# '

.

In The Matter Of: 

## SERVED: August 27, 2015 U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C.

DocketNo. FAA-2014-0119 SPIRIT AVIONICS, LTD. ) ) ) ) ) CaseNo. 2012-GL-07-0056 Respondent

ORDERGRANTING THE RESPONDENT'S MOTION FOR SUMMARYJUDGMENT, CANCELLING THE HEARING, AND DISMISSING THE PROCEEDING
On June 1, 2015, the Respondent, Spirit Avionics, Ltd., filed a Motion for Decision ("Motion").

\

.. ,1. On July 1, 2015 the FAA filed 

## acombined Response to Respondent's Motion for Decision ("Response") and Complainant's Motion for Decision in Favor ofthe Complainant ("FAA Motion for Decision"). Six days later, on July 7, 2015, the FAA filed a Response to Respondent's Motion to Strike, 1in which it also requested leave to file a late Response to the Respondent's Motion. OnJuly 13, 2015, the Respondent filed a Motion to Strike Complainant's Response to Respondent's Motion for Decision and Complainant's Motion for Decision. That same day, on July 13, 2015, the Respondent filed a Motion for Extension ofTime to Respond to Complainant's Motion Pending the Decision ofRespondent's Motion to Strike Filed on 7-1-2015 [sic] ("Motion for Extension"}.2

1As noted in the July 31, 2015 Order, the FAAfiled its Response to the Motion to Strike with the Court six (6) days before the Respondent's Motion to Strike was filed. (7/31/15 Qrder, 2.)
2 In its July 13,2015 Motion to Strike, the Respondent requested an extension oftimeto file a Reply, since ifits Motion to Strike the FAA's late Response was granted, no Reply would be necessary. (Mot. Extension, 1.)On July 31, 2015 an Order Granting the FAA's Motion to File a Late Response and Granting the Respondent's Motions for Extension and to Strike FAAMotion for Decision was filed.
OnAugust 6, 2015 the Respondent filed a Respondent's Reply to Complainant's Response filed July 1, 2015 ("Reply"). OnAugust 11, 2015 the parties**~ppear~~ ~Y:** **telephone** for a Motion Conference, and p ,·; • ; ! ' presented oral argument on the Respondent's Motion. On August 12, 2015 an Order Setting Deadlines for Submission ofSupplemental Material was filed, which codified oral rulings made by the Court during the August 11, 2015 Motion Conference. On August 12, 2015 the FAA filed the following: 1) Exhibit A to the FAA's July 1, 2015 Response; 2) a Notice ofCo-Counsel Appearance; and 3) an Amended Complaint.
On August 14, 2015 the Respondent filed an Answer ofRespondent [to the Amended Complaint], and a Supplemental Declaration ofEric C. Ochs. A. Notice ofViolation and Proposed Penalty Assessment On or about May 8, 2014, the Federal Aviation Administration ("FAA") Regional Counsel for the Great LakesRegion filed a Complaint with the U.S. Department of Transportation Office ofHearings, in w1tich

### th~**F~**generally alleged3 thaton or about February 24, 2011, the Respondent, Spirit Avionics, Ltd., had committed a minimum often (10) violations4 of 14 C.F.R. 

### § 21.9(b), when it sold 22 fabricated brackets and 22 fabricated lanyards to Lane Aviation, a sub-contractor ofthe Respondent, and represented inthe sale ofsuch articles thatthey were suitable for installation on type certificated, FAA aircraft. (Compl. 2.) The FAA proposed a total penalty of$11,000 for the violations.

3 There was a general allegation because the May 8, 2014 Complaint did not specify the exact number ofviolations.

4 In the Complaint, the FAA asserted that the maximum penalty for one (1) violation of 14 C.F.R. § 21.9(b) was $1,100. It then requested a total civil penalty of$11,000. Based on the pleading, the FAA generally alleged the Respondent had committed a minimum often (10) violations (i.e., $11,000/$1,100 = 10). (Compl. 2.) Page 2 of 16However, during the August 

### 11

## ~~20

### 1S

## Motio~ Conference, the FAA clarified its pleading, and statedthat that it was charging a total ofone (1) violation of 14 C.P.R. 

### § 21.9(b) inits Complaint.5 (8/11115 Tr. 11:10-11.) One day later, on August 12,2015,the FAA filed an Amended Complaint, in which it asserted that the maximum penalty for one 

### (1) violation of 14 C.F.R. 

### § 21.9(b) was $11,000, and proposed that the Respondent be assessed a total civil penalty of$11,000 for the one (1) violation. 6 

### B. Summary Judgment Request
The Respondent's June 1, 2015 Motion seeks a decision on the merits regarding the one 

### (1) alleged violation ofthe Federal Aviation Regulations ("FARs"). The Respondent asserts that it did not violate 14 C.F.R. 

### § 21.9(b), because itnever soldparts to its sub-contractor, Lane Aviation. 

### C. BriefReview ofSummary**Judgm~~t~~~~n~ard**

, ' .'\,.: I Pursuant to 14 C.F.R. 

