vs. ) Case No. 99-1676
TONY J. MAFFEI, )
Respondent. )
Pursuant to notice, a hearing was held in this case in accordance with Section 120.57(1), Florida Statutes, on February 1, 2000, by video teleconference at sites in Fort Lauderdale, Florida and Tallahassee, Florida, before Stuart M. Lerner, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.
For Respondent: Tony J. Maffei
Whether Respondent committed the violations alleged in the Administrative Complaint, as amended, and, if so, what penalties should be imposed.
On January 6, 1999, Petitioner filed an Administrative Complaint against Respondent containing the following "essential allegations of material fact":
According to the Administrative Complaint, "based upon the foregoing," Respondent was guilty of "failure to communicate an appraisal in violation of [Section] 475.624(16), Fla. Stat" (Count I); "having failed to maintain records in violation of [Section] 475.629, Fla. Stat." (Count II); and "culpable negligence or breach of trust in a business transaction in violation of [Section] 4[7]5.624(2), Fla. Stat." (Count III). 1/
Respondent "dispute[d] the allegations of fact contained in the Administrative and request[ed] . . . a formal hearing pursuant to Section 120.57(1), Florida Statutes." Petitioner, on April 8, 1999, referred the matter to the Division of Administrative Hearings (Division) for the assignment of a Division Administrative Law Judge to conduct the hearing Respondent had requested.
As noted above, the hearing was held on February 1, 2000.
2/ At the hearing, three witnesses testified: Dennis Thresher, Steve Mohan, and Respondent. In addition to the testimony of these three witnesses, five exhibits (Petitioner's Exhibits 1 through 5) were offered and received into evidence.
At the close of the evidentiary portion of the hearing on February 1, 2000, the undersigned, on the record, advised that proposed recommended orders had to be filed with the Division no later than 20 days from the date of the filing of the transcript of the hearing. The hearing Transcript was filed on March 2, 2000. On March 22, 2000, Petitioner filed its Proposed Recommended Order, which has been carefully considered by the undersigned. To date Respondent has not filed any post-hearing submittal.
Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made:
Petitioner is a state agency. It is responsible for administering and enforcing the provisions of Chapter 475, Part II, Florida Statutes.
Respondent is now, and has been since June 1, 1996, a Florida-certified residential real estate appraiser (holding certificate number RD 0002087 issued by Petitioner). 3/ At no time during the period of his certification has he had any disciplinary action taken against his certificate.
At all times material to the instant case, Steve Mohan was the owner of the following income-producing properties: attached "twin homes" located at 3976 and 3978 West Roan Court, Lake Worth, Florida; and a triplex located at 517 South F Street, Lake Worth, Florida (Subject Properties).
In or about March of 1998, Mr. Mohan approached Brett Matchton, a mortgage broker, to inquire about refinancing the loans that he (Mr. Mohan) had obtained to purchase the Subject Properties. Mr. Matchton advised Mr. Mohan that, in order to obtain such refinancing, Mr. Mohan needed to have the Subject Properties appraised.
On or about March 2, 1998, Mr. Matchton asked Respondent if he would appraise the Subject Properties (which Mr. Matchton described as a duplex and a triplex) for Mr. Mohan (Appraisal Assignment).
Respondent told Mr. Matchton that he would accept the Appraisal Assignment, provided that he was paid either "at the door" (in advance) or upon delivery of the appraisals.
Mr. Matchton advised that Mr. Mohan would pay Respondent by check "at the door."
Respondent deemed such an arrangement to be acceptable.
That same day, accompanied by Mr. Mohan, Respondent inspected, photographed, and made rough sketches of the Subject Properties. He also obtained information about the properties from Mr. Mohan.
Before departing, Respondent received two checks (both made out to him) from Mr. Mohan. One check (in the amount of
$400.00) was for "a duplex income property appraisal on the [West] Roan Court property" and the other check (in the amount of
$450.00) was for "a triplex income property appraisal on the F Street property."
