STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHARLES E. KIMMIG, SR., )

)

Petitioner, )

)

vs. ) CASE NO. 76-1569

) PD NO. 2889

ARTHUR W. HASTINGS, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held pursuant to notice in the above styled cause in the Hearing Room of the Florida Real Estate Commission, 2699 Lee Road, Winter Park, Florida at 8:30 A.M. on January 13, 1977 before Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings.

This matter came on to be heard upon the Administrative Complaint filed by the Florida Real Estate Commission against Arthur W. Hastings alleging that he is a real estate salesman employed by Alpheus C. Stubbs and while in the employ of Stubbs, operated as a real estate broker for Southern Fruit Distributors, Inc., a nonregistered corporation, in violation of Subsection 475.42(1)(b) and having been employed by Southern Fruit Distributors, Inc. and Alpheus C. Stubbs at the same time is in violation of Commission Rule 21V-6.04 and Section 475.25(1)(b), Florida Statutes.

APPEARANCES

For Petitioner: Joseph A. Doherty, Esquire

Florida Real Estate Commission 2699 Lee Road

Winter Park, Florida 32789

For Respondent: Bruce M. Bogin, Esquire

619 East Washington Street Orlando, Florida 32801

FINDINGS OF FACT

1. Arthur W. Hastings is a registered real estate salesman associated with Alpheus C. Stubbs, a registered real estate broker, doing business at 103 East Burleigh Boulevard, Tavares, Florida 32778. Said employment with Alpheus Stubbs is part-time and Arthur W. Hastings is employed full-time as an agricultural economist by Southern Fruit Distributors, Inc.

   
   

2. During 1975, the School Board of Orange County sought to condemn property owned by Southern Fruit Distributors, Inc. known as Hurley Grove for a proposed high school site in the Winter Garden-Ocoee-Windermere area consisting of forty-three (43) acres. In that regard, suit was brought by the School Board of Orange County as Petitioner against Southern Fruit Distributors, Inc. in the

   Circuit Court of the Ninth Judicial Circuit, in and for Orange County, Florida, Civil Action No. 73-8434.

   
   

3. Southern Fruit Distributors, Inc. was represented in that action by William Eagan, Attorney at Law, who sought to present the best possible case for his client in terms of evaluation of the property to be condemned. In that regard, Mr. Eagan had an appraisal of the property prepared by Duckworth, Duckworth and Perdue, Inc., realtors specializing in property appraisal. This appraisal estimated the fair market value of the fee simple interest in the Hurley Grove as of the date of the appraisal using the comparable sales method. In addition, Mr. Eagan soght a means of presenting at the trial other evidence indicating the full value to include profits from the business conducted on the property. In this regard, Mr. Eagan was placed in contact by the owner of the property with its employee, Mr. Arthur W. Hastings.

   
   

4. Arthur W. Hastings was employed full-time by Southern Fruit Distributors, Inc. as an agricultural economist. His training experience, and background enabled him to render an opinion as to the economic value of the Hurley Grove. Mr. Eagan requested Mr. Hastings to provide him with information regarding the profits of the business and the loss of those profits associated with taking of the Hurley Grove. Pursuant to Mr. Eagan's request and under the direction of his employer, Mr. Hastings prepared two reports on the Hurley Grove. The first of these was received into evidence as Exhibit 6 and the second was received as Exhibit 5. The basis of both of these reports was an evaluation of the loss which would be suffered by Southern Fruit by the loss of Hurley Grove. Hasting's method for computing this was explained on page 255 of the transcript of the trial. First, the production of the grove was derived from the books of Southern Fruit. This was used to establish income figures for the longest period possible. This figure was then capitalized at a rate determined to be a reasonable return which was taken as 6 percent in this case. This was then divided into the net profit to arrive at 100 percent of the property's economic value to the owner. In his first report, however, Hastings also included the value of certain improvements to the property of which the other appraisers had not been aware: an underground drainage system, a large drainage ditch, and an eight (8) inch irrigation well, plus the value of the land itself. This report was discussed with Perdue and Eagan, and as a result, Eagan directed Hastings to prepare a new report which was limited solely to a capitalization of profits approach. This second report was Exhibit 5.