### § 13.218, a party may file motions, including a motion for a decision onthe merits, in advance ofa hearing when a party asserts thatthere is no disputed material issues offact to beheard. Pursuant to 14 C.F.R. 

### § 13.218(±)(5), any motion for a decision onthe merits priorto a testimonial hearing is reviewed under the same standard as a summaryjudgmentmotionunder Rule 56 ofthe Federal Rules ofCivil Procedure. 

### HorizonAir Industries, Inc., FAA OrderNo. 96-24, n.3 (Aug. 13, 1996). The purpose ofsummaryjudgmentis "to isolate, and then terminate, claims and defenses that are factually unsupported." Steven Baicker-McKee, et al., 

### Federal CivilRules Handbook, 1122 (West Publishing 2012). Pursuantto Rule 56(a), a summaryjudgmentmotion may be granted if"the movant shows thatthere is no genuine dispute as to any material fact and the movant is entitled to

. l \'

..}.)If;

' \ i ' ' 't ,\

5 As noted in the August 11, 2015 record, the Respondent objected to any amendmentto the Complaint. This objection was reserved, and the Respondent was provided a deadline ofAugust 18,2015 to specify its objections, pursuant to 14 C.F.R. § 13.214 (c).
6 The Respondent did not did not file any written objection, on orbefore August 18, 2015, to the Amended Complaint. Page 3 of 16judgment as a matter oflaw." SeeAnderson v. LibertyLobbyInc., 477 U.S. 242,247-48 (1986); Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Circuit 2006). On a summaryjudgment motion, the court does not rule on witness credibility orthe weight ofthe evidence. See, Steven Baicker-McKee, et al., supra, at 1125. Instead, the court reviews the submitted record to determine ifthere**i~** a genuine dispute regarding material facts.**~'** \,**~** ' ;,, . ..... A fact is "material" ifit is capable of**affecting~**the substantial outcome ofthe litigation. Holcomb, 433 F.3d at 895; LibertyLobby, Inc., 477 U.S. at 248. A dispute is "genuine" ifthe evidence is such that a reasonable trier offact could return a verdict for the non-moving party. See, Scott v. Harris, 550 US 372, 380 (2007); LibertyLobbyInc., 477 US at 248; Holcomb, 433
I F.3d at 895. Itis well established that on a motion for summaryjudgment, all evidence and inferences
are to be viewed in light most favorable to non-moving party. However, a non-moving party (e.g., the FAA herein answering the Respondent's Motion) may not rest upon mere denials or allegations in the pleadings. Pursuant to Rule 56(c), (d), and (e), a non-moving party who wishes to proceedto trial mustrespond to the motion for summaryjudgment, and set forth specific facts sufficientto showthere is a genuine issue for trial. Celotex Corp. v. Catrett, 477 US 317, 324 (1986). See also, Citizens State Bank of BigLake v. Transamerica Ins. Co., 815 F.Supp. 309 (D. Minn. 1993); Baicker-McKee, et al.,**su~ra, at):~~3:::.34**  (a non-moving party may produce materials, and/or cite to materials produced or

### ~ot p;oduced by the movant in resisting the summaryjudgmentmotion). To raise a genuine dispute, the "caliber" and "quantity" ofthe evidence presented must "allow a rational finder offact," to return a verdict for the nonmoving party. Liberty Lobby, Inc., 477 U.S. at 254. A "genuine" dispute is not created by a "mere scintilla" offavorable evidence,
or evidence that is "merely colorable

... or is not significantly probative." 

### !d. at 249-50, 252 (citations omitted). Therefore, while the Court may not "weigh the evidence and determine the truth ofthe matter," its "inquiry

... unavoidably asks whether reasonablejurors could find by a preponderance ofthe evidence that the plaintiffis entitled to a verdict." LibertyLobby, Inc., 477 U.S. at 249, 252.

,\,'.,:, 

### t ; ·) c .) .l • "f**~')..·** ',·'·· ·;•' Page 4 of 16l!, 

### D. Admissibility ofRespondent's SummaryJudgmentFactual Proof
Pursuantto Rule 56(c)(1)(A), specific facts allegedby either party maybe asserted by submitting evidence, and/or citingto a variety ofadmitted pleadings or other documents inthe record. Materials submitted during summaryjudgmentproceedings must be capable ofbeing offered attrial 

### in an admissible form. 

### See, Baicker-McKee, et al., 

### supra, at 1135. Aspart ofits June 1, 2015 Motion, theRespondent submitted six (6) Exhibits, identified
as Respondent Exhibits A-F. The FAAdid not file any objectionto the admissibility ofany of the Respondent's summaryjudgmentExhibits. Afterreview, all six (6) Respondent Exhibits are deemed admissible for summaryjudgmentconsideration as follows:

• Respondent Exhibit C, the DeclarationofEric C. Ochs, is admissible as testimonial
;.· evidence.
• Respondent Exhibits A, D and E are admissible as documentary evidence.
• RespondentExhibits B and F are admissible as courtesy copies ofpublicrecords. In addition, onAugust 12, 2015 (i.e., one day after the August 11, 2015 oral argument), the Respondent filed a Supplemental Declaration ofEric C. Ochs. Pursuant to Rule 56(e)(1), this Supplemental Declaration is hereby marked as Respondent Exhibit C-1, and deemed admissible
as testimonial evidence for consideration. 

