In the Matter Of: 

U.S. DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

WASHINGTON, D.C. 

CEIVED 

AUG l 7 2015 

Ht=ARING DOCKET ) 

) 

) 

) 

) 

Docket No. FAA-2014-0119 

Spirit Avionics, LTD., 

Case No. 2012-GL-07-0056 

Respondent. 

RESPONDENT'S REPLY TO 

COMPLAINANT'S RESPONSE FILED JULY 1, 2015 

Respondent, Spirit Avionics, LTD., files this Reply to Complainant's Response and 

hereby states as follows: 

The ultimate issue in this matter is whether the transaction between Respondent and its 

sub-contractor, Lane Aviation, constitutes a sale of fabricated parts. As a preliminary matter, it is 

important to note that Respondent, pursuant to its operations certificate, has the authority to 

manufacture replacement or modification articles for installation on type certificated aircraft. 

In support of its theory that Respondent sold the parts in question to Lane Aviation, 

Complainant ultimately relies upon its "smoking gun," an invoice from Respondent to Lane 

Aviation, which states as follows: "Lane Aviation Portion of Purchase and Assembly of 

Headliner Installation Kits. Kits supplied to be used for the 3'd FAA Aircraft through the 18th 

aircraft." 

In its Motion for Decision, Respondent explains that it worked exclusively with two 

subcontractors to complete all the work contemplated under the contract with the FAA. The 

subcontractors were necessary because Respondent could not complete every task required by 

the contract under its current operations certificate, so it enlisted the services of two reputable 

service providers (Lane Aviation and Tritex). 
The contract negotiations with the FAA were lengthy and endured several revisions. As a 

result, Respondent, Tritex, and Lane Aviation miscalculated their costs; specifically, those costs 

related to the headliner installation kits for the FAA aircraft. 1 Rather than frustrate the progress 

of the work under the contract and potentially compromise the business of an important 

customer; Respondent, Lane Aviation, and Tritex agreed to share the loss.2 This fact explains 

why the invoices to Tritex and Lane Aviation are identical in both price and description. The 

invoices do not represent a sale from one entity to the other; they represent reimbursement 

payments made by Tritex and Lane Aviation to Respondent for a specific portion of a large 

contract. 

A. The Transaction Between Respondent and Lane Aviation Was Not a Sale Under Part 21 

Under the Applicable Common Definition of a "Sale." 

In its Response, Complainant first asserts that the transaction between Lane Aviation and 

Respondent was a sale under Part 21 as per the applicable common definition of the term "sale." 

In support of this assertion, Complainant cites the most recent version of Black's Law Dictionary 

which defines the term sale as: "the transfer of property or title for a price." Complainant also 

cites two other sources for the definition, but essentially suggests that a "sale" would involve two 

elements: 1) an exchange of goods or services, and 2) money. This definition, however, is overly 

simplistic and inapplicable to this situation as there was no "exchange." Arguably, when there is 

an exchange of goods or services the buyer would get something of value in return (the goods or 

services). The "buyer" in this instance, Lane Aviation, got nothing of value in return because the 

parts in question were always the property of the FAA and were installed in the eighteen aircraft 

listed in the contract. 

1 The parts in question involve kits of hardware used to mount the interior panels within the cabin of the aircraft to 

the airframe. 2 Respondent's CEO declares this fact in his Declaration attached as EXHIBIT C to its Motion for Decision ftled on 

June 1, 2015. 

2 
As further support, Complainant lists several analogies that are wholly inapplicable and 

unsupported by law. For example, a real estate agent does not sell a house. Rather, a real estate 

agent is just that, an agent, which facilitates the sale of real property on the seller's behalf. 

Complainant also states that one can sell stolen goods without title. While one could sell stolen 

goods, it does not mean the sale is valid because such a sale is illegal. Lastly, Complainant cites 

the example of a consignment shop. Again, this is an agency relationship where one is selling 

something on behalf of another. Simply transferring physical possession of something does not 

make it a sale. Otherwise, every instance of a bailment, loan of goods, or lease of property would 

constitute a sale if one were to take Complainant's argument to its logical conclusion. Thus, this 

argument must fail. 

Finally, Complainant insists that a sale exists based upon the fact that Respondent 

prepared an invoice and received $7,416.90 for the "purchase and assembly of headliner install 

kits." Conveniently, Complainant omits the entire description on the invoice which specifically 

states that it was "Lane Aviation's portion" of the cost to purchase and install headliner install 

kits. The headliner kits and subsequent installation of the same actually cost $22,250.00.3 This 

amount is that which was unintentionally omitted from the bid on the contract and subsequent 

negotiation of the same. Since the parties had an expected profit on the entire contract, the three 

parties were able to determine the total loss from the omission of the headliner install kit and had 

agreed to share it. 

Complainant is using vague generalizations and a broad definition of the term "sale" to fit 

a square peg into a round hole. That is, Complainant is advancing the logic that because an 

invoice was paid, and because that invoice contains the word "purchase" it must therefore be a 

sale. Complainant's proposed definition omits one critical component; that where goods are 

3 $7,416.90 represents 1/3 of the total cost of$22,500.70. 

