STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS ) AND PROFESSIONAL REGULATION, ) DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 02-2717PL

)

ANTONIO PRIETO, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case by video teleconference on November 15, 2002, with the parties appearing from Miami, Florida, before J. D. Parrish, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Stacy N. Robinson Pierce, Esquire

Department of Business and Professional Regulation

Division of Real Estate

400 West Robinson Street Suite N802

Orlando, Florida 32802

For Respondent: James R. Mayfield, Esquire

18080 Palm Point Drive Jupiter, Florida 33458

STATEMENT OF THE ISSUE

Whether the Respondent, Antonio Prieto, committed the violations alleged in the Administrative Complaint involving the standard for the development of or the communication of a real estate appraisal and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On January 15, 2001, the Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (Department), entered an Administrative Complaint against the Respondent, Antonio Prieto, which alleged four violations of law. More specifically, the Department claimed that the Respondent had violated the Uniform Standards of Professional Appraisal Practice (USPAP) and thereby violated Section 475.624(14), Florida Statutes; and had failed to exercise reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. The allegations stemmed from two separate appraisals performed or supervised by the Respondent. Although four counts were initially filed, the Petitioner has conceded one count related to one appraisal report.

The case was promptly scheduled for hearing but continued upon request of the parties on two occasions. The matter was ultimately heard on November 15, 2002. At the hearing, the

Petitioner presented testimony from John Esposito, Diane DeFonzo, and Brian Piper. The Petitioner's Exhibits numbered 1-4 were received into evidence. The Respondent testified in his own behalf and the Respondent's Exhibit 1 was admitted into evidence. All requests for official recognition of pertinent statutes, rules or precedent were granted.

The Transcript of the proceedings was filed on

November 25, 2002. Thereafter, the Petitioner timely filed a Proposed Recommended Order that has been considered in the preparation of this order. The Respondent has not filed a Proposed Recommended Order.

FINDINGS OF FACT

1. At all times material to the allegations of this case, the Petitioner is the state agency charged with the responsibility of regulating persons holding real estate appraisers' licenses in Florida.

2. At all times material to the allegations of this matter the Respondent has been a State-certified residential real estate appraiser holding license number RD0000591.

3. On or about July 6, 1995, the Respondent prepared an appraisal report for property located at 2821 Coacoochee Street, Miami, Florida. The appraisal report completed for this property did not contain a certification page.

4. When the Department requested Respondent's entire appraisal file for the Coacoochee property, the Respondent failed to produce a certification page in connection with the work performed for this appraisal. The Respondent acknowledged that an appraisal report without the certification page is considered incomplete. The Respondent provided no credible explanation for the failure to maintain the certification page for the Coacoochee appraisal report file.

5. On or about September 8, 1998, the Respondent was responsible for a second appraisal report for real property located at 12695 Southwest 92nd Avenue, Miami, Florida. As of the date of the second report, the estimated value of the subject property was noted to be $395,000.

6. In the development of the second report the Respondent acted as a supervisory appraiser to Rita Rindone, a State-registered assistant real estate appraiser. In the Respondent's presence, Ms. Rindone provided the Department with a copy of the entire work file for the second property's appraisal report.

7. Inconsistent and incomplete information in the work file for the second property revealed errors in following USPAP standards. For example, the alleged existence of an unrecorded quit claim deed and the disparity between the

   subject property's listed price ($268,000) and the appraised value should have been "red flags" to the Respondent. In fact the listing was not even disclosed in the appraisal report (an error the Respondent acknowledged).

8. As the supervisor to Ms. Rindone, the Respondent was responsible to ensure that the standards of USPAP were followed. Based upon the testimony of the expert, DeFonzo, it is determined that the Respondent's failures in connection with the second appraisal report constitute negligence, gross negligence, incompetence, or fraud.

9. The USPAP standards require appraisers to maintain records for at least five years. Some circumstances may warrant a longer retention of records. At the minimum the Respondent should have maintained a complete work file for the relevant period of time for the Coacoochee property. The failure to make that complete file available to the Department is a violation of law.

10. The USPAP standards require that the methodology option used in preparing an appraisal report be prominently stated. The option used for the second property was not so stated. Such failure is a violation of law.

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. Section 120.57, Florida Statutes.

12. The Petitioner bears the burden of proof in this cause to establish by clear and convincing evidence the allegations of the Administrative Complaint. With the exception of Count II, it has met that burden.

13. Section 475.628, Florida Statutes, provides:

    
    

    Each appraiser registered, licensed, or certified under this part shall comply with the Uniform Standards of Professional Appraisal Practice. Statements on appraisal standards which may be issued for the purpose of clarification, interpretation, explanation, or elaboration through the Appraisal Foundation shall also be binding on any appraiser registered, licensed, or certified under this part.

    
    

14. Section 475.624, Florida Statutes, authorizes the Florida Real Estate Appraisal Board to take disciplinary action against the license of any real estate appraiser if the appraiser commits any of the prohibited acts delineated by the statute.

15. Pertinent to this case are two alleged violations: Sections 475.624(14) and 475.624(15), Florida Statutes. Such statutes provide:

    1. Has violated any standard for the development or communication of a real estate appraisal or other provision of the

       Uniform Standards of Professional Appraisal Practice.

    2. Has failed or refused to exercise reasonable diligence in developing an appraisal or preparing an appraisal report.

       
       

16. The Petitioner has demonstrated by clear and convincing evidence that the Respondent violated Section 475.624(14), Florida Statutes, as to both of the appraisal reports addressed in this record. As to the first, the failure to include a certification page renders the report defective. As to the second, the failure to include the option and other verified information correctly violates the USPAP. Alternatively, the Department established that the Respondent failed to maintain an appropriate record of the first appraisal report (also a requirement of USPAP).

17. As to Section 475.624(15), Florida Statutes, the Department has established by clear and convincing evidence that the Respondent failed to properly supervise the assistant appraiser, failed to use reasonable diligence in the development of the appraisal report, and failed to honor the premise of not entering an appraisal report that might mislead the marketplace. Clearly, an appraisal report rendered at

    $122,000 above the purchase price sought for the property suggests some marketplace discrepancy that should have been fully explained.

18. Additional conclusions of violations outlined in the Petitioner's Proposed Conclusions of Law are accurate but have been deemed cumulative and unnecessary to the conclusions reached herein.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Appraisal Board enter a Final Order determining the Respondent has violated Sections 475.624(14), and (15), Florida Statutes, and imposing an administrative fine in the amount of $3000.00, together with suspending the Respondent's license for a period of five years. Further, it is recommended that prior to being actively licensed, the Respondent be required to complete a continuing education course to establish familiarity with USPAP and all rules and regulations governing licensees in this state.

DONE AND ENTERED this 23rd day of December, 2002, in Tallahassee, Leon County, Florida.

_________________________________

J. D. PARRISH 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 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 2002.

COPIES FURNISHED:

Buddy Johnson, Director Division of Real Estate Department of Business and

Professional Regulation

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900

Hardy L. Roberts, III, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-2202

James R. Mayfield, Esquire 18080 Palm Point Drive Jupiter, Florida 33458

Stacy N. Robinson Pierce, Esquire Department of Business and

Professional Regulation Division of Real Estate

400 West Robinson Street Suite N308

Orlando, Florida 32802

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 should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 02-002717PL

Orders for Case No: 02-002717PL