CRIME OR PUNISHMENT – YOUR CHOCE, YOUR WALLET
Dennis R. Haber, Attorney at law
Did you realize that not getting paid can be a crime? It is, or can be, perhaps more so than you realize. However, not getting paid for your hard work may be only part of your problems. You may also be violating state criminal law!!! Read on . . .
There is hardly an FBO, a mechanic or avionics shop that has not at some time, not gotten paid. Worse yet, the aircraft owner sometimes fails to pick up their aircraft in a timely fashion or in some cases, even abandons their aircraft because your bill is beyond their ability to pay: The gas is too expensive, their medical has expired, they can’t afford the additional work needed, they can’t sell their aircraft, and a myriad of other reasons people have that causes them to just walk away from their aircraft and avoid paying what they owe you. This of course leaves you holding the economic bag, and may even create criminal liability on your part.
CONVERGENCE OF EVENTS – Recently, my office has seen a convergence of changes in the law unique to aviation that affects your income, your risk, your liability and the potential for criminal prosecution against you.
Of course, this stem in part from an aircraft owner who avoids paying their bill and walks away from the aircraft creating a multitude of problems. On its face, an aircraft sitting on your ramp or in your hangar at minimum, takes up space. Additionally, there is always the risk of hurricane damage to the aircraft, and to the neighboring aircraft. Should a storm hit, there is no way of knowing whether it will be their insurance or yours that will fall victim to the next passing weather event. Do you even know if your customer has insurance? The most obvious problems fall into a few categories.
You don’t or didn’t get paid: Aviation is full of folks that are in love with the idea of aviation, but then the bill comes, and with it comes the realization that they can’t afford the benefit of their passion. Hopefully, you have properly drafted your work order and your work order is properly signed by the client. If so, this addresses some of your risk of not getting paid. If that fails, you can always place a lien on the aircraft however there are several critical things that you must remember.
a. You must file the lien within 90 days from the last substantial work.
b. You must be in possession of the aircraft.
c. You must file suit to recover on your mechanics lien within 1 year
Missing any of the critical elements above will cause you to lose your lien rights. Of particular interest, and less obvious is element b. above. If you give back the plane, you lose your right to file a lien. You must maintain POSSESSION and by the way, you can charge for storage until the matter is resolved because lien law requires possession for a valid lien.
But we are just getting warmed up here. As we all know, previously aircraft registration lasted forever but now, aircraft must be re-registered every three year. If not properly done, you may find yourself in possession of an aircraft that, notwithstanding that it is perfectly flyable, cannot be flown because is has no valid aircraft registration and at best, will take many weeks to get back to “re-registered” status. What do you do with it if you can’t fly it out, have no hangar space is available, and the storm rages on.
ENTER FLORIDA STATUTE 329 – ARE YOU A CRIMINAL?
It was bad enough that they didn’t pay you but now let’s suppose that someone left their aircraft in your possession and the 3 year registration has expired while it’s sitting there at your shop or on your ramp.
Florida Statute 329.10 states that It is unlawful . . . to have in your possession, an aircraft that is not registered in accordance with the FAA. Further, any aircraft in the state owned by a person or a corporation that is no longer a legal entity is in violation of this statute. Further, any corporation that has no physical location or that has lapsed inactive, or been dissolved for more than 90 days is also in violation.
Of course the statute has a whole lot more to say and should be read in its entirety, but the upthrust of this lapse is that if you have an aircraft in your possession, that is; A) not properly registered with the FAA; or B) or have an aircraft in your possession which is owned by a lapsed business entity (corporation, LLC, etc.) than you have a potential legal problem. “So what’s the big deal” you say?
The big deal is that, “a violation of this section shall be deemed a felony of the third degree, punishable as provided by” other criminal statutes . . . and that’s not all.
“Any violation of this section shall constitute the aircraft to which it relates as contraband and said aircraft may be seized as contraband by a law enforcement agency and shall be subject to forfeiture.
So, what do we have here? Let’s focus on the first few words in the statute. This statute creates a problem for those who have aircraft in their possession that are either “unregistered” (which now happens after three years) or that are owned by entities that have lapsed as the result of such mundane things as not paying the corporation annual fee to the state.
The long and short of this is that if your client 1) hasn’t paid you, 2) allowed their corporation to lapse, or 3) allowed their aircraft registration to lapse, YOU have a problem. You are either going to get stuck with an unpaid and outstanding invoice, be charged with being “in possession” and thus a felony, or both, and if they have no insurance, your insurance (and you) might be stuck with damage liability
Yea, yea, it’s insane, but it’s your business, so do something about it. Don’t just sit there with an unpaid invoice waiting for the government to make you a loan and/or take care of you.
SOLUTION: Make sure you have well drafted work orders that are signed by your customers. If the invoice doesn’t get paid after 30 days, place a lien on the aircraft; don’t wait. It cost little to place a lien, (the cost of which can be addressed in the work order agreement) but gets very expensive and deprives you of your legal rights if you don’t. After you’ve done those things, make sure your client’s corporation is valid. You can do a search at www.sunbiz.org. Next, check with the FAA to assure yourself that the aircraft registration is valid. Just think of these items as a Service Bulletin that you’ll do as a matter of course.
And after all of that is done and you still need help . . . call me . . . please. I’d rather keep you out of trouble than get you out of trouble, please.
Dennis R. Haber Esq. www.Av8Lawyer.com www.Facebook.com/Av8lawyer