Hanusosky ex rel. High Tech Aviation, Inc. v. Firstmerit Bank, N.A.

2002 Ohio 6269, 779 N.E.2d 1101, 121 Ohio Misc. 2d 1
CourtLake County Court of Common Pleas
DecidedJune 17, 2002
DocketNo. 01CV000678
StatusPublished
Cited by2 cases

This text of 2002 Ohio 6269 (Hanusosky ex rel. High Tech Aviation, Inc. v. Firstmerit Bank, N.A.) is published on Counsel Stack Legal Research, covering Lake County Court of Common Pleas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanusosky ex rel. High Tech Aviation, Inc. v. Firstmerit Bank, N.A., 2002 Ohio 6269, 779 N.E.2d 1101, 121 Ohio Misc. 2d 1 (Ohio Super. Ct. 2002).

Opinion

Eugene A. Lucci, Judge.

INTRODUCTION

{¶ 1} This matter came on for hearing on February 15, 2002, on the issues of the validity and priority of liens held by defendant Crow Executive Air, Inc. (“Crow Executive”) and defendant FirstMerit Bank, N.A. (“First Merit”) as against a 1971 Lear jet that was owned by plaintiff High Tech Aviation, Inc. (“High Tech”) when the liens attached to the aircraft.

{¶ 2} For the following reasons, the court ruled on the record at the hearing that Crow Executive has a valid artisan’s lien and that Crow Executive’s artisan’s lien has priority over First Merit’s purchase money lien. However, because the parties required additional discovery, the precise amount of Crow Executive’s artisan’s lien was not determined on the date of the hearing.

{¶ 3} Subsequent to the hearing, the parties also filed the following documents relevant to the issues of lien validity and lien priority: (1) defendant First Merit’s renewed motion for judgment with respect to lien priority, filed April 17, 2002; (2) motion of defendant First Merit for evidentiary hearing and oral argument on amount and priority of Crow Executive’s lien, filed May 2, 2002; (3) defendant Crow Executive’s memorandum in opposition to defendant First Merit’s renewed motion for judgment with respect to lien priority, filed May 3, 2002; (4) motion of defendant First Merit to dismiss claims of Crow Executive for lack of subject-matter jurisdiction, filed May 8, 2002; (5) memorandum of law in support of motion of defendant First Merit to dismiss claims of Crow Executive for lack of subject-matter jurisdiction, filed May 8, 2002; (6) motion for leave to [3]*3file amended reply to joint counterclaim and cross-claim of defendant Crow Executive, filed May 9, 2002 (in which plaintiff sought to add a constitutional challenge to the interpretation of R.C. 1311.75 advanced by defendant Crow Executive); (7) defendant Crow Executive’s response to defendant First Merit’s motion for hearing and oral argument, filed May 20, 2002; (8) defendant Crow Executive’s memorandum in opposition to plaintiffs motion for leave to file amended reply, filed May 20, 2002; (9) defendant Crow Executive’s memorandum in opposition to defendant First Merit’s motion to dismiss, filed May 20, 2002; and (10) reply memorandum in support of motion of defendant First Merit to dismiss claims of Crow Executive for lack of subject-matter jurisdiction, filed May 30, 2002.

FACTS

{¶ 4} This ease involves (1) First Merit’s perfected purchase money security interest (“PMSI”) in an aircraft that was purchased by High Tech, (2) Crow Executive’s artisan’s lien on the aircraft, which arose and was perfected subsequent to the perfection of First Merit’s PMSI, and (3) the application of R.C. 1311.71 et seq., which became effective on April 16,1993.

{¶ 5} The parties have stipulated to the following facts. In 1998, High Tech purchased a Lear jet. First Merit loaned a sum of money to High Tech to finance the purchase and perfected its purchase money security interest by having the security agreement recorded with the Federal Aviation Administration (“FAA”) in Oklahoma City, Oklahoma. It is undisputed that First Merit did not “perform labor upon or furnish materials for an aircraft.” Therefore, First Merit’s lien is not a lien that arises under R.C. 1311.72.

