EMBRAER AIRCRAFT MAINTENANCE SERVICES, INC.
Session February 9, 2017
Certified Question of Law from the United States District
Court for the Middle District of Tennessee No. 3:13-cv-00059
Aleta A. Trauger, Judge
case, the petitioner had a repairman's lien on personal
property and filed an action in federal district court to
enforce the lien by original attachment of the lien-subject
property. During the pendency of the federal court action,
the lien-subject property was sold to a purchaser and was no
longer available for attachment, so the lienholder sought to
reach the proceeds from the sale of the lien-subject
property. The federal court then sought certification under
Tennessee Supreme Court Rule 23 of two questions: (1) May a
repairman's lien arising under Tennessee Code Annotated
section 66-19-101 (2015) be enforced by a method other than
attachment of the lien-subject property itself? and (2) In
Tennessee, under what circumstances, if any, may a court
attach the proceeds of the sale of lien-subject property, or
otherwise reach them with a judgment, where the owner has
rendered attachment of the lien-subject property
impracticable or impossible after the initiation of a
foreclosure proceeding? We answer the first question by
interpretation of Tennessee Code Annotated section 66-21-101
(2015), which addresses enforcement of a statutory lien by
original attachment where the lien statute does not specify a
method to enforce the lien. The lienholder has no statutory
lien on the proceeds from the sale of the lien-subject
property, and section 66-21-101 addresses only enforcement of
a statutory lien. Accordingly, section 66-21-101 is not a
statutory vehicle for the lienholder to reach the proceeds
from the sale of the lien-subject property. Section 66-21-101
neither provides for nor excludes other remedies that may be
available to the lienholder to reach the proceeds from the
sale of the lien-subject property. The second question
certified by the federal district court in this case is not a
defined question of unsettled Tennessee law, but it is more
in the nature of an open-ended inquiry regarding other
remedies that might enable the lienholder to reach the
proceeds from the sale of the lien-subject property. Such an
open-ended inquiry is not suitable for certification under
Tennessee Supreme Court Rule 23, and there is ample Tennessee
case law available to the parties on other possible remedies,
so we respectfully decline to address the merits of the
second certified question.
Sup. Ct. R. 23 Certified Question of Law
W. Edwards, Nashville, Tennessee, for the petitioner, Embraer
Aircraft Maintenance Services, Inc.
P. Funk and David Gilbert Schuette, Nashville, Tennessee, for
the respondent, AeroCentury Corp.
Kirby, J., delivered the opinion of the court, in which
Jeffrey S. Bivins, C.J., Cornelia A. Clark, Sharon G. Lee,
and Roger A. Page, JJ., joined.
certified questions in this case come from the United States
District Court for the Middle District of Tennessee
("District Court") pursuant to Rule 23 of the Rules
of the Supreme Court of the State of Tennessee. Because this is a
certified question from a federal district court, we have no
record. Consequently, our recitation of the facts
and the procedural background is taken from the District
Court's order certifying the questions to our Court.
See Allmand v. Pavletic, 292 S.W.3d 618, 621 (Tenn.
2009). We assume the facts as recited in the District Court
order to be true. Yardley v. Hosp. Housekeeping
Sys., 470 S.W.3d 800, 802 n.2 (Tenn. 2015).
and Procedural Background
the events giving rise to this case began, Respondent
AeroCentury Corp. ("AeroCentury"),  a California
corporation, owned the property that is the subject of this
case, a SAAB-SANIA Model SAAB 340B aircraft
("Aircraft"). AeroCentury had leased the Aircraft
to a regional airline, Colgan Air, Inc. ("Colgan").
In late 2011, Colgan's lease on the Aircraft was close to
expiring and Colgan was scheduled to return the Aircraft to
AeroCentury upon expiration of the lease. The terms of the
lease required Colgan to complete a lease return inspection
and perform certain maintenance service and repair work on
the Aircraft before returning possession of it to
fulfill these lease obligations, Colgan contracted with
Petitioner Embraer Aircraft Maintenance Services, Inc.
("Embraer"), headquartered in Nashville, Tennessee,
to perform the inspection, the maintenance, and any needed
repairs. On October 29, 2011, Colgan delivered the Aircraft
to Embraer's Nashville facility. Embraer inspected the
Aircraft and identified the service and repairs that would be
necessary to put the Aircraft in a condition that complied
with the terms of the lease. Over the next three months
Embraer worked with representatives of both Colgan and
AeroCentury to develop and revise a "Bill of Work"
detailing the service and repairs to be done on the
January, 2012, Embraer completed the service and repairs
listed in the Bill of Work and released the Aircraft to
Colgan. When Embraer completed its work on the Aircraft, a
repairman's lien secured by the Aircraft
("Lien") automatically arose under Tennessee Code
Annotated sections 66-19-101 and 66-19-102.
January 25, 2012, Embraer issued an invoice to Colgan for the
work completed, in the amount of $351, 465.20. Colgan never
paid the invoice. On April 1, 2012, Colgan filed a Chapter 11
bankruptcy petition. In re Pinnacle Airlines Corp.,
483 B.R. 381, 396 (Bankr. S.D.N.Y. 2012). Soon afterward,
Embraer perfected its Lien by filing a notice with the
Register of Deeds for Davidson County, Tennessee on April 9,
2012, and also filing a separate notice with the Federal
Aviation Administration on April 10, 2012. Embraer notified
Colgan and AeroCentury of the Lien. See Tenn. Code
Ann. § 66-19-301 (2015) (liens on aircraft must be filed
with the county in which actions giving rise to the lien
occurred, and notice of the lien shall be mailed to the party
for whose account the work was performed and to any party
known to have an ownership interest in the aircraft).
January 25, 2013, Embraer initiated an action in the District
Court to foreclose on the Aircraft. Embraer asked the District
Court to direct the sale of the Aircraft, order AeroCentury
to surrender possession of the Aircraft and its title to the
new owner, and then apply the proceeds of the sale to the
debt owed by Colgan to Embraer.
the pending foreclosure proceedings, in July 2013,
AeroCentury leased the Aircraft to Private Corporation
International Joint Stock Aviation Company URGA
("URGA"), an aviation company located in Ukraine.
Pursuant to the new lease, the Aircraft was exported from the
United States to Ukraine and removed from registration in the
also gave URGA an option to purchase the Aircraft. On March
25, 2014, URGA exercised its option and purchased the
Aircraft from AeroCentury. The Purchase Agreement with URGA
stated that AeroCentury conveyed title to the Aircraft
"free and clear" of encumbrances, except for the
Lien, which would purportedly be "removed by
[AeroCentury] post-Closing." AeroCentury ...