### E. Admissibility ofFAA's Summary JudgmentFactualProof Aspart ofits July 1, 2015 Response, the FAAreferenced one (1) Exhibit, identified as FAAExhibit A. (Resp. 3.) However, FAAExhibit A was not attached to the FAA's Response, and as ofthe date ofthe August 11, 2015 oral argument, had not been received orreviewedby

. d. eitherthe Court orthe Respondent. i

.. Duringthe August 11, 2015 Motion Conference, the FAAwas given a deadline of August 14, 2015, to file missing Exhibit A. The Respondent's oral objectionto Exhibit A was reserved. OnAugust 12, 2015 (Le., one day afterthe August 11, 2015 oral argument), the FAA filed the FAA's missing Exhibit A. Pursuantto Rule 56(e)(4), the Respondent's objectionto the Page 5 of16FAA's Exhibit A is overruled, and FAA Exhibit A is deemed admissible as a courtesy copy ofa partial webpageproviding a dictionary definition of"sale." 

### F. Applicable Regulation As noted earlierherein, the Responde:qt is alleged to have committed one (1) violation of 14 C.F.R. 

### § 21.9(b), whichprovides as follows: (b) Except as provided inparagraphs (a)(1) through (a)(2) ofthis section, a person who produces a replacement ormodification article for sale may notrepresent that part as suitable for installation on a type-certificated product.

. 14 C.F.R. 

### § 21.9(b) (emphasis added). In addition, pursuantto 14 C.F.R. 

### §21.9(a)(l) and (a)(2), a person7 may not produce an article "reasonably likely" to be installed on a type-certificated product, unless thatperson has produced it under a type certificate or under an FAAproduction approval. 

### G. Definition ofthe Words "Sale" and "Bailment" The parties agreed that the FARs did not provide a definition for the word "sale'' contained in 14 C.F.R. §21.9(b). It was undisputed that the word "sale" shouldbe givenits "ordinary, contemporary, commonmefi:r;tg.:'JResJ?ri:?' citingPerrin v. UnitedStates, 444 U.S. 37, 42 (1979)). As a result, bothparties submitted commondefinitions ofthe word, utilizing various sources. (Motion, 5-6; Resp. 2-3.) When comparingthe 1979 and 2009 editions ofBlack's LawDictionary, it is clearthat the definitions for types ofsales have changed and grown over the lastthirty (30) years. However, the core definition ofa "sale"has consistently required the transfer ofproperty ortitle for a price. Sale

...A contractbetweentwo parties, called, respectively, the "seller" (or vendor) and the "buyer" (or purchaser), bywhich the former, inconsideration of the paymentorpromise ofpayment ofa certainprice inmoney, transfers to the latter the title and the possession ofproperty. Black's Law Dictionary 1200(5th ed.1979).

i>h 7 14 C.F.R. § 1.1 defines the word "person" to {nch.lde 

### it"fi.nii[1 partnership, corporation, [or] company." Page 6 of16Sale, n. (bef.12c) 

### 1. The transfer ofproperty ortitle for a price. See UCC §2-106(1). Black's Law Dictionary 9th ed. (2009). Section 2-106(1) ofthe 2015 Uniform Commercial Code ("UCC")defines a "sale" as requiring the passing oftitlefrom the sellerto the buyer for a price. UCC §2-106(1). In short, for a "sale"to occur, "absolute ownership overthe subject ofthe transaction" must "bepassed." 67 Am.Jur.2d §16 (2015). A "sale"requires that the parties, acting as "seller" and "buyer," have
a meeting ofthe minds and pass title from one to the other. 

### (/d.). See also, UCC § 2-401(1)(a sale occurs when ''titleto goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed onby the parties"); 77 C.J.S. §382 (2015)(the UCC defines a sale as whentitle to goods generallypasses from the seller to the buyer in any manner explicitly agreed



### . ·e·· to bythe parties); 67 Am.Jur.2d §16 (2015)(Vfider·futicle 2 ofthe UCC, a "sale" consists ofthe passing oftitle from the sellerto the buyerfor a price.)
Because ofcertain arguments made by the parties herein, it is importantto clearly distinguish a "sale".from a "bailment", which is defined as follows: bailment (16c) 1. A delivery ofpersonal property by one person (the 

### bailor) to another (the 

### bailee) who holds the property for a certainpurpose, usu. under an express or implied-in-factcontract. Unlike a sale or gift ofpersonal property, a bailmentinvolves a change inpossession butnot intitle

.... "Although a bailment is ordinarily createdbythe agreement ofthe parties, resulting in a consensual delivery and acceptance ofthe property, such a relationship may also result from the actions and conduct ofthe parties indealing withthe property in question

..." 8A Am.Jur.2d Bailment § 1 (1997). Black's LawDictionary 9th ed. (2009). 

