Airplane sale gone bad...

gismo

Touchdown! Greaser!
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iGismo
A friend was selling his Lancair (a past Grand Champion no less) this summer and with more than one offer on the table agreed to sell it to a buyer who saw it at OSH this year. I was visiting with him a week ago last Saturday when the buyer agreed to his terms over the phone. The buyer (I'm leaving out names because the buyer is a well known pilot and this may end up in the courts) wanted my friend to return the plane to OSH the next day so he could fly it home. My friend insisted that the buyer arrange for insurance and a full checkout by a CFI with significant Lancair experience before any flight and the buyer agreed. An Avemco rep right at OSH bound coverage and an instructor recommended by the Lancair folks on the field was lined up for the checkout.

Now I have to admit that overhearing this conversation left me believing that my friend was being a bit paranoid about his "baby" but given the quality of the job he did on it and the time he had invested I could understand.

When I got home last Saturday from Kansas he was standing in his hangar talking to another pilot friend of mine and the plane was gone. I stopped to confirm that he was able to complete the sale and delivery and he relayed the bad news point by point.

Point 1: He had indeed delivered the plane the previous Sunday.

Point 2: The buyer and his CFI managed to prang the airplane on their first flight. They encountered two occurances of a rudder trim runaway during the two hour training flight but each time they were able to retrim the plane adequately using the normal (electric) trim control which is a coolie hat on top of the stick. My friend and I both believe that the problem was most likely caused by one of the pilots resting some part of his hand on the trim control and inadvertently activating it. At no time during the flight did either pilot consider pulling the breaker for the trim which was clearly labeled and easily seen on the panel. The encountered a third trim runaway during their flare on the first landing performed by the buyer. The original story of the pilots given freely to several bystanders at the scene was that the buyer felt he was losing control and said "Your airplane" leaving the CFI to attempt a recovery which ended up in a very hard nosewheel first touchdown. The prop suffered damage in the form of three blades curled back an inch or so and there is clear evidence that the engine mount/nosegear attachment is bent (spinner no longer lines up with the cowling).

Point 3: A representative from Lancair inspected the trim system and declared it both operational and properly assembled.

Point 4: The buyer provided a signed promissary note for the purchase price and my friend accepted that because he felt the buyer was trustworthy and the banks were closed on Sunday. The buyer indicated that he had to complete the deal on Sunday so he could fly home the next morning. Later it was learned that he actually planned to return on Tuesday.

Point 5: When the buyer called my friend to report the mishap he indicated he "no longer wanted to buy the plane"

Point 6: Subsequently the buyer indicated he would consider "completing" the purchase if my friend discounts the plane now that it's damaged.

That's where it stood the last time we talked. There was also some discussion about the buyer's reluctance to report either the incident or the alleged trim failure to the FAA. My friend also expressed concern about accepting the plane back in either it's current unairworthy condition or after repairs were made by some other mechanic. So far the sale has turned into my friend's worst nightmare.
 
Ow! Sounds like your friend was trying to do everything right. Of course, you only have his (understandably) biased viewpoint, but it sounds like he's pretty clear from a moral standpoint. From a legal standpoint? I couldn't even begin to guess. I'm certainly glad that he made sure about the insurance!

Why didn't he go up with the buyer and/or instructor for an intro/checkout flight? Of course had he done so he might have more liability.

Just an overall cruddy situation!
 
Ummm... there's a signed bill of sale, accepted by the buyer. I hope it has a witness signature for the seller's sake. The smartest thing done in the whole process was getting the binder.

The buyer damages the plane in the company of a CFI and he wants to back out? I'd say not a chance. There may be argument on who was PIC between the buyer as pilot and the CFI but regardless, they had possession. I can't see why one or both wouldn't be liable for the damage.

I'm betting the CFI may want to save his tater and not let an incident be on his record. The buyer doesn't want to be held liable for damages so he points to the CFI.

I'm not the smartest business person but what could I be missing? I don't see how this isn't headed to court at some point.
 
The yaw trim or whatever is irrelevant. Once the buyer signed a Promisarry note, took the keys, and actual possesion, it became his. Anything else is eyewash. If he reneges on the sale now, it'll cost him more after the lawyers are done. This is all assuming everything we've read is accurate. I bet the Avemco rep is madder than Sen Clinton. He bound coverage and four hours later has a claim......
 
That's too bad for him, but I agree that he shouldn't back out like that.
 
Point 5: When the buyer called my friend to report the mishap he indicated he "no longer wanted to buy the plane"

Ugh.

We went thru an aviation escrow service in the recent purchase of the 201, we didn't get keys and bill of sale until our funds were received and all parties had executed all the stipulations of the purchase agreement.

If we ever sell, it will be done the same way. If the buyer doesn't like a sighned purchase agreement and escrow service, he can walk.
 
This will end up in court for sure. Your friend needs to get a lawyer who has a background in contracts right now. There is no time to fool around on this one. I feel really bad for friend, sounds like the person who said he was buying the airplane is less than honorable IMHO. You say he is a well known, well I just hope I don't know him, 'cause I'll tell him he is wrong on this matter.
 
