners, or even sell the whole plane, without incurring CA sales tax of nearly 10%.
 
One local builder of an RV-8 removed the engine and instruments from his plane and donated it to an aviation museum with the idea that it would never fly again.

The museum hung the -8 from the rafters for a few years and then sold it. Guess what, it is flying again.

I suspect what the builder should have done is donated his plane w/o the log books and removed the data plate.

Then, if someone wanted to fly it again, they would have come up with a data plate and log books. All that is easy enough to do since his N-number was still on the plane.
 
Donations

EAA has sold at least one airplane that was put back in the air. There are allegations of many more. When you donate to EAA you relenquish all control over what they may do with the airplane.
I buillt an airplane that was involved in a fatal many years after I sold it. Never heard a word from anuyone. Of course I not only don't have deep pockets, I don't have any pockets at all.
 
EAA has sold at least one airplane that was put back in the air. There are allegations of many more. When you donate to EAA you relenquish all control over what they may do with the airplane.
.

I purchased a core O-360 on ebay a few years back that was on a starduster too originally. it was listed as available as pick up in wisconsin so I arranged to pick it up while I was at airventure

imagine my surprise when I called the seller from the grounds and was told to drive over to a certain barn for pick up and received a receipt signed by Audrey Poberezny ;)
 
Keep it

Bob,

Keep it for awhile, you are not done yet, you are a youngster.
I can give you Martins # if you want the real deal of selling over seas.
 
Bob,

Keep it for awhile, you are not done yet, you are a youngster.
I can give you Martins # if you want the real deal of selling over seas.



As Jay suggested, I am going to just keep on flying and not worry about it for now.

By the way, for those of you that do not know it, if it was not for Jay Pratt, I would still be working on it. I was in his builder's assist program. We finished the project in a timely manner and I knew that I had a safe plane to fly.

Close to 650 hours now and I have never had a problem.

Thanks for all of the comments.

Bob Dean
 
Liability question?

After the liability crisis of the late 80s, new reforms have limits on liability for manufacturers.
Please correct me if I am mistaken, manufacturers liability is now limited to 17 years after the date of manufacture.
I am assuming that the same rules apply to commercial builders as well as individual builders.
Here is the idea: List the date of manufacture on your aircraft when you started building or "thinking about it" and for most of us that means about 5 to 7 years. Most of us keep an airplane 10 years or more and it's easy to see how liability no longer comes into play.
Any thoughts on this idea?
 
Unfortunately, the official "date of manufacture" on an amateur-built aircraft is the date of certification.
 
Date of Sale

It has always been my understanding that the clock doesn't start ticking until the date of sale not mfg
 
Experimental Aircraft

I personally know of several cases where the builder was sued.
I know of none, nor have I heard of any being successful.

The builder is the builder, is the builder, forever and ever, Amen!

Parting out does NOT relieve the builder of any liability.


I also have heard for years that no one has been successful in a lawsuit against the builder on an Experimental Aircraft. I have no confirmation if my info is current. Something to keep current on as things do change.
 
NOTHING matters

If a party wants to sue you, you WILL be served. It matters not who is, or is not, at fault. You will spend $$$ on defense.
If you choose to settle, be ready for the size of THAT check! In the end, you have not been successfully sued, but you have surely paid to be released.

That being said, the plaintiffs usually go for the deep pockets. I have found their 1st question to be about insurance: are you insured for such a loss? If the answer is no, sometimes, I am told, they will desist. Their attorneys are looking for a quick turn-around, and a protracted lawsuit is not what they want.

So, who has the deep pockets? The kit manufacturer, or at minimum this is the expectation of the plaintiffs' attorneys. So, the kit manufacturer is named in the suit.
Ask me how I know about this.

You could incorporate, but this doesn't work either. I know about that, too.

The plaintiffs end game is to place blame on anyone else - in their eyes, their loved one could not be at fault. Ever. This is completely understandable, but not always moral, or ethical.

So, de-register your plane if you want - it might help you (the builder), but it will not likely help the kit manufacturer. Seems the process to re-register such a pile of parts is actually fairly easy, tho completely illegal, or at least outside the normal process.
Again, you can ask me how I know about this.

Depressing? Speaking as a manufacturer, you bet. I'd like to build more airplanes - you have heard the plans - but I have to ask myself WHY would I? There is no real money in it - there never was for me. Do I want to fund another defense using my remaining retirement, if there is any left? No, thanks. I might build ONE MORE, for myself...

I could go on and on, but the plaintiffs attorneys are surely watching this site.

Carry on!
Mark
 
When one builds an R12 ELSA (which most are being built this way), his name as builder does not go on it, only Vans as the manufacturer. Other than the chain of ownership, the actual builder is never even named. I suppose that would pretty well eliminate the actual builders from liability, no way to prove who that really was since there is no 51% rule either, the first owner may have not even pulled one rivet.
Maybe the deep pockets would be the FAA or the DAR who said it was airworthy.
 
Maybe the deep pockets would be the FAA or the DAR who said it was airworthy.

First off, the FAA nor the DAR ever deem an experimental aircraft as "airworthy".

The builder signs off on the aircraft as being "in a condition for safe operation."

The FAA or the DAR only signs off on it meeting "the requirements for the certificate requested."
 
When one builds an R12 ELSA (which most are being built this way), his name as builder does not go on it, only Vans as the manufacturer. Other than the chain of ownership, the actual builder is never even named. I suppose that would pretty well eliminate the actual builders from liability, no way to prove who that really was since there is no 51% rule either, the first owner may have not even pulled one rivet.
Good luck with that. It's probably next to trivial to figure out who built it, there are probably builder's logs, websites showing photos, record of "hey, how do you fix this issue?" here on VAF, photos of first flight with "yay, I built and flew my own airplane!" captions, etc. Unless the builder is (a) dead or (b) willing to perjure him/herself under oath, who built it will be easy to ascertain with a very high degree of certainty.

As others have pointed out, it's not likely to be an issue unless (like Mark) you become a vendor of parts or kits.
 
If the builder is deceased and the plane is sold in an estate sale can the surviving spouse / estate be held libel?
 
I can hear the final argument to the jury now. My clients lost their loved one in an Aircraft that was built in a garage by an amateur builder. Now when the armature built experimental was sold it was sold
" as is where is" condition with no warranties expressed on implied. The widget installed on this aircraft that failed and caused this accident was not approved by the FAA to be used on a certified aircraft because the accident aircraft was not a certified aircraft and was an experimental aircraft built by a person in their garage over a period of a number years. Even though my clients loved one knew that he/she was flying in an Experimental aircraft noted by the large printed Experimental sign posted for everyone to see. I believe that the jury should award a multi million dollar award because I slept in a Fancy hotel last night.
 
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