### H. Undisputed Facts I;•

. :··;,.

.**~~ Y:.~,**  ., trit(· l. ,,\ In its August 14, 2015 Answerto the Amended Complaint, the Respondent admittedto multiple factual allegations. In addition, as noted earlier herein, the Respondent submittedthe testimonial statements of

### Mr. Eric C. Ochs, the CEO ofSpiritAvionics, Ltd. (Mot. Exh. C and C-1), two February 24, 2011 Invoices (Mot. Exhs. D and E), and the mainportions ofanAugust 2010 Contract inwhichthe Respondent had contracted withthe FAAto perform interior work on

Page 7 of 16certain FAA aircraft (Mot. Exh. A). 8 Most ofthe Respondent's factual evidence was undisputed for purposes ofthe Motion, since the FAA did not submit any responsive facts to challenge or refute such evidence. For example, it was undisputedfthat

# th~'Rds~ondent was a holder ofRepair Station Certificate UOKR250X. (Resp. 1.) On or about August 2010, the Respondent andthe FAA entered into a renewable contract ("Contract"),9 where the Respondent, as the prime contractor, agreed to perform maintenance work onthe interiors ofeighteen (18) ofthe FAA's fleet of Beechcraft King Air 300 aircraft. (Motion, 1; Mot. Exhs. A 20**~** G.3 and C; Resp. 1.) The Contract negotiations had been lengthy, and had involved multiple revisions. 10 (Reply, 2.) The Respondent's interior work on each aircraft's cabin included mounting interior panels to the airframe utilizing hardware kits. (Reply, 2, fn. 1.) The Contract specifically envisioned that the Respondent might work with subcontractors to complete the terms ofthe work. (Mot. Exh. A 14**~** C.3(f).) Pursuantto the Contract, all materials acquired by the Respondent with government funding were the property ofthe FAA. (E.g., Mot. Exh. A at 3, 6, 8, and 10.) The FAAheld title to suchproperty, which was defined**astContra9tor~A.cquired-Government** Furnished Property." i '·

.**"·~· ~~·**  . (!d. at 14**~** C.3 (h).) However, ifthe Respondent or its subcontractors obtained materials, parts, or supplies that were not "furnished, installed, or consumed" inthe performance ofthe Contract, such items were not Government-furnished property. (Mot. Exh. A, 16**~** C.5.) Any such acquired items, not used as specifiedbythe Contract, needed to be "kept separate" from any Governmentfurnished property, would notbe paid for by the FAA,·and wouldremain "theproperty" ofthe acquiring contractor. (ld.)

8 Part Ill, Section J ofthe Contract identified four (4) Attachments to the Contract, none ofwhich were included in the Respondent's Summary Judgment materials. The FAA did not object to the Contract as submitted.

9 The term ofthe contract was for one (1) year option periods, subject to renewal for up to a total offive (5) years. (Resp. Exh. A, 2.) The first, or Base year, ran from April 7, 2010 -Apri16, 2011 (Jd.)

10 As evidence ofsuch revisions, multiple pages ofthe Contract contained different dates, such as December 2005 (Mot. Exh. A, 32); April 2008 (Mot. Exh. A, 31); August 4, 2910 (Mot. Exh. A, 26); September 1, 2010 (Mot. Exh. A, 14); and September 21,2010 (Mot. Exh. A, 

### 2).**While\\:le~ny··the** Contract had been modified both before and after August 2010, there was no dispute that Respondent's Exhibit A was an accurate copy ofthe Contract in use at the time ofthe alleged February 24, 2011 violations. Page 8 of 16In addition, the Contract specified that, in the absence ofspecified notice, the FAA was not obligated to reimburse the Respondent for any costs in excess ofthe total amount allotted by the FAA inthe Contract. (/d. at 28 ,-rAMS 3.3.1 (h).) The estimated reimbursable costs, for both replacementparts and contractor acquired materials needed to refurbish the aircraft interiors, was not to exceed a total of$1,415,325.62. (/d. at 3-4 ,-r CLIN 0004.) Atthe time ofthe alleged violations, on or about February 24, 2011, the FAA and the Respondent were exercisingthe terms ofthe Contract during the first Base Year (i.e., April 7, 2010-April6, 2011). (Mot. Exh. A, 

