UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

M :- ' •• ,"^U 

SUN QUEST EXECUTIVE AIR CHARTER, INC, 

Applicant, 

V. 

ADMINISTRATOR, 

FEDERAL AVIATION ADMINISTRATION 

Respondent. 

FAA DOCKET No. CP08WP0004 

.Tudge: Hon, Richard C. Goodwin 

FDMSNo. FAA-201M294 

BRIEF SUPPORTING APPLICATION RE: EAJA 

PROCEDURAL FACTS 

Complainant glosses over an unusual chronology in its recital of the 

procedural history. It correctly explains that the Notice of Proposed Civil Penalty was 

issued on October 17, 2005, and that the Informal Conference took place about June 6, 

2006. It fails to explain, however, why the Final Notice of Proposed Civil Penalty was 

not issued until February 12^ 2008, almost 2 years after the Informal Conference. 

The record, however, does give an explanation as to why the case appears 

to have been dormant, then resurrected. As to this, an examination of Respondent's 

Motion to Dismiss is enlightening. After the complaint was filed, the Respondent 

brought an unsuccessful Motion to Dismiss, arguing by analogy, tliat the case should be 
barred by the equivalent of the Stale Complaint Rule and because of the additional facts 

that the key witness for Respondent, the owner of the company, namely Frank Kratzer, 

had died after the Informal Conference and before the filing of the complaint. 

The explanation for the delay is simple. The earlier proceedings in the case 

were handled and supervised by the then Regional Counsel, namely Monroe Balton, The 

Informal Conference could not resolve in a disposition because of the position which 

Respondent has argued all along, namely, that the Agency has no jurisdiction over police 

flying by the L.A.P-D- helicopter because of the definition in the statute and the 

regulations adopted thereunder. That single issue was the one that prevented an entire 

disposition at the Informal Conference, was the key issue argued at the hearing of this 

case, and the sole issue raised on appeal by the Complainant in its appeal of the 

Administrative Law Judge's decision. 

Amplifying on the foregoing, the then Regional Counsel agreed to do 

research in order to determine whetlier there was any precedent, anywhere, for the 

argument and contentions of a violation due to the L.A.P.D. flying by Mr. Smith. He 

could not come up with any and so the matter sat unfil tlie new Regional Counsel, still 

without any precedent, elected to proceed on the old Notice even thougli, during the 

interim, nothing had changed since the Informal Conference. The statute and the 

regulations remained unchanged. That portion of the case elsewhere in this 

memorandiun characterized as the gut issue of the case is simply an overreaching by a 
new Regional Counsel. Respondent suggests that the foregoing preliminary facts, 

standing by themselves, manifest that the Agency was not substantially justified in 

pursuing the action as a matter of law. 

But there are more preliminary facts which are applicable. 

The initial proceedings were submitted on a stipulation as to the facts. 

As detailed hereafter this precludes an argument that the proceedings could have been 

substantially justified because there was a fact conflict or because there were facts 

unknown to the Complainant. 

There are more preliminary facts applicable to this case. The Complainant 

prevailed on an argument that the flight fime of Respondent's pilots should have been 

logged differently, even though its method of loggmg them, until the Complaint, was one 

provided for in its manuals, approved by successive Principal Operations Inspectors and 

were clearly honest and sincere efforts by the Respondent to comply with the regulations. 

While the Administrative Law Judge did find the foregoing to have been a violafion, it 

was only a technical violation for which the proposed penalty was substantially reduced. 

The Complainant did not really prevail on any of the other issues, even 

though it had actual knowledge of the underlying facts and even stipulated to them for the 

proceeding. 
After the Administrative Law Judge's decision, the Complainant appealed, 

but that appeal was solely on the issue of Mr, Smith's police department flying. That 

issue, namely the alleged improper logging of police department flights is clearly, by 

examination of the record, the sine qua non of the entire proceedmgs involved in this 

case. 

LEGAL ARGUMENT 

5 U.S.C. § 504, et seq. is the Equal Acce^ss to Justice Law, It provides, in 

substance, that a prevailing party is entitled to an award of attorneys* fees unless "the 

position of the agency was substantially justified or.. . special circumstances make an 

award unjust, Tlie determination as to whether the position of the agency was 

substantially justified shall be determined on the basis of the administrative record, as a 

whole, which is made in the adversary adjudication for which fees and expenses are 

sought." 

"5 U.S.C. §504 (a)(1) 

The burden is on the Agency to prove that its position was substantially 

justified. 

• United States vs. $12,248 U.S. Currency, 957 F 2d 1513 (9^'^ Circ, 

1991) To meet its burden the agency must prove that the position had a reasonable basis 

in both fact and law. 
Pierce vs. Underwood, 2897 U.S. 552, 556, lOlL.ed 

2d 490, 108 S.Ct. 2541 

As detailed hereafter, the agency's position is not limited to the agency's 

decision to initiate the underlying action. It is applicable to all of the agency's 

subsequent litigation positions. 

