Judge: Layne H. Melzer, Case: 2022-01253515, Date: 2022-12-15 Tentative Ruling

Petitioner Nutrawise Corporation

Motion - Other (Verified Petition to Release Aircraft From Invalid Aircraft Repair Lien)

The Petition to Release Aircraft Lien brought by Nutrawise Corporation is GRANTED.

Initially, the Court notes that a review of Business & Professions Code §9790 et seq. did not reveal any statutory authority which directly addresses challenging an aircraft lien.   Instead, the provisions applicable to aircraft liens contemplate that the lienholder will pursue a sale of the aircraft.  Pursuant to Business & Professions Code §9798.3(a), “[a]ny repairperson having perfected his or her statutory lien pursuant to Section 9798.2 shall be entitled to the ex parte issuance of an order to show cause why the aircraft or other property should not be sold at auction.” (Business & Professions Code §9798.3(a).)

No process is outlined for challenging an aircraft lien, beyond allowing the registered owner to present evidence at the above articulated OSC, “as to any reason why the aircraft or other property subject to the lien should not be sold at auction in accordance with the provisions pertaining to the enforcement of judgments generally within this state.” (Business & Professions Code §9798.3(a).) 

In this instance, however, Petitioner has submitted evidence which indicates Respondent Cinco Air Charter, LLC is no longer registered to transact intrastate business in this state. (¶21 of Verified Petition and Exhibit 1 thereto).  As a result, Respondent cannot maintain an action or proceeding in this state and cannot seek an OSC re: Sale. (Corporations Code §17708.07(a).)   Additionally, as a result of the above, Respondent has been properly served via the Secretary of State and consistent with the Court’s November 3, 2022 order. (Corporations Code §17708.07(d) and Corporations Code §17701.16; See also ROA No. 31).

Given the above, absent clearly applicable authority, the Court is inclined to find the situation herein is analogous to challenges directed towards mechanic’s liens and, additionally, find that Petitioner is entitled to challenge the sufficiency of the lien, within this action. (See Lambert v. Superior Court (1991) 228 Cal.App.3d 383, 386-387 and Connolly Development, Inc. v. Superior Court (1976) 17 Cal.3d 803, 822).   The Court notes that Lambert found that due process requires property owners be provided a remedy to demonstrate the invalidity of a lien.  Additionally, both Lambert and Connolly championed speedy remedies, for property owners. 

Having found this is an appropriate means through which to challenge the aircraft lien, the Court additionally finds that Petitioner has shown the lien to be invalid.

Petitioner identifies several defects in the language of the lien.  Pursuant to Business & Professions Code §9798.2(b), “the statutory lien created pursuant to subdivision (a) of Section 9798.1 is valid upon recordation by the FAA Aircraft Registry of a written document entitled ‘NOTICE OF LIEN (PURSUANT TO CHAPTER 19.5 OF THE CALIFORNIA BUSINESS AND PROFESSIONS CODE).’”

Notably, the lien attached as Exhibit 4 to the Petition does not include the above title.  Similarly, while the lien asserts that it is certified to be true, the lien does not include the verification statement articulated in Business & Professions Code §9798.2(b)(2). 

Similarly, the lien does not include a “narrative statement describing the nature of the work accomplished,” as required by §9798.2(c)(7).

Likewise missing is an “affirmative statement that a copy of the notice of lien is concurrently being sent by United States mail, certified, return receipt requested with postage fully prepaid thereon, or by other comparable or more expeditious delivery services, to both the registered owner and to the person consenting to the work.” (Business & Professions Code §9798.2(c)(8)).

Additionally, Petitioner challenges the lien, asserting Respondent failed to comply with §9793 and §9795.  Pursuant to Business & Professions Code §9793, “[n]o repairperson shall commence work for compensation without specific authorization from the customer or his or her agent,” in accordance with additional requirements specified in the provision.  The provision proceeds to indicate that a repairman is to provide, either, a written estimate of the price for labor and parts or a written estimate of the maximum cost for a specific job.  (Business & Professions Code §9793(a)).  Similarly, Business & Professions Code §9795, requires that “[a]ll work done by a repairperson, including all warranty work, shall be recorded on an invoice and shall describe all work done and parts supplied.”

Here, the undisputed Declaration of Darren Rude, the Chief Executive Officer of Petitioner Nutrawise Corporation, declares that the Agreement between Nutrawise and Cinco Air Charter, LLC was terminated on November 28, 2017. (¶1, ¶3 and ¶5 of Rude Declaration).  Relevant to the above issues, Mr. Rude declares: “At the time the Agreement was terminated, all of RESPONDENT’S invoices for maintenance, operation and charter of the Aircraft, all services rendered by RESPONDENT, were paid in full.  There were no unpaid invoices and no further services rendered by RESPONDENT.” (¶6 of Rude Declaration).

Further, Mr. Rude states: “All of the work and services that PETITIONER received from RESPONDENT prior to the termination of the AGREEMENT was timely paid for.  PETITIONER did not authorize any work or services after the termination of the AGREEMEN.  PETITONER never received an invoice or invoices for the amount claimed in RESPONDENT’S lien. RESPONDENT’S work and services after the termination of the AGREEMENT, if any, were not authorized by PETITONER.” (¶8 of Rude Declaration).

The above Declaration is undisputed and supports a finding that, to the extent additional work was performed for which Cinco Air Charter, LLC was unpaid, the same was not authorized or invoiced, as required by Business & Professions Code §9793 and §9795.

Pursuant to Business & Professions Code §9798.1(h), “[t]he statutory lien created pursuant to subdivision (a) shall not exist unless the repairperson has complied with all provisions of Sections 9793, 9794, 9795, 9796, 9797, and 9798.”

Based on all of the above, the lien recorded against the subject aircraft is improper and the instant Petition is GRANTED.