### UNITE D STATE S O

F AMERICA DEPARTMEN

T O F TRANSPORTATION WASHINGTON , D.C
. M :- ' • • ,"^ U


### SU N QUES T EXECUTIVE AIRCHARTER , INC ,

Applicant ,
V
. 

### ADMINISTRATOR , FEDERA L AVIATIO N ADMINISTRATIO N

Respondent

. FAA DOCKET No
. CP08WP000 4
.Tudge : Hon , RichardC
. Goodwin
FDMSNo
. FAA-201M29 4

BRIEF SUPPORTING APPLICATIO N RE : EAJA

PROCEDURA

L FACT S Complainant

glosse s ove

r a n unusua l chronolog y i n it s recital o f th e procedura l history

. I t

correctl y explain s tha

t th e Notic e of

Propose dCivi l Penalt

y was issuedo n Octobe r 17 , 2005 , andtha

t th e Informa

l Conferenc e too k

plac e abou

t June 6 , 2006
. I t fail s to explain , however , wh y th e Fina l Notic e of

Propose dCivil Penalt

y was
no t issuedunti l Februar

y 12 ^ 2008 , almos t

2 year s afte

r th e Informa

l Conference

.

The record , however , doe s giv e a n explanatio n a s t o wh

y th e cas e appear s to hav e been dormant , the n resurrected

. A s to this , a n examinatio n o f

Respondent' s Motio n t o Dismis s i s enlightening

. Afte r th e complain

t wa s filed, th e Responden

t brough t a n unsuccessful Motio n t o Dismiss , arguin g b y analogy , tlia

t th e cas e shoul db e

### barre db y th e equivalent o f th e Stal e Complain

t Rul e andbecaus e o f

the additiona

l facts tha t th e key witnes s fo

r Respondent , th e owne

r of th e company , namely Fran k Kratzer , ha ddie dafte r th e Informa

l Conferenc e andbefor

e th e filing o f

th e complaint

.

The explanatio n fo

r th e dela y i s simple

. The earlier

proceeding s i

n the cas e
wer e handle dan

dsupervise db y th e the

n Regiona l Counsel , namely Monro e Balton , Th e Informa l Conferenc e coul dno t

resolv e i n adispositio n becaus e o f

th e positio n whic

h Responden

t ha s argue dal l along , namely , tha t the Agenc y ha s n o jurisdictio n ove r polic e flying b y th e L.A.P-D

- helicopte r becaus e o f

th e definitio n i n th e statute andth e regulation s adopte dthereunder

. Tha t singl e issu e wa s the one that prevente da

n entir e dispositio n a

t th e Informa

l Conference , was th e ke

y issu e argue dat

th e hearin g o

f thi s
case , an dth e sol e issu e raise do

n appea l b y th e Complainan

t i n it s appea

l of th e Administrativ e La

w Judge' s decision

.
Amplifyin g o

n th e foregoing , th e then Regiona l Counsel agree dto d

o
research in orde

r t o determin e whetlie

r ther e wa s an y precedent , anywhere , fo

r the argumen t an dcontention s o f

aviolatio n du e t o the L.A.P.D
. flying b y Mr
. Smith

. H e coul dno t com e u p wit h an y an ds o th e matte

r sa t unfi l tli e new Regiona

l Counsel , still without an y precedent , electe dto procee do n th e oldNotic e even thougli , durin g the interim , nothin g hadchange dsinc e th e Informa l Conference

. Th e statute an dth e regulation s remaine dunchanged

. Tha t portio n o f th e cas e elsewhere in thi s memorandiu

n characterize da s the gut

issu e of th e cas e i s simply a

n overreachin g b

y a

### ne

w Regiona l Counsel

. Respondent

suggest s tha

t th e foregoing preliminar

y facts , standing b y themselves , manifes t tha t the Agenc y wa s no t

substantiall y justifie di

n pursuin g th e actio n a s amatter of law

.

Bu t there are mor

e preliminar

y facts whic h ar

e applicable

.

Th e initia l proceeding s wer

e submitte do

n astipulatio n a s to the facts

. A s detaile dhereafte

r thi s preclude s a

n argumen t tha t th e proceeding s coul dhav e bee n substantially justifie dbecaus e there wa s afac t conflic t o r becaus e ther e were facts unknown t o th e Complainant

.

Ther e are mor e preliminar

y facts applicabl e t o thi s case . Th e Complainan t prevaile do

n a n argument

tha t th e flight fime o f Respondent' s pilot s shoul dhav e been loggeddifferently , even thoug h it s metho do f loggm g them , unti l th e Complaint , was one provide dfo

r in it s manuals , approve db y successiv e Principa

l Operation s Inspector s an

d
wer e clearl y hones t an dsincere efforts b y th e Responden t t o compl y wit

h th e regulations

. While the Administrativ e La w Judg e di dfindthe foregoing t o hav e bee n aviolafion , it
wa s onl y atechnica

l violatio n fo

r which th e propose dpenalt y wa s substantially reduced

.

The Complainant

di dno t really prevai l o n an

y o f th e other issues , eve

n though it hadactua l knowledg e o f

th e underlyin g fact s an

deven stipulate dto themfo r the proceeding

.Afte r th e Administrativ e La w Judge' s decision , th e Complainan t appealed , bu t that appeal wa s solel y o n th e issu e o f Mr , Smith' s polic e departmen t flying. Tha

t issue , namel y th e allege dimprope r loggin g o f

polic e departmen t

flight s i s clearly , b y examinatio n o f

th e record , th e sin e qu ano n o f th e entir e proceedmg s involve di n thi s
case .

LEGA L ARGUMEN T

5 U.S.C
. § 504 , e t

seq . i s th e Equal Acce^s s t o Justic e Law , I t provides , in substance , tha t

aprevailin g part y i s entitle dt o a n awar do f

attorneys * fee s unles s "th e positio n o f

th e agenc y wa s substantiall y justifie dor.. . specia l circumstance s mak e a n
awar dunjust , Tli e determinatio n a s t o whethe r th e positio n o f

th e agenc y wa s substantiall y justifie dshal l b e determine do n th e basi s o f th e administrativ e record , a s a whole , whic h i s mad e i n th e adversar y adjudicatio n for whic h fee s an dexpense s ar e sought. "

" 5 U.S.C
. §50 4 (a)(1 )

Th e burde n i s o n th e Agenc y t o prov e tha t it s positio n wa s substantiall y justified

.