### 1.) Both the Respondent and any subcontractors it hired
were deemed "contractors" under the**~ontract,** andU.Were bound by its terms. (/d. at 14 ,-r C.3(f).) :?. l,.,;\\ ,;:.,.•rl- \ As the prime contractor, the Respondent was**respon~ible** for ensuring that any subcontractors complied with the Contractprovisions. (/d.) The Contract specifically identified Lane Aviation and its' plant in Columbus, Ohio, as the designated location where the FAA could inspect Contractmaterials. (Mot. Exh. A, 17 ,-r E.1(a).) The Respondent sub-contracted portions ofthe Contract work to Lane Aviation. 11 (August 14, 2015 Ans., 1,-r 4; Mot. Exhs. C and C-1.) It was undisputedthatthe primary terms ofthe Contract were adopted on or about August 2010. Approximately six (6) months later, on February 24, 2011, the Respondent issued Invoice No. 515449 to Lane Aviation Corporation, for "Work Order# 11027" in the amount of $7,439.16 for a quantity of"l". (Mot. Exh. D.) This charge was identified onthe Invoice as "LaneAviationportion ofpurchase and assembly ofheadliner install kits. Kits**~upplied** to be used for the 3rd FAA aircraft through the 18th aircraft." (/d.) That same day, onFebruary 24, 2011, the Respondent also issued Invoice No. 5154?0 to Tritex Corporation, for the same "Work ; ' "
- J"'\# Order # 11027" inthe same amount of**~'$7**,43'9'.11·6"1''for the same quantity of"1". (Mot. Exh. E.) The charge addressed to Tritex Corporation on Invoice No. 515450 was identified as the "Tritex Corporation portion" ofthe "purchase and assembly" ofthe same kits, to beinstalled on "FAA aircraft" as previously identified inthe Invoice addressed to Lane Aviation. (/d.) There was no sales tax added to either Invoice amount. (Mot. Exhs. D and E.)

11 It should be noted that during the August 11, 2015 oral argument, the FAA asserted that no subcontractor arrangement had beenproved during earlier, private, settlement negotiations. Typically, settlement negotiations remain private to encourage good faith discussions, and the parties do not reference such discussionsas part ofany subsequent disputed motion. See, e.g., Fed. R. Evid. 408. More significantly, however, the FAA did not present any evidence to dispute or refute the Respondent'sprima facie case, where the Respondent presentedtestimonial fact evidence that it had subcontractual relationships with both Lane Aviation and Tritex Corporation. Page 9 of 16It was undisputed that the Respondent's Contract with the FAA was renewed annually, pursuant to its terms. On or about June 6, 2012 (i.e., approximately 1 

### Yz years after the February 24, 2011 Invoices were issued) the FAA conducted an inspection ofLane Aviation. This inspection occurred during the Contract's

## se~6hd6·6n:ewed year (i.e., "OptionII-Period of Performance"). (Mot. Exh. A, 8.) During the inspection, the FAA Inspector found parts, fabricated bythe Respondent, on a Lane Aviation work table near the vicinity ofan FAA Beechcraft King Air 300 aircraft. The FAA asserted that the Inspector also found other "similar parts" that had already been installed on FAA aircraft "without airworthiness release documentation." (Resp., 2.) On February 21, 2013, the FAA issued a Notice ofProposed Civil Penalty to the Respondent, alleging that the Respondent had "sold" fabricated aircraft parts to Lane Aviation on or about February 24, 2011 (the date listed on Invoice No. 515449), in violation of 14 C.F

### .R. § 21.9(b). OnApril 30, 2014, the Respondent filed a Notice ofHearing and requested formal adjudication. I. Respondent's Prima Facie 

### Case As noted earlier herein, the moving party in a summaryjudgmentmotion must first make**~. ~**  aprima facie showing that summaryjutlgmen'ttisfappropriate, before the burden shifts to the responding party. The movant'sprima facie burden maybe met by submitting evidence, and/or by "pointing out an absence ofevidence in support ofthe non-moving party's claims." BaickerMcKee, supra, at 1134. In addition to the undisputed facts, Mr. Ochs testified in his Declaration that both Lane Aviation and Tritex Corporation12 were acting as its subcontractors, working withthe Respondent onthe FAA's fleet ofBeechcraft King Air 300 aircraft pursuant to the Respondent's August 2010 Contract with the FAA. (Mot. Exh. C,**~~** 3-5.) The Respondent was the named primary contractor in the Contract, and therefore was the sole recipient ofF AA funds for use in purchasing parts and materials. (Id.**at~** 12.) All the parts and materials acquired by the Respondent for the interior work onthe FAA aircraft had eitherbeenpurchased or made bythe Respondent, and hadbeen secured and stored by the Respondent pursuant to the Contractterms (!d. at**~** 17). These parts included the lapyards

.. E!fld :brackets referenced by the FAA in its B '

