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Chopping up your plane for sale doesn't help.

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jhelms(at)nationair.com
Guest

Posted: Thu Apr 27, 2006 12:30 pm Post subject: Chopping up your plane for sale doesn't help.

I've posted this information before, but understand that a customer called

one of my agents about this issue again today.  So, I think it must not be

too soon to post this again.    



 



For purposes of this discussion I refer to Van's Aircraft as the

manufacturer, and the builder as the assembler. I'm not trying to step on

any toes. only trying to help everyone understand better.



 



When selling your plane, the liability that you would have as the assembler

of the airplane would not be lessened by "parting it out" and selling the

various parts to different people.  Actually, it could, in essence, increase

the liability exposure.  



 



Selling the wings to one person, the engine to another, etc. could

potentially increase your exposure to liability.  If any of the planes which

your former parts go into crash, then you could be sued.  Your part which is

now in that plane wouldn't even necessarily have had to fail.  Families

often sue despite the cause of the crash or facts of the case.  Their loved

one couldn't have been at fault.  In my opinion, the cost of defending the

lawsuit could be as bad or worse than the eventual judgement.  So, having 4

or 5 aircraft out there with your former parts and the potential to crash

broadens the risk of a lawsuit being brought against you.  



 



A very few aviation insurance policies cover "liability for the sale of the

aircraft" (AIG provides that but only for production aircraft, and AVEMCO

offers it on all their policies) but that is designed to cover any aircraft

owner from lawsuits arising out of poor maintenance and the like.  It was

not designed to cover your liabilities as the assembler of a kit aircraft.

In fact, AVEMCO's coverage for sale of the aircraft even states that it is

intended to provide coverage arising out of your "ownership, maintenance,

and use" of the aircraft.  It specifically does not state it covers

liability arising out of  "assembly of" or "manufacture of" the aircraft.



 



As previously mentioned today on this forum, verbal and even written

agreements to waive liability are pretty much worthless.  



 



The very best things which you as the assembler of the plane can do to

lessen your exposure are:



 



1.	Follow the plans exactly, don't substitute parts, or change

anything.  Any modification or substitution could be increasing your

liability by crossing over into the manufacturer or engineering type

liability areas.   Obviously, there are differences amongst all your planes,

and places in the plans where it calls for you to make a choice (i.e. tip

up/slider) or whether or not to install an autopilot.  In any event, if they

exist I'd suggest following the plans or  recommendations as closely as

possible.   

2.	Have a third party A+P do an annual as the pre-buy.  Don't do it

yourself as the builder or if you're an A+P or allow an A+P who might be

buying it from you do it.  This applies to any airplane (production or

homebuilt) that you might sell.  The annual is a declaration by that A+P

attesting to the airworthiness of the plane for another year.  Having it be

a third party will support your position if you are sued, and you might be

able to even sue them if there was a problem which you were sued for

successfully.  Or, the buyer might sue the A+P and not you (although they'd

likely sue both of you.)  

3.	Maintain the airplane well.  

4.	Don't own anything (and all the other legal things you can do to

make yourself less of a target to go after).  A lawyer once told me that the

2nd best thing you can do is have a ton of coverage, the best thing is to

have none (and no assets).    



 



While product liability coverage exists, it exists for manufacturers.  It is

not realistic to believe it'd be affordable for any of you for having built

one plane.  It'd cost more than the value of your plane.  Anything is

insurable, but the starting price for special stuff like that thru Lloyd's

would be in the multiple tens of thousands of $'s if not $50,000.  One might

as well make their plane into paperclips.  



 



Just please don't think that parting your plane out for sale achieves a

lessening of liability exposure.    



 



John "JT" Helms



Branch Manager



NationAir Insurance Agencies, Inc. 



 



***Notice to All Recipients*** 



Please be advised that we cannot bind, modify, or cancel coverage via the

Internet, email or voicemail. Please call our office at (877) 475-5860 to

speak with a NationAir Representative. Thank you for your cooperation. 



 



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3edcft6(at)cox.net
Guest

Posted: Thu Apr 27, 2006 10:01 pm Post subject: Chopping up your plane for sale doesn't help.

