Tradewinds Airlines, Inc. v. AAR Aircraft Services-Miami, Inc. (In Re Tradewinds Airlines, Inc.)

394 B.R. 614, 21 Fla. L. Weekly Fed. B 451, 2008 Bankr. LEXIS 2876, 50 Bankr. Ct. Dec. (CRR) 187
CourtUnited States Bankruptcy Court, S.D. Florida.
DecidedSeptember 18, 2008
Docket18-23496
StatusPublished
Cited by2 cases

This text of 394 B.R. 614 (Tradewinds Airlines, Inc. v. AAR Aircraft Services-Miami, Inc. (In Re Tradewinds Airlines, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Florida. primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tradewinds Airlines, Inc. v. AAR Aircraft Services-Miami, Inc. (In Re Tradewinds Airlines, Inc.), 394 B.R. 614, 21 Fla. L. Weekly Fed. B 451, 2008 Bankr. LEXIS 2876, 50 Bankr. Ct. Dec. (CRR) 187 (Fla. 2008).

Opinion

MEMORANDUM OPINION AND ORDER GRANTING DEBTOR’S EMERGENCY MOTION FOR PRELIMINARY INJUNCTION

A. JAY CRISTOL, Chief Judge Emeritus.

THIS CAUSE came before the Court for hearing on August 26, 2008 at 3:00 p.m. upon Debtor’s Emergency Motion For Preliminary Injunction (the “Motion”) [D.E. 4] and Defendant’s Response thereto *616 [D.E. 12]. Central to the issues in the above-captioned adversary proceeding and Debtor’s Motion is whether Defendant, AAR Aircraft Services — Miami, Inc., properly complied with Florida and federal law regarding the recordation and perfection of both its asserted statutory lien and contractual lien in Debtor’s model A-300 aircraft bearing tail number N504TA (“Aircraft 504”).

As of the Petition Date, Aircraft 504 was in the possession of Defendant, who is asserting statutory and contractual liens in Aircraft 504 for outstanding maintenance payments it claims are due for work allegedly performed on Aircraft 504 and for work previously performed on other aircraft owned by Debtor. Pursuant to this Court’s Order Granting, in Part, Debtor’s Emergency Motion for Preliminary Injunction [D.E. 14], Defendant was directed to turn over possession of Aircraft 504 to Debtor, subject to certain enumerated conditions, including the preservation of whatever lien rights Defendant has, subject to further order of this Court determining whether Defendant’s asserted liens are valid, and if valid, the extent and priority of such liens.

At the hearing, the Court advised each of the parties to submit proposed orders as to their respective positions regarding the requirements of Florida and federal law relating to the validity of Defendant’s asserted liens in Aircraft 504, whether arising pursuant to contract or by statute.

The Court, having reviewed the file and submissions of all interested parties, and having heard the proffers, representations and argument of counsel, and having otherwise been duly informed in the premises, holds that Defendant’s asserted statutory hen and contractual lien are invalid against Debtor, its bankruptcy estate and its creditors for failure to timely file a prepetition notice of lien with the Federal Aviation Administration in Oklahoma City, Oklahoma.

BACKGROUND

From the commencement of this bankruptcy case on July 25, 2008, Debtor has been acting as a debtor in possession and a fiduciary of this Court, and in that capacity is vested with certain rights, powers and obligations of a chapter 11 trustee pursuant to 11 U.S.C. § 1107, including the rights of a bona fide purchaser and a hypothetical lien creditor under 11 U.S.C. § 544. As a fiduciary, the debtor in possession owes a duty to all creditors of the bankruptcy estate, including the Defendant.

As debtor in possession, Debtor currently operates a cargo carrier business that provides airport-to-airport service to the air freight community and owns certain Airbus model A-300 aircraft, including Aircraft 504.

Debtor, pursuant to a General Terms Agreement and Aircraft Maintenance Agreement 1 (collectively, the “Contract”), delivered Aircraft 504 to Defendant on June 19, 2008 for the purpose of having a 96-month heavy maintenance check performed in Miami-Dade County, Florida. The Contract provided for the payment of $250,000 to Defendant at induction of Aircraft 504 for the purposes of the 96-month maintenance check.

Debtor asserts that, after delivery of Aircraft 504 to Defendant, Debtor instructed Defendant not to perform any mainte *617 nance on Aircraft 504. Defendant asserts it performed substantial work to prepare for the 96-month maintenance check as well as in connection with the movement of Aircraft 504 upon delivery. As a result, the parties dispute whether Aircraft 504 was actually inducted pursuant to the contract, and whether any amount is owed by Debtor to Defendant in respect of maintenance work allegedly performed on Aircraft 504. 2

The dispute between the parties arose due to Defendant’s refusal to return Aircraft 504 to Debtor after Debtor had requested the turnover of the aircraft post-petition. Defendant’s refusal to relinquish possession of Aircraft 504 was based on its assertion of a statutory mechanic’s lien and a contractual lien in Aircraft 504 for outstanding maintenance payments due for work allegedly performed on Aircraft 504 and performed on other of Debtor’s aircraft. Essentially, irrespective of whether labor or services were performed for Debt- or on Aircraft 504, Defendant argues that it is entitled to assert a lien on Aircraft 504 due to the “cross-collateralization” provision found in the parties’ Contract and as a matter of statutory right pursuant to Fla. Stat. § 713.58.

On July 24, 2008, the day immediately preceding the petition date, Defendant filed a claim of lien with the Clerk of the Circuit Court in Miami-Dade County, Florida, as document no. CFN 2008R0607302, at O.R. Book 26493, Page 3683 (the “Claim of Lien”) asserting a mechanic’s lien solely against Aircraft 504 for labor, materials and services Defendant allegedly provided on Aircraft 504 [D.E. 1, Ex. 3]. Defendant listed the unpaid amount of these services as $250,000, which is the payment amount the Contract provides is to be charged Debtor at induction of Aircraft 504.

Post-petition, on July 29, 2008, Defendant recorded a certified copy of the Claim of Lien with the Federal Aviation Administration (the “FAA Claim of Lien”), which asserts a lien in the amount of $250,000 against Aircraft 504, for labor, material or services allegedly performed on Aircraft 504 [D.E. 1, Ex. 4],

Debtor has argued that Defendant’s assertion of a perfected lien in Aircraft 504 is contrary to Fla. Stat. §§ 713.58, 329.51, and 329.01 because Defendant failed to timely file the FAA Claim of Lien prior to the petition date pursuant to Fla. Stat § 329.01 and 49 U.S.C. §§ 44107 and 44108, in order to have a properly perfected lien in Aircraft 504 that is valid and enforceable against both the Debtor and third parties. Debtor further argues that, if Defendant does have a valid lien, Defendant’s Claim of lien filed with the Clerk of the Circuit Court in Miami-Dade County, Florida and the FAA Claim of Lien filed with the Federal Aviation Administration (“FAA”) would not perfect the lien asserted for the amounts claimed by Defendant as due and owing for work performed on Debtor’s aircraft, other than Aircraft 504.

Defendant has argued that it has perfected liens in Aircraft 504 for work performed on Aircraft 504 and for work performed on other aircraft of Debtor in compliance with applicable Florida Statutes, including Fla. Stat.

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Cite This Page — Counsel Stack

Bluebook (online)
394 B.R. 614, 21 Fla. L. Weekly Fed. B 451, 2008 Bankr. LEXIS 2876, 50 Bankr. Ct. Dec. (CRR) 187, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tradewinds-airlines-inc-v-aar-aircraft-services-miami-inc-in-re-flsb-2008.