Embraer Aircraft Maintenance Services, Inc. v. Aerocentury Corp.
538 S.W.3d 404
Tenn.2017Background
- Embraer performed lease-return maintenance on a SAAB 340B aircraft and a statutory repairman’s lien arose under Tenn. Code Ann. § 66-19-101; Colgan (lessee) did not pay and later filed bankruptcy.
- Embraer perfected its lien by filing notices with Davidson County Register of Deeds and the FAA, then filed a federal action to foreclose the lien and seek sale of the Aircraft.
- While the foreclosure action was pending, AeroCentury (owner) leased and exported the Aircraft to a Ukrainian lessee, which later purchased it; AeroCentury did not notify Embraer.
- Because the Aircraft was no longer in the U.S. and unavailable for attachment, Embraer sought to reach the proceeds of the sale.
- The federal district court certified two questions to the Tennessee Supreme Court under Tenn. Sup. Ct. R. 23: (1) whether a § 66-19-101 repairman’s lien may be enforced by methods other than attachment of the liened property, and (2) when, if ever, a court may reach sale proceeds after the owner renders attachment impracticable.
- Tennessee Supreme Court limited review to statutory construction under Rule 23 and interpreted Tenn. Code Ann. § 66-21-101 (the statutory “catch-all” enforcement provision) in answering the first question and declined to address the second as an open-ended question unsuitable for certification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. May a repairman’s lien under § 66-19-101 be enforced by methods other than attachment of the liened property? | Embraer: § 66-21-101’s use of “may” shows attachment is permissive, not exclusive; in personam remedies should be available where court has jurisdiction. | AeroCentury: (Implicit) enforcement under § 66-21-101 contemplates attachment of the res; no statutory lien exists on proceeds. | Held: § 66-21-101 provides only for original attachment of the lien-subject property; it does not create a statutory lien on proceeds and does not itself provide a remedy to reach sale proceeds. |
| 2. When may a court attach or otherwise reach proceeds from sale of lien-subject property after attachment is rendered impracticable? | Embraer: common-law and other statutory remedies (conversion, ancillary attachment, in personam relief) may allow recovery of proceeds. | AeroCentury: (Implicit) sale defeats attachment of the res; § 66-21-101 does not reach proceeds. | Held: Court declined to answer — the question is an open-ended inquiry not suitable for Rule 23 certification; other Tennessee authorities exist to address such remedies. |
Key Cases Cited
- Allmand v. Pavletic, 292 S.W.3d 618 (Tenn. 2009) (procedure for considering certified questions)
- Yardley v. Hosp. Housekeeping Sys., 470 S.W.3d 800 (Tenn. 2015) (scope of review for certified questions)
- Seals v. H & F, Inc., 301 S.W.3d 237 (Tenn. 2010) (Rule 23 limits to questions of law)
- Rent-A-Car Co. v. Belford, 45 S.W.2d 49 (Tenn. 1932) (owner’s sale may affect enforcement and remedies where res is sold)
- Potter v. Foster, 64 S.W.2d 520 (Tenn. Ct. App. 1932) (predecessor statute construed to require original attachment for enforcement of statutory liens)
- Allen v. Simmons Mach. Co., 666 S.W.2d 44 (Tenn. 1984) (statutory liens supplement common-law remedies; conversion remedies available)
- Mammoth Cave Prod. Credit Ass’n v. Oldham, 569 S.W.2d 833 (Tenn. Ct. App. 1977) (discusses suit for conversion where debtor’s goods were sold and proceeds paid to debtor)