Aircraft-Logbooks-Value of Aircraft Records
Aircraft-Logbooks-Value of Aircraft Records
AIRCRAFT LOGBOOOKS
I. INTRODUCTION
Captain Chesley “Sully” Sullenberger’s final task before exiting the US Airways
Airbus minutes after ditching into the Hudson River was to collect the aircraft’s
maintenance logbooks.2 Indeed this experienced airline captain knew there would be an
accident investigation as to its cause, in spite of the fact that a flock of Canadian geese
clearly caused the double engine failure.3 He did not doubt the FAA and NTSB
investigators would still want to review the aircraft’s maintenance logbooks to aid in their
accident investigation. These records would show how the aircraft had been maintained,
compliance with airworthiness directives, number of airframe and engine hours, damage
history--if any, among many other factors. Being able to verify this historical
information was important not only in the cases of US Airways Flight 447 and other
accidents, but in most cases it is extremely important and valuable to aircraft owners and
operators.4
This article discusses the impact on aircraft owners, operators and finance
companies when aircraft logbooks are lost, destroyed, stolen, held in lieu of payment or
1
Ms. Elizabeth Vasseur-Browne is an attorney with Cooling & Herbers, P.C., a Kansas City law firm. She
focuses her law practice on aviation and insurance defense matters and FAA enforcement actions. She is a
licensed pilot and served in the United States Air Force.
2
Sullenberger, Chesley. Interview with Katie Couric. “Miracle on the Hudson.” Sixty Minutes. CBS.
WCBS, New York, 8 February 2009.
3
Id.
4
For the purposes of this article aircraft logbooks include the aircraft’s engine, propeller, airframe,
accessory and any other logbook required to be maintained pursuant to federal code and is applicable to
both fixed wing and rotorcraft. The cases cited in this article will focus on issues related to aircraft
logbooks.
1
to regain possession of his/her aircraft logbooks and how unavailable logbooks can affect
the value of aircraft. It is important however to keep in mind that the impact of missing
records in accordance with 14 C.F.R. § 91.417. Although the FAA has strict regulations
as to the type and length of time maintenance records must be maintained, generally, they
The records themselves do not need to, and arguably should not be, stored on the
aircraft, but must be produced for inspection in a reasonable amount of time when
reasonable amount of time pursuant to 14 C.F.R. § 91.417, the FAA can initiate an
5 See FAA Advisory Circular Number 43-9C, (AC No. 43-9C) Maintenance Records; published on June 8,
1998.
2
enforcement action, as was the case in United States v. Intercon Leasing, Inc.6 In
Intercon Leasing, Inc., the FAA suspended the airworthiness certificate of a Douglas
DCA aircraft.7 Intercon was the registered owner of the aircraft and Jerry Harvey was the
president of Intercon.8 After the FAA suspended the airworthiness certificate, the FAA
demanded, inter alia, the aircraft maintenance records.9 Intercon never surrendered the
records and later sold the aircraft.10 The FAA initiated an enforcement action against
both Intercon and Harvey for a number of FAR violations, including their failure to
provide the FAA with the aircraft maintenance records pursuant to 14 C.F.R. § 91.417,11
and assessed a civil penalty of $1,000 a day from the time the FAA demanded the records
until the aircraft was sold, totaling $1,950,000.12 Intercon and Harvey appealed to the
United States District Court, Southern District of Florida, which upheld the penalties and
Piper aircraft who received a six month suspension of his airman’s certificate for
operating his aircraft without aircraft logbooks and without a current annual inspection.15
The FAA initially sought a 365-day suspension and Robbins appealed the suspension to
the NTSB.16 At his hearing Robbins testified that his aircraft logbooks had been stolen
6 United States v. Intercon Leasing, Inc., 617 F. Supp. 323, 328-329 (S.D. Fla. 1985).
7 Id. at 325.
8
Id. at 324.
9
Id.
10
Id. at 329.
11
The violation cited in the decision was 14 C.F.R. § 91.173 which has since been re-codified as 14 C.F.R.
91.417. Hinson v. Ira Donald Farrington, NTSB Order No. EA-4171, 1994 WL 239001 * 7 (May 12,
1994).
12
Id. at 329.
13
Id. at 330.
14
Administrator v. Robbins, 4 N.T.S.B. 807 (1983).
15
Id. at 810.
16
Id. at 807.