Following his visit, using his computer, Respondent accessed local government public records (that were available "on line") on the Subject Properties and on other "comparable" properties ("to find comparable sales"). His examination revealed, among other things, that there were actually "two single-family twin homes" (not a duplex) located at 3976 and 3978 West Roan Court.
Respondent subsequently spoke with Mr. Matchton and informed him that a separate appraisal needed to be done for each
of the "twin homes." Mr. Matchton responded that he "wanted it done as a duplex," not as two separate properties. Mr. Matchton also told Respondent what "minimum valuations" were required "to make the [refinancing] work."
Based upon the preliminary work he had done, Respondent determined that the fair market values of the Subject Properties were "far and above" these "minimum valuations."
Sometime after April 1, 1998, Respondent contacted
Mr. Matchton and advised that he (Respondent) was not going to do any additional work on the Appraisal Assignment because of ethical concerns he had regarding the manner in which (in accordance with Mr. Matchton's instructions) he was to complete the assignment. 4/
On or about April 10, 1998, Respondent spoke with Mr. Mohan over the telephone. During this telephone conversation, Mr. Mohan told Respondent to "forget about" appraising the Subject Properties and "just refund the money
back." Respondent agreed to refund, in full, the $850.00 he had received from Mr. Mohan for the Appraisal Assignment, but indicated that, because of his financial situation, it was "going to take [him] some time" to make such a refund.
Respondent never completed any appraisal reports concerning the Subject Properties (although he had started working on such reports).
Not having received the promised refund from Respondent (who was experiencing serious "cash flow" problems at the time), Mr. Mohan, on May 26, 1998, filed a formal written complaint with Petitioner. The complaint read as follows:
I, Steve Mohan requested Tony J. Maffei to appraise the following properties, 517 South F Street, Lake Worth Florida and 3976 and 3978 West Roan Court, Lake Worth, Florida.
On March 2, 1998, Mr. Maffei came out and looked at the above properties and I paid him the amounts of $400 and $450 (copies of checks enclosed). On 3/16/98, Mr. Maffei was contacted to inquire about whether the appraisals were done. He said that they were not.
Mr. Maffei was contacted almost every other day between 3/17/98 and 4/7/98, only to be told that the appraisals were not done. On 4/10/98, Mr. Maffei was contacted by phone, at which time he said that he could not do the appraisals and he would refund the monies back. Today is 5/13/98 and I have not received anything from him.
Mr. Mohan's complaint was assigned to Dennis Thresher, an investigator specialist with Petitioner, on June 15, 1998.
Mr. Thresher interviewed Respondent on July 30, 1998, at which time he requested Respondent to produce "copies of the two appraisals that were supposed to be provided to Mr. Mohan."
On August 18, 1998, after some delay, Respondent provided Mr. Thresher with a copy of his work file on the Subject Properties. Included in the file were data sheets, photographs, and sketches. Because of a hardware problem, he was unable to retrieve and make copies of the "partial," unfinished appraisal
reports concerning the Subject Properties that he had stored on his computer.
At no time did Respondent "come out and actually say" to Mr. Thresher that he (Respondent) had not completed the appraisal reports concerning the Subject Properties. He reasonably assumed that Mr. Thresher already knew, from reading Mr. Mohan's complaint, that no such appraisal reports were completed by Respondent. Respondent did not intend, at any time, to mislead Mr. Thresher.
On or about October 5, 1999, after the filing of the Administrative Complaint in the instant case, Respondent sent the following letter, accompanied by a check in the amount of
$400.00, to Mr. Mohan:
I have enclosed a bank check in the amount of
$400 for the refund of the appraisal fee that you paid to me for the appraisal of one of the properties located in Palm Beach County. An additional bank check for $450 will follow as the refund of the appraisal fee for the other Palm Beach County property.
I humbly apologize for the delay of the appraisal refund checks and the inconvenience it has caused you. This was due to my lower- than-typical cash flow and higher-than- typical bills/expenses.
