05/30/2015 15:18

In the Matter Of: FAA AGL 7 COUNSEL

U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C. DOCKETNO. FAA-2014-0119 PAGE 02/09

SPIRIT AVIONICS, LTD., ) ) ) ) CASENO. 2012-GL-07-0056 Respondent. RESPONSE TO RESPONDENT'S MOTION FORDECISIONAND COMPLAINANT'S MOTION FORDECISION lN FAVOR OF THE COMPLAINANT The Agencyresponds to the Respondent's Motion for Decision as follows; 

### I. Background ln August, 2010, Spirit Avionics, Ltd. (the Respondent), holder ofRepair Station Certificate UOKR250X, enteredinto a contract with the FederalAviation Administration (the FAA) to perform maintenance on a number oftype certificated aircrafts owned and operatedby the FAA. The Respondent subcontractedmajor portions ofthe work to LaneAviation, holder ofRepair Station Certificate DYCR407D. At some time prior to February 24,2011, the Respondent fabricated orhad fabricated at least twenty-two (22) brackets andtwenty-two (22) lanyards. The brackets and lanyards were replacement or modification parts for the use on the FAA aircraft. On February 24, 2011, the Respondent sold 

### the brackets and lanyards it fabricated to Lane Aviation as replacement or modification articles, representing these parts as suitable for installation onthe FAA aircraft. 

### This is evident 

### by

### the invoice the Respondent prepared, directed to Lane Aviation'sAccounts Payable, which states "Lane Aviation portion ofpurchase and assembly ofheadliner install kits. Kits supplied to 

### beused for the 

### 3'd FAA aircraft through the 

### 18th aircraft" 

### See Resp. Exhibit

### D. The invoice furtherrepresents thatthe amount, $7,439.16, was paid by

### Lane Aviation on February 25, 2011. 105/30/2015 15:18 8472948293 FAA AGL 7 COUNSEL PAGE 03/09

During an investigation ofLane Aviation, anFAA Special Agent discovered the undocumented parts that the Respondent fabricated onthe worktable near the vicinity ofan aircraftbelonging to the FAA and found that similarparts had been installed on other FAA aircraft without airworthiness release docum,entation. The FAA conducted an investigation and issued aNotice ofProposed Civil Penalty on February 21, 2013, asserting that the Respondent's sale offabricated parts to Lane Aviation was in violation of 14 C.F.R. §21.9(b). (Part 21) The Respondent requested a hearing and filed a Motion for Decision on June 5, 2015. The Complainant cross files this Motion for Decision in favor oftbe Complainant andprays that the Court determinethat theRespondent was in violation of 14 C.F.R. 

### §21.9(b) when it sold fabricated parts to Lane Aviation.


### II. Argument

The FAA has the burden to showthat the Respondent produced areplaceJ;nent or modification article for sale an.d represented that the part was suitable for installation on atype certificated aircraft. Th.e Respondentdoes not argue that 

### it fabricated parts for a type certificated aircraft or that it held out the parts to be suitable for such aircraft. The invoice attached as Exhibit D to the Respondent's motion, which the Respondent created, explicitly states thatthe parts were for installation on the FAA aircrafts. The Respondent does dispute whether it sold theparts, but tbis argument is without merit.


### A. The Transaction Between rhe Re$pondentandLaneAviation Was a Sale UnderPart 21 In

### Accordance With the

### Applicable Common Definition. The Respondent'stransaction with Lane Aviation was a sale under Part 21. The Agency agrees that Part 21 does not specifically define the term "sale." However, ''[w]hen a word is

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undefined in a statute, the agency and the reviewing courtnonnally give the undefined term its ordinarymeaning."AKSteel Corp. v. UnitedStates, 226 F.3d 1361, 1371 (Fed. Cir. 2000) (citing Perrin v. UnitedStates, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979) ("A fundamental
canon ofstatutory construction is that,

**unle~s** otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning.")). Th.e plain and ordinary definition ofsale is not limitedjust 

### to a change in title ofthe property as the Respondentpurports. (Resp. Motion p.6) The Respondent reaches far backto the 1979 Black's LawDictionaryto show a definiti.on ofthe term "sale" that it prefers. However, the most current and contemporary Black's Law Dictionary defines "sale" as "[t]he transfer of property or title for a price." Black's Law Dictionary (lOth ed, 2014). Similarly, MerriamWebster's Ollline Dictionary, also cited to by Respondent, also defines sale as "the act ofselling something; the exchange ofgoods, services, orproperty for money." 