3
and when he took the aircraft to Pelican Aviation, a repair/inspection facility, for its
hundred hour inspection, he also requested they reconstruct the aircraft logbooks and
perform an annual inspection; he also testified that when he picked-up the aircraft, he was
During the hearing, the FAA called a representative from Pelican to testify who
reconstruct the aircraft logbooks.18 He further testified that an annual inspection could
not be performed without the aircraft’s logbooks.19 Judge Capps, the NTSB
administrative law judge, did not find Robbins’ testimony credible and held he violated a
number of FARs including 14 C.F.R. § 91.417, but he reduced the suspension to six
months.20 Robbins appealed to the full NTSB board which upheld the six month
suspension and in their decision wrote, “…the fact remains that respondent operated the
Although the FAA requires detailed maintenance records be maintained for each
aircraft and the FAA and the NTSB have the authority to request these records be
produced in a reasonable amount of time for inspection, the FAA does not have the
authority to compel one party to deliver such records to another party--this is a matter of
17
Id. at 808.
18
Id. at 809.
19
Id.
20
Id. at 810.
21
Id. This six month suspension also included a violation of 14. C.F.R. § 91.169(a).
4
state law, which will be discussed later in this article. However, the FAA can impose
sanctions in limited situations, such as when a seller of a U.S. registered aircraft refuses
or fails to deliver maintenance records to an aircraft purchaser, at the time of sale. See 14
C.F.R. § 91.419:
Inc.,22 where the FAA sought a $65,000 civil penalty against a seller of a Hughes 269A
helicopter for violating 14 C.F.R. § 91.419.23 In Seaquest Expeditions, after the sales
deliver the aircraft logbooks to the buyer; after five months of failing to do so, the buyer
complained to the FAA who initiated this enforcement action and sought a $65,000 civil
penalty.24 The FAA assessed a separate § 91.419 violation for each day Seaquest
Expeditions failed to deliver the aircraft logbooks to the buyer.25 Seaquest Expeditions
appealed to the Department of Transportation which upheld the violations but reduced the
22
Administrator v. Seaquest Expeditions, Inc., Docket No. CP04NM0006, 2006 WL728859, (D.O.T).
23
Id. at * 1.
24
Id. at *1 and * 3.
25
Id. at * 4.
26
Id. at * 4.
5
In the end, although Seaquest Expeditions received a substantial civil penalty, the
FAA lacked the power and authority to compel Seaquest Expeditions to actually deliver
When a party in possession of the aircraft logbooks refuses to turn them over to
the aircraft owner, the owner has two legal remedies: 1) file a lawsuit and sue the party
in possession for specific performance. If the lawsuit is successful, a court may order the
party holding the logbooks to turn them over to the aircraft owner or; 2) file a lawsuit for
money damages which could include, but not be limited to, the diminished value of the
aircraft, the cost to recreate the logbooks or both. Diminution of value and the cost to
recreate aircraft logbooks are discussed later in this article. Neither remedy is ideal if you
take into account the costs associated with lawsuits, in terms of money, time, and the
where Strum, the owner of an Aero Commander aircraft was convicted of extortion for
refusing to surrender the aircraft’s logbooks to the bank after the bank foreclosed on the
aircraft.28 Strum, had fallen behind on the aircraft’s loan payments--the loan was secured
by other collateral including the aircraft logbooks.29 Strum did eventually catch up on the
late payments, but, when the bank learned that another bank was considering placing a
lien on Strum's Aero Commander because Strum was in default with that bank on a
27
United States v. Strum, 870 F.2d 769 (1ST Cir.1989).
28
Id. at 769-770.
29
Id. at 770.
6
different aircraft, the bank repossessed the Aero Commander. For reasons not explained,
The bank tried to auction the aircraft but the auction did not produce what the
bank considered to be fair market value, thus the bank took possession of the aircraft. 31
The bank later learned that “the low valuation was directly related to the unavailability of
the plane’s logbooks.”32 When the bank attempted to get the aircraft logbooks from
Strum, the United States government alleged Strum tried to extort money from the bank
in exchange for the logbooks.33 Strum told the bank, “I don’t know where the books are
right now, but I can get them for you for a price.”34 He made other such comments and
was subsequently prosecuted and convicted under the Hobbs Act for extortion.35 The
Court in Strum discussed how the missing logbook affected the value of the aircraft.
Strum’s conviction was later overturned and, unfortunately for the bank, so long
as Strum withheld the logbooks, it was unable to sell the aircraft despite the time, effort
and financial resources the bank incurred trying to get what lawfully belonged to it.36
In Corporate Wings, Inc. v. King,37 the aircraft owner (bank)38 and its aircraft
broker (King) were original plaintiffs in the underlying lawsuit where they sued
30
Id.