Rawlings vs. Heckler, 725 F 2d 1192, 1191-1196 (9^^ 

Cir, 1984) 

RESPONDENT WAS THE PREVAILING PARTY.^ 

The initial decision summarized the Complainant's issues and decided them 

as follows: 

1, The nature of Respondent's pilot logbook keeping. 

As to this, the initial decision ruled in favor of the Complainant 

only on the grounds that the log sheet, standing alone could not be 

determinative. In determining this issue favorably to the 

Complainant, the Administrative Law Judge reduced the penalty 

from the huge amount requested by the Administrator to a total of 

As the Complainant had a right to do, it merely referred to its Order for Civil Penalty as its complaint. 

Unfortunately, however, the original Order dealt with allegations regarding Frank Kratzer and he was deceased by 

the time the instant proceedings became operational. For clarity, therefore, the original decision from the 

Administrative Law Judge will be summarized for better understanding of what issues were actually tried and the 

TTilings therepn. 
$5,000, recognizing that Respondent's forms for logging pilot flight 

time were the ones set forth in its operation manual and had been 

accepted for years by F.A.A. inspectors assigned to supervise 

Respondent's practices. 

2. Other flying) namely, flights on January 24, 2005 

and on March 9, 2005. The Administrative Law Judge decided this 

issue as a "mixed bag", finding that one of the flights, namely the 

one on March 9 was "other commercial flying" while the January 24 

flight was not "other commercial flying." 

3. L.A.P.D. flying. As to this, the ruling was that the 

helicopter flights for the L.A.P.D. were flights in "public aircraft" 

and as such not subject to F.A.A. jurisdiction. Thus, the 

Complainant failed to prove the violation. As briefed more 

extensively hereafter, that issue appears to have been the triggering 

mechanism for the entire proceeding. It is the issue that received 

most attention during the proceedings, at the hearing, and of the 

. determination by the Administrative Law Judge. Having decided it 

adversely to the Complainant, the Complainant took up an appeal 

only on that issue. Clearly the other issues could have, and probably 

would have been disposed of without these adversarial proceedings. 
The "new way" of logging pilot time could have been handled by a 

request from the Principal Operations Inspector for a change in 

Respondent's Operations Manual. The 2 operational charges were 

miniscule compared with the fhmst of the Complaint and could have 

been easily handled by a warning letter. It is not insignificant that 

the original Regional Counsel who handled this matter did not 

pursue any of the issues after he hit a brick wall on precedents 

regarding the L.A.P,D. flying because, comparatively speaking, 

those other charges were miniscule, 

ARGUMENT 

THE PROCEEDINGS WERE NOT SUBSTANTLy.LY JUSTIFIED. 

The rules requiring estabhshment of substantial justification pass the 

burden of proof to the Complainant to establish where, why, and how its proceedings 

were substantially justified. Carefully reading Complainant's memorandum, it appears to 

merely be a reargument of all of the issues that have already been submitted and 

adversely determined to it but it is significantly silent, giving no explanation, whatsoever, 

as to the lack of authority, the unwillingness of the original Regional Counsel to proceed, 

the reasons for the appeal on the single issue from the Administrative Law .Tudges 

decision or its reasons for the huge amount of civil penalty requested. 
RESPONDENT WAS THE PREVAJLfl^TG PARTY 

It is disingenuous for the govermnent to argue that Respondent was not a 

"prevailing party". 

As to Count 1, the A.L.J.'s decision regarding Respondent's forms for 

tracking time, there was, at best, only a partial victory for Complainant. The 

Administrative Law Judge agreed, that Respondent's logging method was no longer 

correct but he recognized that there were substantial mitigating factors due to the prior 

approval of Respondent's methods by multiple previous inspectors and the fact that its 

then procedure used the forms that had been contained in its Operations Manual which 

was also approved by the prior P.O.I.s, including the one who raised the issue after prior 

approval of Respondent's manual. 

As to Count 2, the Complainant was only a partial prevailing party. Out of 

hundreds of flights by Respondent, there were issues raised by Complainant only as to 2. 

On one of them, the Administrative Law Judge agreed with the Respondent as to one; as 

to the other, it ruled in favor of Complainant. 

With respect to Charge 2, Complainant was not substantially justified. The 

Agency contents itself to argue that there was a reasonable basis for determining that Mr. 

Smith had flown as pilot in command under Charge 2. At least from the time of the 

Infotmal Conference, back on June 6,2006, the government knew exactly what the facts 
were, namely, that the flight in question was in a King Air, which was a single pilot 

airplane. Even if they had not learned it at the Informal Conference, the Agency, having 

certified the King Air, had to have known that the airplane was a single pilot airplane. 

Nevertheless, the Agency put that charge in the Complaint, apparently as a part of its 

attempt, as spelled out in Charge 3, to create a redefinition of the statutory and regulatory 

definition of "Other Commercial Flying". It is not insignificant that the ttumpted-up 

charges regarding the single flight in the King Air and the single error regarding the 

March 9^ flight was not really the actual thrust of all of these proceedings. The real 

thrust, as indicated before and as will be hereafter set forth in detail, is that the Agency 

was attempting to gain a change in the law by administrative fiat. The intent of the 

Agency is so clear, that it did not even bother to appeal on any aspect of the A.L.J.s 

decision, including the King Air flight and the very substantial reduction in penalty. 

