Selling the airplane and limiting the liability

[cliffy]

Not that I'm ready to quit aviation or sell the Mooney but the thought has me wondering about the liability after sale.

Specifically. as I do all my own maintenance (A&P since 1967)  

Has anyone given this a thought or been down this road?   I haven't read anything about it here. 

Might be different if the new pilot makes a smoking hole and the previous owner had ALL the maintenance done is shops I guess but in the case of owner assisted annuals and owner preventive maintenance maybe a different set of circumstances. 

Maybe going through 2 annuals with no owner maintenance in the logs might be enough? I don't know.

Anyone want to postulate?

 

[N201MKTurbo]

Go get a beer and a lawn chair.

Walk up to a nice hill overlooking the lake. Look over the beautiful view and consider how great it is and don’t worry about it.

[Guitarmaster]

Go get a beer and a lawn chair.
Walk up to a nice hill overlooking the lake. Look over the beautiful view and consider how great it is and don’t worry about it.

This^^^

Sent from my Pixel 2 XL using Tapatalk

[ArtVandelay]

1. Make sure last annual was done by MSC (this insures you can argue that you did “due Diligence” in providing proper maintenance)

2. when you sell, write up a short document stating that it’s sold as is, no warranty is provided expressed or implied....

you probably can find example of #2 on the internet somewhere. Or have professional broker sell the plane for you, I would expect them to do this.

 I would encourage the buyer to have a prebuy and would be willing to fly it anywhere within reason to have it done.

 

[Yetti]

Which then brings up the it's cheaper to buy a plane with a working engine and then sell the parts off the old plane.   Then the installer of the parts is the one signing off on the parts installed.

[tigers2007]

IIRC there is a member here who cuts up the airframe (other than Alan). I can't remember the exact details why but it was a liability issue. Maybe because it was in a accident before? 

What do you do when you trade-in or sell a vehicle? With cars (I've sold probably 15 in my life) I have them sign a canned hold harmless agreement as a condition of the sale. I've have several buyers not want to sign and after telling them the deal is off they sign it. I've had to sign agreements light that when buying a used car from a dealer that didn't go through inspection yet (you get a better "deal"). I was literally told that if the car broke in half on the way home to call two tow trucks on my own.

I get your concern for aircraft though as the justice system seems to treat flying vehicle related litigation differently. 

AOPA example contract: https://www.aopa.org/-/media/Files/PPS/AOPA-Legal-Services-Plan--Sample-Aircraft-PurchaseSales-Agreement2018-01.pdf

[Bravoman]

Assuming a hold harmless would be effective as against the purchaser if injured as a result of allegedly defective maintenance, which is questionable and very fact and state law dependent, it would not protect against the claims of third parties or strangers to the agreement.

[PMcClure]

My thoughts - a normal owner has little if any liability selling a plane as is as long as he is not doing anything fraudulent. The A&P has liabilities beyond the owner. Negligence or fraud would create liability as long as your signature is in the book. As an owner, I would not worry about liability after I sell the plane. As an A&P, I would worry about liability on every plane I signed off on over the years, including this one. Insurance? 

Having a 3rd party do the next annual seems excessive to me. Buyer beware right? I would sell it as is, without any warranty and go spend my money on the next hobby. But I would consult my attorney and insurance man about how to deal with the liability of my A&P previous activities after retirement.

Not a lawyer, not an A&P - just a business owner and PP. 

[bradp]

Didn't Richard Collins scrap his P210 for concern for liability? 

[Jerry 5TJ]

12 minutes ago, bradp said:

Didn't Richard Collins scrap his P210 for concern for liability? 

First he tried to sell it but found no buyer for a 9,000 hour P210.  Then he sold it to a parts salvage operation.   

Collins Scraps His P210

[Bravoman]

1 hour ago, PMcClure said:

My thoughts - a normal owner has little if any liability selling a plane as is as long as he is not doing anything fraudulent. The A&P has liabilities beyond the owner. Negligence or fraud would create liability as long as your signature is in the book. As an owner, I would not worry about liability after I sell the plane. As an A&P, I would worry about liability on every plane I signed off on over the years, including this one. Insurance? 

Having a 3rd party do the next annual seems excessive to me. Buyer beware right? I would sell it as is, without any warranty and go spend my money on the next hobby. But I would consult my attorney and insurance man about how to deal with the liability of my A&P previous activities after retirement.

Not a lawyer, not an A&P - just a business owner and PP. 

Unfortunately, incorrect 

[MooneyMitch]

I did purchase Mooney parts from a person several years ago that parted out his fully operational and airworthy F model.

He ( and his wife ) were attorneys. The reason for his action was for possible future liability issues.  

[ArtVandelay]

1 hour ago, Bravoman said:

Assuming a hold harmless would be effective as against the purchaser if injured as a result of allegedly defective maintenance, which is questionable and very fact and state law dependent, it would not protect against the claims of third parties or strangers to the agreement.

