Sent: Wednesday, September 19, 2007 6:19
PM
Subject: [LML] Re: Homebuilt
Liability
Bob and Jeff,
I agree. There is no control on use of a
sold asset regardless of the agreements made. ie museum. If you maintain
any control over the airplane after sale; it might be construed in a legal
proceeding that you have some ownership of the plane. (ie similar to IRS
rulings on asset sales to dump assets out of your estate). "There is
also the problem of "chain of ownership" which holds all previous owners
liable to and need to defend in a lawsuit.
I recently sold a motel which I did not
build. It was a gas station and garage in an earlier day. We had
to remove the fuel tanks, remove tainted soil, conduct quarterly water sample
tests until the treatment was successful. Received a notice of no further
action from the Department of Ecology. If fifty years from now the
owner digs up the dirt for another project and tainted soil is
discovered; we are liable for that as well as all present and past
owners to cure the problem.
Another scenario. Let's say you keep the
plane in your hanger. It is an asset, right? Subject to attachment
in a lawsuit. Let's say you are sued for another event and a judgement
is filed. The sheriff confiscates your plane for judgement settlement.
It is sold in a Sheriff's sale. You are now exposed to further liablility
action if an accident occurs with the plane. So there is no protection
there. Am I paranoid? Some will say yes. BUT, if you are
a cash cow in this litigous society; you must be ever aware of possible
situations and protect yourself.
I have come to the conclusion that the only safe
way to resolve the issue is to eliminate the risk of any possible exposure
by:
Destroying the parts that you manufactured. ie
any component that you assembled or manufactured which is:
All airframe components, Possibly
assemblying the instrument panel, any modificiations to the engine which
renders it expermental and not certified tags the engine as a "Your
Name-Lycoming" etc. should also be destroyed or disassembled and sold
separately.
Some people say you dissassemble the plane and
sell the parts to the same ownner. I say NOT. If you sell a
wing. You are the manufacturer of that wing. Same exposure
applies.
You can sell the parts ie products you purchased
and placed into the airplane but not in their assembled state. Thus an
instrument panel could not be sold because you put it together and wired it
up. The Lancair hardware kit could be sold but not the hardware you
made.
If you are worth more than a million or say
several million dollars net worth; a $100,000 or $400,000 lancair becomes
insiginficant as compared to the risk involved. If you have a home,
couple cars, a small life insurance policy; then you might consider it.
Attorneys always are on the lookout for deep pockets.
My father was a secretary for a small cemetery
association. It was sued. The ambulance chaser attorney held
discovery proceedings for all members of the board to determine their net
worth, insurance policies, assets held. Dad was the one with money bag
pockets. The attorney dropped the case on all the other members, even
the one that was involved in the incident, and sued dad. The
insurance company took over the lawsuit and settled for $50,000. This soured
dad on community service and thus a 50 year history of community service was
ended and he was very bitter about the experience.
Would I do it again? You bet I would. I
wouldn't have traded the experience for anything else. I really loved
building a work of art that flew. When I flew next to Don Goetz for the
first time in a machine that I had created; It ranks right up there with
marriage to my second wife, and college graduation.
The hard part is now to pick up the emotional
courage to take a saw to the fuselage, wings, and control surfaces. Also
the motor needs to be dissassembled and the parts sold separately. I did
not manufacture the parts but the assembly was under my supervision by an
overhaul facility. How do you destroy a work of art? That is my
dilema.
Bob Smiley
N94RJ