The salient issue in this Application is the injustice heaped upon the 

Applicant based on Mr. Smith's flying for the L.A.P.D. 

In its memorandum, the Complainant concedes that the issue was, at best, 

"unsettled" and because of this the Agency was justified in pursuing it. Not so. At tills 

pomt, it is significant that the original Regional Counsel dealt with the issue at the 

Informal Conference, agreed not to pursue it unless and until there was authority to 

justify the position and then it was not pursued until a new Regional Counsel took over 

the case. While it is true as stated in the oft quoted saying that "a new broom sweeps 
clean" in this case, the new Regional Counsel had no right to experiment and attempt to 

change the law at the expense of Applicant without a Notice of Proposed Rulemaking. 

The Agency here argues that it had "... a reasonable basis" because the 

final Decisionmaker's order did not even have to bother to address the issue because the 

Complainant's position otherwise WEIS factually insufficient. However, the Initial 

Decision by the Administrative Law Judge did address the issue, and ruled against the 

Agency on that very issue, but the Agency, nevertheless took it on appeal, to try and 

create new law. Unfortunately, the old law as in the statute has remained unchanged. 

The short, simple alternative of the Agency was to go to the Congress and request a 

change in the definifion set forth in the Aviation Act. It failed to do so, failed to convince 

the Administrative Law Judge to do so> and its procedure was so far out of line that the 

Administrator did not, in its language, rule on the non issue, stating that"... there is no 

need to address the issue'\ 

Complainant's brief places great emphasis on the fact that the 

Administrator's ruling was on the side issue, namely, that the record failed to disclose 

whether or not pilot Smith was being paid for his services with the LAPD. The short, 

simple answer is that the Administrator followed the well settled tradition of judicial 

restraint and decided the case on the payment issue, thereby sidestepping the possibility 

of creating new law unnecessarily. In this, the Administrator's ruling should be 

commended. 

10 
The ruling did not mean, however, that the initial position of the 

Complainant was correct or substantially justified from the beginning. The Administrator 

took a position that was not legally correct under the facts of this case. Tlie 

Administrative Law Judge so ruled and that, in and of itself, shows a glaring lack of 

substantial justification in the Administrator's position from the very beginning. Perhaps 

a short time line on this point may be of help to the decision in the instant issue. 

1. Before the issue of the L.A.P.D. flying was presented by Complainant in 

the institution of the instant action, there was an Informal Hearing at which the then 

Regional Counsel agreed that there was no precedent, one way or the other, and it was 

not pursued; 

2. When and only when a new Regional Counsel came into the case was 

the issue again raised. But at that time, there still had been no precedent to justify the 

position of the Agency; 

3. After hearing legal argument, and all of the evidence by way of 

stipulated facts, the Administrative Law Judge ruled that the helicopter flying for the 

L.A.P.D. was not a situation that required tracking by tlie Respondent; 

11 
4. After the ruling by the Administrative Law Judge, the Complainant 

compounded its stubbornness by taking an appeal to the Administrator on the sole issue 

as to whether or not the flights for the L,A-P.D, had to be considered by the Respondent; 

5. To this day, the Complainant has stubbornly maintained that position 

and spends a large portion of its memorandum dedicated solely to that issue. 

Respondent respectfiiUy suggests that the Complainant should have read 

the message that was already clearly spelled out and not have proceeded further with its 

incorrect argument. In deciding this issue, the applicable rule is well settled, namely, that 

the position of the government in an EAJA case must be substantially justified at all 

stages of the proceeding. 

The Agency has an affirmative duty to prove as to each alleged violation 

and as to the amount and choice of its sanction to determine that it was substantially 

justified at each stage of the case. 

Application Of Airtrek, Inc. EA-5551; 

EAJA-SE^18284 (2010) 2010 NTSB Lexis 113 

ID, 2010 NTSB Lexis 14 

See Mendenhall v. NTSB, FAA 92F.3d 871 (1996) 

12 
Complainant has raised an argument in its memorandum to the effect that 

Respondent has not yet adduced evidence of its financial condition in order to establish 

that its net worth fell within the guidelines of the EA.TA statute. In this, the Complainant 

ignores the express language of the EAJA petition, namely, that that information will be 

furnished at any time upon request and, if necessary, will be put into evidence at the time 

of the hearing of this application. Instead of availing itself of the good faith offer and the 

right to seek that information anytime,^ the Complainant has now raised it as an issue that 

the instant petition is defective because the evidence was not included in the petition 

itself. The old proverb of "be careful of what you ask for because you may get it" is 

applicable here. Attached hereto are the fmancial statements of the Respondent for all of 

the years applicable to the present. The statements show that the Respondent had a 

qualifying net worth during all that period of time and, in part because of the financial 

burdens imposed on it by the Complainant, it has had to end its existence. 