Which is why I recommended a 3rd party annual, preferably with MSC.

In the end it comes down to who has the deepest pockets.   By showing due diligence using a MSC, who probably have insurance, you are spreading the risk. If I was rich enough, I’d probably scrap the plane, instead of selling it whole.

[Hank]

29 minutes ago, ArtVandelay said:

Which is why I recommended a 3rd party annual, preferably with MSC.

In the end it comes down to who has the deepest pockets.   By showing due diligence using a MSC, who probably have insurance, you are spreading the risk. If I was rich enough, I’d probably scrap the plane, instead of selling it whole.

There should be no more liability after the sale from having worked on your own plane than you already have on every other plane that you've worked on and signed off as an A&P. Sell the plane, spend a portion of the proceeds on your favorite beverage and make a toast that the new owner enjoys it as much as you did.

[Hank]

41 minutes ago, Bravoman said:

Unfortunately, incorrect 

Not very helpful. Please point out the mistake(s), explain what is wrong and give correct guidance instead.

[MooneyMitch]

Based on differences of opinion in this thread, and including my experience with the attorneys that parted out their airplane.......  maybe it boils down to risk management, and what can, and does happen within a court of law.

[steingar]

My thinking is the OP hasn’t sufficiently deep pockets to interest a trial lawyer. I honestly don’t mean to denigrate anyone, it’s just that usually those with deep enough pockets to be of interest to trial lawyers also fly much fancier aircraft and farm out maintenance. 

[EricJ]

17 minutes ago, MooneyMitch said:

Based on differences of opinion in this thread, and including my experience with the attorneys that parted out their airplane.......  maybe it boils down to risk management, and what can, and does happen within a court of law.

It's risk management, risk tolerance, and your personal interpretation of whether or how much other people just generally overreact to things.   There is always risk.   You wouldn't get out of, or even stay in, bed in the morning if you really wanted to completely mitigate risk.

I've always liked the saying, "I am an old man and have had many troubles, most of which never happened."

[PMcClure]

1 hour ago, Bravoman said:

Unfortunately, incorrect 

Willing to be learn.  - Can you point to a case where an owner sold a certified and airworthy plane and was held liable for a later accident and that the previous owner was not guilty of fraud or gross negligence?

[ArtVandelay]

There should be no more liability after the sale from having worked on your own plane than you already have on every other plane that you've worked on and signed off as an A&P. Sell the plane, spend a portion of the proceeds on your favorite beverage and make a toast that the new owner enjoys it as much as you did.

I’m assuming he’s retired and no longer has insurance, and only performing work onhis own plane.


Tom

[cliffy]

28 minutes ago, steingar said:

My thinking is the OP hasn’t sufficiently deep pockets to interest a trial lawyer. I honestly don’t mean to denigrate anyone, it’s just that usually those with deep enough pockets to be of interest to trial lawyers also fly much fancier aircraft and farm out maintenance. 

Interesting observation to categorize someone by the airplane they fly. Maybe some just keep a low profile. Many of the millionaires that I have known  (and I've known a few) also drive non- descript pick up trucks for a reason. I've known a few who were flamboyant but several who were incognito so to speak.   

Also posted, I too, would like to know of any first hand cases of after sale suits but I have no info on that hence this thread,

[cliffy]

2 minutes ago, ArtVandelay said:

I’m assuming he’s retired and no longer has insurance, and only performing work onhis own plane.


Tom

Only half correct

[ArtVandelay]

Not very helpful. Please point out the mistake(s), explain what is wrong and give correct guidance instead.

The first sentence is simply wrong, there is potential liability, how much just depends...
Again, it comes down to how wealthy (how big a target are you) and when the incident occurs. Once the buyer has done their own annual, pretty easy to shift the blame.
I recommended 2 inexpensive ways of potentially limiting the liability. If OP is rich with unprotected assets, he should talk to a lawyer.


Tom

[ArtVandelay]

Only half correct

If you’re performing AP work on others planes, and don’t have insurance, selling your plane is the least of your worries.


Tom

[flyer338]

A seller’s potential liability after the sale is very complicated and includes variations in tort laws among the various states, where the sale takes place, and where the airplane is ultimately based. The depth of the pockets involved also matters.

The discussion above about owner annuals did not distinguish between a supervised annual, and an annual where the owner was the I&A. In the latter case the potential liability is greater. Unless the governing law includes strict liability, there must be a breach of duty by the owner before liability attaches. I suspect that in a case where the sale is “as is” and the seller warned they buyer in the contract, including that there is no representation regarding airworthiness, recommended a pre-purchase evaluation by a qualified shop, and did not personally sign-off the last annual, seller liability is minimal.

On the other hand, if there is evidence sufficient to prove unlogged work personally performed by the selling owner contributed to a wreck, all bets are off.

The above are my random thoughts inspired by this thread, and they are not intended and should not be relied upon by any person as legal advice.