As we discussed via telephone, I am personally compelled to compensate you for you inconvenience, loss of interest income and costs you may have incurred due to the delay of the appraisal fee refund. As we agreed upon, I will perform an appraisal report for you on a single family or condominium property at "no fee" after you have received the full $850 appraisal refund. Please be expecting a $450 bank check for
payment of the final balance before October 30, 1999.
Please note that a copy of this letter and the $400 check will be faxed to the Department of Professional Regulation, Florida Real Estate Appraisal Board for their files.
Again, I apologize for the inconvenience this has caused you.
Mr. Mohan subsequently received from Respondent the "$450 bank check" Respondent had promised to send to him.
CONCLUSIONS OF LAW
The Florida Real Estate Appraisal Board (Board) is statutorily empowered to take disciplinary action against Florida-certified real estate appraisers based upon any of the grounds enumerated in Section 475.624, Florida Statutes. Such disciplinary action may include one or more of the following
penalties: certificate revocation; certificate suspension (for a period not exceeding ten years); imposition of an administrative fine not to exceed $5,000 for each count or separate offense; issuance of a reprimand; and placement of the certificateholder on probation. Section 475.624, Florida Statutes.
Proof greater than a mere preponderance of the evidence must be submitted. Clear and convincing evidence of the certificateholder's guilt is required. See Department of Banking and Finance. Division of Securities and Investor Protection v. Osborne Stern and Company, 670 So. 2d 932, 935 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Munch v.
Department of Professional Regulation, 592 So. 2d 1136 (Fla. 1st DCA 1992); Section 120.57(1)(j), Florida Statutes ("Findings of fact shall be based on a preponderance of the evidence, except in penal or licensure disciplinary proceedings or except as otherwise provided by statute.").
"'[C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must be distinctly remembered; the testimony must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established."' In re Davey, 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval, from Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983).
The disciplinary action taken against the certificateholder may be based only upon those offenses specifically alleged in the administrative complaint. See Cottrill v. Department of Insurance, 685 So. 2d 1371 (Fla. 1st DCA 1996); Delk v. Department of Professional Regulation, 595 So. 2d 966, 967 (Fla. 5th DCA 1992); Kinney v. Department of State, 501 So. 2d 129, 133 (Fla. 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So. 2d 842, 844 (Fla. 2d DCA 1984).
In determining whether Section 475.624, Florida Statutes, has been violated in the manner charged in the administrative complaint, one "must bear in mind that it is, in effect, a penal statute. . . . This being true the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it. Furthermore, if there are any ambiguities included such must be construed in favor of the . . . [certificateholder]." Lester v. Department of Professional and Occupational Regulations, 348
So. 2d 923, 925 (Fla. 1st DCA 1977).
The Administrative Complaint issued in the instant case, as amended, alleges that Respondent violated subsections
(2) (Count III) and (16) (Count I) of Section 475.624, Florida Statutes, as well as Section 475.629, Florida Statutes (Count II), in connection with two appraisal assignments for which he was paid a total $850.00 by Mr. Mohan.
Subsection (2) of Section 475.624, Florida Statutes, authorizes the Board to take disciplinary action against a Florida-certified real estate appraiser who "[h]as been guilty of
. . . culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory . . . . It is immaterial to the guilt of the . . . certificateholder that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct;
or that such victim or intended victim was a customer or a person in confidential relation with the . . . certificateholder, or was an identified member of the general public."
Subsection (16) of Section 475.624, Florida Statutes, authorizes the Board to take disciplinary action against a Florida-certified real estate appraiser who "[h]as failed to communicate an appraisal without good cause."