LAW OFFICE OF ARTHUR WASSERMAN 

Dated: March 12, 2012 ^^><---

ARTHUR WASSERMAN 

Counsel for Respondent 

16380 Roscoe Boulevard, Suite 120 

Van Nuys, California 91406-1221 

Telephone: (818)895-8234 

Facsimile: (818)895-0675 

^ A simple telephone call would have been enough. They are attached as is the evidence supporting the amount of 

Respondent's claim. 

13 
S:46 PM 

03/08/12 

Accrual Basis 

Sun Quest Executive Air Charter, Inc. 

Balance Sheet 

A€ of December 31 , 2006 

c«e 31, 05 

ASSETS 

Currant Aeaeta 

Checking/Savings 

1D2 • Inveatment CD 13,010.68 

Total ChscMng/Savtngs 

Accounts Rsc«lvablo 

120 'Accourita Raealvabis 

Total Accounts RKalvabla 

Othar Currant Auot s 

RaclassHled Nag Llab 

130 ' Loins Rec - Employe? Adv . 

131 • Employ** Advancas 

135 • Undapoettad Funds 

Total Qihar Currant Aaftsta 

Total Currant Aisata 

FIxad Aasats 

150 • Ofllca Equipment 

151 • Malntenanca Equipment 

162 • Computar Equtpmant 

1S3' Leasahold tmprovaments 

1S5-AIrcraftN280TT 

16S-Alrcraft4SQ 

160 •Accumulated Depreciation 

Total FIxadAssats 

Other Assets 

170 • Invest In A/C 23A (MaxQuHt] 

171 ' Security DaposK Hangar Leasa 

Total Other Assets 

TOTAL ASSETS 

UABlUTlES i EQUITY 

Llabmtles 

Currant Lhbllltlos 

Accounts Payable 

200 - Accounts Payabia 

Total Acecunta Payable 

Other Currant Liabtllties 

231 - OVERDRAFT PROTECTION 

Total Other Currant UabUltles 

Total Currant Llabllltlea 

Lang Tartu Lkbllittes 

275 • Loan Payables 

' 275.3 • BaIUmor« CI1ppei^4SQ 

275.4 ' Huntington Bank - 280TT 

275.5 • MflicQijesI - 23A 

275.G ' Mandelsohn ETAL45Q 

MBNA-717HT 

Total 275 • Loan Payables 

Total Long T«mi Liabitltles 

Tcital Llabintm 

Equity 

30D • Ownor Investment 

300.1 • A Ron Raaource 

300.2-capen 1/3 share 

300.3' FranK 

300.4 • Mark 

Total 300 • Owner Invastmant 

360 • Opening Bat E(itiity 

399 ' Retained Earnings 

Nat tncomo 

Total Equity. 

TOTAL UABIUT7ES A EQUITY 

13,01D.G8 

383,813.69 

383,513,59 

29,662.30 

2,937.35 

75.00 

3,800.00 

38,674.65 

433,498.92 

6,131.47 

21,660.61 

2,95S,7S 

1,000.00 

947,600.00 

1,412.651,22 

-2,380,959.00 

10,042.98 

146,994.00 

42,100.00 

189,094.00 

632,635.90 

406,966.44 

405,965.44 

100,016.00 

100.015.00 

506.960,44 

260,662.93 

B1B,374.B8 

125,000.00 

1,280,699.23 

9.D0 

2,485,646.04 

2^5,64G.04 

2,992,626.48 

e6«,666.66 

Z9,U3.91 

1Z3.D64.66 

208,047.68 

1.027.212.83 

-Z,313,$74.59 

iaiy4Q0.B7 

C -2,359,990.58 

£32,636.90 
S:4B PM 

03/08/12 

AocruvlBasI s 

aun uuest txeoutive Air onarter, mc. 

Balance Sheet 

As of December 31,2007 

Dec 31,07 

ASSETS 

Current AsBets 

Chacklntr/Savlngs 

101 • Checking-B of A 

102 ' (nvastmentCD 

Total Chacking/Savlngfi 

Accounts Recahrabta 

IZD ' Accounts Receivable 

5,754.04 

13;S62.£1 

19,31S:SS 

350,481.50 

Total Accounts nacehmble 

Other Currant Assets 

129 • FET Refund Receivable 

Total Other Current Assets 

Total Currant Aasata 

Fixed Assets 

160 ' Office Equipment 

151 • Maintenance Equipment 

152 • Computer Equipment 

155-Aircraft N280TT 

166-Aircraft 4SQ 

160 • Accumulated Depreciation 

Total Fbcad Aaaata 

Other Aaeeta 

170 • Invest In A/C 23A [MsKQuest) 

171 - Security Deposit Hangs r Ijease 

Total Other Assets 

TOTAL ASSETS 

LIABmiTlES « EQUITY 

LlabllltlBS 

current Uabinties 

Accounts Payabia 

20Q • Accounts Payable 

Total Accounts Payable 

Other Current Llabllttlea 

231 ' OVERDRAFT PROTECTION 

250-Payrol l Liabilities 

252 ' Sale* Tax Payable 

253 > Segment Tax Payable 

2G0 • Insurance Contract Payable 

Total Other Currant LiabiiiUe:) 