• Unite dState s vs . $12,24 8 U.S
. Currency , 95 7 F 2 d151 3 (9^' ^ Circ , 1991 ) T o mee t

it s burde n th e agenc y mus t prov e tha t

th e positio n ha dareasonabl e basi s i n bot h fac t an dlaw

.

### Pierc e vs . Underwood , 289 7 U.S
. 552 , 556 , lOlL.e d 2 d490 , 10 8 S.Ct
. 254 1

A s detaile dhereafter , th e agency' s positio n i s no t limite dt o th e agency' s decision to initiate th e underlyin g action

. I t i s applicabl e t o al

l o f th e agency' s subsequen t litigatio n positions

. Rawling s vs . Heckler , 72 5 F 2 d1192 , 1191-119 6 (9^

^ Cir , 1984 )

RESPONDENT WA S TH E PREVAILING PARTY. ^

The initia l decisio n summarize dth e Complainant' s issue s an ddecide dthem
a s follows :

1 , The nature o f Respondent' s pilo t

logbook keeping

. A s t o this , th e initia

l decisio n rule di n favo

r o f th e Complainant onl y o n th e ground s tha

t th e lo g sheet , standin g alon e coul dno t b e determinative

. I

n determinin g thi s issu e favorably t o th e Complainant , the Administrativ e La w Judg e reduce dth e penalt y fro mth e hug e amoun

t requeste db

y the Administrato r

to atota l of

A s th e Complainan t

ha daright

t o do , i t merel y referre dt o it s Orde r for Civi l Penalt y a s it s complaint

. Unfortunately , however , th e origina l Orde r deal t wit h allegation s regardin g Fran k Kratze r an dh e wa s decease db y th e tim e th e instan t

proceeding s becam e operational

. Fo r clarity , therefore , th e origina l decisio n fromth e Administrativ e La w Judg e wil l b e summarize dfo r bette r understandin g o f

wha t issue s wer e actuall y trie dan dth e TTiling s therepn

.$5,000 , recognizin g tha t Respondent' s form s fo r

loggin g pilo t

flight tim e wer e th e one s se t

fort h i n it s operatio n manua l an dha dbeen accepte dfo r

year s b y F.A.A
. inspector s assigne dt o supervis e Respondent' s practices

.

2
. Othe r flying) namely , flights o n Januar y 24 , 200 5

an do n Marc h 9 , 2005
. Th e Administrativ e La w Judg e decide dthi s issu e a s a"mixe dbag" , findin g tha t on e o f th e flights, namel y th e
on e o n Marc h 9 wa s "othe r commercia l flying" whil e th e Januar y 2 4 flight wa s no t "othe r commercia l flying. "

3
. L.A.P.D
. flying. A s t o this , th e rulin g wa s tha t th e helicopte r

flights for

th e L.A.P.D
. wer e flights i n "publi c aircraft "

an da s suc h no t

subjec t t o F.A.A
. jurisdiction

. Thus , th e Complainan t

faile dt o prov e th e violation

. A s briefe dmor e extensivel y hereafter , tha t issu e appear s t o hav e been th e triggerin g mechanis mfor

th e entir e proceeding

. I t i s th e issu e tha t

receive d

mos t attentio n durin g th e proceedings , a t th e hearing , an do f

th e

. determinatio n b y th e Administrativ e La w Judge

. Havin g decide dit adversel y t o th e Complainant , th e Complainan t too k u p a n appea l onl y o n tha t

issue

. Clearl y th e othe r

issues coul dhave , an dprobabl y woul dhav e been dispose do f withou t thes e adversaria l proceedings

.Th e "ne w way " o f loggin g pilo t

tim e coul dhav e been handle db y a reques t fro mth e Principa l Operation s Inspecto r fo r achang e i n Respondent' s Operation s Manual

. Th e 2 operationa l charge s wer e miniscul e compare dwith th e fhms t o f th e Complain t

an dcoul dhav e bee n easil y handle db y awarnin g letter

. I t i s no t insignifican t

tha t th e origina l Regiona l Counse l wh o handle dthi s matte r di dno t pursu e an y o f

th e issue s afte

r h e hi t abric k wal l o n precedent s regardin g th e L.A.P,D
. flying because , comparativel y speaking , thos e othe r

charge s wer e miniscule ,

ARGUMEN T

TH E PROCEEDING S WER E NO T SUBSTANTLy.L Y JUSTIFIED
.

Th e rule s requirin g estabhshmen t o f substantia l justificatio n pas s th e burde n o f proo f t o th e Complainan t

t o establis h where , why , an dho w it s proceeding s
wer e substantiall y justified

. Carefull y readin g Complainant' s memorandum , it appear s t o merel y b e areargumen t

o f al l o f th e issue s tha t

hav e alread y bee n submitte dan d adversel y determine dt o i t bu t i t i s significantl y silent , givin g n o explanation , whatsoever , a s t o th e lac k

o f authority , th e unwillingnes s o f th e origina l Regiona l Counse l t o proceed , th e reason s fo r

th e appea l o n th e singl e issu e fromth e Administrativ e La w .Tudges decisio n o r

it s reason s for

th e hug e amoun t

o f civi l penalt y requested

.

### RESPONDEN T WA S TH E PREVAJLfl^T

G PARTY It i s disingenuou s fo

r th e govermnen

t to argu e tha

t Respondent

wa s no t a "prevailin g party"
.

A s t o Count

1 , th e A.L.J.' s decisio n regardin g Respondent' s forms fo r trackin g time , there was , a

t best , onl y apartia

l victor y fo r Complainant

. Th e Administrativ e La

w Judg e agreed , that

Respondent' s loggin g metho dwa s n o longe r
correc t bu t he recognize dtha

t there wer e substantia

l mitigatin g factor s du e to the prio r approva l of Respondent' s method s b

y multipl e previou s inspector s an dth e fac t tha t it s then procedur

e use dth e forms tha

t ha dbee n containe din it s Operation s Manua l which
wa s als o approve db

y th e prio r P.O.I.s , includin g the one wh o raise dth e issu e afte r prio r approva l o f Respondent' s manual

.