### See Exh. A. The Oxford Online Dictionary also defi.nes sale as "the exchange ofgoods, services, orproperty for money." These definitions reflect that the plainmeaning ofthe word ''sale"does not require a transfer 

### in title. Certainly, transactions where title is transferred would be encompassed, butthe term is not so limited, This is further evident by the common nsage ofthe word sale. For example, one can sell stolengoods (clearly the seller does not have title), a real estate broker can sell a house or have an exclusive right to sell withouthaving title, and consignment shops sell goods without title. Under the plain and ordin.ary meaning ofthe word "sale", the transaction between the Respondent and Lane Aviationwas a "sale." The Respondent does notdispute that

### it gave possession ofthebrackets and lanyards to Lane Aviation. In fact, the Respondent acknowledges that it could not have installed the brackets and lanyards andthat it made theparts for Lan.e 305/30/2015 15:18 8472948293 FAA AGL 7 COUNSEL PAGE 05/09

Aviation to install. (Resp. Motion p. 2) The invoice, attached as Exhibit D to the Respondent's motion, also clearly reflects that the Respondent requested and received compensation for the exchange ofthe parts. The invoice was prepared by the

**Re~pondent** and was for the sum of $7,439.16, which the invoice reflects 

### it received from Lane Aviation for the "purchase and assembly ofheadliner install kits." Therefore, goods were exchanged for money, satisfying the applicable common definiti.on of"sale".
B. The PlainLanguage of the Respondent's Invoice Shows That Its Transaction Wilh Lane Aviation Was a Sale UnderAnyDefinition of the Term "Sale". The Respondent's transaction with its subcontractor was a sale under any definition ofthe term as is evidentbytheplain language ofthe invoice it sent to its subcontractor. The Respondent argues that "sale" should bedefined in accordance with the U.C.C. definition, which requires a passing oftitle. Itis the Respondent's position that it did not have the intent to transfer title to the brackets and. lanyards because the work wasbeing performed on. J.ts behalf and it was to receive the parts back after installation. Itfurther argues that the FAAretained title under the terms ofthe contract. Although the definition of"sale" as set forth in the U.C.C. shouldnot governthe definition ofJ?art Zl because itis not the plain and ordinary meaning ofthe term, even iftheU.C.C. did govern the definition ofsale in Part 21, the Respondent's argument that it looked theintentto transfer title to the parts is without merit. The intent ofparties to an unambiguous contract is determ.ined by theplain and. ordinary terrns ofthe contract. SeeAppeal of Hoffman Construction Co., 1.991. WL 248042, *9 (D.O.T. March 20, 1991). A contract is ambiguous only ifreasonably intelligentpeople cou.ld find the provisions susceptible to more than one meaning. Id \Vhen the meaning is clear, parol evidence cannotbe introduced to contradict the plain meaning ofa contract. BarronBancshares, Inc. v. 405/30/2015 15:18 8472948293 FAA AGL 7 COUNSEL PAGE 05/09



### UnitedStates, 366 F.3d 1360, 1375 (2004) ("Ifthe terms ofa contract arc clear and unambiguous, they must be given theirplain meaning-extrinsic evidence is inadmissible to interpretthem."). The invoice betweenthe Respondent and Lane Aviation clearly and unambiguously shows their intent. The invoice statesthat it is for the "purchase and assembly ofheadliner install kits." Purchase is defined as "[t]he act or aninstance ofbuying." Black's Law Dictionary (lOth ed. 2014). There is nothing ambiguous about the parties' agreement. It clearly states that 

### it was for thepurchase ofspecific items and shows that consideration was given in exchange for those items. The Respondent is stuck with the plain language ofits agreement and cannot introduce parole evidence to show that the parties' intent was for anything otherthan the "purchase" (and consequently sale) ofthe parts, Because the invoice clearly and unambiguously shows that it was for the "purchase" ofthebrackets and lanyards, it is clear that the Respondent sold thebrackets and lanyards for purposes ofapplying 14 C.F.R. 

### § 21.9. The Respondent's motionfor decision in their favor must be denied. The Complainant moves the courtto determine that there was a sale and thus a

**viol~.tion** of 14 C.F.R. 

### § 21.9. C. The Transaction Was a Sale Under the U.

### C.C. 's Definition. Moreover, the transaction betweenthe Respondent and Lane Aviation satisfies the definition of"sale" under the U.C.C. The Respondent defined legal title as the "ownership ofproperty that is cognizable or enforceable 

### in a court oflaw
..." Ownership is the "act, state, orright of possessing something." Black's LawDictionary (IO'h ed. 2014). It is undisputed thatLane Aviation possessed the brackets and lanyards and that it had the right to do so. The parts were in their shop and Lane Aviation was responsible for installing them. The Respondent even

