Limited Liability Companies May Protect Aircraft Owners

Posted on November 30, 2010 by Mike Danko

It’s not uncommon for three or four pilots to share ownership of an aircraft. For years, owning an aircraft as “partners” was the norm. That form of ownership, however, carries with it some liability considerations.

  • “Partners” can generally be held individually liable for one another’s debts, including debts arising from one another’s negligence. In other words, if one partner ’s piloting mistake kills or injures a passenger, the other partners may in some cases be held accountable to the victim or the victim’s family.
  • Aircraft owners are responsible for maintaining their aircraft properly. If one of the partnership’s maintenance decisions – such as an ill-considered decision to run past TBO – leads to an accident, each partner could be held responsible for that as well.
  • Even assuming the partnership made all the right maintenance decisions, the partnership may still be held responsible for the negligence of the mechanic. More on that here. If the partnership is liable, each of the individual partners may be liable as well.

Many pilots seeking to share an airplane now form a limited liability corporation. They arrange it so that the corporation, and not the individual pilots, own the aircraft. The pilots own shares in the corporation only. Because the pilots do not themselves own the aircraft, they avoid some of the liability that comes with aircraft ownership generally and with the partnership relationship in particular.

But here’s where people often get confused: no form of ownership allows the pilot who is flying the aircraft to avoid responsibility for his own negligence. If a pilot error kills or injures someone, that pilot may be held accountable to the victim or his family regardless of whether the aircraft is owned by his partnership or by his limited liability corporation.

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Holding the Aircraft Owner Responsible for the Mechanic's Negligence

Posted on November 11, 2010 by Mike Danko

An aircraft owner loans his plane to a friend. The plane crashes and a passenger is injured. It turns out the crash was caused by the negligence of the aircraft's mechanic. Can the crash victim hold the aircraft owner liable for the mechanic’s faulty work?

This question comes up a lot. In fact, it comes up in almost every case where the mechanic doesn't have adequate insurance to cover the passenger's medical expenses. 

Ask the owner’s insurance company whether the owner can be held liable, and they will always say “no.” Their argument is that the owner didn’t perform the work and, in fact, without a mechanic's license was legally prohibited from doing so. The owner trusted the mechanic, as the regulations required him to, and so did nothing wrong. According to the owner’s insurance company, the passenger must look to the mechanic for compensation, and not to the owner. 

There are a couple of court opinions that seem to go along with the insurance company's reasoning.  But none of those opinions applies in California.  

In California, unlike in some other states, an owner of a machine that can seriously injure someone if not properly maintained is responsible to those injured as a result of faulty maintenance. It doesn’t matter that the owner didn't actually perform the faulty maintenance. 

Why does this make sense? Because, according to the Supreme Court's opinion in Maloney v. Rath, it is the owner who decides who the mechanic will be.

the owner selects the [mechanic] and is free to insist upon one who is financially responsible and to demand indemnity of him.

In other words, the injured party had no say in what mechanic did the work, or whether the mechanic carried insurance. But the owner who selected him did. So the accident victim can hold the owner financially responsible, and leave it to the owner to try to obtain reimbursement from his mechanic.

The Maloney case didn’t involve airplanes. It involved a car crash caused by improperly maintained brakes. But the reasoning applies to airplanes too. After all, improper aircraft maintenance is just as dangerous as improper car maintenance. Maybe even more so.

The federal aviation regulations make the owner responsible for maintaining the aircraft in airworthy condition. The owner can’t necessarily avoid that responsibility by hiring a good mechanic. Despite what the insurance company says, the owner may still be on the hook.  At least in California.

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Res Ipsa Loquitur and the Aviation Accident: When the Evidence is Destroyed in the Crash

Posted on August 4, 2010 by Mike Danko

When the evidence needed to reconstruct an aviation accident is lost or destroyed in the crash, can the victim nonetheless hold whoever caused the accident accountable?

Yes, if the legal doctrine of "res ipsa loquitur" apples -- Latin for "the thing speaks for itself."

Most courts recognize that air crashes do not normally occur unless someone, somewhere, was negligent.  It’s just a matter of who.  If circumstances point to one particular person above all others, then "the thing speaks for itself," and that person can be held accountabe even without any physical evidence to prove the case.

Let’s say an airplane's engine fails and the plane crashes. The pilot survives but is badly injured. The key engine components are either battered beyond recognition, destroyed by the post-crash fire, or never located. Under the circumstances, it may be impossible to ever determine exactly why the engine failed.  There may be little chance of determining from the wreckage who was responsible for the accident.

