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Auburntsts

Auburntsts

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Questions for the group.

1. What's the min required to make an aircraft un-airworthy for the purpose of releasing your liability after a sale? For example do you remove the data plate, airworthiness certificate, and de-register the n-number and to sell it as non-airworthy?

2. If you do all of that, is there anyway for the next owner to re-certify it?
 
There is little or no possibility of you getting sued unless you have VERY deep pockets. If there is no money in it for the lawyers, it doesn't happen.
 
A few years ago my Dad was looking at a -6 because of an extremely (crazy) low price. The owner was selling it as a parts aircraft, although it was a perfectly good, airworthy RV. When asked why he was doing this the story was that he was worth some money, and to release himself from liability of getting sued, he was going to take a saw and (literally) cut the wings off the airplane along with some other possible parts so it was deemed DESTROYED and never to fly again.
 
Wellllll..... OK maybe the possibilty is low (deep pockets are probably not something I'll ever have to worry about :rolleyes:) but for the sake of argument is there a way out based on my assumption that the best protection is to not sale it as an airworthy aircraft?
 
Deep pockets?

I wish someone would define deep pockets...

It's not unusual for a retired person to have 6 or 7 figures in investments and a paid off house. Someone most likely to be selling their RV and moving into sport pilot as the age issue creeps up on them.

Does a person like this fit the description of having deep pockets ?
 
The aircraft maint. dept. at my school recently took possesion of a perfectly airworthy Gulfstream donated by Jim Carey. I'm told that the donation came with a requirement that the aircraft never be flown. We have also received a Pitts and an RV the same way. Apparently, donating an airplane is a way to get some of your money (tax deduction) without the liability.
 
Lawyers for this type of case typically get 1/3rd of the settlement. It generally takes years to get to trial. It would take a lot of work for them to prove you manufactured an unsafe product. And your FAA homebuilt certification makes it harder. Should an accident happen, you would probably be sued by the estate, not the person.

7 figures is chump change. Generally, a retirement plan cannot be touched by a suit (so I am told). Remember, OJ Simpson still has his!
 
iwannarv said:
A few years ago my Dad was looking at a -6 because of an extremely (crazy) low price. The owner was selling it as a parts aircraft, although it was a perfectly good, airworthy RV. When asked why he was doing this the story was that he was worth some money, and to release himself from liability of getting sued, he was going to take a saw and (literally) cut the wings off the airplane along with some other possible parts so it was deemed DESTROYED and never to fly again.
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There is an RV-6A in a hangar at a nearby airport That was cut up with a chain saw. Both wings were cut off and the fuselage was cut just behind the wing. A friend of mine bought it for the engine and instruments, and a few other parts for the RV-6 he is building.
 
Kitplanes had an article about liability a couple months ago, it was a good read. basically, if you build to a good standard, fly the plane several hundred hours, you probably don't have any liability.

it also mentioned that there have been no successful lawsuits going back to a kit builder, but i know of one that is going on right now.
 
Thanks for the comments. EAA has a number of articles on the subject in the member's section (Homebuilder's HQ) and although they didn't answer my questions specifically, they speak a lot to the overall liability question and pretty much answers my concerns.
 
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gpiney said:
...Generally, a retirement plan cannot be touched by a suit (so I am told). Remember, OJ Simpson still has his!
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This depends on the state law. OJ moved to Florida because retirement is protected in that state.

Danny7 said:
...it also mentioned that there have been no successful lawsuits going back to a kit builder, but i know of one that is going on right now.
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Do you have any details on this case? Part of it has to be public record.
 
I'm a lawyer

Look, my advice would be not to worry about it. If you have a lot to protect, then just keep the airplane, because you can't avoid the possibility of liability. If not, just correct any obvious defects and sell it "as is" and without any warranty, express or implied (put that in your sales contract). Have reasonable confidence in your work, and don't look back. The law varies widely from jurisdiction to jurisdiction, but you don't have much exposure as the manufacturer of an experimental aircraft sold used. On the other hand, there is no one single thing that is going to make you immune from suit.
 
It is a really sad commentary on our society that this discussion is even taking place.:(
 
Couldn't agree more. The genesis is a discussion I'm engaged in over on another forum and is completely hypothetical. VAF is such a wealth of info that this seemed a logical place to pose the same questions being debated by mainly non-E-AB pilots to get a different perspective.
 
