STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 97-2722

)

BARBARA E. COGAN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Administrative Law Judge, Mary Clark, conducted a formal hearing in the above-styled case on

January 14, 1998, in Melbourne, Florida.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Division of Real Estate

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

For Respondent: Barbara E. Cogan, pro se

3745 Oak Lane

Melbourne, Florida 32934 STATEMENT OF THE ISSUES

Petitioner's Administrative Complaint dated March 5, 1997, charges that Respondent, Barbara Cogan, obtained a license by means of knowingly submitting false information or engaging in misrepresentation in violation of Section 475.624(12), Florida

Statutes. The issue for disposition is whether that violation occurred, and if so, what discipline is appropriate.

PRELIMINARY STATEMENT

In response to the Administrative Complaint, Ms. Cogan requested a formal hearing and the case was referred to the Division of Administrative Hearings.

At the hearing the Petitioner presented testimony of Beverly Ridenauer and Investigator Kathleen Koeberich. Ms. Cogan testified and presented the additional testimony of Thomas M. Hayes. Without objection, Petitioner's Exhibits no. 1 through 7, and Respondent's Exhibits no. 1 through 3 were received into evidence.

Both parties submitted proposed recommended orders which have been considered in the preparation of this order.

FINDINGS OF FACT

1. Respondent Barbara E. Cogan is a state-certified residential real estate appraiser, having been issued license no. 0002758 on or about April 22, 1996, pursuant to Chapter 475, Florida Statutes.

2. Beverly Ridenauer is presently a complaint analyst, but previously was an administrative assistant in appraiser certification for the Department of Business and Professional Regulation (DBPR). As part of her duties at the time,

   Ms. Ridenauer reviewed Ms. Cogan's application for state certified residential appraiser in March 1996. The application on its face was complete and the requisite fee was attached.

   Ms. Cogan achieved the required hours of education and passed the state examination. Her application was, therefore, approved.

3. In the meantime, Ms. Ridenauer, as required by law, commenced an audit of the work experience claimed by Ms. Cogan in support of her application for certification. In response to a letter request from Ms. Ridenauer, Ms. Cogan promptly submitted copies of appraisal reports that she had prepared in her pre- certification employment experience.

4. The appraisal reports submitted by Ms. Cogan were all signed by Thomas M. Hayes, a state certified residential appraiser, with the additional notation "assistance by Barbara E. Cogan." In the course of her review, Ms. Ridenauer determined that Ms. Cogan had no real estate sales or broker's license, nor was she registered or certified as an appraiser. Ms. Ridenauer sent a memo to the DBPR complaint division because she deemed that the experience claimed by Ms. Cogan in the application process was invalid: qualifying appraisal experience may only be obtained when an individual is licensed to perform the appraisals.

5. There are no false statements on Ms. Cogan's application. She did not claim any other professional licenses in Florida and she truthfully answered "no" to the question

   whether she had ever been registered, licensed, or certified in another jurisdiction. Nor did Ms. Cogan misrepresent her work experience. She did all of the work on the appraisals under the supervision of Thomas Hayes, with whom she worked for 2 and 1/2 years. She successfully completed the required appraisal education courses and was trained by Mr. Hayes.

6. Neither Ms. Cogan nor Mr. Hayes had the slightest notion that Ms. Cogan was performing work for which she was not appropriately licensed. The appraisals signed by Mr. Hayes and submitted by Ms. Cogan to the agency as evidence of her experience include this statement in the appraiser's certification:

   I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. If I relied on significant professional assistance from any individual or individuals in the performance of the appraisal or the preparation of the appraisal report, I have named such individual(s) and disclosed the specific tasks performed by them in the reconciliation section of this appraisal report. I certify that any individual so named is qualified to perform the tasks. . . .

   (Petitioner's Exhibit no. 4, emphasis in original)

7. The emphasized language in the above text of the certification was underlined by hand and an asterisk was placed in the margin. Below Mr. Hayes' signature and next to an asterisk is the notation acknowledging Ms. Cogan's assistance that is described in paragraph 4, above.

8. When she took her appraisal education courses, Ms. Cogan observed that she was the only student who was not a registered appraiser. She asked her teacher if she had to be registered in order to get certified and he said, "no." Ms. Cogan also had obtained, and was thoroughly familiar with, a 2-sided sheet from the Department of Business and Professional Regulation, Division of Real Estate, titled "Essential Information for Real Estate Appraiser Applicants." The information sheet provides instructions for completing applications. It also describes the qualifications for registered appraiser (75 classroom hours of approved courses), licensed appraiser (75 classroom hours plus

   2 years' experience in real property appraisal), certified residential appraiser (120 classroom hours plus 2 years' experience in real property appraisal), and certified general appraiser (165 classroom hours plus 2 years' experience in real property appraisal, including non-residential appraisal work).