"An "appraisal," as used in Chapter 475, Part II, Florida Statutes, including Section 475.624, Florida Statutes, is defined in subsection (1)(a) of Section 475.611, Florida Statutes, as follows:
"Appraisal" or "appraisal services" means the services provided by certified or licensed appraisers or registered assistant appraisers, and includes:
"Appraisal assignment" denotes an engagement for which a person is employed or retained to act, or could be perceived by third parties or the public as acting, as an agent or a disinterested third party in rendering an unbiased analysis, opinion, review, or conclusion relating to the nature, quality, value, or utility of specified interests in, or aspects of, identified real property.
"Analysis assignment" denotes appraisal services that relate to the employer's or client's individual needs or investment objectives and includes specialized marketing, financing, and feasibility studies as well as analyses, opinions, and conclusions given in connection with activities such as real estate brokerage, mortgage banking, or real estate counseling.
Subsection (1) of Section 475.624, Florida Statutes, authorizes the Board to take disciplinary action against a Florida-certified real estate appraiser who "[h]as violated any provisions of [Part II of Chapter 475, Florida Statutes]." Section 475.629, Florida Statutes, is among the "provisions of this part." It provides as follows:
An appraiser registered, licensed, or certified under this part shall retain, for at least 5 years, original or true copies of any contracts engaging the appraiser's services, appraisal reports, and supporting data assembled and formulated by the appraiser in preparing appraisal reports.
The period for retention of the records applicable to each engagement of the services of the appraiser runs from the date of the submission of the appraisal report to the client. These records must be made available by the appraiser for inspection and copying by the department on reasonable notice to the appraiser. If an appraisal has been the subject of or has served as evidence for litigation, reports and records must be retained for at least 2 years after the trial.
An "appraisal report," as used in Chapter 475, Part II, Florida Statutes, including Section 475.629, Florida Statutes, is defined in Subsection (1)(c) of Section 475.611, Florida Statutes, as follows:
"Appraisal report" means any written or oral analysis, opinion, or conclusion issued by an appraiser relating to the nature, quality, value, or utility of a specified interest in, or aspect of, identified real property, and includes a report communicating an appraisal analysis, opinion, or conclusion of value, regardless of title. However, in order to be recognized in a federally related
transaction, an appraisal report must be written.
A review of the record in the instant case reveals that Petitioner met its burden of proving Respondent's guilt of the violation alleged in Count III (as amended) of the Administrative Complaint issued in the instant case, but that its proof was insufficient to demonstrate that Respondent committed the violations alleged in the remaining two counts of the Administrative Complaint.
The record evidence establishes that, although Respondent had entered into an agreement to appraise the Subject Properties for Mohan, the agreement was subsequently rescinded by mutual agreement and no appraisals or appraisal reports concerning the Subject Properties were ever completed by Respondent. See Hammond Realty Company v. Wheaton, 90 So. 2d 292 (Fla. 1956); Maruri v. Maruri, 582 So. 2d 116, 117 (Fla. 3d DCA 1991), quoting from Gustafson v. Jensen, 515 So. 2d 1298,
(Fla. 3d DCA 1987) and McMullen v. McMullen, 185 So. 2d 191 (Fla. 2nd DCA 1966)("'The abandonment of a contract may be
effected by the acts of one of the parties thereto where the acts of that party are inconsistent with the existence of the contract and are acquiesced in by the other party. This is tantamount to a recision of the contract by mutual assent.'"); In re Estate of Algar v. King, 383 So. 2d 676. 677 (Fla. 5th DCA 1980)("A contract can be modified or revoked by mutual agreement of the contracting parties.").
Because the appraisals that Respondent is alleged, in Count I of the Administrative Complaint, to have failed to "communicate" (in violation of Section 475.624(16), Florida Statutes) never existed, that count of the Administrative Complaint must be dismissed.
Count II of the Administrative Complaint should likewise be dismissed because no showing has been made that Respondent failed to maintain any records concerning the Appraisal Assignment that he was required to retain pursuant Section 475.629, Florida Statutes. 5/ While it is true, as asserted in numbered paragraph 11 of the Administrative Complaint, that the work file that Respondent delivered to Mr. Thresher did not contain any appraisal reports prepared by Respondent concerning the Subject Properties, there were no such appraisal reports in the file, not as a result of any failure on Respondent's part to comply with the record retention requirements of Section 475.629, Florida Statutes, but simply because, as noted above, no such reports were ever completed by Respondent.