Total Current Liabllftlaa 

Long Term Liabilities 

27S • Loan Payables 

275 J > A Ron Resources 

275.3 • Baltimore Cllppar- 4SQ 

275.4 ' Huntington BanV • 230Tr 

27£.S-MaxQuest> 23A 

Z7S.5 • Mendeleohn ET AL 4Sq 

Total 275 • Loan Payables 

Total Long Tarm Liabilities 

Total Ltabintles 

Equity 

300 - Owner Investment 

300.2 • Capan 1/3 Ohare 

300.3 • Prank 

300.4 - lUlark 

Total 300' Owner Investment 

306 • AddlUonal Paid-in Capital 

310 * CommDH Stack 

399 • RataEnad Earnings 

Net Income 

Total Equity 

TOTAL UABIUTIEft & EQUITY 

3£0,4B1.60 

2,837.42 

2,837.42 

372,535.57 

9,241,82 

21,660.61 

5.488.72 

947,600.00 

1,412,651.22 

-2,38 9,263,00 

7,379.27. 

1D0,S60.0D 

37,589.70 

138,345.70 

618,364.54 

346,777.53 

346,777.53 

85,015.00 

-319.89 

-75.88 

4,173,60 

126,674.63 

215,367.46 

562,145.09 

G56,BBS.66 

182,375.85 

737,207.17 

102,662.20 

1,226,336.67 

2,919,148.55 

2,915,148.55 

3,477,293,64 

29^3.9 1 

i23,0M.eS 

205,569.54 

359,068.13 

-100.00 

100,00 
03/08/12 

A(±crual Bnsis 

Balance Sheet 

As of December 31, 5C03 

Pec 31, 06 

ASSETS 

Current Assets 

Choc king/Saving a 

101 - CheckingB or A 

102- InvastmantCD 

Total Checking/Savings 

Accounts Recaivabta 

120 • Accounts Rocalvabia 

Total Accounts Receivable 

Other Current Aeaeta 

130 - Loana Rac •< Employee Adv. 

135 • Undeposlted Funds 

Total Other Current Assets 

Total Current Assets 

Fixed Assets 

160 • Office Equipment 

151 • Malntenanca Equipment 

1S2' Computer Equipment 

155-Aircraft N2fl0TT 

158 • Aircraft 4Sq 

160 - Accumulatad Depreciation 

Total Flmd Assets 

Other Assets 

170 • Invest In A/C 23A (MaxQuast) 

171 • Security Deposit Hangar Leega 

Total Other Afisats 

TOTAL ASSETS 

UABIUTIES 8. EQUITY 

Llabllitlsa 

Current Liabilities 

Accounts Payable 

200 •Accounts Payablo 

Total Accounts Peyabte 

Other Current Liabilities 

231 - OVERDRAFT PROTECTION 

250-Payroll Liabilities 

260 • Insurance Contract Payabia 

Total Other currant Liabiiitres 

Total Current Llabllltiaa 

Long Tenn Liabilities 

275 • Loan Payables 

275.2 • A Ran Resources 

276.3 • Baltimore Cllpper-4SQ 

275.4 • Huntington Bank-2eoTT 

27S.S-MaxQuc*t- 23A 

275.6 • Mandelsohn ET AL 4SQ 

275.8 • Highland 280TT-Principal Pmta. 

275.9 > Loan Payable - Capen 

276.1' Loan Payable • Mark Smith 

Total 275 • Loan Payables 

Total Long Temi Llabllltlas 

Total Liabilities 

Equity • 

300 • Owner Invosbnent 

300J ' Capan 1/3 share 

30OJ - Frank 

300.4 - Mark 

Total 300 - Ownar Investment 

306 * Additional Pald^n CapKal 

310 • Common Stack 

A93 • Retained Earning* 

t4et Income 

Total Equity 

TOTAL UABILITIES A EQUITY 

-1,72348 

14,062,85 

12,339,47 

345,516.48 

345,5iej(S 

1,450.00 

4,410.00 

5,860.00 

363,71635 

9,241.82 

21^60.51 

5^88.72 

947,600.00 

1,412,651.22 

-2,391,169.00 

6.473.27 

S7.202.00 

23.343.12 

60,545.12 

449,734.34 

379,594.55 

379,694.55 

100,015.00 

2,168.64 

177,150.95 

279,344.49 

653,939.04 

666,666.66 

182,375.85 

678,743.39 

e6,D4i,42 

1.167,502.30 

63,201.07 

26,900.00 

29,261.96 

2,890,697.65 

2,690,697.65 

3,649,636.69 

29,433.91 

123,064.68 

20e,5G?.G4 

359,066.13 

--Hiq,OD 

100. 

^337,MT.g3 

-140,973.253 

-3,09S.902.3S 

449,7 
5:47 PM 

03/08/12 

Accrual BKI S 

Sun Quest Executive Air Charter, Inc. 

