STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS ) AND PROFESSIONAL REGULATION, ) DIVISION OF REAL ESTATE, )
)
Petitioner, )
)
vs. ) Case No. 08-3898PL
)
ANDREW S. MELTZER, )
)
Respondent. )
)
RECOMMENDED ORDER
As previously scheduled, a formal hearing was held in this case by video teleconference between Miami and Tallahassee, Florida, on October 30, 2008, before Administrative Law Judge Eleanor M. Hunter of the Division of Administrative Hearings.
APPEARANCES
For Petitioner: Robert Minarcin, Esquire
Department of Business and Professional Regulation
Division of Real Estate
400 West Robinson Street Suite N801
Orlando, Florida 32801
For Respondent: Daniel Villazon, Esquire
Daniel Villazon, P.A.
1420 Celebration Boulevard
Suite 200
Celebration, Florida 34747
STATEMENT OF THE ISSUE
Whether the Respondent, Andrew S. Meltzer, committed the violations alleged in the Administrative Complaint involving the standards for the development of or the communication of real estate appraisals and, if so, what penalty should be imposed.
PRELIMINARY STATEMENT
On February 14, 2008, the Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (Department), filed an eleven-count Administrative Complaint in FDBPR Case No. 2007051437 against the Respondent, Andrew S. Meltzer, a certified residential real estate appraiser. The Administrative Complaint alleged that he violated several statutory provisions, including that requiring compliance with the Uniform Standards of Professional Appraisal Practice (USPAP), by making errors and omissions in appraisal reports for a residential parcel of property in Pinecrest, Florida. More specifically, the Administrative Complaint alleged that the Respondent had violated the following provisions of Florida law: Subsection 455.227(1)(a), Florida Statutes (2006)(Count One); Subsection 475.624(15), Florida Statutes (2006) (Count Two); Section 475.629, and, therefore, Subsection 475.624(4), Florida Statutes (2006)(Count Three); Subsection 475.624(2), Florida Statutes (2006)(Count Four); Subsection 475.624(14), Florida Statutes (2006), by violating the Record Keeping Section of the Ethics Rule or other provisions of the USPAP (2006)(Count Five);
Subsection 475.624(14), Florida Statutes (2006), by violating the Conduct Section of the Ethics Rule or other provisions of the USPAP (2006)(Count Six); Subsection 475.624(14), Florida Statutes (2006), by violating Standard 1-1(a), (b) and (c) or other provisions of USPAP related to the development or communication of real estate appraisal (Count Seven); violated Subsection 475.624(14), Florida Statutes (2006), of the USPAP, by violating Standards Rule 1-4(a) and (b)(i), (ii), and (iii) (2006)(Count Eight); Subsection 475.624(14), Florida Statutes (2006), by violating Standards Rule 1-5(a) of the USPAP (2006) (Count Nine); Subsection 475.624(14), Florida Statutes (2006), by violating Standards Rule 2-1(a) and (b) of the USPAP (2006) (Count Ten); and Subsection 475.624(14), Florida Statutes (2006), by violating Standards Rule 2-2(b)(viii) of the USPAP (2006) (Count Eleven).
On August 12, 2008, the Respondent’s Petition for Formal Hearing was referred to the Division of Administrative Hearings by the Department and designated DOAH Case No. 08-3898PL. Administrative Law Judge Larry Sartin was assigned to hear the case, and as requested by the parties, Judge Sartin set the case for hearing for October 30, 2008. Before the hearing, the case was re-assigned to the undersigned.
At the hearing, the Petitioner presented the testimony of Raymond Scott Thompson and Phillip Spool, an expert in appraisal practice. The Petitioner's Exhibits numbered 1-6 were received
into evidence. The Respondent testified on his own behalf, and the Respondent's Exhibit 1 was received into evidence.
The Transcript of the proceedings was not filed until December 18, 2008. Because of the delay in the expected filing date for the transcript, each party filed and was granted an extension of time to file Proposed Recommended Orders. Both were received on January 20, 2009.