505/30/2015 15:18 FAA AGL 7 COUNSEL PAGE 07/0g

acknowledges that it could not install the parts. Therefore, Lane Aviation was 

### in the state or act ofpossessing the brackets and lanyards. More importantly, Lane Aviation's interest in tlle brackets and lanyards was enforceable for the reasons stated above. ln the event ofa dispute, any reviewing court would look only at the invoice, which clearly and unambiguously states that Lane Aviation "purchased"tlle parts for consideration. Therefore, pursuantto the agreement, Lane Aviation had a legally protected property interest because they paid $7,439.16 for theparts. In any case, Lane Aviation's ownership only needs to be "cognizable", which means "capable ofbeingknown orrecognized"
or "capable ofbeingjudiciallytried or examined". Cognizable clearly is a lesser standard than enforceable. Lane Aviation possessed tlle brackets and lanyards, had the right to use tllose parts to complete 

### its work, paid a significant sum ofmoney for the parts, and it had an agreement setting forth thoserights. Clearly, it would have a recognizable interest inthese parts. For these reasons, the Respondent's transaction with Lane Aviation was a sale underthe U.C.C. 

### D. The Activity Complained Ojls Within the Scope of 14 CFR.. § 21.9. The Respondent also argues that the activity complained ofis outside the scope of.14 C.F.R. § 21 because oflanguage in tlle "background" section ofthe amendments to thatpart. As tlle court is aware, any discussion following the regulation itselfmay be used to interpret the intent ofa regulation, butis not law and inno way limits the plain language ofthe regulation. Rather, this section only shouldbe turned to for interpretation where the plain language ofthe regulation is ambiguous. A regu.lation is not ambiguous simply because aU the terms are not defined, Here, § 21.9 was not ambiguous, nor does the Respondent so argue. Rather, the regulation shouldbe given itsplain meaning, rendering the following discussion inapplicable to determine its intent. The background discussion ofthe regu.lation does not trump the plain language ofthe 605/30/2015 15:18 8472948293 FAA AGL 7 COUNSEL PAGE 08/09

Regulation and cannot be expected to address every situationthat may arise. 

### TI1e plain language of§ 21.9 c)early encompasses situations such as the matter discussed herein. Assuming that the U.C.C.'s definition of"sale" defmes "sale" in§ 21.9 and that the parole evidence rule does notpreclude additional evidence, the Respondent's argument centers around whether it intended to pass title to LaneAviation. However, this wouldbe clearly contradictory to the plain language oftheir invoice. There is no evidence regarding any subcontract between the companies andthe Respondent. The only clear evidence is the paid invoice for the exchange ofparts made by the Respondent and sold to Lane, thus constituting a 

### sale and a violation ofthe Federal Aviation Regulations.


### E. Conclusion The only issue in this matter that is in dispute betweenthe parti.es is whether the transaction between the Respondent and Lane Aviationconstituted a sale 

### ofparts that were fabricated by the Respondent. 

### The transaction was a sale under 

### all definitions 

### ofthe term. Based on the foregoing reasons, the Agency requests that the Respondent's Motionfor Decision in their favorbe denied and 

### moves that 

### a decision be rendered in favor ofthe Complainant. Respectfully submitted,

By:

7 Jeffrey 

### A. Klang Regional Counsel



# K,~ Federal Aviation Administration Office ofRegional Counsel, AGL-7B 2300 East Devon Avenue Des Plaines, Illinois 60018 Facsimile: 847.294.786205/30/2015 15:18 8472948293 FAA AGL 7 COUNSEL PAGE 09/09

CERTIFICATE OF SERVICE 

### I hereby certifY that 

### I have, this date, served the foregoing Complainant's Response to the Respondent's Motion for Decision, to the following addresses as follows: One Copy (via facsimile): Hearing Docket Federal Aviation Administration 800 Independence Ave, S.W. Washington, D.C. 20591 Attn: Hearing Docket Clerk AGC-430-, Wilber Wright Building Suite 2Wl000 

### Fax: 202-267-1293 One Copy (via facsimile): The Honorable J.E. Sullivan U.S. Administrative 

### Law Judge Office ofHearings, M-20 U.S. Department ofTransportation 1200NewJersey Ave., S.E. 

### (Ell-310) Washington, D.C. 20590 Fax: 202-366-7536
One Copy (and RegularMail, facsimile): Jerry A. Eichenberger EICHENBERGER & ASSOCIATES 6037 Frantz 

### Road, Suite 107 Dublin, Ohio 43017 614-798-1600/614-798-1620 (fax) Attorney for Respondent

Dated: June 29, 2015

Legal Technician

805/30/2015 15:18

To: Company: Phone: Fax:
From: Title: 8472948293

Judge J.E. Sullivan 

### (202) 366-7536
Kate Barber FAAAttorney

Date: June 30, 2015 Pages wlcover:


### Message: FAA AGL 7 COUNSEL PAGE 01/09


# Federal Aviation Administration

Office olthe Regional Counsel Great Lakes Region 2300 East Devon Des Plaines, IL 60018 Telephone. 847-294-7862 Fax No. 847-294-8293 E-mail: kate.barber@laa.gov Facsimile