A s to Count

2 , th e Complainan

t wa s only apartia

l prevailin g party
. Ou

t of hundred s o f

flights b y Respondent , ther e wer e issue s raise db

y Complainant

onl y a s to 2
. O n on e o f them , the Administrativ e La w Judg e agree dwit

h th e Respondent

as to one ; as to the other , it

rule di n favo

r of Complainant

.

Wit h respec t to Charg e 2 , Complainan

t wa s no t substantiall y justified

. The Agency content s itsel f

to argu e tha

t ther e wa s areasonabl e basi s fo r determinin g tha

t Mr
. Smit h hadflown a s pilo t

in commandunde

r Charg e 2
. At

leas t fromth e time of

th e Infotma l Conference , back

o n Jun e 6,2006 , th e government kne w exactl y wha

t the facts

### were , namely , tha t th e flight i n questio n wa s in aKin g Air , whic h wa s asingl e pilo t airplane

. Eve

n i f they hadno t

learne dit a t th e Informa

l Conference , th e Agency , having certifiedthe Kin g Air , hadto hav e known tha t th e airplan e wa s asingl e pilo t airplane

. Nevertheless , the Agenc y pu t tha t charg e i n th e Complaint , apparently a s apar t o f it s attempt , a s spelle dout

in Charg e 3 , t o creat

e aredefinitio n o f

th e statutor

y andregulator

y definition of

"Other Commercia

l Flying"

. It

i s no t insignifican

t tha t th e ttumpted-up charge s regardin g th e singl e flight i n th e Kin g Ai r

andthe singl e erro r

regardin g th e March 9 ^ flight

wa s no t really the actua

l thrus t o f al l o f thes e proceedings

. The rea l thrust , as indicate dbefor

e an da s wil l b e hereafte

r se t fort h i n detail , i s tha

t th e Agency
wa s attemptin g to gai n achang e i n th e la w b y administrativ e fiat. Th e intent of th e Agency i s s o clear , tha

t it di dno t eve n bothe r t o appea l o n an y aspec t o f th e A.L.J. s decision , includin g th e Kin g Ai r flight an dth e ver y substantia

l reductio n i n penalty

.

The salient

issu e in thi s Applicatio n i s th e injustic e heape dupo n th e Applican t base do n Mr
. Smith' s flying fo r the L.A.P.D
.

I n it s memorandum , th e Complainan t concede s tha

t th e issu e was , a

t best , "unsettled " an

dbecaus e of

thi s th e Agency wa s justifie din pursuin g it

. No t so . A t till s pomt , it i s significan

t that th e origina

l Regiona l Counsel dealt

wit h th e issu e a

t th e Informa l Conference , agree dno t

to pursu e it

unles s an dunti l there wa s authorit y to justif y the positio n andthe n it

wa s no t pursue dunti l ane w Regiona l Counsel took

ove r th e case . Whil e i t

i s tru e a s state di

n th e of t quote dsayin g tha

t " anew broo msweep s

### clean " in thi s case , th e ne w Regiona l Counsel hadn o right

t o experiment

an dattemp t t o chang e th e la

w a t the expens e o f

Applicant without aNotic e o f

Propose dRulemaking

.

The Agenc y here argue s tha t i t had"..
. areasonabl e basis " becaus e th e final Decisionmaker' s orde r di dno t even hav e t o bother

t o addres s th e issu e becaus e the Complainant' s positio n otherwis e WEI S 

### factuall y insufficient

. However , th e Initia l Decisio n b y th e Administrativ e La

w Judg e di daddres s th e issue , andrule dagains t the Agenc y o n tha t ver y issue , but

the Agency , nevertheles s took it o n appeal , to try an

d creat e ne w law

. Unfortunately , th e oldla w a s i n th e statut

e ha s remaine dunchanged

. Th e short , simpl e alternativ e o f th e Agenc y wa s t o g o t o th e Congres s andreques t a chang e i n th e definifion se t

fort h i n th e Aviatio n Act
. I t

failedt o do so , failedto convinc e th e Administrativ e Law Judg e to d o so > andit s procedur

e wa s s o fa

r out o f lin e tha t the Administrato r

di dnot , i n it s language , rul e o n th e no n issue , statin g that"..

. ther e i s n o
nee dt o addres s th e issue' \

Complainant' s brief

place s grea

t emphasi s o n th e fact

tha t th e Administrator' s rulin g wa s o n th e side issue , namely , tha t th e recordfaile dt o disclos e whether o r no t pilo t Smit h wa s bein g pai dfo

r hi s service s wit

h th e LAPD
. Th e short , simpl e answe

r i s tha t th e Administrator

followedth e well settle dtraditio n o f judicial restraint an ddecide dth e cas e o

n th e paymen

t issue , thereb y sidesteppin g th e possibilit y
o f creatin g new la

w unnecessarily

. In this , th e Administrator' s rulin g shoul db e commended

.
1 0

### Th e rulin g di dno t

mean , however , tha

t th e initial positio n o f

the Complainan

t wa s correc t

or substantially justifie dfro

mth e beginning

. Th e Administrator too k apositio n tha

t wa s no t legall y correc t

unde r th e fact s o f

thi s case . Tlie Administrativ e La

w Judg e s o rule dandthat , in an dof itself , show s aglarin g lac

k of substantia l justificatio n in th e Administrator' s positio n fro mth e ver y beginning

. Perhap s
ashor t tim e lin e o

n thi s point

ma y b e o f hel p t o th e decisio n in th e instant issue

.