3 
exchanged for money, the buyer would retain a benefit. Respondent argues that benefit is the 

passing of title, and the right to have complete and total control of the parts in question, which is 

not present. Therefore, Complainant's proposed applicable common definition of the term "sale" 

must fail. 

B. The Plain Language of the Respondent's Invoice Is Irrelevant Because it is Not a ----------- -- ------eontra-ct;- ------ ----------- - - -- --- ---------------

Complainant's second argument that the transaction with Lane Aviation constituted a sale 

under any definition of the term must fail. Complainant attempts to treat the invoice issued to 

Lane Aviation as an unambiguous contract, and as such, argues that parol evidence cannot be 

introduced to contradict the plain meaning of a contract. 

The invoice issued to Lane Aviation is not a contract. An invoice is neither a bill of sale 

nor evidence of a sale, and, standing alone, furnishes no proof of title. Dows v. National 

Exchange Bank Of Milwaukee, 91 U.S. 618 (1875). 

Complainant, however, maintains that there is nothing ambiguous about the parties' 

"agreement" and that the invoice clearly states it was for the purchase of specific items and 

shows consideration was given in exchange for those items. Again, Complainant is completely 

ignoring the factual basis of the transaction and providing absolutely no evidence of its own to 

come to its desired outcome. Lane Aviation did not purchase anything from Respondent. 

Respondent purchased materials on behalf of its customer, the FAA, which is clearly the proper 

procedure outlined in the FAA contract. Respondent even used its customer's money to purchase 

said materials. Lane Aviation reimbursed Respondent for the shared loss relating miscalculation 

of the parts cost. 

Further, by seeking to use the invoice in question (which is not a contract) as evidence to 

prove the terms of a contract between Respondent and Lane Aviation, Complainant is using 

4 
parol evidence, which it had specifically stated in subheading B of its Response to Respondent's 

Motion for Decision, is prohibited. The unambiguous contract is not the invoice, but rather the 

agreement between the parties to reimburse Respondent for its share of the loss on the contract. 

The invoice, which specifically and unequivocally states that the amount is representative of 

Lane Aviation's share, is simply a standard business practice (particularly in the context of a 

joint venture) memorializing that fact that money had been paid to reimburse a loss. Therefore, 

Complainant's argument must fail because it simply misapplies basic contract and business 

principles to come to its own faulty conclusion. 

C. The Transaction Was Not a Sale Under the U.C.C.'s Defmition. 

Complainant's assertion that the transaction in question constitutes a sale under the 

U.C.C. is without merit. U.C.C. § 2-106(1) defines a "sale" as consisting of the passing of title 

from the seller to the buyer for a price. Complainant maintains that since Lane Aviation used the 

parts in question to complete part of the work order, it had "possession" and thus a legally 

protected property interest. 

Complainant misconstrues the meaning of actual possession and legal possession. For 

example, one can be in possession of something, but not have the right to possess it. Lane 

Aviation had possession of the parts which were consumed in the course of providing the labor 

to install them. Lane Aviation had no property interest in the parts because the parts were the 

sole property of the FAA. As was made abundantly clear in the FAA contract, everything 

purchased to complete the contract is the property of the FAA: 

CLIN 004 - Materials Acquired by the Contractor for the Government - all 

materials and equipment acquired with government funding are property of the 

FAA and shall be maintained lAW Government Furnished Property (GFP) 

provisions ofthe contract.4 

4 See pages 3, 6, 8, 10, and 12 of the FAA Contract. This clause is also referenced in Footnote 18 of Respondent's 

Motion for Decision. 

5 
Finally, Complainant asserts that Lane Aviation possessed the parts, had the right to use 

those parts to complete its work, paid a significant sum of money for the parts, and had an 

agreement setting forth those rights. This is purely conjecture and Complainant offers no 

evidence to prove any of its assertions. Lane Aviation had a duty, not a right to use the parts. 

Lane Aviation did not pay a significant sum of money for parts; Respondent purchased the parts 

with funds from the FAA. Further, there was no agreement setting forth those rights because, as 

stated above, an invoice is not a contract. 

The U.C.C. requires the passing of title to create a valid sale. Lane Aviation did not have 

title to the parts in question because the parts belonged to the FAA. Therefore, the transaction in 

question did not constitute a sale under the U.C.C. 

D. The Activity Complained of Is Not Within the Scope of 14 C.F.R. § 21.9. 

Complainant asserts that any discussion following the regulation itself may be used to 

interpret the intent of a regulation, but it is not the law and in no way limits the plain language of 

the regulation. Respondent agrees that while it may not be controlling, it is certainly helpful to 

understand how and why this specific regulation came into existence. 

Section 21.9 was enacted to protect unsuspecting consumers from the sale of nonconforming parts in the marketplace. This regulation is a safety measure enacted to protect 

consumers from purchasing non-conforming parts for installation on type certificated aircraft and 

is therefore inapplicable to the facts and circumstances underlying the instant matter. 