FINDINGS OF FACT
The Petitioner (Department) is the state agency charged with the responsibility of regulating persons holding real estate appraisers' licenses in Florida.
At all times material to the allegations of this matter the Respondent has been a State-certified residential real estate appraiser holding license number 3190. He is 38 years old and has been a real estate appraiser for approximately seventeen years. During that time, he has never been disciplined nor has he been removed from a bank's approved list of appraisers.
On or about October 23, 2006, the Respondent prepared a Uniform Residential Appraisal Report for property located at 9900 Southwest 72nd Avenue, Pinecrest, Florida ("the subject property"), for the F S Lending Group.
In September 2007, an investigator for the Department received a copy of an appraisal report (Report One) from a closing agent. The report showed that "Aida Martinez" was the name of the buyer. Based on his investigation and her
admissions, the investigator found that Martinez was a "straw buyer" and was paid $10,000 for the use of her name and credit report. The person who is alleged to have paid her was not available to talk to investigators due to possible criminal proceedings, but the Department's investigator made it clear that he found no evidence of a connection between that person and the Respondent. A copy of the contract, also provided by the closing agent, showed a different name for the buyer, "Aida Barrero" or "Aida Barren," as best the handwriting and poor quality of the copy could be read. In addition, an addendum to the contract for a purchase price of $999,000, provided that "seller will contribute [provide concessions in the amount of] $173,000 at closing with (sic) to the buyer (for repair of subject property and buyer closing costs). The amount that seller will receive for the property will be $825,000 less seller (sic) closing costs and mortgage payoff if any." Report One has the Respondent's digital signature on it. A mortgage loan on the subject property is now in foreclosure, but no one from the Department contacted the lender to see what appraisal was the basis for making the loan.
Based on the fact that the property was listed for sale, Report One has an incorrect "no" answer on page 1 to a question regarding a current or other sales listings in the last 12 months. Based on the provisions in the contract, it also has an incorrect "no" answer to whether there are seller's concessions.
When an investigator showed Report One to him, the Respondent immediately retrieved what has been designated "Report Two" from his computer files. Report Two on page 1 named the buyer as "Barren" using only the last name as is customary for the Respondent, and using the same name that was on the appraisal order form sent to the Respondent. Report Two has what appears to be a signed transmittal page to F S Lending Group. It also has a correct "yes" answer on page 1 to the question regarding a current or sales listings in the last 12 months, unlike Report One. Like Report One, it erroneously has a "no" answer on page 1 regarding seller's concessions and is, in all other respects, the same as Report One. The witnesses agreed that the most likely explanation for Report One is that page 1 was altered fraudulently after Report Two was no longer within the Respondent's control.
The Respondent's appraisal work file for the subject property included another report (Report Three) that also listed "Barren" as the buyer, but had no signature on it, and was an earlier draft of Report Two. Although the Department's expert said an oral communication of its contents could make Report Three an appraisal, he and the Department's investigator had no evidence of that and agreed that it was not an appraisal.
A three-page excerpt of the contract in the Respondent's work file did not include and did not refer to the addendum to the contract with concessions that indicated work needed to be
done on the house and that the purchase price was reduced. The three pages were clearly not the entire sales contract, based on missing page and item numbers on the standard form. The Respondent admitted that he only instructs clients to send the "first page, signature pages, addendum pages, and anything that would [a]ffect the purchase price." He said that he only asks for pertinent pages and he could not survive in the industry if he reviewed seventy or a hundred page construction contracts, although he checked the box on the appraisal from that says, "I did analyze the contract for sale of the subject property."
The Department's expert prepared a One-Unit Residential Appraisal Field Report (field report) to evaluate Report One that is, except for the name of the buyer and the answer regarding the sales listing, applicable to Report Two. He cited numerous errors and omissions in Report One. He admitted, however, that his work was "sloppy" because he listed the incorrect property address as 12745 Southwest 72 Avenue, the address for the subject property, not 9900 Southwest 72nd Avenue.