1
. Befor e the issu e of

th e L.A.P.D
. flying wa s presente db y Complainan

t i n the institutio n o f

th e instan t

action , ther

e wa s a n Informa l Hearin g a

t which th e then Regiona l Counse l agree dtha

t there wa s n o precedent , on e wa y or th e other , an

di t wa s
not pursued ;

2
. Whe

n an donl y whe n ane w Regiona

l Counse l cam

e into th e cas e wa s the issu e agai n raised

. But a t tha t time , ther e stil l ha dbeen n o precedent

to justif y th e positio n o f

th e Agency ;

3
. Afte r hearin g lega

l argument , andal l of

th e evidenc e b

y wa y o f stipulate dfacts , the Administrativ e La w Judg e rule dtha

t th e helicopter

flying fo r the L.A.P.D
. wa s no t

asituatio n tha

t require dtrackin g b y tli e Respondent ;

1 14
. Afte r th e rulin g b y th e Administrativ e La w Judge , th e Complainan t compounde dit s stubbornnes s b y takin g an appea l t o th e Administrato r on th e sol e issu e
a s t o whethe r

o r no t th e flights fo r

th e L,A-P.D , ha dt o b e considere db y th e Respondent ;

5
. T o thi s day , th e Complainan t ha s stubbornl y maintaine dtha t positio n
an dspend s alarg e portio n o f it s memorandu mdedicate dsolel y t o tha t issue

.
Responden t

respectfiiU y suggest s tha t th e Complainan t

shoul dhav e rea d th e messag e tha t

wa s alread y clearl y spelle dou t an dno t hav e proceede dfurther

with it s incorrec t argument
. In decidin g thi s issue , th e applicabl e rul e i s wel l settled , namely , tha t th e positio n o f

th e governmen t

i n an EAJ A cas e mus t

b e substantiall y justifie da t al l stage s o f th e proceeding

.

Th e Agenc y ha s an affirmativ e duty t o prov e a s t o eac h allege dviolatio n
an da s t o th e amoun t

an dchoic e o f

it s sanctio n t o determin e tha t i t wa s substantiall y justifie da

t eac h stag e o f

th e case . Applicatio n O f

Airtrek , Inc
. EA-5551 ; EAJA-SE^1828 4 (2010 ) 201 0 NTS B Lexi s 11 3
ID , 201 0 NTS B Lexi s 1 4
Se e Mendenhal l v . NTSB , FA A 92F.3 d87 1 (1996 )

1 2Complainan t ha s raise da

n argumen t

i n it s memorandu mt o th e effec t tha t Responden t

ha s no t ye t adduce devidenc e o f

it s financial conditio n i n orde r t o establis h tha t it s ne t worth fell withi n th e guideline s o f th e EA.T A statute
. I n this , th e Complainan t ignore s th e expres s languag e o f th e EAJ A petition , namely , tha t tha t informatio n wil l b e furnishe da

t an y tim e upo n reques t

and , i f necessary , wil l b e pu t

int o evidenc e a

t th e time
o f th e hearin g o f

thi s application

. Instea do f availin g itsel f

o f th e goo dfait

h offe r an dth e righ t t o see k tha t informatio n anytime, ^ th e Complainan t ha s no w raise di t

a s a n issu e tha t th e instan t

petitio n i s defectiv e becaus e th e evidenc e wa s no t include din th e petitio n itself

. Th e ol dproverb o f "b e carefu l o f

wha t yo u as k for becaus e yo u ma y ge t

it " i s applicabl e here

. Attache dheret o ar e th e fmancial statement s o f th e Responden t

for al l o f th e year s applicabl e t o th e present
. Th e statement s sho w tha t th e Responden t

ha da qualifyin g ne t

wort h durin g al l tha t

perio do f tim e and , i n par t

becaus e o f

th e financial burden s impose do n it

b y th e Complainant , i t

ha s ha dt o en dit s existence

. LA W OFFIC E O F ARTHU RWASSERMA N Dated : Marc h 12 , 201 2 ^^><--

- ARTHU RWASSERMA N Counse l fo r

Responden t 1638 0 Rosco e Boulevard , Suit e 12 0 Va n Nuys , Californi a91406-122 1 Telephone : (818)895-823 4 Facsimile : (818)895-067 5

^ A simple telephon e cal l woul dhav e bee n enough

. The

y ar e attache da s i s th e evidenc e supportin g the amoun t of Respondent' s claim

. 1 3S:4 6 P M

03/08/1 2 Accrua l Basi s Su n Ques t Executiv e Ai rCharter , Inc

. Balanc e Shee t A € o f Decembe r31 , 200 6

c« e 31 , 05 ASSET S Curran t Aeaet a Checking/Saving s 1D 2 • Inveatmen t C D 13,010.6 8 Tota l ChscMng/Savtng s Account s Rsc«lvabl o 12 0 'Accourit a Raealvabi s Tota l Account s RKalvabl a Otha rCurran t Auot s RaclassHle d Na g Lla b 130 ' Loin s Re c - Employe ? Adv

. 13 1 • Employ* * Advanca s 13 5 • Undapoetta d Fund s Tota l Qiha rCurran t Aaftst a Tota l Curran t Aisat a FIxa d Aasat s 15 0 • Ofllc a Equipmen t 15 1 • Malntenanc a Equipmen t 16 2 • Computa rEqutpman t 1S3 ' Leasahol d tmprovament s 1S5-AIrcraftN280T T 16S-Alrcraft4S Q 16 0 •Accumulate d Depreciatio n Tota l FIxadAssat s Othe rAsset s 17 0 • Inves t I n A/ C 23 A (MaxQuHt ] 171 ' Securit y Dapos KHanga rLeas a Tota l Othe rAsset s TOTA L ASSET S UABlUTlES i EQUIT Y Llabmtle s Curran t Lhbllltlo s Account s Payabl e 20 0 - Account s Payabi a Tota l Acecunt a Payabl e Othe rCurran t Liabtlltie s 23 1 - OVERDRAF T PROTECTIO N Tota l Othe rCurran t UabUltle s Tota l Curran t Llabllltle a Lan g Tart u Lkbllitte s 27 5 • Loa n Payable s
' 275. 3 • BaIUmor « CI1ppei^4S Q 275. 4 ' Huntingto n Ban k - 280T T 275. 5 • MflicQijes I - 23 A 275. G ' Mandelsoh n ETAL45 Q MBNA-717H T Tota l 27 5 • Loa n Payable s Tota l Lon g T«m i Liabitltle s Tcita l Llabint m Equit y 30 D • Owno rInvestmen t 300. 1 • A Ro n Raaourc e 300.2-cape n 1/

3 shar e 300.3 ' Fran K 300. 4 • Mar k Tota l 30 0 • Owne rInvastman t 36 0 • Openin g Ba t E(itiit y 399 ' Retaine d Earning s Na t tncom o Tota l Equity

. TOTA L UABIUT7E S A EQUIT Y 13,01D.G 8 383,813.6 9 383,513,5 9 29,662.3 0 2,937.3 5 75.0 0 3,800.0 0 38,674.6 5 433,498.9 2 6,131.4 7 21,660.6 1 2,95S,7 S 1,000.0 0 947,600.0 0 1,412.651,22 -2,380,959.0 0 10,042.9 8 146,994.0 0 42,100.0 0 189,094.0 0 632,635.9 0