N941WR said:
Do you have any details on this case? Part of it has to be public record.
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I believe (i heard from a fellow former lancair employee) that the IV-P that crashed recently somewhere in the southwest killed all aboard or several people. I heard the family members were suing the guy on the data plate.

i don't know n numbers or names, and i'm not going to ask around the lancair shop for them.
 
A friend of mine bought an unairworthy RV-4..

Auburntsts said:
Questions for the group.

1. What's the min required to make an aircraft un-airworthy for the purpose of releasing your liability after a sale? For example do you remove the data plate, airworthiness certificate, and de-register the n-number and to sell it as non-airworthy?

2. If you do all of that, is there anyway for the next owner to re-certify it?
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......last year. The builder, around 80 years old, is an engineer and removed the engine, instruments and the data plate for this reason and also de-registered it. He sold it as "aircraft parts" to my buddy.

Re-certification is another question.....Mel?


Regards,
 
mikegraycmg said:
Look, my advice would be not to worry about it. If you have a lot to protect, then just keep the airplane, because you can't avoid the possibility of liability. If not, just correct any obvious defects and sell it "as is" and without any warranty, express or implied (put that in your sales contract). Have reasonable confidence in your work, and don't look back. The law varies widely from jurisdiction to jurisdiction, but you don't have much exposure as the manufacturer of an experimental aircraft sold used. On the other hand, there is no one single thing that is going to make you immune from suit.
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A buddy & I buy & sell quite a few RV's. The best advice I can give you is just what Mike says. Correct any know defects. Do not sell a plane when you know or suspect something is wrong with it, unless you disclose it to the buyer in writing. I Sell it with a fresh "annual". If you are the builder do not do the condition inspection yourself, hire an A&P. Sell the plane "As is, where is". , and say in your bill of sale the buyer or his relatives releases the seller from all liability, that this is an EXPERIMENTAL Amateur Built Aircraft not built to FAA standards for conventional aircraft. There are many good liability release forms available on line at EAA.

I'm not an attorney, but IMHO liability is created when you misrepresent something or you are negligent in disclosing known material facts about the airplane. Disclose, disclose, disclose, everything you know about the airplane in writing. "Up front, and honest" will go along way toward releasing you from liability. Informing the buyer of what he is buying is more important than making a sale.

Most important is don't worry about it.

JMHO

N395V said:
It is a really sad commentary on our society that this discussion is even taking place.:(
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Amen! The goods news is with a sinking economy everyone is worth less anyway. ;)
 
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Recertification is another question!

pierre smith said:
......last year. The builder, around 80 years old, is an engineer and removed the engine, instruments and the data plate for this reason and also de-registered it. He sold it as "aircraft parts" to my buddy.
Re-certification is another question.....Mel?
Regards,
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In what category would you re-certify it? Who's the builder? Who's going to sign the 8130-12? Sounds like an expensive piece of "Lawn Art" to me.
 
I'm not a lawyer

but I am a doctor which some folks (attorneys) consider a deep pocket. I put my RV-7A in a LLC. I don't own the plane anymore. If I'm careful and make it look like it truly is a stand alone entity, I think I'm protected. I have a separate bank account for the LLC to which I pay to use the airplane as well as a seperate credit card to make fuel charges or other purchases. If I sell it and the new owner crashes into a daycare center the LLC can be sued but I should be protected. I welcome any comments from the lawyers out there.
 
Ain't necessarily so

What's gonna protect you is good building habits and good faith. An LLC is not going to protect you if you built the plane or if you knew of a defect in the plane hidden to the purchaser -- and that's a pretty easy case to make, if there is something wrong with the plane.

Generally speaking, the efforts and expense used to do this are misspent, and would be better used on building costs, third-party inspections, and insurance. Any insurance agents out there know if product liability insurance is available for an RV build/sale?
 
Mel said:
In what category would you re-certify it? Who's the builder? Who's going to sign the 8130-12? Sounds like an expensive piece of "Lawn Art" to me.
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I agree with Mel. Buying a "deregistered" plane as "parts" leaves the buyer in a difficult situation. He/she can't legally claim to be the "builder" since they did not in fact build the aircraft. (Restoration or repair is not considered "building" by the FAA.) This being the case, the aircraft could not legally qualify for amateur-built certification since signing the 8130-12 would be falsification of the document (a felony).