..**~·:·,,·:~:·I!.**
12 NB: Tritex Corporation was not identified in either the FAA's May 8, 2014 Complaint or its August 12, 2015 Amended Complaint. Page 10 of 16Complaint against the Respondent. (Mot. Exh. C-1,**~~** 3-4; August 14, 2015 Ans., 1**~~5-6.)** Mr. Ochs testified that afterthe August 2010 Contracthad been awarded to his company, it was discovered that there had been "anoversight" by Respondent and its partner subcontractors in "estimating the costs ofparts and hardware relating to the installation ofthe headliner ofthe interior cabin." (Mot. Exh. C,**~** 9.) As a result, the Respondent and its two subcontractors, Lane Aviation and Tritex Corporation, agreed to equally share the costs of purchasing and installing the hardware on the FAA aircraft. (/d.**at~** 10; Mot. Exh. C-1,**~** 6.) The Respondent's consecutively numbered feb11J.¥J**241,~::4011** Invoices to both subcontractors, for the identical amount of$7,416.91, represeJted

# th~·~q~~liy shared cost ofthe underestimated work that each ofthe three companies assumed. (!d.) The use ofsuch Invoices was a commonbusiness practice, in order to track money relevant to the Contract. (Mot. Exh. C-1,**~** 5.) The totality ofthe Respondent's evidence, even when viewed in a light most favorable to the FAA (i.e., the non-moving party) demonstrated that the Respondent had met itsprima facie burden in moving for summaryjudgment. 

### J. FAA's Responsive Case Pursuant to Rule 56, once the moving party has established a prima facie case, the burden shifts to the non-moving party to show, by affidavit or otherwise, that a genuine dispute of material fact remains for the fact-finder to resolve. See, Baicker-McKee, et al., supra, at 1133-34. · A non-moving party (e.g., the FAA herein answering the Respondent's Motion) may not rest upon mere denials or allegations inthe

## pleadlngs.'~E~J>. Pursuant to Civ. R. 56(c), (d), and (e), a non-moving party who wishes to proceed to trial must respond to the motion for summary judgment, and set forth specific facts sufficientto show there is a genuine issue for trial. Celotex, 477 US at 324. See also, Citizens State Bankof BigLake, 815 F.Supp. at 309; Baicker-McKee, et al., supra, at 1133-34 (a non-moving party may produce materials, and/or cite to materials produced or not produced by the movant in resisting the summaryjudgmentmotion). As part ofits Response, the FAA produced a copy ofa partial webpage providing a dictionary definition ofthe word "sale." (FAA Exh. A.) It then focused on one ofthe two Invoices submitted bythe Respondent, and argued that Lane Aviation's Invoice (Mot. Exh. D), taken at face value, demonstrated that a sale had occurred, in violation of 14 C.F.R. § 21.9(b). Page 11 of16The FAA argued that an Invoice was an "unambig-g?us" sales contract. (Resp. 4.) Thus, the FAA reasoned, the "unambiguous" sale shoWn

## bytlre'Ih~~lce "cannot" be "contradict[ed]" by Mr. Och's testimony. (Resp. 4.) The FAA also argued that Mr. Och'stestimony should not be deemed credible, since he was a party to the proceedings, and had an interest in the outcome. (8/11115 Tr. 33:4-7.) There is no doubt, as the FAA pointed out, that the Invoice addressed to Lane Aviation identified physical goods (i.e., "headliner install kits"), referenced such goods as part ofa "purchase and assembly," and listed a total price for Lane Aviation to pay, inthe amount of $7,416.91 (Mot. Exh. D.) But the FAA's arguments ignored admitted facts, partially misunderstood the summaryjudgment standard, failed to refute the Respondent's factual evidence, and did not set forth specific facts sufficient to showthat there was a genuine material issue in dispute for trial. For example (not inclusive), the mere use ofan invoice by the Respondent does not demonstrate that a sale has unambigumtsly

## ~~·b\irr.e~CSee, e.g., Black's LawDictionary 742 (5th ed.1979) (an invoice "maybe as appropriate to a consignment or a memorandum shipment as it is to a sale"). An invoice form may be utilized in sale, but that does not mean an invoice always represents a sale. 

### See, e.g., Black's Law Dictionary 9th ed. (2009)(invoice alternatively defined
as "abill ofcosts"). An "invoice" may be used for many reasons, in orderto describe an itemized account or statement ofgoods with values attached. 

### See, e.g., 19 C.P.R.§ 141.91 (invoice utilized as summary documentation for customs inspection sufficient to determine estimated duty charges and to use for statistical purposes). Thus, an invoice may be used outside ofa sale, simply as a written list or register that specifically identifies items ofvalue. 