The record evidence, on the other hand, clearly and convincingly establishes that, as alleged in Count III (as amended) of the Administrative Complaint, Respondent committed a "breach of trust in a business transaction" in violation Section 475.624(2), Florida Statutes, by failing to timely refund the monies he was paid by Mr. Mohan to complete the Appraisal
Assignment. See Department of Professional Regulation, Division of Real Estate v. Cooper, 1989 WL 644276 (Fla. DOAH 1989)(Recommended Order)("There is, however, a breach of trust in a business transaction in that Cheryl [Cooper, a licensed real estate broker and permit holder for a real estate school] breached the trust imposed in her (through her agent) by her customers when she failed to timely refund the deposits.
Therefore, as to this element, the complaint has been sustained.").
Having determined that Petitioner established, by clear and convincing evidence, Respondent's guilt of the violation alleged in Count III (as amended) of the Administrative Complaint, the undersigned must next decide which of the penalties enumerated in Section 475.624, Florida Statutes, should be imposed upon Respondent for having committed this violation.
In order to answer this question, it is necessary to consult Rule 61J1-8.002, Florida Administrative Code, which contains the "disciplinary guidelines" adopted by the Board. See Parrot Heads Inc. v. Department of Business and Professional Regulation, 741 So. 2d 1231, 1233 (Fla. 5th DCA 1999)("An administrative agency is bound by its own rules . . . creat[ing] guidelines for disciplinary penalties."); cf. Williams v. Department of Transportation, 531 So. 2d 994, 996 (Fla. 1st DCA 1988)(agency is required to comply with its disciplinary guidelines in taking disciplinary action against its employees).
Rule 61J1-8.002, Florida Administrative Code, provides, in pertinent part, as follows:
Pursuant to s. 455.2273, Florida Statutes, the Florida Real Estate Appraisal Board sets forth below a range of disciplinary guidelines from which disciplinary penalties will be imposed upon licensees guilty of violating chapter 455 or part II, chapter 475, Florida Statutes. (For purposes of this rule, the term licensee shall refer to registrants, license holders or certificate holders.) The purpose of the disciplinary guidelines is to give notice to licensees of the range of penalties which normally will be imposed for each count during a formal or an informal hearing. For purposes of this rule, the order of penalties, ranging from lowest to highest, is: reprimand, fine, probation, suspension, and revocation or denial. Pursuant to s. 475.624, Florida Statutes, combinations of these penalties are permissible by law. Nothing in this rule shall preclude any discipline imposed upon a licensee pursuant to a stipulation or settlement agreement, nor shall the ranges of penalties set forth in this rule preclude the probable cause panel from issuing a letter of guidance upon a finding of probable cause, where appropriate.
As provided in s. 475.624, Florida Statutes, the Florida Real Estate Appraisal Board may, in addition to other disciplinary penalties, place a licensee on probation. The placement of the licensee on probation shall be for such a period of time and subject to such conditions as the board may specify. Standard probationary conditions may include, but are not limited to, requiring the licensee: to attend pre-
licensure courses; to satisfactorily complete a pre-licensure course; to attend and satisfactorily complete continuing education courses; to submit to reexamination through the state-administered examination, which must be successfully completed; to be subject to periodic inspections and interviews by an
investigator of the Department of Business and Professional Regulation.
The penalties are as listed unless aggravating or mitigating circumstances apply pursuant to paragraph (4). . . .
(d) 475.624(2)
Guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence of breach of
trust. . . .
In the case of culpable negligence and breach of trust, the usual action of the Board shall be to impose a penalty from $1000 fine to a 1 year suspension.
