I haven't seen a direct answer to the question yet so I'll give my two cents worth (as if all of you have been waiting on the edges of your seats for it, right? :-)
The A&P/IA will ultimately be held accountable if he/she signs off an aircraft that is clearly not mechanically fit to fly - especially if mechanical problems result in an accident or incident. However, the one thing that the FAA stresses during our annual IA Refresher seminars is that the mechanic's signature on an annual inspection certifies ONLY that the aircraft was airworthy AS OF THE DAY OF THE SIGNATURE. Any mechanical problem after that date does not automatically mean that the mechanic failed to do a proper inspection. But let's also be realistic here. If an IA signs off an annual on Friday and the plane sheds a wing on Monday due to extensive rust and age cracks in the wing attachment points, the FAA will likely hang the IA out to dry.
That said, the FAA holds the PILOT accountable for an aircraft's fitness to fly prior to each flight. Does this mean that the pilot has to borescope his cylinders prior to each flight to make sure something isn't about to come apart? Of course not. But it does mean that the pilot will be held accountable if the pilot elects to fly an aircraft with an obvious deficiency that likely developed since the last inspection. (And by "obvious" I mean something that would be plainly visible during a preflight; i.e. a caved-in leading edge due to a bird strike.)
And per a question brought up earlier: Is a paperwork inspection part of an annual? Yes. Will a paperwork problem keep an annual from being completed? Not necessarily because the IA is only determining the mechanical fitness of the aircraft for flight, not whether the address on the registration is correct or that the state taxes have been paid. (Nonetheless, the IA is obligated to bring any such paperwork deficiencies to the attention of the owner during the inspection.) However, if the logbooks contained a note that the airworthiness certificate has been revoked or there wasn't one in the airplane during the inspection, I, personally, wouldn't sign it off because I wouldn't want my signature in the logbook of a plane that had questionable legality issues! There is a saying among A&Ps and IAs that we should never put our name in a logbook that we wouldn't want to be shown projected on a screen in a courtroom.
And per another question above, it is a simple matter to take your old, tattered airworthiness certificate to the local FSDO to have an official replacement made. (The regs state that a photocopied certificate is not acceptable; therefore, only an official FAA replacement is legal.) The FAA is aware that these things are usually "displayed" down at our feet where they get brake fluid dripped on them, etc over the years so your FSDO should have no problem issuing you a replacement. Of course, this only applies to currently valid, if only tattered, certificates.
Oh, and by the way, any jerk can record a lien against your plane, house, car, etc at any time and it can be a bear to have it removed. Nonetheless, if challenged, that person will ultimately be required to justify the validity of their lien. Unfortunately, it may cost you some money in legal fees to have a bogus claim removed. (Much like identify theft – a sign of our times!)
Chris, I’m just outside of Houston. E-mail me at HLHartman@houston.rr.com . I can’t promise to fix your problem but maybe I can help.
Harvey Hartman
A&P-IA