### See, e.g.,Ace 

### Constructors, Inc. v. US. 70 Fed. Cl. 253, 276 (Fed. Cl. 2006 (invoices used to identify not only costs ofrental equipment but also the costs ofoperating owned equipment). It should also be noted that the FAA's assertion that the February 24, 2011 Invoice (Mot. Exh. D) should be deemed an**"unambiguous",~o!l~:t?c,t** was not legally supported. First, there is •i·· ! \**~~··** tt.J**~:** no definition inthe Uniform Commercial Code ("UCC") that describes an invoice as an unambiguous sales contract. Indeed, a web search ofthe 2015 UCC definitions does not result in the word "invoice" evenbeing listed in the UCC's common definitions sectionregarding sales transactions. Second, it is well established that an invoice is not a negotiated legal instrument of Page 12 of 16sale. Instead, an invoice is typically a list ofitems with certain value, prepared by a person or entity without any negotiation orthird party input. The invoice may (or may not) then be sent or provided to some otherperson orentity for review. By its very nature, an invoice is a document generated solely by one side, which is then subjectto review, interpretation, and challenge bythe recipient. See, e.g.,Amersham Corp. v. United States, 564 F. Supp. 813, 820 (Ct. Int'l Trade 1983) ("statements in invoices neither estop norpreclude parties from showing the true character ofmerchandise"). Thus, an invoice cannot summarily be deemed an "unambiguous" legal contract. 13

.**~·· ·~** **~,.** :·a(· The FAA also ignored

### evidence~ in order

# t6 make its arguments. For example (not inclusive) the two Invoices submitted by the Respondent (Mot. Exh. D and E) bore consecutive invoice numbers (i.e., 515449 and 51450) and had been sentto both ofthe Respondent's subcontractor companies onthe same day (i.e., February 24, 2011). They referenced an identical work order number (i.e., 11027). The "quantity" in each Invoice was "1" with the "rate" ofthe "quantity" stated as "$7,416.91." (!d.) No sales tax was included ineither calculation. 14 The description on each Invoice was identical, except for the individual company's name. Although the word "purchase" was contained in the Invoice description, it was used to describe both Lane Aviation's and Tritex's "portion" ofthe "purchase and assembly" ofinstallation kits "supplied" for FAA aircraft. ((Mot. Exh. D and E.) The Invoice descriptions also specifically provided that the "kits supplied" were "tobe used for the 3rd FAA aircraft through the 18th aircraft." (Mot. Exh. D and E.) Thus, as part ofthe Invoice, the Respondent gave each**sub~ontractin~d~mpany** specific directions regarding what it
was to do with the installation kits the Respondent was providing (i.e., "kits supplied to be used for

..."). This type ofdirection does not indicate a passing ofownership ortitle. Instead, it demonstrates a continued, exercised "bailment" authority bythe Respondent, as prime

13 While it is certainly possible, under common law principles, to review an invoice to interpret party actions, statements, and intent regarding the scope ofa disputed contractual arrangement, see, e.g., UCC § 2-207, Additional Terms in Acceptance or Confirmation ofa Contract, that is far different from finding that the invoice itselfis an unambiguous contract ofsale.
14 It should be noted that a "CMH" fee of$22.50 was added to the amount, resulting in the total of$7,439.16. (Mot. Exh. D.) Neither party introduced evidence regarding the "CMH" abbreviation. Given the lack ofevidence submitted and the minimal amount ofthe charge (i.e., $22.50), the CMH fee is deemed tobe not material to the issue before the court. Page 13 of 16

' :. 'i'. ' \.t\.' contractor, over the materials "supplie&"**See;t:~,'g;(8A** Am. Jur. 2d Bailments, 

### § 21 (unlike a sale, in a bailment, the bailee ofthe property does not acquire ownership and must account for the property.) In discussing the Invoices, Mr. Och testified that no "sale" ortransfer oftitle had occurred, because the referenced hardware kits materials were the FAA's acquired property, owned and retained by the FAA for exclusive use on its aircraft. In addition, Mr. Ochs testified thatthe 22 fabricated brackets and 22 fabricated lanyards referenced inthe FAA's Complainthad beenpurchased by the Respondent with FAA funds, or fabricated by the Respondent pursuantto 14 C.F.R. 

### § 21.9(a)(6), in compliance with the Contract terms. (Mot. Exh. C,**at~~** 14-16; Exh. C-1,**~~** 3-4.) Thus, the 22 fabricated brackets and 22 fabricated lanyards were the property of the FAA (i.e., the "bailor"), and remained the FAA'sproperty throughout the remodeling ofthe aircraft. (Mot. Exh. C,**at~~** 14-16.) 

### '· "

..v; Mr. Och's testimony was consistentwiththe!ierms ofthe Contract, which outlined both

. the Respondent's contractual responsibilities as the prime contractor, as well as the "bailment" relationship the Respondent and its subcontractors had in regard to any FAA "property" acquired and utilized for the repairs on the FAA's aircraft. 