Balance Sheet 

As of Oecamber 31, 2009 

Dec 31, 03 

ASSETS 

Current Assets 

Checklng/Savlnge 

101 - ChecWng - B of A 

Total ChccMng/$avtnga 

Accounts Receivable 

120 • Accounts Receivable 

Total Accounts RecofvabJa 

Other Current Assets 

130 ' Loans Rec-Emptoy«« Ady. 

Total Other currant Assets 

Total Current Assets 

Fixed Assets 

150 • Office Equipment 

151 • Maintenance Equipment 

162" Computar Equipment 

166 • Aircraft N2S0TT 

160 • Accumulated Dvpreclatlon 

Total Fbcad Assets 

Other Assets 

170 • Invest In A/C Z3A (MaxQuost) 

171 • Security DepasH Hangar Lease 

Total Other Assata 

TOTAL ASSETS 

LIABIUTIES & EQUITY 

Liabilities 

Current Liabilities 

Accounts Payable 

200 • Accounts Payabia 

Total Accounts Payable 

Credit Cards 

228 • B of A - Mark Smith [MalnL) 

Total credit Cards 

Other Current Uafallitles 

231 • OVERDRAFT PROTECTION 

232 • Loan Payable Khurshoed 

261'FET Tax Payable 

Total Other Current Liabilities 

Total current Liabilities 

Long Term Liabilities 

275 - Loan Payables 

Z7S.3' Baltimore Clipper- 4SQ 

275.4 • Hunttngten Bank - 2S0TT 

275.8 • Highland 280TT- Principal Pmts. 

276.1 • Loan Payable - Mark Smith 

Total 276 • Loan Payables 

Total Long Term Liabilities 

Total Liabilities 

Equity 

300' Owner Investment 

300.2-Capen 1/3 shara 

300.3 - Frank 

30D.4 - Mark 

Total 300 • Owner Investment 

305 - Additional Paid-in Capital 

S10 • Common Stock 

399 • Retained Earnings 

Net Income 

Total Equity 

TOTAL LIABIUTIES & EQUITY 

11,704,00 

11.704.0Q 

226,652.43 

Z26,8£2.43 

175.00 

176.00 

238,731.43 

9,241.82 

21,660,61 

6,488.72 

947,600.00 

-980.018.78 

3,972.27 

-110,565.00 

16,255.62 

^4.309.38 

149.394.32 

261,981.98 

251,981,98 

0.03 

0.03 

100,016.00 

10,000,00 

1,371.78 

111,386.78 

363,368.79 

155,375.85 

572,594.06 

116.893.67 

88,000.06 

932.863.64 

932,863.64 

1,296,232.43 

29,433.91 

•f23,De4.B8 

206,569,54 

359,068.13 

-100.07 

1UDJI0 

,952,002^7 

^ ^ -1,l4r,838.1'» 

148,334 J 2 
5J47 PM 

03/08/12 

Accrual Basis 

Sun Quest Executive Air Charter, Inc. 

Balance Sheet 

As of December 31, 2009 

Dec 31,09 

ASSETS 

Current AssBta 

Checking/Savings 

fOl-Cfiacklng-BorA 

Total Checktng^savlngs 

Accounts Receivable 

120 • Accounts Receivable 

Total Accounts Receh/able 

Other Current Assets 

130' Loans Hoc - Employee Adv. 

Total Other Current Assets 

Total Current Assets 

Fixed Assets 

150 - Office Equipment 

151 • Maintenance Equipment 

152 ' Computer Equipment 

156'Aircraft N280TT 

160 > Accunrulated Depreoladon 

Total Fbtcd Aasftts 

' Other A«setft 

170 - Invest In A/C 23 A (MaxQue«t) 

171 ' Security Deposit Hangar Lease 

Total Other Assets 

TOTAL ASSETS 

UABIUTIES a. EQUITY 

UabllKIes 

Currant LlabKltlae 

Accounts Payablo 

200 • Accounts Payable 

Tolal Account s Payable 

Credit Cards 

228 * B of A - Mark Smith (Matnt.) 

Total Credit Cards 

Other Curr^t Liabilities 

231 • OVERDRAFT PROTECTIOM 

232 • Loan Payable Khursheed 

251 -FETTa;? Payable 

Total Other Current Liabtllties 

Total Cum)ntLlabimi*6 

Long Term Liabtllties 

275 • Loan Payables 

2rS.3 • Siiltlmare Clipper- 4SQ 

275.4 ' Huntington SanI? - 2B0TT 

275,8 • Highland 290TT-Pilncipal Pmis. 

