Slander of Title: The Risk of Filing an Invalid Aircraft Mechanic's Lien

An individual recently called me and told me he wanted to file a mechanic's lien against an aircraft. When I asked him what type of work he had performed he indicated that he had performed some maintenance on the aircraft and also provided pilot services to the owner in the aircraft. Unfortunately, in this individual's state, as is the case in most other states, pilot services are not the type of work upon which an aircraft mechanic's lien may be based. When I told him that, he asked why he couldn't just file the lien for the full amount and then worry about whether he could collect for the pilot services component of the lien down the road. I answered that this was not a good idea. Here's why.

One defense an aircraft owner may assert in response to a lien claimant's attempt to enforce a mechanic's lien against an aircraft is that the lien is invalid because the lien claimant is knowingly demanding an amount in excess of what is justly due. This defense is very common in situations where the aircraft owner initially disputed the amount being charged by the lien claimant. It is also common where the lien claimant is trying to get paid for work that is not lienable work, such as the pilot services in the above-situation. Although this defense usually requires that the aircraft owner show bad faith on the part of the lien claimant or that the lien claimant knew the lien statement was overstated, that isn't necessarily hard to do when the lien is for work that is not allowed under the applicable mechanic lien statute.

And here is the risk a lien claimant may be exposed to if his or her mechanic lien is invalid: If the aircraft owner is successful in defending against the foreclosure proceeding, the aircraft owner will also probably succeed in a slander of title claim against the lien claimant. An aircraft owner asserting a slander of title claim alleges that the lien claimant improperly encumbered the aircraft with an invalid lien. A slander of title claim could have serious and expensive implications for the lien claimant if the improper lien prevented a sale of the aircraft or forced the aircraft owner to accept less in a sale than he or she would have in the absence of a lien.

The moral of the story? Perfecting and enforcing an aircraft mechanic's lien can be tricky. In addition to the federal filing requirement, each state has its own specific requirements governing aircraft mechanic's liens. Lien claimants should understand what their particular state laws allow and require in order to assert an aircraft mechanic's lien. When in doubt, contact an aviation attorney familiar with your state's aircraft mechanic's lien laws to analyze your situation and help you choose the best course of action.