Aircraft Lien Law.

• Author: Ravich, Timothy M.

Florida's statutory scheme governing aviation liens is a labyrinth. Practitioners are required to reconcile at least three different statutory chapters (i.e., Ch. 85, 329, and 713) when perfecting and enforcing an aircraft lien. These laws lack an over-arching coherence to the state's various mechanic's lien statutes. What is more, practitioners must further consider that although state law determines priorities, all interests in the aircraft must be federally recorded before they can obtain whatever priority to which they are entitled under state law. (1) Finally, presuming exacting state and federal lien requirements are met, Florida law presents no fewer than five methods for enforcement, including an action in chancery, action at law, special action at law, summary action, and retention of possession.

Aggravating this turbulent legal environment is ambiguity about a question that is as fundamental to the legal concept of a lien as it is confounding to the civil bench and aviation and commercial bar: Are aviation lien rights possessory? Stated otherwise, is a repairman's right to claim a lien extinguished if or when he voluntarily relinquishes possession of the property on which his or her lien is asserted prior to perfection?

Florida's Third District Court of Appeal answered both of these questions a decade ago in Commercial Jet, Inc. v. U.S. Bank, N.A., 45 So. 3d 887 (Fla. 3d DCA 2010). That decision, however, not only produced "conflict with just about every cannon of legislative interpretation there is," according to the dissenting opinion of the late Judge Alan Schwartz, but also established a perverse set of incentives for the aircraft maintenance, repair, and overhaul community.

The Florida Legislature recently amended F.S. Ch. 329 and clarified that possession is not required for perfection purposes; notice suffices. This article tracks the development of this significant change to Florida's nearly four-decade-old aviation lien laws, contextualizes the change in light of recent caselaw concerning aircraft liens, and offers insight into the law's policy prospectively.

Possession is Nine-Tenths of the Law... Everything

Aviation liens originate in Title XL, Part II, Ch. 713 of the Florida Statutes --a catch-all statutory section titled, "Miscellaneous Liens." Under this part is an eclectic jumble of lien laws, including laws for molders and labor or services in connection with cotton ginning; stallions, jackasses, or bulls; hotels; and interior decorating. Part II does not address aviation liens. Nevertheless, aviation practitioners have prosecuted and defended mechanics' liens involving aircraft on the basis of Florida's general law lien statute, F.S. [section]713.58, and its broad language establishing a lien "[i]n favor of persons performing labor or services for any other person, upon the personal property of the latter upon which the labor or services is performed." (2)

Importantly, caselaw has universally construed liens created under F.S. [section]713.58 as possessory in nature, existing only as long as the person entitled to the lien retains possession of the property upon which the lien was claimed. As Florida's Third District Court of Appeal stated in an aviation lien foreclosure action, this statute explicitly provides that "the possessory right and lien of the person performing labor or services under this section is released, relinquished, and lost by the removal of such property." (3)

Florida statutory law also explicitly prescribes "retention of possession" as an enforcement mechanism for a [section]713.58 mechanics' lien. F.S. [section]85.011 allows a lienor who furnishes labor, services, fuel, or material upon an aircraft to retain possession of an aircraft upon which a lien has accrued for 90 days. (4) Crucially, under the plain terms of this statute, a repairman's right to so retain possession exists only "if the [lienor] was in possession of the aircraft at the time the lien attached." (5)

Notice

Whereas the perfection and enforcement of Florida's general law concerning liens over personal property under F.S. [section][section]85.011 and 713.58 turn on possession (albeit only for three months), the statutory regime tailored explicitly to aviation liens (Title XXV, Florida Statutes) identifies notice, not possession, as the sine que non of lien perfection. Indeed, on its face, F.S. [section]329.51, provides that an aircraft lien is enforceable upon the recordation of a claim of lien within 90 days of the services rendered. (6) The statute states that "[a]ny lien claimed on an aircraft under... [section]713.58 is enforceable when the lienor records a verified lien notice with the clerk of the circuit court in the county where the aircraft was located at the time the labor, services, fuel, or material was last furnished." (7)

This statute has been the subject of considerable uncertainty for aviation practitioners, particularly its cross-reference to F.S...