   
   

5. At the trial of the condemnation case between the School Board of Orange County and Southern Fruit Distributors, Inc., Mr. Hastings was called as an expert witness by the Respondent, qualified as an expert in agricultural economics, and testified as to the economic loss to the owner of the property. His testimony related to the second report he prepared and submitted to Mr. Eagan. The only testimony relating to his qualifications as a real estate salesman were on cross examination and indicated that Hasting's did not present his report as an expert in the values of real estate.

   
   

6. None of the activities undertaken by Arthur C. Hastings were under the direction or through his broker, Alpheus C. Stubbs.

   
   

   CONCLUSIONS OF LAW

   
   

7. The issue presented in this case is whether the activity of Arthur C. Hastings in preparing a report of the economic evaluation of Hurley Grove and his testimony presented in the condemnation suit between the School Board of

   Orange County and Southern Fruit Distributors, Inc. constituted "appraisal" as that term is used in Chapter 475.

   
   

8. The Commission argues that compensation for condemnation is based on the fair market value and any opinion bearing on the amount of compensation is an opinion as to the fair market value and therefore an appraisal.

   
   

9. The position of the Commission is not supportable; because while it is said that the measure of compensation is the fair market value, the Florida law requires full compensation for the property when taken. Evidence of the full loss may include loss of profits and similar economic data. The comparable sales method is frequently used to present the fair market value of property and real estate dealers who are familiar with such sales may be qualified to offer an expert opinion thereon; however, other testimony which is not related to comparable sales but which related to the full value of the property being taken is permitted. The nature of such other factors is such that many different kinds of experts might be qualified to offer their opinions. These opinions are not on the fair market value, but to the added loss to the order beyond the market value.

   
   

10. The acceptance into evidence by the trial court of Hastings' testimony and the appellate court's affirmation of the trial court's ruling on its admissibility is not relevant to the issues raised here beyond substantiating the status of the law set out above that various types of expert testimony may be presented in a condemnation case. It is quite clear from the cross examiiation of Hastings at the trial that he was not qualified and did not assert any qualifications to render an expert opinion as to the market value of the property based on his real estate experience. Therefore if Hastings' opinion was admissible, and it was, it had to be based on his expertise as an agricultural economist testifying to the amount of the economic loss suffered by Southern Fruit. Similarly, the trial court's award of $1,000 to the land owner for its reasonable appraiser's fee only indicates the trial court's award of a recognized cost of presenting the landowner's case. It is clear from the trial court's direct comments at trial that the court did not consider Hasting's testimony an appraisal of real property.

    
    

11. Hastings' opinion dealt with the value of the investment and profits from the grove to Southern Fruit which had been lost, and was not an appraisal of the fair market value. The nature of this opinion is most clearly presented in Exhibit 6, in which the value of the land and improvements is presented and separated from the profits. These figures were consolidated and the land value deducted in Exhibit 5, the land's value having already been testified to by the County's appraiser. Hastings' expert opinion on the value of the loss of the grove is not an opinion as to the value of the land, but was a determination of the value of the economic loss to Southern Fruit of the Hurley Groves. In rendering this opinion Hastings did not "appraise" the land and his report was not an appraisal. Therefore, Hastings did not violate Section 475.42(1)(b) by doing this work for Southern Fruit.

    
    

12. The assertion that Hastings violated Rule 21V-6.04 by being employed by two brokers, to wit: Stubbs and Southern Fruit followed by the assertion, not in the alternative, that Southern Fruit was not a registrant is difficult for the Hearing Officer to fathom. It suffices to say that there is no evidence that Southern Fruit is a registrant, and therefore Hastings cannot be guilty of said violation.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the charges against Arthur W. Hastings be dismissed and that no action be taken against him.

DONE and ORDERED this 23rd day of February, 1977, in Tallahassee, Florida.

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Bruce M. Bogin, Esquire Joseph A. Doherty, Esquire

619 East Washington Street Florida Real Estate Commission Orlando, Florida 32801 2699 Lee Road

Winter Park, Florida 32789

Docket for Case No: 76-001569

Orders for Case No: 76-001569