406,966.4 4 405,965.4 4 100,016.0 0 100.015.0 0 506.960,4 4

260,662.9 3 B1B,374.B 8 125,000.0 0 1,280,699.2 3

9.D 0 2,485,646.0 4 2^5,64G.0 4 2,992,626.4 8
e6«,666.6 6 Z9,U3.9 1 1Z3.D64.6 6 208,047.6 8 1.027.212.8 3

-Z,313,$74.5 9 iaiy4Q0.B 7 C -2,359,990.5 8

£32,636.9 0S:4 B P M

03/08/1 2 AocruvlBasI s au n uues t txeoutiv e Ai ronarter , mc . Balanc e Shee t A s o f Decembe r31,200 7
De c 31,0 7 ASSET S Curren t AsBet s Chacklntr/Savlng s 10 1 • Checking- B o f A 102 ' (nvastmentC D Tota l Chacking/Savlngf i Account s Recahrabt a IZD ' Account s Receivabl e 5,754.0 4 13;S62.£ 1 19,31S:S S 350,481.5 0 Tota l Account s nacehmbl e Othe rCurran t Asset s 12 9 • FE T Refun d Receivabl e Tota l Othe rCurren t Asset s Tota l Curran t Aasat a Fixe d Asset s 160 ' Offic e Equipmen t 15 1 • Maintenanc e Equipmen t 15 2 • Compute rEquipmen t 155-Aircraf t N280T T 166-Aircraf t 4S Q 16 0 • Accumulate d Depreciatio n Tota l Fbca d Aaaat a Othe rAaeet a 17 0 • Inves t I n A/ C 23 A [MsKQuest ) 17 1 - Securit y Deposi t Hangs rIjeas e Tota l Othe rAsset s TOTA L ASSET S LIABmiTlE S « EQUIT Y LlabllltlB S curren t Uabintie s Account s Payabi a 20 Q • Account s Payabl e Tota l Account s Payabl e Othe rCurren t Llabllttle a 23 1 ' OVERDRAF T PROTECTIO N 250-Payrol l Liabilitie s 25 2 ' Sale * Ta x Payabl e 25 3 > Segmen t Ta x Payabl e 2G 0 • Insuranc e Contrac t Payabl e Tota l Othe rCurran t LiabiiiUe: ) Tota l Curren t Liabllftla a Lon g Ter m Liabilitie s 27 S • Loa n Payable s 27 5 J > A Ro n Resource s 275. 3 • Baltimor e Cllppar
- 4S Q 275. 4 ' Huntingto n Ban V • 230T r 27£.S-MaxQuest > 23 A Z7S. 5 • Mendeleoh n E T A L 4S q Tota l 27 5 • Loa n Payable s Tota l Lon g Tar m Liabilitie s Tota l Ltabintle s Equit y 30 0 - Owne rInvestmen t 300. 2 • Capa n 1/

3 Ohar e 300. 3 • Pran k 300. 4 - lUlar k Tota l 300 ' Owne rInvestmen t 30 6 • AddlUona l Paid-i n Capita l 31 0 * CommD H Stac k 39 9 • RataEna d Earning s Ne t Incom e Tota l Equit y TOTA L UABIUTIEf t & EQUIT Y 3£0,4B1.6 0 2,837.4 2 2,837.4 2 372,535.5 7 9,241,8 2 21,660.6 1 5.488.7 2 947,600.0 0 1,412,651.2 2 -2,3 8 9,263,0 0 7,379.27
. 1D0,S60.0 D 37,589.7 0 138,345.7 0 618,364.5 4

346,777.5 3 346,777.5 3 85,015.0 0 -319.8 9 -75.8 8 4,173,6 0 126,674.6 3 215,367.4 6 562,145.0 9
G56,BBS.6 6 182,375.8 5 737,207.1 7 102,662.2 0 1,226,336.6 7 2,919,148.5 5 2,915,148.5 5 3,477,293,6 4

29^3.9 1 i23,0M.e S 205,569.5 4 359,068.1 3 -100.0 0 100,0 003/08/1 2

A(±crua l Bnsi s Balanc e Shee t A s o f Decembe r31 , 5C0 3 Pe c 31 , 0 6 ASSET S Curren t Asset s Cho c king/Savin g a 10 1 - CheckingB o rA 102
- InvastmantC D Tota l Checking/Saving s Account s Recaivabt a 12 0 • Account s Rocalvabi a Tota l Account s Receivabl e Othe rCurren t Aeaet a 13 0 - Loan a Ra c •

< Employe e Adv

. 13 5 • Undeposlte d Fund s Tota l Othe rCurren t Asset s Tota l Curren t Asset s Fixe d Asset s 16 0 • Offic e Equipmen t 15 1 • Malntenanc a Equipmen t 1S2 ' Compute rEquipmen t 155-Aircraf t N2fl0T T 15 8 • Aircraf t 4S q 16 0 - Accumulata d Depreciatio n Tota l Flm d Asset s Othe rAsset s 17 0 • Inves t In A/ C 23 A (MaxQuast ) 17 1 • Securit y Deposi t Hanga rLeeg a Tota l Othe rAfisat s TOTA L ASSET S UABIUTIE S 8

. EQUITY Llabllitls a Curren t Liabilitie s Account s Payabl e 20 0 •Account s Payabl o Tota l Account s Peyabt e Othe rCurren t Liabilitie s 23 1 - OVERDRAF T PROTECTIO N 250-Payrol l Liabilitie s 26 0 • Insuranc e Contrac t Payabi a Tota l Othe rcurran t Liabiiitre s Tota l Curren t Llabllltia a Lon g Ten n Liabilitie s 27 5 • Loa n Payable s 275. 2 • A Ra n Resource s 276. 3 • Baltimor e Cllpper-4S Q 275. 4 • Huntingto n Bank-2eoT T 27S.S-MaxQuc*t
- 23 A 275. 6 • Mandelsoh n E T A L 4S Q 275. 8 • Highlan d 280TT-Principa l Pmta

. 275. 9 > Loa n Payabl e - Cape n 276.1 ' Loa n Payabl e • Mar k Smit h Tota l 27 5 • Loa n Payable s Tota l Lon g Tem i Llabllltla s Tota l Liabilitie s Equit y • 30 0 • Owne rInvosbnen t 300J ' Capa n 1/