9. Ms. Cogan correctly noted that neither the information sheet nor her appraiser rules booklet states plainly that a candidate for certification as a residential appraiser must be first registered or licensed as an appraiser, a real estate salesperson, or a broker. When she was notified of the administrative complaint, she was thoroughly surprised and confused. She never intended to obtain her certification under false pretenses.

10. While agreeing that the rules and statute are not perfectly clear, the agency contends that Chapter 475, Florida Statutes, requires that appraisals must be done by appropriately- licensed individuals. The agency concedes that Ms. Cogan did the work she claimed and that it was good, competent work. But for the fact that she was not registered or licensed when she did the work, Ms. Cogan is fully qualified for her residential real estate appraiser certificate.

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to Sections 120.569, 120.57(1), and 455.255(5), Florida Statutes.

12. In license discipline cases such as this, the agency must prove the allegations of its complaint with evidence that is clear and convincing. Department of Banking and Finance v. Osborne Stern, 670 So. 2d 932 (Fla. 1996).

13. In this case the agency has alleged one simple violation: that because the appraisals submitted by Ms. Cogan as work experience were performed when she was neither registered nor licensed, she ". . . obtained a license by means of knowingly submitting false information, or engaging in misrepresentation in violation of Section 475.624(12), Florida Statutes." (p. 2, Administrative Complaint).

14. Section 475.624(12), Florida Statutes (1995), provides:

    
    

    475.624 Discipline.-The [Florida Real Estate Appraisal Board] may deny an application for

    registration, licensure, or certification, investigate the actions of any appraiser registered, licensed, or certified under this section; and may reprimand, fine, revoke, or suspend, for a period not to exceed 10 years, the registration, license, or certification of any such appraiser, or place any such appraiser on probation if it finds that the registrant, licensee, or certificate holder:

    . . .

    (12) Has obtained or attempted to obtain a registration, license, or certification by means of knowingly making a false statement, submitting false information, refusing to provide complete information in response to an application questions, or engaging in fraud, misrepresentation, or concealment.

    
    

15. Counsel for Petitioner concedes, and the evidence is clear, that Ms. Cogan did not intentionally misrepresent her experience or knowingly submit false information. He argues, nonetheless, that "misrepresentation" does not require knowing intent. This argument is refuted by the case, Munch v. Department of Professional Regulation, Division of Real Estate,

    592 So. 2d 1136 (Fla. 1st DCA 1992), cited in Walker v. Florida Dept. of Business and Professional Regulation, 23 Fla. Law Weekly D292 (5th DCA opinion filed 1/23/98). A violation of fraud, misrepresentation, or concealment requires that an intentional act be proved.

16. Ms. Cogan submitted her work experience and relied on this language of Section 475.612(1), Florida Statutes:

    . . . the work upon which an appraisal report is based may be performed by a person who is not a certified, licensed, or registered appraiser if the report is approved and signed by a certified or licensed appraiser.

    She made diligent inquiry of her instructor and relied on his response. She was thoroughly familiar with the statutes and regulations governing appraisers and still remained uninformed, as were her employer and her instructor, that the 2 years' real property appraisal experience required in Section 475.617(3), Florida Statutes, for a certified residential appraiser, had to be appraisal experience as a registered or licensed appraiser. The only exception recognized by the agency is the exception found in Section 475.612(2), Florida Statutes, that permits appraisals and appraisal services by real estate brokers, salespersons, or broker-salespersons.

17. The board's interpretation of the experience requirement is reasonable and should not be rejected. Erfman v. Dept. of Professional Regulation, 577 So. 2d 710 (Fla. 5th DCA 1991). But this conclusion is irrelevant to the ultimate and inescapable conclusion that the agency failed to clearly and convincingly prove the violation with which Ms. Cogan is charged. Her error was thoroughly unwitting and unintentional and there is, therefore, no basis for any penalty.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the agency enter its Final Order dismissing the Administrative Complaint against Barbara Cogan.

DONE AND ORDERED this 19th day of February, 1998, in Tallahassee, Leon County, Florida.

MARY CLARK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 19th day of February, 1998.

COPIES FURNISHED:

Steven W. Johnson, Esquire Department of Business and

Professional Regulation Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Barbara E. Cogan 3745 Oak Lane

Melbourne, Florida 32934

Lynda L. Goodgame, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Henry M. Solares, Division Director Division of Real Estate

Department of Business and Professional Regulation

Post Office Box 1900 Orlando, Florida 32802-1900

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order must be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 97-002722

Orders for Case No: 97-002722