31
Id.
32
Id.
33
Id.
34
Id.
35
Id.
36
Another interesting case is Gasho v. United State of America where Customs and Border Agents seized a
DC3 for not having the proper registration number. The aircraft was being sold to a Canadian buyer and
the FAA had authorized removal of the serial number and a onetime flight to the US/Canadian border.
Border agents were unable to contact the FAA official that authorized this flight, became suspicious and
seized the aircraft. The owners were later arrested for refusing to deliver the aircraft logbooks to the
agents, but these charges were ultimately dropped. The Gashos subsequently filed a Federal Tort Claims
Act lawsuit against the agents for false arrest, inter alia. See Gasho v. United States of America, 39 F.3d
1420 (9th Cir. 1994).
37
Corporate Wings, Inc. v. King, 767 S.W.2d 485 (Tex. Civ. App. 1989).
38
While this appeal was pending the owner settled with Corporate Wing and was dismissed.
7
Corporate Wings for wrongfully withholding their aircraft logbooks.39 Corporate Wings
performed aviation related services for the subject aircraft and submitted a bill to the
bank for $35,047.84 for some inspection and demonstrating services Corporate Wings
performed.40 The bank disputed and refused to pay the bill and in-turn, Corporate Wings
refused to return the aircraft to the bank.41 The parties eventually reached an agreement:
Corporate Wings reduced its bill and returned the aircraft to the bank, but for three
months did not return the aircraft logbooks.42 During this time the bank and its broker
made repeated requests for the return of the logbooks, but a Corporate Wings manager,
still upset about not being paid in-full, maintained he did not know where the logbooks
were, but for $15,000 he would look for them.43 Also, during this three month dispute,
the owner/broker lost the sale of this aircraft to a potential Canadian purchaser because
The bank filed a lawsuit alleging the missing logbooks affected the sale of the
aircraft; the court agreed and in its decision wrote, “[b]ecause log books contain records
of federally-required maintenance, they are critical to the sale of an aircraft.”45 And for
Corporate Wings’ misconduct, the court awarded the bank $53,545 in actual damages and
$50,000 in exemplary damages,46 and for the broker $1,057 in actual damages and
39
Id. at 486-487.
40
Id.
41
Id.
42
Id. at 487.
43
Id.
44
Id.
45
Id.
46
“Exemplary damages serve to punish the wrongdoer and to provide an example to other potential
wrongdoers.” Id. at 488 (citations omitted).
47
Id. at 489.
8
Corporate Wings appealed arguing the exemplary damages were excessive,
however the appellate court upheld the trial court’s decision holding Corporate Wings’
actions were intentional, malicious and wanton because 1) they knew the importance of
the logbooks; 2) they knew the sale was pending; 3) they sent a proposal to the owner and
broker stating they would be willing to look for the books for $15,000; 4) the owner
requested the logbooks be returned several times, and 5) the logbooks were found in a
Corporate Wings manager’s office.48 See also, Raytheon Aircraft Credit Corporation v.
Starship Enterprises, Inc. and Aircraft Crew Management, Inc,49 where the court ordered
Aircraft Crew Management, Inc. to return the aircraft logbooks to Raytheon after Starship
When aircraft logbooks are properly maintained they will show 1) the aircraft’s
maintenance history; 2) the total airframe, engine and propeller time; 3) compliance with
airworthiness directives, and 4) the aircraft’s damage history, if any. A savvy aircraft
purchaser or finance company will want to verify these facts before entering into any
sales transaction because the best way, and (in most cases) the only way to do so is to
a. Maintenance History
et al,50 ST Equipment was finding it difficult to sell its MU-2 twin turbo-prop aircraft
48
Id. at 487.
49
Starship Enterprises, Inc. and Aircraft Crew Management, Inc., 1998 WL 166582, (D.Kan. 1998).
50
Filmer Aviation, Inc. v. Nashville Jet Sales, Inc. v. ST Equipment Company, et al, 1992 WL 368671
(Tenn.Ct.App.1992).