John Helms wrote:



 	  Quote: 	
		  When selling your plane, the liability that you would have as the assembler

of the airplane would not be lessened by "parting it out" and selling the

various parts to different people.  

  



I thought the idea of taking it apart was to sell ALL of the parts to 
	


one person who then would obviously need to reassemble it.  Then if an 

accident were to occur they would have to prove that whatever supposed 

defect didn't come from the guy who bought the parts putting it together 

wrong.



do not archive

-- 

Chris W

KE5GIX



Gift Giving Made Easy

Get the gifts you want & 

give the gifts they want

One stop wish list for any gift, 

from anywhere, for any occasion!

http://thewishzone.com

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jhelms(at)nationair.com
Guest

Posted: Thu Apr 27, 2006 10:32 pm Post subject: Chopping up your plane for sale doesn't help.

What benefit is there for the buyer in that.  He's likely seen the plane, knows it flies.  Then you disassemble it and sell it to him.  Do you think that a) he'd still want to buy it knowing he has to put it all back together (which he might not know how to do)and b) give you the same price for it that he might have been thinking of giving you?  



do not archive



JT

--------

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rv8ch

Joined: 10 Jan 2006
Posts: 250
Location: Switzerland

Posted: Fri Apr 28, 2006 12:19 am Post subject: Chopping up your plane for sale doesn't help.

 	  Quote: 	
		   What benefit is there for the buyer in that.  He's likely seen the

 plane, knows it flies.  Then you disassemble it and sell it to him.

 Do you think that a) he'd still want to buy it knowing he has to put

 it all back together (which he might not know how to do)and b) give

 you the same price for it that he might have been thinking of giving

 you?


	


I'm pretty sure the answer to all your questions is "no".



It seems like this important topic would be a good one for the RVWiki.



    http://www.rvwiki.org/



It comes up about every three months, and the discussion always

goes the same way:



1) Someone asks if they need to think about getting sued

    if they sell their RV;



2) Several people say it has never happened, or is very rare;



3) Several people bring up John Denver's unfortunate crash;



4) Several people talk about various schemes for protecting assets;



5) Several people talk about sales contracts and no-harm clauses

    and waivers;



6) Several people talk about dismantling the aircraft as a way

    to avoid being sued;



7) Several people dismiss that idea as expanding the risk;



 Finally, as is common with our legal system, everyone ends

    up confused, not really knowing if there is anything that

    can be done.  So, they go back to flying, riveting, or

    surfing the web.



I probably missed one or two important phases above, so

feel free to interject your comments!



After reading these several times over the past few years,

here is what I have gotten out of the discussion.



1) The risk of getting sued is very low;



2) Best protection generally is to build as close as possible

    to the original design, and get lots of independent inspections;



3) No-harm liability waivers probably don't hurt, and probably

    won't help in court, but they may be enough to scare off

    potential suits by survivors or inexperienced lawyers;



4) If you're *not* "rich" (not sure how to define that), then

    the risk of getting sued is low, since the suing lawyer

    wants to get paid for their effort if they win;



5) If you *are* "rich", you should either buy a certified airplane,

    or if you do build an airplane, don't sell it.  If you do,

    somehow protect your assets from lawsuits by consulting

    with a good attorney.



6) Liability insurance to help in the case of getting sued is

    available, but not cost-effective.

Again, please feel free to make any comments or suggestions,

and I'll be happy to slap this into the RVWiki for future

reference.  It really won't hurt my feelings at all if you

tell me the above is all a bunch of Bravo Sierra, and I

should go crawl under a rock.



Best regards,

Mickey

-- 

Mickey Coggins

http://www.rv8.ch/

#82007 finishing

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_________________
Mickey Coggins
http://www.rv8.ch/

pcowper(at)webtv.net (Pet
Guest

Posted: Fri Apr 28, 2006 9:34 pm Post subject: Chopping up your plane for sale doesn't help.

"I thought the idea of taking it apart was to sell ALL of the parts to

one person who then would obviously need to reassemble it."



You couldn't offer me enough money to drill out all those rivets.



Pete Cowper

RV8 #81139

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