In his review, the Department's expert found that the Respondent incorrectly categorized the pool on the subject property as a structural improvement rather than a site improvement.
Comparable one in Report Two was a superior property, so the Respondent used matched paired sales data that he keeps in his office among other reference material, including the Marshall
and Swift publication on cost estimates. He made adjustments for square footage and room count accordingly. The Department's expert testified that USPAP required documentation for any adjustments, and, regarding where the records had to be kept, responded as follows:
Q. Now, and again I'm referring to comp number, report number two, comp number one. What documentation does he need in his file to support his adjustment for the site square footage?
A. Either -- I would say the best support would be a paired, p-a-i-r-e-d, sales analysis.
Q. Does that have to be in the work file?
A. Yes. No-no-no-no. It does not have to be in the work file. It could be somewhere in your office readily accessible . . .
Adjustments to comparable two were reasonable based on the Respondent's observation that it was "a lot more superior," and his determination, after talking to the realtor that it was completely "renovated like new" which he wrote in his notes. The MLS listing also reported that the renovations were made in 2006. The Respondent received conflicting information from two different data sources concerning the square footage for comparable two, so he called the realtor and used the figure that the realtor verified in his analysis, as the Department's expert testified he should have done. No adjustment was made based on his note that the comparable was "similar in square footage" and less than a 100-square foot difference.
The Department's expert differed with the selection and adjustment of comparables three and four due to lot sizes and bedroom/bathroom counts. The subject property is on a lot of 15,832 square feet, or less than half an acre, has four bedrooms and two and a-half baths, with 2,639 square feet of livable, air conditioned space. Comparable three has a lot size of 32,670 square feet, although the living area is similar, and it has only one half bath more than the subject. Although comparable three has a much larger site, the sales price was only $25,000 difference, because of its condition. So the Respondent reasonably made a consistent negative adjustment based on sales history.
Comparable four is within a half mile of the subject property, in the Pinecrest area, but it has a lot size of 33,541 square feet, has five bedrooms and four full baths, and has 4,283 square feet of livable space.
The Respondent agreed that, as a rule, comparables should have not more than a ten percent adjustment, and that, as the Department's expert noted, lenders require only three comparables. To provide as much information as possible, the Respondent included a fourth comparable with a greater adjustment down because it had a tar and gravel roof, and because the realtor told him "it needed updating." He made it the fourth comparable because it was the least desirable one, but he did not include the fact that it had a tennis court, as he should have.
He failed to note that it was gated property, although the Department's expert agreed that whether a gate adds or does not add value to property is "a matter of professional opinion." He also agreed that the differences between a tar and gravel roof and a tile roof would not usually be documented in a work file. It was appropriate to make adjustments based on the condition of the property. As USPAP required, the Respondent inspected the comparables from the street.
In reviewing the Respondent's work, the Department's expert observed only the subject property from the street, but not the comparables and testified as follows:
Q. But you did not inspect each of the comparable sales at least from the street?
A. Correct, correct.
* * *
Q. -- you testified that you did not inspect the comparables?
A. I agree.
* * *
Q. Correct. And that goes to the whole point where you were earlier discussing that it's hard to verify what he did because you actually didn't go out and see the comparables?
A. Correct.
Q. Which is contrary to what you were supposed to do?
A. Correct.
The Respondent made a mathematical error in the calculation of the depreciation at 22% when it should have been 20%, resulting in an underestimate of $8,541.
Although he correctly noted that the subject property was listed for sale for $999,000, the Respondent failed to include the Multiple Listing Service (MLS) history, including,".
. . data source(s), offering price(s), and date(s)" of listings in the twelve months prior to the effective date of the appraisal.
The sales prices for the subject property were listed as $885,000 in June 2006; reduced to $875,000 in July 2006, reduced again to $849,990 in August 2006; and increased to
$999,000 on October 14, 2006. The Department's investigator testified that the listing broker said she raised the price based on an appraisal that was faxed to her, but he agreed that it could not have been based on the Respondent's appraisal since the price increase took effect on October 14, 2006, and the Respondent's appraisal report was dated October 23, 2006.