Under this same section, Complainant also argues the requirement that title pass to a 

buyer under a U.C.C. contract is contradictory to the plain language of the invoice. The "plain 

language" of the invoice is irrelevant because it is not a contract. 

6 
Finally, Complainant also argues that there is no evidence regarding any subcontract 

between the companies and respondent. This is untrue. Respondent directs Complainant's 

attention to EXHIBIT A, specifically page 17 of the contract which explicitly states Lane 

Aviation therein. Therefore, to say that there is no evidence of Lane Aviation's involvement 

under this contract is patently false. Respondent also cites Exhibit C filed with the Motion which 

contains a Declaration from Eric C. Ochs, the CEO of Respondent, Spirit Avionics. Specifically, 

in Paragraph 5, Mr. Ochs declares as follows: 

5. Due to a combination of both limitations of the certificate belonging to 

Spirit Avionics, Ltd. and lack of equipment and/or specialization needed to 

perform every task contemplated under the terms of the contract with the FAA, 

Spirit Avionics utilized the experience and expertise of two highly respected and 

qualified sub-contractors: Lane Aviation Corporation ("Lane Aviation") and 

Tritext Corporation ("Tritex") in carrying out the work contemplated by the 

contract. 

Respondent maintains that Section 21.9 does not apply to the instant matter and reiterates 

the fact that Respondent did not sell the parts in question to Lane Aviation or Tritex. The invoice 

in question simply represents reimbursement of the portion of the loss the parties agreed to share 

due to a mutual mistake. Therefore, Respondent did not violate Section 21.9. 

E. Conclusion 

Complainant has the burden to show that the respondent produced a replacement part or 

modification article for sale and represented that the part was suitable for installation on a type 

certificated aircraft. Notwithstanding the invoice submitted to Lane Aviation regarding its share 

of the reimbursement of the loss, which Complainant prefers to incorrectly view as a valid, 

binding, and unambiguous contract, Complainant has no evidence to demonstrate that 

Respondent sold the parts in question in violation of Section 21.9 because that evidence does not 

exist. 

7 
Respondent does not dispute that it fabricated the parts in question. It has every right to 

produce such parts under its operations specifications. What Respondent categorically denies, 

based on the foregoing, is that it sold said parts to its subcontractor, Lane Aviation. Therefore, 

Respondent submits that there are no genuine issues of material fact and that it is entitled to 

judgment as a matter of law on the grounds that the transaction between Respondent and its 

subcontractor was not a "sale" and therefore did not violate 14 C.P.R. §21.9. 

Respectfully submitted, 

// ) 77 ;fl' 

// (///,::::1:., / J"~· <» ~ / ""--"~-~~" 

// Patrick T. Moro 

/ Jerry A. Eichenberger 

.!' Eichenberger & Associates, Co. LP A 

(../ 6037 Frantz Road, Suite 107 

Dublin, Ohio 43017 

Phone: 614-798-1600 

Facsimile: 614-798-1620 

Counsel for Respondent 

8 
CERTIFICATE OF SERVICE 

I hereby certify that a copy of the foregoing was served upon the following parties by 

facsimile this 6'h day of August, 2015. 

FAA Hearing Docket 

800 Independence Ave, S.W. 

Washington, D.C. 20591 

Attn: Hearing Docket Clerk 

AGG·430;Wilber·WrightBuilding 

Suite 2Wl 000 

Fax: 202-267-1293 

The Honorable J.E. Sullivan 

U.S. Administrative Law Judge 

Office of Hearings, M-20 

U.S. Department of Transportation 

1200 New Jersey Ave, S.E. (Ell-310) 

Washington, D.C. 20590 

Fax: 202-366-7536 

Kate Barber 

Federal Aviation Administration 

Office of Regional Counsel, AGL-7B 

2300 East Devon Avenue 

Des Plaines, Illinois 60018 

Fax: 847-294-7862 

/ 

9 
EICHENBERGER &ASSOCIATES 

Federal Aviation Administration 

800 Independence Avenue, S.W. 

Washington, DC 20591 

Attn: 

Hearing Docket Clerk 

AGC-430, Wilber Wright Building 

Suite 2WIOOO 

To the Hearing Docket Clerk, 

August 6, 2015 

RECEIVED 

fl!.UG 1 7 2015 

HEARING DOCKET 

Re: Respondent's Reply to FAA Response 

DocketNo.: FAA-2014-0119 

Case No.: 2012-GL-07-0056 

Please find the enclosed Reply to the FAA's Response. A copy of the same has also been served 

by facsimile to the FAA attorney and Judge Sullivan. 

If you have any questions, please do not hesitate to contact me at the number below. 

Enclosures 

CC: 

Kate Barber, Esq. 

Judge J.E. Sullivan 

6037 Frantz Road, Suite 107 Dublin, Ohio 43017 T/ 614-798-1600 i F/ 614-798-1600 www.ehlawyers.com