Now assume that engine work had been performed on the plane just before the accident. Under the circumstances, one might suspect that the engine failed because the mechanic who performed the engine work did something wrong.  Of course, there are other possible explanations for the engine failure as well.  But if the injured pilot can prove that the mechanic's work is the most likely explanation, a judge or jury may decide that the maintenance shop is responsible, even without any physical evidence to rely on.

To invoke the doctrine of res ipsa loquitur against the maintenance shop in this example, the injured pilot must prove that:

  1. The engine would not have failed unless someone was negligent;
  2. The maintenance facility had exclusive control of the engine during the key time period (that is, only the facility's own mechanics had access to the inside of the engine when it was opened up); and
  3. The pilot did not cause or contribute to the engine failure (by, for example, running out of gas).

Even if there isn't enough physical evidence to determine how or why the engine failed, if the pilot can prove all these three things, he may nonetheless be able to hold the shop responsible for his injuries.

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Running Past TBO: Smart Economics or Owner Negligence?

Posted on December 4, 2009 by Mike Danko

Aircraft engine manufacturers recommend that owners overhaul their engines when they accumulate a certain amount of operating time, usually between 1200 and 2400 hours depending on the engine's make and model. For example, Teledyne Continental Motors suggests that owners overhaul its IO-550 model engine at 2000 hours. Textron LycLycoming Engine - photo by wirelizardoming suggests that owners overhaul its O-235 engine, like the one pictured, at 2400 hours.

Overhauls are expensive.  Some can cost $40,000 or more.  An increasing number of owners opt to run their engines 200, 400 or more hours past the manufacturer's recommended "time between overhauls," or TBO.  Once past TBO, they may take extra precautions by, for example, regularly sending out engine oil samples for spectrographic analysis, checking the engine’s compression, and looking inside certain parts of the engine with a boroscope to insure that  things look good. They feel the manufacturer's TBO recommendations are somewhat arbitrary. By running their engines past TBO they are squeezing more life out of them, and that just makes good economic sense.

The FAA does not require private owners to comply with the manufacturer’s stated TBO interval. The manufacturer's TBO is therefore advisory only.  As long as a properly certified mechanic has

within the previous twelve months certified that the engine is airworthy, then the owner is, from a regulatory standpoint, free to operate the engine as many hours as he wishes.

But if an owner does operate past TBO, and the engine fails, and a passenger is hurt as a result, could the owner be held accountable despite the fact he was in compliance with all FAA regulations?

You bet.

An owner can be held accountable for an accident after TBO if a judge or jury decides that:

1.  in not complying with the manufacturer's overhaul recommendations, the owner was negligent (not "reasonably careful" under the circumstances) and

2.  the negligence was a cause of the accident. 

The FAA regulations are minimum standards only.  Many would argue that more can and should be expected of a reasonably careful owner or operator.  If a judge or jury agrees, then the operator would be held responsible for the harm resulting from running the engine past TBO, even though the regulations allowed him to.


How would the aviation attorney representing the injured passenger establish the owner's liability?  Through expert testimony.  Let's say that at 100 hours past TBO an exhaust valve failed, the engine lost power, and an accident resulted.  It wouldn't be difficult to establish a causal link between the owner's decision to run the engine past TBO and the engine failure. 

Q: Mr. Metallurgist, did you find any defect in the exhaust valve?


A: No, it was manufactured properly and was a fine example of an exhaust valve in all respects.


Q: Then why did it fail?


A: It failed in fatigue. It took all the vibration, bending, and heat that it could and then it finally quit.


Q: Would it have broken if the owner had not continued to run the engine past the manufacturer's 2000 hour overhaul interval?


A: No, sir, it would not have broken had the owner followed the manufacturer's recommendation.


Q: How do you know that?


A: Well, for one thing, it completed the manufacturer's service interval without breaking. It broke only when the owner asked more of it than the manufacturer recommended. Certainly, had the engine been overhauled at 2000 hours and a new valve installed, one would not expect it to have failed in fatigue 100 hours later. Rather, one would have expected the valve to continue in service well beyond that.


The injured passenger's attorney would next call to the stand the owner of an FBO (aircraft rental agency).  The FBO owner would testify that he never runs engines beyond TBO because he doesn't assume that he is smarter than the manufacturer.  He would testify that some things, like whether internal parts are worn beyond safe limits, cannot be determined without tearing down the engine. The witness might then suggest that the costs saved by running an engine beyond TBO are marginal and just aren't worth the risk to human life. 