Concerning the MLS listings, the Respondent said he called and asked the realtor why the listing price was increased. He accepted the realtor's explanation that improvements in the last six months, a new roof and a new garage door, would justify the increase in the sales price. In his notes, the Respondent wrote "property renovated" and "big realtor" because the realtor was well-known and he believed he could rely on her
representations. He also saw the new roof himself, and it made sense to him that a million dollar house could have a 10% increase in value because of those improvements. While this may have been a logical explanation, the Respondent failed to document it in his work file despite the fact that the MLS fluctuations were a "red flag," possibly indicating fraud.
The Department's expert found no support in the work files for the Respondent's allocation of 61% of the total value of $903,100, or $550,000 ($34.74), to the site value, but agreed that differences in value based on what buyers might pay for additional land is a matter of legitimate differences in "appraiser opinion."
In summary, the Department's expert established that Report Two was inaccurate and misleading because it (1) did not include the terms of the entire contract that affected the price;
(2) did not show the value of the pool in the appropriate category; (3) did not report the MLS listings history for the subject property for the past year; (4) had an incorrect value for depreciation; and (5) did not show the tennis court on comparable four.
Based on the evidence, the Department did not show, as alleged in paragraph 7 (A) through (D) of the Administrative Complaint, that the Respondent made errors and omissions on Report One other than those carried over from Report Two, before
it was altered. Report One was not alleged or proven to be the document communicated by the Respondent's client.
Based on the evidence, Report Two is the only accurate representation of the Respondent's work appraising the subject property. Paragraph 8 (A) of the Administrative Complaint alleging that the name of the borrower was incorrect is not supported by the evidence. The Department's assertion in paragraph 8 (B) that the MLS listing history is incomplete is clearly and convincingly supported by the evidence. Paragraph 8
(C) of the Administrative Complaint, alleging that the Respondent failed to review all agreements for sale, and paragraph 8 (D), regarding the misstatement on seller's concessions, are clearly and convincingly established by the evidence.
The Department's allegations in paragraphs 9 (A)-(D), related to Report Three, are not established by clear and convincing evidence based on the witnesses' agreement that Report Three was not an appraisal report.
With regard to Report Two, the only appraisal report for the subject property that was shown to have been developed and communicated by the Respondent, the evidence is not clear and convincing that the Respondent made the following errors and omissions: as alleged in paragraph 10 (A) and (B), that adjustments for room count and square footage were not explained for comparable sales one and that discrepancies were not resolved for comparable sale two; in paragraph 10 (C), that room count and
square footage adjustments for comparable three are not accurate and supported; and in paragraph 10 (D), that room count and square footage adjustments for comparable four are not accurate and supported.
With regard to Report Two, the evidence is clear and convincing, as alleged, in paragraph 10 (E) and (F), that the Respondent omitted the tennis court on comparable four and showed no adjustment or reasonable explanation for not doing so.
The evidence was not clear and convincing, as alleged in paragraph 10 (G), that different comparables should have been used.
The evidence is clear and convincing that the Respondent made a mathematical error in determining the amount of depreciation in Report Two, as alleged in paragraph 11 (A). Depreciation of improvements, as alleged in paragraph 11 (b), is not clearly and convincingly shown to be erroneous.
The comparisons of Reports One, Two, and Three in paragraph 12 are rejected as irrelevant, because Report One is altered except for the mistakes carried over from Report Two, and Report Three was a draft. Charges related to Report Three are also not proved for the same reason.
Paragraph 13 is established by clear and convincing evidence because the entire sales contract is not in the working files for the subject property.
32. Paragraphs 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24,
25 and 26, all related to the absence of documentation for comparable adjustments, the square footage price, value of improvements, and condition are not supported by clear and convincing evidence based on the testimony of Department's expert regarding the required documentation and his incomplete review of the comparables.