The only real option would be experimental exhibition category, which has no "51% rule" requirement but comes with some significant operational restrictions which are usually undesirable.

Cheers!

Joe
 
I, Ron Lee, being of sound mind and body, do hereby release the original builder of my plane (N54RL), any previous owners, airplane mechanics who worked on the plane, parts suppliers, fuel suppliers, and associated businesses whom I use while engaging in flying, from any liability that may arise from my flying, even if said activities result in personal injuries or death to myself.

In other words, my estate is hereby prohibited from suing anybody.

PS, I am not a lawyer either.
 
I wouldn't do it!

jnorris said:
The only real option would be experimental exhibition category, which has no "51% rule" requirement but comes with some significant operational restrictions which are usually undesirable.
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While the exhibition category is certainly a possibility, one might have a problem getting a DAR to sign off on it. I certainly won't issue an "exhibition" certificate if I know that it is being used as a "loop hole". I was approached once to do this on a Legend Cub just because they wanted to increase the gross weight.
 
The bad thing about lawsuits is, there doesn't have to be an actual defect in a product. The lawyer only has to convince 12 of the dumbest morons he can find that there was.
 
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Keep it awhile

In 1994, Congress passed the General Aviation Revitalization Act (GARA), which in essence states that manufacturers of non-airline aircraft are protected from product liability lawsuits once an aircraft and its original parts have been in service for 18 years.
 
And unfortunately, many times a perfectly executed waiver is totally ignored. While it shows good intent, many lawyers can convince the jury and the judge that a waiver does not hold water.
 
Jurors

Remember, as a defendant, your fate is dependant upon 12 individuals that weren't smart enough to get out of jury duty.

I once had a jury get lost in the courtroom. Between the 12 of them, none of them could pick the correct door out of the 3 doors in the courtroom that led to the deliberation room, even though there was a sign that read "Jury Deliberation Room" right beside the door.
I suddenly got the sinking feeling that my defense based on the laws of physics and logic may have fallen on deaf ears.
 
Sometimes not...

Mel said:
And unfortunately, many times a perfectly executed waiver is totally ignored. While it shows good intent, many lawyers can convince the jury and the judge that a waiver does not hold water.
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That certainly has happened, but so has the reverse. I was involved in a litigation involving passengers that had signed a waiver. The judge ruled in favor of the defendant based on the plaintiffs having signed the waiver. The plaintiffs appealed and lost again in the California supreme court. Game over. The real problem in these things is that the only sure "winners" are the lawyers. OK, sometimes an expert witness can pick up a buck or two. :rolleyes:

John Clark
RV8 N18U "Sunshine"
KSBA
 
Mel said:
While the exhibition category is certainly a possibility, one might have a problem getting a DAR to sign off on it. I certainly won't issue an "exhibition" certificate if I know that it is being used as a "loop hole".
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Mel,

FAA Order 8130.2 specifically states that exhibition can be used for "aircraft that normally would be eligible for amateur-built airworthiness certification, but the owner has chosen not to perform the major portion of fabrication and assembly as required under 21.191(g)." This quote is found in the description of "Group IV, Other Aircraft", Chapter 4, Section 10, paragraph 158 d(1), on page 170 of the order.

So it's not really a "loophole". It's an acceptable alternative as specified in the order. A DAR or FAA inspector shouldn't have any problem issuing such a certificate.

Cheers!

Joe
 
Good Point!

jnorris said:
FAA Order 8130.2 specifically states that exhibition can be used for "aircraft that normally would be eligible for amateur-built airworthiness certification, but the owner has chosen not to perform the major portion of fabrication and assembly as required under 21.191(g)." This quote is found in the description of "Group IV, Other Aircraft", Chapter 4, Section 10, paragraph 158 d(1), on page 170 of the order.
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OK, I'll buy that. The particular one that I refused was to change a Special Light-Sport to Experimental Exhibition to increase the gross weight. I didn't feel comfortable doing that.
 