3 shar e 30O J - Fran k 300. 4 - Mar k Tota l 30 0 - Owna rInvestmen t 30 6 * Additiona l Pald^ n CapKa l 31 0 • Commo n Stac k A9 3 • Retaine d Earning * t4e t Incom e Tota l Equit y TOTA L UABILITIE S A EQUIT Y -1,7234 8 14,062,8 5 12,339,4 7 345,516.4 8 345,5iej( S 1,450.0 0 4,410.0 0 5,860.0 0 363,7163 5 9,241.8 2 21^60.5 1 5^88.7 2 947,600.0 0 1,412,651.2 2 -2,391,169.0 0 6.473.2 7 S7.202.0 0 23.343.1 2 60,545.1 2 449,734.3 4

379,594.5 5 379,694.5 5 100,015.0 0 2,168.6 4 177,150.9 5 279,344.4 9 653,939.0 4
666,666.6 6 182,375.8 5 678,743.3 9 e6,D4i,4 2 1.167,502.3 0 63,201.0 7 26,900.0 0 29,261.9 6 2,890,697.6 5 2,690,697.6 5 3,649,636.6 9
29,433.9 1 123,064.6 8 20e,5G?.G 4 359,066.1 3 --Hiq,O D 100

. ^337,MT.g 3 -140,973.25 3 -3,09S.902.3 S 449, 75:4 7 P M

03/08/1 2 Accrua l BKI S Su n Ques t Executiv e Ai rCharter , Inc

. Balanc e Shee t A s o f Oecambe r31 , 200 9 Dec 31 , 0 3 ASSET S Curren t Asset s Checklng/Savlng e 10 1 - ChecWn g - B o f A Tota l ChccMng/$avtng a Account s Receivabl e 12 0 • Account s Receivabl e Tota l Account s RecofvabJ a Othe rCurren t Asset s 13 0 ' Loan s Rec-Emptoy« « Ady

. Tota l Othe rcurran t Asset s Tota l Curren t Asset s Fixe d Asset s 15 0 • Offic e Equipmen t 15 1 • Maintenanc e Equipmen t 162 " Computa rEquipmen t 16 6 • Aircraf t N2S0T

T 16 0 • Accumulate d Dvpreclatlo n Tota l Fbca d Asset s Othe rAsset s 17 0 • Inves t I n A/ C Z3 A (MaxQuost ) 17 1 • Securit y Depas H Hanga rLeas e Tota l Othe rAssat a TOTA L ASSET S LIABIUTIE S & EQUIT Y Liabilitie s Curren t Liabilitie s Account s Payabl e 20 0 • Account s Payabi a Tota l Account s Payabl e Credi t Card s 22 8 • B o f A - Mar k

Smit h [MalnL ) Tota l credi t Card s Othe rCurren t Uafallitle s 23 1 • OVERDRAF T PROTECTIO N 23 2 • Loa n Payabl e Khurshoe d 261'FE T Ta x Payabl e Tota l Othe rCurren t Liabilitie s Tota l curren t Liabilitie s Lon g Ter m Liabilitie s 27 5 - Loa n Payable s Z7S.3 ' Baltimor e Clipper
- 4S Q 275. 4 • Hunttngte n Ban k - 2S0T T 275. 8 • Highlan d 280TT
- Principa l Pmts

. 276. 1 • Loa n Payabl e - Mar k Smit h Tota l 27 6 • Loa n Payable s Tota l Lon g Ter m Liabilitie s Tota l Liabilitie s Equit y 300 ' Owne rInvestmen t 300.2-Cape n 1/

3 shar a 300. 3 - Fran k 30D. 4 - Mar k Tota l 30 0 • Owne rInvestmen t 30 5 - Additiona l Paid-i n Capita l S1 0 • Commo n Stoc k 39 9 • Retaine d Earning s Ne t Incom e Tota l Equit y TOTA L LIABIUTIE S & EQUIT Y 11,704,0 0 11.704.0Q 226,652.4 3 Z26,8£2.4 3 175.0 0 176.0 0 238,731.4 3 9,241.8 2 21,660,6 1 6,488.7 2 947,600.0 0 -980.018.7 8 3,972.2 7 -110,565.0 0 16,255.6 2 ^4.309.3 8 149.394.3 2

261,981.9 8 251,981,9 8 0.0 3 0.0 3 100,016.0 0 10,000,0 0 1,371.7 8 111,386.7 8 363,368.7 9
155,375.8 5 572,594.0 6 116.893.6 7 88,000.0 6 932.863.6 4 932,863.6 4 1,296,232.4 3
29,433.9 1 •f23,De4.B 8 206,569,5 4 359,068.1 3 -100.0 7 1UDJI 0 ,952,002^ 7 ^ ^ -1,l4r,838.1' » 148,33 4 J 25J4 7 P M

03/08/1 2 Accrua l Basi s Su n Ques t Executiv e Ai rCharter , Inc

. Balanc e Shee t A s o f Decembe r31 , 200 9
De c 31,0 9 ASSET S Curren t AssBt a Checking/Saving s fOl-Cfiacklng-Bor A Tota l Checktng^savlng s Account s Receivabl e 12 0 • Account s Receivabl e Tota l Account s Receh/abl e Othe rCurren t Asset s 130 ' Loan s Ho c - Employe e Adv

. Tota l Othe rCurren t Asset s Tota l Curren t Asset s Fixe d Asset s 15 0 - Offic e Equipmen t 15 1 • Maintenanc e Equipmen t 152 ' Compute rEquipmen t 156'Aircraf t N280T T 16 0 > Accunrulate d Depreolado n Tota l Fbtc d Aasftt s

' Othe rA«setf t 17 0 - Inves t I n A/ C 2 3 A (MaxQue«t ) 171 ' Securit y Deposi t Hanga rLeas e Tota l Othe rAsset s TOTA L ASSET S UABIUTIE S a . EQUIT Y UabllKIe s Curran t LlabKltla e Account s Payabl o 20 0 • Account s Payabl e Tola l Account s Payabl e Credi t Card s 22 8 * B o f A - Mar k