9
because they had lost the aircraft logbooks.51 Nashville Jet Sales was willing to purchase
the aircraft without the logbooks as soon as they found a buyer--Nashville Jet Sales was
planning to do a back-to-back transaction, meaning they would purchase the aircraft and
then immediately sell it.52 Filmer Aviation, Inc, agreed to purchase the aircraft without
the aircraft logbooks from Nashville Jet Sales, so long as it was provided some
Nashville Jet Sales communicated this to ST Equipment and in order to save the
sale, ST Equipment drafted and signed a statement assuring that the aircraft complied
with all ADs at the time of sale. With these assurances, Filmer purchased the aircraft.54
However, just two months later, the FAA inspected the aircraft and found that the
available maintenance records were insufficient to enable the FAA to certify that the
engines were in compliance with the ADs.55 Filmer sued Nashville Jet Sales for the costs
it incurred to bring the aircraft in compliance with the ADs. Nashville Jet Sales filed a
The trial court found that Nashville Jet Sales breached its warranty to Filmer but
held that Nashville Jet Sales was entitled to indemnity and recovery of attorney’s fees
from ST Equipment.56 On appeal the court upheld the breach of warranty claims in favor
of Filmer, but reversed the trial court’s decision to award indemnity and attorney’s fees to
Nashville Jet Sales.57 The court also noted that had the aircraft logbooks been available,
51
Id. at * 1.
52
Id.
53
Id.
54
Id. at * 2.
55
Id.
56
Id.
57
Id. at * 7.
10
the aircraft would have been worth $230,000, but since they were missing, the best price
It is important to note that nothing in this case suggested that either Nashville Jet
Sales or ST Equipment knew there was a problem with the ADs, they simply wanted to
sell the aircraft and did not have the aircraft logbooks to verify its maintenance status.
Had the aircraft logbooks been available to Nashville Jet Sales, then to Filmer, the parties
would have been able to determine whether or not the ADs had been complied with prior
to the sale of the aircraft and a lawsuit would have been unnecessary.
b. Damage History
Another reason aircraft logbooks are important is that they should provide the
aircraft’s damage history. Knowing whether an aircraft has sustained damage in the past,
in many cases, can affect the value of an aircraft as determined on a case-by-case basis.
For example, missing aircraft logbooks for a five year old business jet that in fact has no
damage history will have far greater implications than missing aircraft logbooks for a
thirty year old, two seater-single engine aircraft. But in either case, missing logbooks can
and will affect the aircraft’s overall value. This next case illustrates that even if you get a
signed document stating the aircraft has had no known damage, you may not be able to
rely on such a statement, absent some proof such as the aircraft logbooks.
When you get to the heart of Corporate Air, et al., v. Edwards Jet Center, et al.,59
you can see this is really a breach of contract case even though the parties allege just
about every possible legal theory against one another. For the purposes of this article,
this case illustrates the importance of the aircraft logbooks and what can happen if an
58
Id. at FN 1.
59
Corporate Air, et al., v. Edwards Jet Center, et al., 345 Mont. 336, 190 P.3d 1111 (2008).
11
aircraft purchaser does not receive and inspect the logbooks prior to signing a purchase
agreement.60
Edwards Jet Center, the buyer of two Beechcraft King Air 200 aircraft, signed an
agreement to purchase the two aircraft from Corporate Air.61 Edwards Jet Center alleged
that they had not been provided the aircraft logbooks until after they signed the purchase
agreement; prior to that they were only provided specification sheets which indicated
there was “No Known Damage History” but the spec sheets also indicated they were
“subject to verification upon inspection.”62 Not long after signing the purchase agreement
Edwards Jet Center inspected the aircraft logbooks which indicated that one of the
aircraft did in fact have damage history and after translating the logbook for the other
aircraft from French and Hebrew to English, Edwards Jet Center learned that a five year
period was missing. Not surprisingly, upon discovering the damage history Edwards Jet
Center was no longer interested in purchasing either aircraft and it formally rejected the
sale. Thereafter, Edwards Jet Center sued for breach of contract and a litany of other
claims.63
The court granted summary judgment in favor of Corporate Air and awarded
damages, costs and attorney’s fees.64 Both parties appealed up to the Montana Supreme
Court who reversed and remanded the case back to the trial court finding summary
60
The following passage is directly from this Montana Supreme Court opinion:
“The parties' extensive and often petty wrangling, both before and after the
instant action was commenced, has resulted in a factual and procedural history
that, at this point, can fairly be characterized as labyrinthine. … It seems that
every conceivable claim and counterclaim has been alleged...” Corporate Air v.
Edwards Jet Ctr., 2008 MT 283, 345 Mont. 336, 339, 190 P.3d 1111, 1115.
61
Id. at 342.
62
Id.
63
Id. at 344.
64
Id. at 345.