FrankK90989 said:
In 1994, Congress passed the General Aviation Revitalization Act (GARA), which in essence states that manufacturers of non-airline aircraft are protected from product liability lawsuits once an aircraft and its original parts have been in service for 18 years.
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yes, but.

this only works if the plane is flying, and only covers parts that have been on the plane for 18 years. I don't really see how this applies to homebuilders, 18 years is a really long time.
 
mikegraycmg said:
Any insurance agents out there know if product liability insurance is available for an RV build/sale?
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I'm sure Van's has PL coverage but normally this type of coverage is for manufactured products from a bonafide manufacturer. I feel if I was asked to try and broker out this type of coverage I could not get it as single coverage policy. It would have to be inclusive in the Business Owners Policy which would have CGL, Builders Risk, E & O and other coverages. For a single individual the premiums would not be cost effective and I doubt, especially in this market right now you could even get one of the commercial carriers to underwrite the policy, Lloyds might because they insure the craziest stuff like rubber duck derbys and hole in one contests but be advised that the minimum coverages for product liability start at the one millon mark..buy yourself some of that coverage and you just earned yourself some deep pockets. In Clark County Nevada to operate your POV on the airport you need $500K liability coverage, If I was an insurance scammer I would drive around town looking for our pretty blue stickers they make us put on the rear of the car try to force that person into an accident...$500K is sorta deep pockets in that type of accident. Nothing like telling the world you have a half-a-mil in coverage.
 
Sell it abroad

The other choice is to sell it abroad.

Now if anyone has a nice cheap RV8 they want to off load, remember our ? has crashed against the $ so we are very poor now.

If the above fits I can solve your liabilty problem.

Rob
 
Ditto

Rob beat me to it. Sell it aboard. There are lots of Rv's that end up in Europe and behond.
It seems such a shame when you hear of perfectly good aeroplanes scrapped because someone doesn't want to be sued.


Peter
 
cost to defend

Danny7 said:
Kitplanes had an article about liability a couple months ago, it was a good read. basically, if you build to a good standard, fly the plane several hundred hours, you probably don't have any liability.

it also mentioned that there have been no successful lawsuits going back to a kit builder, but i know of one that is going on right now.
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It is the cost of defending a law suit that worries me. Even if the defendant wins the case, the costs would be in the tens of thousands.
 
Joe, kindly answer this one.....

jnorris said:
Mel,

FAA Order 8130.2 specifically states that exhibition can be used for "aircraft that normally would be eligible for amateur-built airworthiness certification, but the owner has chosen not to perform the major portion of fabrication and assembly as required under 21.191(g)." This quote is found in the description of "Group IV, Other Aircraft", Chapter 4, Section 10, paragraph 158 d(1), on page 170 of the order.

So it's not really a "loophole". It's an acceptable alternative as specified in the order. A DAR or FAA inspector shouldn't have any problem issuing such a certificate.

Cheers!

Joe
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....for me. A friend went to Germany and bought a Fascination D4, the first one into this Country. It was disassembled and shipped to the dealer in Jacksonville who re-assembled it and delivered (flew) it here.

Within weeks, the FAA grounded the airplane and told him it could only be flown to airshows, parked and then flown back home, in the Exhibition category. The owner was furious and sued the dealer to get his money back but lost the suit in Court.

He had intended to use the airplane regularly in his Aerial photography business but now it's of no use to him.

It never did meet the 51% rule and that seems to be the crux of the problem.

Any thoughts on which way he should turn to be able to use the airplane?

Thanks,
 
That's right

N91CZ said:
It is the cost of defending a law suit that worries me. Even if the defendant wins the case, the costs would be in the tens of thousands.
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That's the biggest cost of these lawsuits. I can tell you, though, that it comes in every walk of life. Anything you do involves this risk -- at work, at home and with any recreation in which you participate. While it could happen to anyone, you can't let it be the overriding determining factor in what you do.

The reality is that the risk of exposure is slight in selling an RV if you act prudently, but it's never going to go away entirely in this or in anything else you may do.
 