With the testimony of those two witnesses, a judge or jury could well decide that the owner was negligent in operating his engine past TBO and that the negligence caused the passenger's injuries.

Some proponents of running an aircraft engine beyond TBO downplay the risks.  They argue that the manufacturer's TBO is a "made up" number, and few engine failures have actually been attributed to the owner's decision to run past it.  One prominent aviation maintenance expert even suggests that there have been no cases where running past TBO resulted in an owner being held responsible for a passenger's resulting injuries.

Not so.  

There may be good economic reasons to run an engine past TBO.  But an owner who does so should expect to be held responsible if an accident results. 
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Aircraft Maintenance Manuals and the Mechanic's Liability

Posted on August 28, 2009 by Mike Danko

Maintenance manuals tell the mechanic when to perform an inspection or service, and how to perform it.  Many mechanics believe that the regulations require them to follow the book exactly.Aircraft Mechanic But in an excellent column on this murky subject, mechanic and aviation author Mike Busch sums up the regulatory requirements nicely:

The manufacturer's “how-to” instructions are compulsory, but the manufacturer’s “when-to” instructions are not.

Let's say, for example, that the manual requires the aircraft’s spark plugs to be removed and regapped every 100 hours. If a mechanic decides to service the aircraft’s spark plugs, he must do it exactly as instructed in the aircraft manual. The regulations, however, do not require the mechanic to follow the manufacturer's instructions at all concerning when or how often to service the plugs, regardless of how much time the engine has accumulated. As Busch explains:

No manufacturer can mandate any maintenance requirement on a part 91 aircraft owner; only the FAA can do so.

There is another part of the story, however, that Busch's column doesn't address. The FAA regulations are bare minimum requirements only.  If an accident occurs because the mechanic failed to comply with the manufacturer’s recommendations, questions can arise as to whether the mechanic was negligent – that is, not reasonably careful -- and thus liable to those injured as a result.  A jury may conclude that, though the regulations didn't require him to, a reasonably careful mechanic would have followed the manufacturer's recommendations anyway.  After all, does a reasonably careful mechanic believe he knows better than the manufacturer? 

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A Mechanic's Liability for Failure to Comply with a Manufacturer's Maintenance Instructions

Posted on May 21, 2009 by Mike Danko

The General Rule

Mechanics are required by regulation to follow the instructions set forth in the manufacturer's maintenance manuals when working on an aircraft.  The mechanic is not allowed to deviate from the instructions covering the work he undertakes.  If he does deviate, and someone is injured as a result, the mechanic is liable.

Service Bulletins

Sometimes, a manufacturer learns of a problem with the way its product is performing in the field.

The manufacturer may then issue a “service bulletin” to warn the industry of the problem and how to correct it.  For example, when it learned that its exhaust valves were failing at an unacceptably high rate, one engine manufacturer  issued a service bulletin requiring that those valves be inspected regularly (pdf) and, if necessary, repaired or replaced.  GA MechanicThe service bulletin warns that failure to perform the inspection can result in engine failure.  Because the risk is so great, the manufacturer labeled this particular service bulletin "mandatory."

If a mechanic works on an aircraft but returns it to service without performing the "mandatory" inspection, is the mechanic responsible to those injured if the engine quits shortly thereafter due to valve failure?

You might think so.   After all, of all the manufacturer's instructions, those in the service bulletins might be the most important.   However, the regulations allow mechanics to ignore service bulletins entirely, even “mandatory” ones, and still pronounce the aircraft to be "airworthy."  That is, at least when working on aircraft operated under Part 91 of the FAA regulations—the section under which most general aviation aircraft are operated.   

The Industry Practice

When an aircraft is brought into the shop for service, many mechanics provide the owner with a written list of the service bulletins that apply to the owner's aircraft.  Unless the maintenance manuals expressly require the mechanic to comply with all service bulletins, the mechanics leave that decision to the owner. After explaining to the owner the work entailed, its cost, and its importance to flight safety, these mechanics require the owner to direct them, in writing, either to comply with the various service bulletins or to ignore them.

The mechanics keep the owner's written instructions on file.  In the event of an accident, the mechanic will argue that, although he was the one who pronounced the aircraft "airworthy," it was the owner who decided not to follow the manufacturer's recommendations.  The mechanic will argue that therefore the owner, not the mechanic, is the one responsible for the resulting injuries or death.  
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