Seeking a quiet title is not an attempt to have peace and tranquility. Rather, it is filing a lawsuit to establish the proper owner of property, in our case, an airplane.
As a former Air Force officer, Ted Leslie has extensive experience with aviation. As a panel attorney for the AOPA Legal Services Plan, he helps pilots with FAA violations, works on aircraft title issues, and regularly advises clients in connection with ownership, operation, and management of business aircraft.
Over the last few years, I have been called upon by several aircraft owners in the final stages of selling aircraft who needed immediate assistance with removing a “cloud” (such as a lien) on their airplane title. In most of these cases the owners unknowingly inherited the clouded title with their aircraft purchase. Now the owner is trying to transfer the title and the buyer’s financing is being held up because of the clouded title.
Typically, the first approach in clearing a “clouded” title is to find out who is holding the lien or encumbrance. If the individual or entity is still in existence, it’s best to exhaust every avenue to try to work with them to obtain release information to satisfy the FAA’s recording requirements.
If it’s not possible to obtain the necessary release, a lawsuit (or quiet title action) to establish that the lien or encumbrance is no longer in effect is the next step. When filing a petition to initiate a quiet title action, part of the process includes identifying the jurisdiction and venue for the lawsuit. Establishing jurisdiction and venue can be a tricky issue with quiet title actions. But one tried and true approach has been to take the action to a civil court in Oklahoma, the state where FAA aircraft records are kept in central repository. In past quiet title actions, FAA recognized judgments by Oklahoma courts.
Once jurisdiction and venue are established, the petition may be filed and notice must be provided to the parties of the pending lawsuit, either by personal service or by publication. In Oklahoma, the parties have not less than 41 days from the first date of publication to respond. As you can imagine, waiting is often the most difficult part of this process because you don’t know if, or how, the other party will respond.
Sometimes the other party responds affirming their intent to continue to assert the lien or encumbrance. In those cases, the process becomes very complex, requiring discovery through both written and oral means. Obviously, this means the whole process is going to take a lot longer.
However, in most situations, the other party doesn’t respond to the notice within the requisite period of time, and this triggers the next step which is obtaining a hearing date. When appearing before the judge at the hearing, a journal entry (or other form of judgement) correcting the discrepancy that started all of this in the first place has to be obtained. It is imperative to have the proper wording in the journal entry or other form of judgment to satisfy the FAA and specifically address the issues. The final step in the process of clearing the aircraft title is to submit the journal entry or judgment to the FAA for recording.
Wholeheartedly, I recommend doing a title search when purchasing your aircraft so any title issues are resolved before you close the deal. If clouds are discovered later, and removal requires a quiet title action, you can expect an expensive and time-consuming process.