### See, e.g., FAA. Mot. Exh. A at 3, 6, 8, and 10 (all materials acquired by the Respondent with government funding were the property ofthe FAA); !d. at 14**~** C.3 (h) (the FAA held title to such acquired property, which was defined as "Contractor-Acquired-GovernmentFurnished Property). The factual evidence demonstrates that Respondent -asthe prime contractor under the terms ofthe Contract- had exercised its mandated "bailee" oversight ofFAA property when it supplied the hardware kits to Lane Aviation and Tritex Corporation (Mot. Exh. C; Mot. Exh. C1,**~~** 3-4.) The Respondent utilized the two Invoices for a dual purpose: 1) to notify its subcontractors oftheir mutual "bailee" responsibilities under the Contract regarding the FAA's property, and 2) "bill"the**subcontracto~s** for**tll~ir** a,greed shared costs for the underestimated 1 '

..· 

### tb i portion ofthe property acquisition. (/d.) The Respondent's evidence showed that the brackets and lanyards had not been sold to, or purchased by, either subcontractor Lane Aviation or subcontractor Tritex Corporation. (!d.) Instead, the materials had been provided by the Respondent (i.e., physical possession transferred without the passing oftitle) "as necessary" for each subcontractorto perform work on the aircraft. (Mot. Exh. C,**at~~** 14-16.) Page 14of 16The FAA did not did not dispute that the terms ofthe Contract were consistent with both Mr. Och'stestimony and the language inthe Invoices. The FAA also did notpresent any evidence, orpointto any admitted evidence, that genuinely refuted or challenged the totality of the factual evidence presented by the Respondent in its admissions, the Contract, Mr. Och's testimony, and theJnvoices. Although the FAA asserted that Mr. Ochs was "notcredible," it did not submit any evidence to demonstrate that ,his testimony was flawed in any way. 

### See Baickeri
. u,., •, l

..**~l.f.,** McKee, et al., supra at 1125 ("[S]imply lobbing Broad, conclusory attacks on a witness's credibility is not enough to defeat summaryjudgment.") In summary, in its Response and oral arguments, the FAA failed to demonstrate that a genuine dispute ofmaterial fact remained for the fact-finder to resolve.


### K. CONCLUSION Pursuantto 14 C.F.R. §13.218(±)(5) and Rule 56, all oftheparties' admissible Exhibits
were considered, as well as the applicable pleadings and documents. After having heard oral argument on the Motion, and having reviewing all relevant caselaw, decisions, regulations, statutory authority, motions, pleadings, and being fully advised;



### IT IS HEREBY ORDERED: r · .u,.. L 1l' 1. The Respondent has shown, by

## apreponderance ofevidence, that it did not sell 22 fabricated brackets and/or 22 fabricated lanyards parts to its sub-contractor, Lane Aviation, on or about February 24, 2011, as alleged by the FAA in its Amended Complaint.
2. The Respondent has shown, by a preponderance ofevidence, that it did not commit a violation of 14 C.F.R. § 21.9 (6) as alleged by the FAA in its Amended Complaint.
3. There are no genuine issues ofmaterial fact in dispute regarding the one (1) charged violation of 14 C.F.R. 

### § 21.9(b), and the Respondent is entitledtojudgment as a matter of law.

'. f' , ., n1 •.1 Page 15 of 16::I 4. The Respondent's Motion for

### ri~cision·i~**~rtlnted.**
5. The three (3) day Hearing scheduled for October 20, 2015- October 22, 2015 in Colwnbus, Ohio is hereby cancelled.

6. This proceeding is dismissed.

7. This Order will become final ten (10) days after it is served, unless eitherparty files a notice ofappeal within the ten (10) day period, pursuantto 14 C.P.R. § 13.233.

Attachment: Service List

Page 16of 16Docket No. FAA-2014-0119 (Civil Penalty Action) SERVICE LIST- BY U.S. MAIL ORIGINAL & ONE COPY Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 Attention: Hearing Docket Clerk, AGC-430 Wilbur Wright Building-Suite 2W1000 1 ONE COPY Ms. Kate Barber Complainant's Counsel Federal Aviation Administration, AGL-7 2300 East Devon Avenue Des Plaines, IL 60018-4696 TEL: 847-294-7862 FAX: 847-294-7498 Mr. Jen·y A. Eichenberger Respondent's Counsel EICHENBERGER & ASSOCIATES 6037 Frantz Road, Suite 107 Dublin, OH 43017 TEL: 614-798-1600 FAX: 614-798-1620

Judge J.E. Sullivan U.S Administrative Law Judge Office ofHearings, M-20 U.S. Department ofTransportation 1200 New Jersey Avenue, S.E. (E11-310) Washington, DC 20590 TEL: 202-366-6941 FAX: 202-366-7536 Ms. Lauren Hoysen Complainant's Co-Counsel Federal Aviation Administration, AGL-7 2300 East Devon Avenue Des Plaines, IL 60018-4696 TEL: 847-294-7862 FAX: 847-294-7498 Mr. Patrick J. Moro Respondent's Co-Counsel EICHENBERGER & ASSOCIATES 6037 Frantz Road, Suite 107 Dublin, OH 43017 TEL: 614-798-1600 FAX: 614-798-1620 E-mail: pmoro@ehlawyers.com

1 Service was by U.S. Mail. For service in person or by expedited courier, use the following address: Federal Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building-Suite 2WIOOO, Washington, DC 20591; Attention: Hearing Docket Clerk, AGC-430.