12
judgment was improper.65 However, for the purposes of this article only, it is not really
important which party prevailed because in the end, one should consider the time, energy
and financial resources both parties expended simply because the seller did not provide
the buyer with the logbooks before the purchase agreement and the buyer did not insist
Lost or destroyed logbooks may be covered under the aircraft’s insurance policy.
However, whether or not coverage exists will depend on the language of the policy and,
if the logbooks are not specifically covered under the policy, an insurer can deny
coverage and a court may have to decide whether coverage exists. The court will
review/interpret the policy and make a determination under the laws of the applicable
aircraft was seized by the federal government in Puerto Rico as an instrument of drug
trafficking.67 Inexplicably, when the aircraft was returned, the seats and the logbooks
were missing.68 The bank that financed the aircraft made a claim under an all risk policy
but the insurer denied the claim; thereafter the bank filed its lawsuit against the insurer.69
The court found the missing logbooks (and seats) were covered under the all risks
policy because the fact they were missing was an unexplained event, not specifically
65
Id. at 358.
66
Union Planters National Bank v. American Home Assurance Company, 2002 WL 1308344 (Tenn. Ct.
App. 2002).
67
Id. at * 2.
68
Id.
69
Id. at * 3.
13
excluded under the policy and further, because there was no wrongdoing by the insured.70
Court agreed with an insurer that denied coverage in a claim for stolen logbooks because
the definition of “aircraft” as defined in the policy did not include its logbooks.72
So, whether or not logbooks are covered under an aircraft insurance policy will
depend on the language of the policy and if it’s not clear if the logbooks are covered, then
it can be up to a court to decide. An aircraft owner should discuss this with his/her
insurance agent or broker and specifically request the aircraft logbooks be covered under
the policy.
Aircraft owners and operators can protect their aircraft logbooks by maintaining
the original copy in a safe place away from the aircraft. If however, the owner needs to
recreate his/her logbooks, there are vendors that specialize in this service. If the owner
plans to recreate the logbook he/she should review Advisory Circular 43-9C---FAA June
But whether the owner recreates the logbooks on his/her own or if he/she hires a
company that specializes in this service, to recoup these expenses from a third-party,
there must be accurate records of these costs and expenses. The final case in this article
70
Id. at * 8.
71
Eagle Aviation, Inc. v. General Insurance Company of America, 679 So.2d 1069 (Ala. Civ. App. 1996).
72
“Aircraft ’ means the airplane or rotorcraft described herein and shall include the engines, propellers,
rotor blades, tools and repair equipment therein which are standard for the make and type of the aircraft,
and operating and navigation instruments and radio equipment usually attached to the aircraft, including
parts temporarily detached and not replaced by other similar parts.” Id. at 1070.
14
took place in California state court, Ford & Vlahos v. ITT Commercial Finance Corp.73
In this case the aircraft finance company, ITT Commercial Finance, repossessed a C-130
aircraft from the aircraft owner, Ford. ITT alleged that after repossessing the aircraft,
they had to clean and paint the aircraft and reconstruct the aircraft logbooks.74 ITT
alleged the cost to perform these tasks was approximately $400,000—but Ford’s expert
testified that many of ITT’s documents offered to prove this claim were suspect and that
some were even forged.75 The court believed Ford’s expert and awarded ITT only
VIII. CONCLUSION
Aircraft logbooks are valuable assets that must be safeguarded to protect the value
of the aircraft and to avoid FAA enforcement actions. Civil remedies are available if a
party refuses to give an aircraft owner his/her logbooks or if a party misrepresents the
condition of the aircraft to a buyer, but these remedies are expensive and time consuming.
An aircraft purchaser should never sign a purchase agreement unless he/she has a
contingency to allow termination of the contact in the event the purchaser cannot obtain
and review the logbooks or until he/she has received them and has had an opportunity to
have a qualified aircraft mechanic review them for the aircraft's maintenance status and
damage history. Aircraft owners should also review their insurance coverage and discuss
with their agents whether specific language can be added to the aircraft’s insurance
73
Ford & Vlahos v. ITT Commercial Fin. Corp., 18 Cal. App. 4th 1107, 23 Cal. Rptr. 2d 175, 179 (Cal.
Ct. App. 1993) review granted and opinion superseded sub nom. Ford & Vlahos v. ITT Commercial Credit
Corp., 864 P.2d 1036 (Cal. 1993) and rev'd, 8 Cal. 4th 1220, 885 P.2d 877 (1994). The reviewing court did
not specifically discus the expense of recreating the logbooks.
74
Id. at 184-185.
75
Id.
76
Id.
15