Oh no! Oh HAYULL no! You sign the note, you break the plane, YOU BOUGHT THE PLANE.

Geesh. Show a little integrity...
 
I think this will boil down to the quality of the paperwork. It's gonna be a case of "my lawyer can beat up your lawyer" unless the buyer shows some sign of a moral compass and accepts responsibility for his actions. Sad.
 
Dunno anything about the legal issues but do people actually go out and buy personal airplanes without having flown them at least once? Or am I missing something here? I would think that this would especially be the case with a homebuilt.

I don't think I've ever bought a car, or even a bicycle, without having taken it, or one just like it, for a test drive. :dunno:
 
Did the FAA bill of sale get completed and sent in?
Was the promissory note secured by the aircraft. Was that sent to the FAA?

Your friend needs a lawyer who knows aviation specific issues. This ain't no car we're dealing with.
 
Yeah, this sounds like a mess. If the two don't agree to terms, then court is where it will be decided and everyone will lose for the most part.
 
This is a terrible story. Sounds as if the seller is a really decent guy, at least according to the way we've seen the facts. He made a classic, time-worn error: he let the property go BEFORE the funds were transferred and verified. Had he not done that, he'd be in a more powerful position. I hope it works out for him. I have heard so many stories over the years about people "buying" something--a car, a boat, a stereo, a puppy, a plane, whatever--and taking possession before funds are transferred. I hope for good news in a future update on this one.
 
I have heard so many stories over the years about people "buying" something--a car, a boat, a stereo, a puppy, a plane, whatever--and taking possession before funds are transferred. I hope for good news in a future update on this one.
The corollary to that is sellers who ask to retain possession for a short time after closing. Our last time house hunting, I don't know how many people expected to live in the house rent-free for a month or more after closing.
 
Yeah but closing is a very formal transaction and payment (typically by a bank from a mortgage) is guaranteed by contract.

Airplane selling is somewhat less formal, it seems...
 
NOW does every one understand why I advertise the aircraft "as is, where is" and have cash in hand when I hand over the keys..

Never be in a hurry to sell, that buyer would have been back with cash/check or he wasn't buying anyway.

With an aircraft as nice as that one the owner could have found a new buyer very easy.

It sounds to me like the buyer wanted to fly it, but really would have found any reason to not buy. he damaged the aircraft, now it belongs to the insurance company and the difference between what the aircraft would have sold for undamaged, plus the deductable, and what will sell for with a damage history is the buyer responsibility.

I would also get payment for down time, and any other expenses, like lawyer fees.
 
Yeah but closing is a very formal transaction and payment (typically by a bank from a mortgage) is guaranteed by contract.

Airplane selling is somewhat less formal, it seems...

If you go through an escrow service, and have a decent purchase contract, the transaction be quite formal, and all must execute the requirements of the contract before documents and monies are disbursed. All parties must also give written authorization to the escrow agent to have monies/docs/keys pass.
 
1) Friend sues under contract law

2) Buyer defends on basis that plane was defecitve and friends negligence in building the plane with trim problems

This is gonna come down to the experts who evaluate the electronic trim system. If they say its ok friend wins if not then there is a problem although the failure to pull the well labeled breaker is a problem for the buyer and CFI as well. As does the fact that they claim the problem is rudder trim not elevator trim. The problem described by the CFI and buyer seems to be control along the vertical axis and it seems the airplane hit the nose wheel whcih one would think would be problem on the horizontal axis.

I love his offer to buy at a reduced price due to the prang. Its like the guy who kills his parents and begs the court for mercy because he is an orphan.
 
I love his offer to buy at a reduced price due to the prang. Its like the guy who kills his parents and begs the court for mercy because he is an orphan.

I'll have to take that one to my friend, I'm sure he'll like the analogy.
 
Man, what a cluster. Tell your friend that he has my deepest sympathies. Kinda makes ya wish baseball bat vengence was legal, eh?
 
Man, what a cluster. Tell your friend that he has my deepest sympathies. Kinda makes ya wish baseball bat vengence was legal, eh?
Are you thinkin what I'm thinkin? Nick, you may have a potential new career here.

"Hey, pal, pay up or my friend Nitro is comin for ya..."
 
I'm very sorry to hear this. When we skip over formalities, it can come back to bite us.

Hopefully there was some contract that specified 'as is, where is'. With essential contract elements in good form. Bill of sale and registration. I just don't know why folks do things like this without some legal advise. Perfect example of an ounce of prevention being worth a pound of cure.

Geeesh!

Best,

Dave
 
The sale comes with the Oklahoma guarantee; "If it breaks in two pieces, you own both pieces." much less if you break it into two pieces.
 
Buyer (if you can even call him that) = Scumbag
 
I'm very sorry to hear this. When we skip over formalities, it can come back to bite us.

As one of the docs who reviews cases for me is fond of saying, "No good deed goes unpunished". I feel for the seller. I hope he has a good lawyer.
 
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