276.1 • Loan Payablo - Mark; smith 

Total 275 - Loan Payablas 

Total Long Teon LlabllKbjs 

Total Liabilities 

Equity 

300 • Owner Investment 

300.2 • CajMH 1/3 sfiare 

30DJ • Frank 

300.4 • Mark 

Total 300 • Owner Investmant 

305 • Additional PaliMn Capital 

310 •commonstoc k 

399 • Ratalned Earnings 

Netlncoma 

Total Equl ^ 

TOTAL UABIUTIES & EQUfTY 

11,704.00 

11,704.00 

226,852.43 

226,652.43 

17S,P0 

175.Q0 

238,731.43 

9,241.82 

21,660.51 

5,489.72 

947,^00.00 

^80,018.7a 

3,972.27 

•110,666.00 

16,255.62 

^4,303.38 

148,394.32 

251,981.98 

251,981.98 

0.03 

0.03 

100,016.00 

10,000.06 

1,371.78 

111,386.78 

363,368.79 

1SB,37S.S5 

672,594.08 

115,893.87 

88,000.06 

933,603,64 

932,&63.64 

1,2SS,232.43 

29,433.91 

I23,0«4.es 

206,669.54 

S69,06S.13 

"100.00 

^OD.Q0 

(-1,147,g3tf.'l1 

148,394.32 
5:4S PM 

03/03/12 

Accrual Basis 

Sun Quest Executive Air Charter, Inc. 

Balance Sheet 

As of Decembier 31, 2010 

Dec 31,10 

ASSETS 

Current Asset? 

Checklns/Savlngs 

101 • Checking "BoT A 

Total Checking/Savings 

Accounts Receivable 

120 • Accounts Receivable 

Total Accounts Receivable 

Othar Current Assets 

136 * Retainer for LLC 

133 • Due from Mark Smhh 

ISO - Loans Rec • Employes Adv, 

135 • Undeposlted Funds 

140 • PUB from SmKh, Burko, & Brclln 

Total Other Current Aaasts 

Total Current Assets 

Fixed Asset? 

160 - Office Equipment 

161 • Maintenance Equipment 

152 • Comptrtar Equipment 

15S • Aircraft N250TT 

160 • Accumulated Depredation 

Total Fixed Assets 

Othar Assets 

170 - Invest In A/C 23A (MaxQuost) 

171 • Security Deposit Hangar Lease 

Total Other Assets 

TOTAL ASSETS 

LIABILITIES & EQUITY 

Llabllitleft 

Current Liabilities 

Accounts payable 

200 -Accounts Payable 

Total Accounts Payable 

Other Currant Uabllhles 

231 • OVERDRAFT PROTECTtOM 

232 • Loan Payable Khunhaed 

251 -FET Tax Payable 

Total Other Currant LlabllitJaa 

Total Current Liabilities 

Long Term Uablllllaa 

275' Loan Payehles 

275.3 > Baltimore Clipper- 4Sg 

2754 • Huntington Bank - 2S0TT 

27S.a ' Highland asOTT- principal Pmts. 

276.1 • Loan Payable - MarK 3mlth 

Total 275 < lunn Payables 

Total Long Term Liabilities 

Total Ltabimies 

Equity 

300 - Owner Inveatmant 

300.4 - Mark 

Total 300 • Owner investment 

305 - Additional PaldJn Capital 

310 •Common Stock 

399 - Retained Eamlnga 

Net Income 

Total Equity 

616.65 

616.65 

271,361.37 

271.381.37 

6,000.00 

1,461.37 

350.00 

25,203.90 

20,000.34 

S2.015.61 

323,913.63 

9,241.62 

21,660.51 

6.466.72 

947,600.00 

-980,974.76 

3,018.27 

-140,790.96 

16,255.62 

-124,535.34 

202,394.56 

343,763.61 

346,753.61 

100,015.00 

1,091.36 

•841.27 

100,266.09 

449,018 JO 

119,375.85 

462,460.78 

182,973.62 

66/486.09 

851,296.34 

661,296.34 

1;300,316.04 

369,068.13 

359,066.13 

-100.00 

100.1 

^606,906.2^ 

.1,097,920.46; 

TOTAL UABJUTIES S EQUITY 
E:4aPM 

03/08/12 

Accrual Basis 

Sun Quest Executive Air Charter, Inc. 

Balance Sheet 

A s of December 31 , 2011 

Dec 31,11 

ASSETS 

Current Assets 

Checking/Savings 

101 ' Checking-B of A 

Total Chocking/Savings 

AccQUnta Receivable 

120 • Accounts Recalvabld 

Total Accounts Receivable 

Other Currant Asaats 

137 'Duefrom LLC 

133 • Due from Mark Smith 

130 • Loans Rec • Employee Adv. 

135 • Undeposlted Funds 

140 ' Dua from Smith, Burke, & Brolln 

Total Othbr Current Aaaets 

Total Current Assets 

Fhcod Assets 

160 • OfTlcB Equipment 

151 - Malntenanca Equipment 

152 - Computer Equipment 

1SB-Aircraft H280TT 

160 • Accumulated DepMcIatlon 

Total Fixed Atseta 

Other Atoels 

170 • Invest In A/C 23A (MaxQuestJ 

171 • Security Deposit Hangar Lease 

Total Other Assets 

TOTAL ASSETS 

LIABILITIES & EQUITY 

Liabilities 

Current LlabUItles 

Accounts Pay^bta 

200 • Accounts Payable 

Total Accounts Payablo 

Other Currant Liabilities 

266-Du e To LLC 

231 - OVERDRAFT PROTECTION 

260 ' Payroll Llabintles 

261 • FET TBK Payabia 

253 ' Segment Tax Payable 

Total Other Current Liabilities 

Total Curt^ntLtabithles . 