Smit h (Matnt. ) Tota l Credi t Card s Othe r Curr^ t Liabilitie s 23 1 • OVERDRAF T PROTECTIO M 23 2 • Loa n Payabl e Khurshee d 25 1 -FETTa; ? Payabl e Tota l Othe rCurren t Liabtlltie s Tota l Cum)ntLlabimi* 6 Lon g Ter m Liabtlltie s 27 5 • Loa n Payable s 2rS. 3 • Siiltlmar e Clipper
- 4S Q 275. 4 ' Huntingto n SanI ? - 2B0T T 275, 8 • Highlan d 290TT-Pilncipa l Pmis

. 276. 1 • Loa n Payabl o - Mark ; smit h Tota l 27 5 - Loa n Payabla s Tota l Lon g Teo n LlabllKbj s Tota l Liabilitie s Equit y 30 0 • Owne rInvestmen t 300. 2 • CajM H 1/

3 sfiar e 30D J • Fran k 300. 4 • Mar k Tota l 30 0 • Owne rInvestman t 30 5 • Additiona l PaliM n Capita l 31 0 •commonstoc k 39 9 • Ratalne d Earning s Netlncom a Tota l Equl ^ TOTA L UABIUTIE S & EQUfT Y 11,704.0 0 11,704.0 0 226,852.4 3 226,652.4 3 17S,P 0 175.Q 0 238,731.4 3 9,241.8 2 21,660.5 1 5,489.7 2 947,^00.0 0 ^80,018.7 a 3,972.2 7 •110,666.0 0 16,255.6 2 ^4,303.3 8 148,394.3 2

251,981.9 8 251,981.9 8
0.0 3 0.0 3 100,016.0 0 10,000.0 6 1,371.7 8 111,386.7 8 363,368.7 9

1SB,37S.S 5 672,594.0 8 115,893.8 7 88,000.0 6 933,603,6 4 932,&63.6 4 1,2SS,232.4 3

29,433.9 1 I23,0«4.e s 206,669.5 4

S69,06S.1 3 "100.0 0 ^OD.Q 0
(-1,147,g3tf.'l 1 148,394.3 25:4 S P M

03/03/1 2 Accrua l Basi s Su n Ques t Executiv e Ai rCharter , Inc

. Balanc e Shee t A s o f Decembie r31 , 201 0 De c 31,1 0 ASSET S Curren t Asset ? Checklns/Savlng s 10 1 • Checkin g "Bo T A Tota l Checking/Saving s Account s Receivabl e 12 0 • Account s Receivabl e Tota l Account s Receivabl e Otha rCurren t Asset s 13 6 * Retaine rfo rLL C 13 3 • Du e fro m Mar k

Smh h IS O - Loan s Re c • Employe s Adv , 13 5 • Undeposlte d Fund s 14 0 • PU B fro m SmKh , Burko , & Brcll n Tota l Othe rCurren t Aaast s Tota l Curren t Asset s Fixe d Asset ? 160 - Offic e Equipmen t 16 1 • Maintenanc e Equipmen t 15 2 • Comptrta rEquipmen t 15 S • Aircraf t N250T T 160 • Accumulate d Depredatio n Tota l Fixe d Asset s Otha rAsset s 170 - Inves t In A/ C 23 A (MaxQuost ) 17 1 • Securit y Deposi t Hanga rLeas e Tota l Othe rAsset s TOTA L ASSET S LIABILITIE S & EQUIT Y Llabllitlef t Curren t Liabilitie s Account s payabl e 20 0 -Account s Payabl e Tota l Account s Payabl e Othe rCurran t Uabllhle s 23 1 • OVERDRAF T PROTECTtO M 23 2 • Loa n Payabl e Khunhae d 25 1 -FE T Ta x Payabl e Tota l Othe rCurran t LlabllitJa a Tota l Curren t Liabilitie s Lon g Ter m Uabllllla a 275 ' Loa n Payehle s 275. 3 > Baltimor e Clipper
- 4S g 275 4 • Huntingto n Ban k - 2S0T T 27S. a ' Highlan d asOTT
- principa l Pmts

. 276. 1 • Loa n Payabl e - Mar K3mlt h Tota l 27 5 < lun n Payable s Tota l Lon g Ter m Liabilitie s Tota l Ltabimie s Equit y 30 0 - Owne rInveatman t 300. 4 - Mar k Tota l 30 0 • Owne rinvestmen t 30 5 - Additiona l PaldJ n Capita l 31 0 •Commo n Stoc k 39 9 - Retaine d Eamlng a Ne t Incom e Tota l Equit y 616.6 5 616.6 5 271,361.3 7 271.381.3 7 6,000.0 0 1,461.3 7 350.0 0 25,203.9 0 20,000.3 4 S2.015.6 1 323,913.6 3 9,241.6 2 21,660.5 1 6.466.7 2 947,600.0 0 -980,974.7 6 3,018.2 7 -140,790.9 6 16,255.6 2 -124,535.3 4 202,394.5 6

343,763.6 1 346,753.6 1 100,015.0 0 1,091.3 6 •841.2 7 100,266.0 9 449,01 8 J O
119,375.8 5 462,460.7 8 182,973.6 2 66/486.0 9 851,296.3 4 661,296.3 4 1;300,316.0 4
369,068.1 3 359,066.1 3 -100.0 0 100. 1 ^606,906.2 ^ .1,097,920.46 ; TOTA L UABJUTIE S S EQUIT YE:4aP M

03/08/1 2 Accrua l Basi s Su n Quest Executive Ai rCharter , Inc

. Balanc e Shee t A s o f Decembe r31 , 201 1
Dec 31,1 1 ASSET S Curren t Asset s Checking/Saving s 10 1 ' Checking- B o f A Tota l Chocking/Saving s AccQUnt a Receivabl e 12 0 • Account s Recalvabl d Tota l Account s Receivabl e Othe rCurran t Asaat s 13 7 'Duefro m LL C 13 3 • Du e fro m Mar k Smit h 13 0 • Loan s Re c • Employe e Adv

