United States District Court, M.D. Tennessee, Nashville Division
A. TRAUGER UNITED STATES DISTRICT JUDGE
before the court is Plaintiff's Second Motion for Leave
to File a Second Amended Complaint (Docket No. 79). Defendant
has filed a Response (Docket No. 82), and Plaintiff has filed
a Reply (Docket No. 83). For the reasons stated herein,
Plaintiff's Motion is GRANTED.
action arises from certain repairs and maintenance work
performed by Plaintiff Embraer Aircraft Maintenance Services,
Inc. on a SAAB-SANIA Model SAAB340B aircraft (“the
plane”) owned (when this case arose) by Defendant
Aerocentury Corp. At the time of Plaintiff's work on the
plane, Defendant had leased the plane to Colgan Air, Inc. In
late 2011, when Colgan's lease with Defendant was about
to expire, Colgan contracted with Plaintiff to perform
inspection, maintenance and any needed repair work for the
plane, work required by Colgan's lease with Defendant.
Plaintiff worked with representatives of both Colgan and
Defendant to detail the service and repairs to be done.
Plaintiff completed its work, a repairman's lien secured
by the plane automatically arose under Tennessee law. Tenn.
Code Ann. §§ 66-19-101 and 66-19-102. Plaintiff
issued an invoice for its work to Colgan for $351, 465.20.
Colgan never paid the invoice and, in fact, filed for
bankruptcy protection soon thereafter. Plaintiff perfected
its lien by filing a notice in the Register of Deeds for
Davidson County, Tennessee, and a separate notice with the
Federal Aviation Administration. Plaintiff also notified
Colgan and Defendant about its lien.
January 25, 2013, Plaintiff initiated this action to
foreclose on the plane in satisfaction of its lien. In July
of 2013, with no notice to Plaintiff, and after this
foreclosure proceeding had been underway for six months,
Defendant leased the plane, with a purchase option, to an
aviation company known as URGA, located in the Ukraine.
Pursuant to the lease with URGA, the plane was exported to
Ukraine and removed from registration in the United States.
On March 25, 2014, URGA exercised its purchase option and
Defendant sold the plane to URGA, despite the pending
foreclosure proceedings in this court.
November 24, 2015, Plaintiff filed a Motion for Summary
Judgment in this action. In its Response to Plaintiff's
Motion, Defendant disclosed, for the first time, that
Defendant had sold the plane that is the subject of this
action. Plaintiff then asked the court to order Defendant to
deliver the proceeds from sale of the plane to Plaintiff, to
be applied toward the debt owed to Plaintiff for work it
performed on the plane.
court found that it could not decide Plaintiff's motion
because it was unclear, under Tennessee law, whether Tenn.
Code Ann. § 66-21-101 allows the enforcement of a
statutory lien, such as Plaintiff's, by any method other
than attachment of the lien-subject property. Docket No. 69 at
5. Therefore, on March 25, 2016, the court certified two
state law questions to the Tennessee Supreme Court as
a repairman's lien arising under Tenn. Code Ann. §
66-19-101 be enforced by a method other than
attachment of the lien-subject property itself?
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?
Docket No. 69. The court then stated that it would hold this
case in abeyance and ordered the Clerk to administratively
close the case. Docket No. 70.
November 27, 2017, the Tennessee Supreme Court responded to
this court's certified questions. It held that the only
remedy provided for in Tenn. Code Ann. § 66-21-101 is
attachment of lien-subject property. Docket No. 75 at 11 and
13. The court stated that the statutory lien follows the
property and, therefore, there is no Section 66-19-101
statutory lien on the proceeds resulting from any sale of the
plane. Therefore, as Plaintiff has no lien on the proceeds of
the sale, Section 66-21-101 provides no remedy for Plaintiff
to reach the proceeds. The court declined to answer the
second question, finding that it did not state a defined
question of unsettled Tennessee law. Id.
receiving the Tennessee Supreme Court's Order, this court
reopened the file and held a telephone conference with
counsel for the parties to discuss the status of the case.
Docket No. 76. The Plaintiff requested leave to amend the
complaint based upon new information and a new legal theory,
which the court granted. The court issued an Order setting
forth the briefing schedule for the Motion to Amend. Docket
No. 77. That Motion to Amend is now before the court.
of the Federal Rules of Civil Procedure provides that
district courts should freely give leave to amend complaints
when justice requires it. The Supreme Court has held that a
motion to amend should be liberally granted unless the motion
is brought in bad faith or the proposed amendments would
cause undue delay, be futile, or unfairly prejudice the
opposing party. Waddle v. Comm'r., Tenn. Dept. of
Correction, 2017 WL 6442143 at * 2 (M.D. Tenn. Dec. 15,
2017) (citing Foman v. Davis, 371 U.S. 178, 182
(1963)). Amending a complaint would be futile if the proposed
amendment would ...