Long Term Liebliitles 

276 • Loan Payabtes 

27S.1 • Maxqu*st-23A 10% repay of loan 

276,3 • Baltimore ClIpper^4SQ 

275.4' Huntington Bank - 280TT 

276.7 • Hlghland/SunQueat LLC 

276.8 • Highland 280TT- Principal Pmts. 

276.1 • Loan Payable - Mark Smhh 

Total 275 ' Loan Payablea 

Total Long Term Liabilities 

Total Uabintfas 

Hqulty 

300 - Owner invastment 

300.4 • Marie 

Total 300 • Owner Investment 

306 • Additional Paid-in Capital 

310 > Common stoc k 

^99 ' Retained Eamlngs 

Net Income 

Total Equity 

TOTAL UABIUTIES & EQUITY 

5,914.46 

243,106.44 

243,10644 

62,664.60 

2,298.86 

1,500.00 

230.81 

20,000,34 

86,702^1 

335,723.40 

11,577.74 

21.660.51 

6,480.72 

947.600.00 

-«80,974.7B 

6,352.19 

-140,790.96 

16,255.62 

-124,636.34 

216,540.25 

200,15842 

200,158.32 

68,230.16 

100,016.00 

e.58 

-2.764.74 

3,371.61 

168,860.61 

369.018.93 

-8,542.53 

92,375.85 

367,472,93 

66,992,72 

182,973.62 

71,449.97 

762,722.56 

762,722.66 

1,131,74149 

368.861.67 

3SB,851.6T 

-lOD.OO'" 

100X0 

-i,4S6i9sesr ^ 

/fa2,936JQX 

V •915.201.24 

216,540.25 
SUIM OUEST 

ex*cutiv « At r Charte r 

March S, 2012 

To whom it may concern; 

Sun Quest execi/trve Air Charter, Inc. has seized operations AS of September 30. 2011. 

Sincerely, 

€4^ . M 

Khursheeti Hostetter 

Controfler 

7415-Hogvenhur&t Place, von Nuys, CA 91406 

Phone (818) 778-6520 ¥<x^ (818) 778-6526 TOU Free (800) 529-7595 

v/ww.sunquestexeccofTi 
LA.W OFFICE OF 

ARTHUR WASSERMAN 

Ui'hRn ROSCOE HOUTJ^.VARD. SUITR 120 

VAN NliyS. C.AT..TFORNTA 9140(5.1221 

TELEPHONE (818) 895-8234 

FACSIMILE (SIR) B55-0(i75 

March 12, 2012 

To Whom it May Concern: 

As the Accountant for the Law Office of Arthur Wasserman, I attest 

to the fact that the total due in the Sun Quest Executive Air Charter, Inc. adv. 

Federal Aviation Administration rnatter is $25,200.53. This amount certainly 

does not include all of the hours this office has worked on this case, but those that 

are included were reduced to the required EAJA regulated rate. 

I hereby certify under penalty of perjury that the foregoing facts are 

true. 

ith Dated this IX^ day of March, 2012. 

Christina Merrick 

Accountant for 

LAW OFFICE OF ARTHUR WASSERMAN 
FDMSNo. FAA-20U-1294 

(Equal Access to Justice Act) 

CERTIFICATE OF SERVICE 

I hereby certify that on this date I sent by both facsimile and Federal Express, the original 

of the attached document (BRIEF SUPPORTING APPLICATION RE: EAJA) and 1 copy, addressed to: 

Federal Aviation Administration 

600 Independence Avenue, SW 

Wilbur Wright Buildiung-Suite 2W1000 

Washington, D.C. 20591 

Attn: Hearing Docket Clerk, AGC-430 

(202) 493-5142 Facsimile 

And sent via Federal Express, a true copy addressed to: 

Joseph A. Conte, Manager 

Air Carrier & Operations Law 

Enforcement Division, AGC-300 

Office of the Chief Counsel 

Federal Aviation Administration 

Washington, DC 20591 

(202) 267-5106 Facsimile 

Naomi Tsuda, Attorney 

Office of Regional Counsel 

Western Pacific Region, AWP-7 

P.O. Box 92007 

Los Angeles, CA 90009-2007 

(310) 725-6816 Facsimile 

The Honorable Richard C. Goodwin 

Administrative Law Judge 

Office of Hearings, M-20 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. 

East Building, Ground Floor Room E12-320 

Washington, DC 20590 

(202) 366-7536 Facsimile 

Dated: March 12, 2012 

Christina Merrick 

LAW OFFICE OF ARTHUR WASSERMAN 

16380 Roscoe Boulevard, Suite 120 

Van Nuys, California 91406-1221