. 13 5 • Undeposlte d Fund s 14 0 ' Du a fro m Smith , Burke , & Broll n Tota l Othb rCurren t Aaaet s Tota l Curren t Asset s Fhco d Asset s 16 0 • OfTlc B Equipmen t 15 1 - Malntenanc a Equipmen t 15 2 - Compute rEquipmen t 1SB-Aircraf t H280T T 16 0 • Accumulate d DepMcIatlo n Tota l Fixe d Atset a Othe r Atoel s 17 0 • Inves t I n A/ C 23 A (MaxQuest J 17 1 • Securit y Deposi t Hanga rLeas e Tota l Othe rAsset s TOTA L ASSET S LIABILITIE S & EQUIT Y Liabilitie s Curren t LlabUItle s Account s Pay^bt a 20 0 • Account s Payabl e Tota l Account s Payabl o Othe rCurran t Liabilitie s 266-Du e T o LL C 23 1 - OVERDRAF T PROTECTIO N 26 0 ' Payrol l Llabintle s 26 1 • FE T TB KPayabi a 253 ' Segmen t Ta x Payabl e Tota l Othe rCurren t Liabilitie s Tota l Curt^ntLtabithle s . Lon g Ter m Liebliitle s 27 6 • Loa n Payabte s 27S. 1 • Maxqu*st-23 A 10 % repa y o f loa n 276, 3 • Baltimor e ClIpper^4S Q 275.4 ' Huntingto n Ban k - 280T T 276. 7 • Hlghland/SunQuea t LL C 276. 8 • Highlan d 280TT
- Principa l Pmts

. 276. 1 • Loa n Payabl e - Mar k Smh h Tota l 275 ' Loa n Payable a Tota l Lon g Ter m Liabilitie s Tota l Uabintfa s Hqult y 30 0 - Owne rinvastmen t 300. 4 • Mari e Tota l 30 0 • Owne rInvestmen t 30 6 • Additiona l Paid-i n Capita l 31 0 > Commo n stoc k ^99 ' Retaine d Eamlng s Ne t Incom e Tota l Equit y TOTA L UABIUTIE S & EQUIT Y 5,914.4 6

243,106.4 4 243,1064 4 62,664.6 0 2,298.8 6 1,500.0 0 230.8 1 20,000,3 4 86,702^ 1 335,723.4 0 11,577.7 4 21.660.5 1 6,480.7 2 947.600.0 0 -«80,974.7 B 6,352.1 9 -140,790.9 6 16,255.6 2 -124,636.3 4 216,540.2 5

200,1584 2 200,158.3 2 68,230.1 6 100,016.0 0 e.5 8 -2.764.7 4 3,371.6 1 168,860.6 1 369.018.9 3
-8,542.5 3 92,375.8 5 367,472,9 3 66,992,7 2 182,973.6 2 71,449.9 7 762,722.5 6 762,722.6 6 1,131,7414 9

368.861.6 7

3SB,851.6 T -lOD.OO' " 100X 0 -i,4S6i9sesr ^ /fa2,936JQ X V •915.201.2 4 216,540.2 5

# SUI M OUES T ex*cutiv « At rCharte r

Marc h S , 201 2

To who m it ma

y concern ;

Su n Ques t execi/trv e Ai rCharter , Inc

. has seize d operation s A S o f Septembe r30

. 2011

.

Sincerely , 

# €4^



# . M Khursheet i Hostette r Controfle r

7415-Hogvenhur& t Place , vo n Nuys , C A 9140 6

Phon e (818 ) 778-652 0 ¥<x ^ (818 ) 778-652 6 TO U Fre e (800 ) 529-759 5 v/ww.sunquestexeccofT iLA. W OFFIC E O F



### ARTHU RWASSERMA N Ui'hR n ROSCO E HOUTJ^.VARD
. SUIT R12 0 VA N NliyS

. C.AT..TFORNT A 9140(5.122 1
TELEPHON E (818 ) 895-823 4 FACSIMIL E (SIR

) B55-0(i7 5



### March 12 , 201 2

T o Whomit

Ma y Concern : A s th e Accountant

fo r th e La w Office o f

Arthur Wasserman , I attes t to th e fact tha t the total du e i n th e Su

n Ques t Executiv e Ai

r Charter , Inc
. adv

. Federa l Aviatio n Administratio n rnatte r i s $25,200.53

. Thi s amoun t certainl y doe s no t includ e al l o f th e hour s thi s office ha s worke do n thi s case , bu t thos e tha t ar e include dwere reduce dt o th e require dEAJ A regulate drate
. I hereb y certif

y under penalt y o f perjur y tha t th e foregoin g facts ar

e true
.

it h



### Date dthi s IX

^ da y of March , 2012
.

Christin aMerric k Accountan

t for LA W OFFICE O F ARTHU

RWASSERMA

NFDMSNo
. FAA-20U-129 4 (Equa l Acces s t o Justic e Act ) CERTIFICAT

E O F SERVIC E I hereb y certif

y tha t o n thi s date I sen

t b y bot h facsimile an

dFedera l Express , th e origina

l of the attache ddocumen

t (BRIE F SUPPORTING APPLICATIO N RE : EAJA ) an

d1 copy , addressedto : Federa l Aviatio n Administratio n 60 0 Independenc e Avenue , S W Wilbu r Wrigh t Buildiung-Suit

e 2W100 0 Washington , D.C
. 2059 1 Attn : Hearin g Docket

Clerk , AGC-43 0 (202 ) 493-514 2 Facsimil e An dsen t vi aFedera

l Express , atru e cop y addresse dto : Joseph A
. Conte , Manage

r Ai r Carrier & Operation s La

w Enforcemen

t Division , AGC-30 0 Office o f th e Chief Counsel Federa l Aviation Administratio n Washington , DC 2059 1 (202 ) 267-510 6 Facsimil e Naom i Tsuda , Attorne

y Offic e o f Regiona l Counsel Wester n Pacifi c Region , AWP- 7 P.O
. Bo x 9200 7 Lo s Angeles , C

A 90009-200 7 (310 ) 725-681 6 Facsimil e Th e Honorabl e Richar

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. Goodwin Administrativ e La

w Judg e Office o f Hearings , M-20 U.S
. Department

of Transportatio n 120 0 Ne w Jersey Avenue , S.E
. Eas t Building , GroundFloor

Roo mE12-32 0 Washington , D C 2059 0 (202 ) 366-753 6 Facsimil e Dated : Marc

h 12 , 201 2

Christin aMerric k LA W OFFICE O

F ARTHU RWASSERMA

N 1638 0 Rosco e Boulevard , Suit e 12 0 Va n Nuys , Californi a91406-122 1