{¶ 6} Subsequent to the purchase of the aircraft, and subsequent to the perfection of First Merit’s lien, Crow Executive entered into a contract with High Tech. Under the contract, Crow Executive agreed to perform labor and to furnish materials for the aircraft. Thereafter, High Tech failed to pay Crow Executive, and Crow Executive obtained judgment in Wood County, Ohio, for the amounts owed by High Tech to Crow Executive. Crow Executive then perfected its artisan’s lien by filing the appropriate affidavit with the FAA in Oklahoma City, Oklahoma.

DISCUSSION

{¶ 7} There were four issues before the court on the date of the hearing on February 15, 2002:

{¶ 8} Did Crow Executive’s artisan’s lien arise under R.C. 1311.72?

[4]*4{¶ 9} If Crow Executive’s artisan’s lien arose under R.C. 1311.72, is it valid under R.C. 1311.72(C) as against the PMSI lien held by First Merit?

{¶ 10} If Crow Executive’s lien is valid, what is its priority under R.C. 1311.75 with respect to First Merit’s previously perfected PMSI?

{¶ 11} If Crow Executive’s lien is valid, what is the amount of that lien (excluding any claims that do not fit within the definition of labor or materials as set forth in R.C. 1311.71)?

{¶ 12} To the extent that Crow Executive’s artisan’s lien was based on labor performed by Crow Executive and materials furnished by Crow Executive for the aircraft, the court concludes that Crow Executive’s artisan lien arose under R.C. 1311.72.

{¶ 13} Having determined that Crow Executive’s lien arose under R.C. 1311.72, the court next addresses the question of whether — under R.C. 1311.72(C) — Crow Executive’s lien is valid against First Merit’s PMSI. R.C. 1311.72(C) states as follows:

{¶ 14} “A lien that arises under this section is valid against any person except a purchaser or encumbrancer who in good faith, without notice, and for value acquired rights prior to the recording of an affidavit for lien pursuant to section 1311.73 of the Revised Code.” (Emphasis added.)

{¶ 15} The court notes that the general rule created by the statute provides that Crow Executive’s lien is valid “against any person.” The remaining language in subsection (C) carves out an exception, stating that such a lien is not valid against “a purchaser or encumbrancer who in good faith, without notice, and for value acquired rights prior to the recording of an affidavit for lien pursuant to section 1311.73 of the Revised Code.”

{¶ 16} First Merit argues that its PMSI fits within the exception in subsection (C), and concludes that Crow Executive’s lien is not valid against the PMSI. In making this argument, First Merit asserts that it is an “encumbrancer” as that term is used in subsection (C). For the following reasons, this court disagrees with that assertion.

{¶ 17} Although a related section of the statute defines the terms “aircraft,” “labor,” and “materials,” it does not define the word “encumbrancer.” Black’s Law Dictionary1 does not offer a definition of “encumbrance” or “encumbrancer,” directing the reader instead to the term “incumbrance,” which Blacks’ defines to mean:

[5]*5{¶ 18} “Any right to, or interest in, land which may subsist in another to the diminution of its value, but consistent with the passing of the fee. A claim, lien, charge, or liability attached to and binding real property. An incumbrance may be a mortgage; a judgment lien; an attachment; an inchoate right of dower; a mechanic's lien; a lease; restriction in deed; encroachment of a building; an easement or right of way; accrued and unpaid taxes; the statutory right of redemption. The term ‘incumbrance’ is sometimes used to denote a burden or charge on personal property as e.g. a chattel mortgage on a stock of goods.” (Citations omitted and emphasis added.)

{¶ 19} A similar definition of “encumbrancer” is found in A Dictionary of Modern Legal Usage,2 which states:

{¶ 20} “[E]ncumbrancer (= a person who holds an encumbrance) is a slightly archaic word that can often be replaced by lienholder.

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Bluebook (online)
2002 Ohio 6269, 779 N.E.2d 1101, 121 Ohio Misc. 2d 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanusosky-ex-rel-high-tech-aviation-inc-v-firstmerit-bank-na-ohctcompllake-2002.