Experimental Exhibition

is covered under 21.191(d) which states;"for the following purposes; exhibiting the aircraft's flight capabilities, performance, or unusual characteristics at air shows, motion picture, television, and similar productions, and the maintenance of exhibition flight proficiency, including (for persons exhibiting aircraft) flying to and from such air shows and productions."
Some local FAA offices are more lax than others on this. But in all cases the owner must submit annually a program letter stating where and when the aircraft will be flown.
Even though as Joe states, it IS legal in the case of an amateur-built that does not meet the major portion rule, I still consider it a "work around" and am not comfortable with an issuance of this type.
 
mikegraycmg said:
That's the biggest cost of these lawsuits. I can tell you, though, that it comes in every walk of life. Anything you do involves this risk -- at work, at home and with any recreation in which you participate. While it could happen to anyone, you can't let it be the overriding determining factor in what you do.

The reality is that the risk of exposure is slight in selling an RV if you act prudently, but it's never going to go away entirely in this or in anything else you may do.
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Mike is right, but i think you can make it where the risk of exposure is no more than driving or other every day activities.

Really, if some of you are concerned about this, you should read the kitplanes article. It covers many details that are just getting glossed over in this thread, or skipped altogether.

for example, the article mentions an airplane insurance company that offers a policy to extend third party liability protection to the builder.

another example is that even if your plane crashes completely due to the new owners fault and the NTSB plainly states such, you cannot use that as evidence. NTSB reports are not available to be used either by defendant or plaintiff in a lawsuit.
 
I'm not a lawyer, but I have sold three experimentals in the past and I have three lawyers in the family. The concensus is to include a strong indemnification clause to the sales contract. It does not assure you of not be sued, but it does make a potential lawyer for the plaintiff to think twice about taking the case absent of any gross negligence.

I've had potential buyers back away when I told them the sales contract was mandatory, as were the indemnification clauses because their lawyer advised them against signing. That's fine, I told them to buy someone else's airplane then.
 
Mel said:
The particular one that I refused was to change a Special Light-Sport to Experimental Exhibition to increase the gross weight. I didn't feel comfortable doing that.
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Yeah, that one smells a bit funny. Nothing in the order to give guidance on that one! But my bet is, some inspector somewhere would do it without a second thought. (Probably the same guy who hung an amateur-built certificate on a rebuilt Boeing 707! THAT one didn't last long!!)

Cheers!

Joe
 
pierre smith said:
He had intended to use the airplane regularly in his Aerial photography business but now it's of no use to him.

It never did meet the 51% rule and that seems to be the crux of the problem.

Any thoughts on which way he should turn to be able to use the airplane?
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Nobody said exhibition is a good deal. It usually beats the "lawn ornament" category, but not by much. There isn't a category for the aircraft you describe that would allow the use the owner intended. Mel already posted the quoted purpose for an "exhibition" certificate. That's why it's not a good solution (but maybe the only one). The aircraft can be flown to and from an exhibition listed on the program letter, and for "proficiency" purposes. For this type of exhibition aircraft (Group IV) proficiency flights must take off and land only at the aircraft's home base. Not much latitude there, huh!

Cheers!
 
There is a bright side to this whole discussion. Imagine this conversation at the kitchen table:

Wife: Honey, we need to sell the RV-10 to pay Timmy's college tuition.
RVer: Baby, You know that I would do anything for you and the kids, but if we sell the RV-10 and the new owner gets into an accident, we could be financially devastated. Even if we win, the Legal bills could eat us alive. Both of the kids college funds could be wiped out. They could take our pensions and savings. They could garnish our wages. They might even take our home. You don't wan't us and our children to be homeless, do you?
Wife: Of course not!
RVer: So you understand, right? We HAVE TO keep the RV-10. Our family's survival depends on it.
Wife: I guess so. What is in that big box the delivery guys just dropped off that says RV-8?
RVer: Pay no attention to that, Baby. It's not important. :D
 
Even if we win

mcjon77 said:
Even if we win, the Legal bills could eat us alive. Both of the kids college funds could be wiped out. They could take our pensions and savings.
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Even if we win.

Sad, but true.

Anybody still think our so called justice system is not broken??:mad:
 
I think you missed an essential word in the name of the system!

Mike S said:
Even if we win.

Sad, but true.

Anybody still think our so called justice system is not broken??:mad:
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It's called The CRIMINAL Justice system!
 
Answers?

Mel said:
It's called The CRIMINAL Justice system!
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Just for sake of discussion lads, what do you suggest we do to fix the system? Remember, it works both ways, there has to be a balance. Many people have had to use the "system" to get what was legitimately owed.

John Clark
RV8 N18U "Sunshine"
KSBA
 
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