(4)(a) When either the petitioner or respondent is able to demonstrate aggravating or mitigating circumstances to the board by clear and convincing evidence, the board shall be entitled to deviate from the above guidelines in imposing discipline upon a licensee. Whenever the petitioner or respondent intends to introduce such evidence to the board in a s. 120.57(2), F.S., hearing, advance notice of no less than seven
(7) days shall be given to the other party or else the evidence can be properly excluded by the board.
(b) Aggravating or mitigating circumstances may include, but are not limited to, the following:
The severity of the offense.
The degree of harm to the consumer or public.
The number of counts in the administrative complaint.
The number of times the offenses previously have been committed by the licensee.
The disciplinary history of the licensee.
The status of the licensee at the time the offense was committed.
The degree of financial hardship incurred by a licensee as a result of the imposition of a fine or suspension of the license.
Violation of the provision of part II of chapter 475, Florida Statutes, wherein a letter of guidance as provided in s. 455.225(3), Florida Statutes, previously has been issued to the licensee.
Having carefully considered the facts of the instant case in light of the pertinent provisions of Section 475.624, Florida Statutes, and Rule 61J1-8.002, Florida Administrative Code, the undersigned concludes that, due to the presence of mitigating circumstances, 6/ deviation from the normal "range of penalties" for a "breach of trust" in violation of Section 475.624(2), Florida Statutes, is warranted in the instant case and that the appropriate penalty to impose upon Respondent for committing the violation alleged in Count III (as amended) of the Administrative Complaint is a fine in the amount of $500.00.
RECOMMENDED that the Board issue a final order dismissing Counts I and II of Administrative Complaint; finding Respondent guilty of the violation of Section 475.624(2), Florida Statutes, alleged in Count III (as amended) of the Administrative
Complaint; and fining Respondent $500.00 for having committed this violation.
DONE AND ENTERED this 30th day of March, 2000, in Tallahassee, Leon County, Florida.
STUART M. LERNER
Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 2000.
1/ Count III of the Administrative Complaint originally alleged a violation of Section 465.624(2), Florida Statutes. At hearing, Petitioner requested and was granted, without objection, permission to correct this scrivener's error and amend the Administrative Complaint to reflect that the "culpable negligence or breach of trust" alleged in Count III was in violation of Section 475.624(2), not 465.624(2), Florida Statutes.
2/ The hearing was originally scheduled to commence on July 23, 1999, but was continued at Petitioner's request. The matter was subsequently held in abeyance pending the Florida Real Estate Appraisal Board's consideration of a settlement stipulation into which the parties had entered. After being advised that the Florida Real Estate Appraisal Board had rejected the parties' settlement stipulation and that the parties had conferred and determined that a hearing in this case was necessary, the undersigned rescheduled the hearing for February 1, 2000.
3/ His certificate became "involuntary inactive due to non- renewal" on November 30, 1996, and remained so until February 18, 1997, the date Respondent late-renewed his certificate.
4/ Pursuant to Section 475.624(17), Florida Statutes, it is unlawful for a certified appraiser to "accept[] an appraisal assignment if the employment itself is contingent upon the appraiser reporting a predetermined result, analysis, or opinion, or if the fee to be paid for the performance of the appraisal assignment is contingent upon the opinion, conclusion, or valuation reached upon the consequences resulting from the appraisal assignment."
5/ Petitioner acknowledges in its Proposed Recommended Order that the record evidence is insufficient to establish that Respondent "failed to maintain records" in violation of Section 475.629, Florida Statutes, as alleged in Count II of the Administrative Complaint.
6/ These mitigating circumstances include Respondent's cash flow difficulties during the time in question; Respondent's ultimate repayment of the monies he owed Mr. Mohan and his agreement to compensate Mr. Mohan for his delay in making such repayment; and Respondent's unblemished disciplinary record.
Tony J. Maffei
Barbara D. Auger, General Counsel Department of Business and
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 should be filed with the agency that will issue the final order in this case.