Paragraph 27, alleging that Aida Martinez was a "straw buyer" is supported by the undisputed evidence presented by the Department.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. §§ 120.569 and 120.57, Florida Statutes.
The Petitioner, the Department, is the state agency authorized to regulate the practice of real estate appraisal in Florida, pursuant to Chapter 475, Part II, Florida Statutes (2006).
Because license disciplinary proceedings are penal, the Petitioner bears the burden of proof in this case to establish by clear and convincing evidence the allegations of the Administrative Complaint. Department of Banking and Finance v. Osborne Stern and Co., 670 So. 2d 932 (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).
The courts have held that:
[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. @d 398,
404 (Fla.1994), quoting, with approval, Slomowitz v. Walker, 429 So. 2d 797 (Fla. 4th DCA 1984).
Applicable Statutes and USPAP Rules:
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.
Subsection 455.627(1)(a) and Section 475.629, Florida Statutes, are statutes applicable to the charges against the Respondent in this case, and are as follows:
455.227 Grounds for discipline; penalties; enforcement.--
The following acts shall constitute grounds for which the disciplinary actions specified in subsection (2) may be taken:
Making misleading, deceptive, or fraudulent representations in or related to the practice of the licensee's profession.
475.629 Retention of records.--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 Department in the Administrative Complaint also charged that the Respondent should be disciplined because he violated the following Subsections of 475.624, Florida Statutes:
Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence, or breach of trust in any business transaction ...
* * *
(4) Has violated any of the provisions of this part or any lawful order or rule issued under the provisions of this part or chapter 455.
* * *
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.
Has failed or refused to exercise reasonable diligence in developing an appraisal or preparing an appraisal report.
The USPAP standards, applicable to the charges are as follows:
Standards Rule 1-1 (a), (b) and (c) that provide:
In developing a real property appraisal, an appraiser must:
be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal;
not commit a substantial error of omission or commission that significantly affects an appraisal;
not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results.
Standards Rule 1-4 (a) and (b) (i), (ii) and (iii) that provide:
In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results.
When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion.
When a cost approach is necessary for Credible assignment results, an appraiser must: (i) develop an opinion of site value by an appropriate appraisal method or technique;
analyze such comparable cost data as are available to estimate the cost new of the improvements (if any); and (iii) analyze such comparable data as are available to estimate the difference between the cost new and the present worth of the improvements (accrued depreciation).
Standards Rule 1-5 (a) that provides:
When the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business:
analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal
Standards Rule 2-1 (a) and (b) that provide:
Each written or oral real property appraisal report must:
clearly and accurately set forth the appraisal in a manner that will not be misleading;
contain sufficient information to enable the intended users of the appraisal to understand the report properly.
Standards Rule 2-2 (b) (viii) that provides:
Each written real property appraisal report must be prepared under one of the following three options and prominently state which option is used: Self-Contained Appraisal Report, Summary Appraisal Report, or Restricted Use Appraisal Report. The content of a Summary Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (viii) summarize the information analyzed, the appraisal methods and techniques
employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income approach must be explained
Conclusions on Counts One through Eleven:
Because of their penal nature, the foregoing provisions must be strictly construed, with any reasonable doubts as to their meaning, resolved in favor of the Respondent. See Jonas v. Florida Department of Business and Professional Regulation, 746 So. 2d 1261, 1262 (Fla. 3d DCA 2000); and Capital National Financial Corporation v. Department of Insurance, 690 So. 2d 1335, 1337 (Fla. 3d DCA 1997).
Count One, a violation of Subsection 455.227(1)(a), Florida Statutes (2006), making misleading representations related to the licensee's profession, was proved by clear and
convincing evidence, as alleged, that the Respondent failed to analyze the complete sales contract.
Count Two, a violation of Subsection 475.624(15), Florida Statutes (2006), failing to exercise reasonable diligence, by not requesting the entire sales contract and by not disclosing the entire history of listing within the prior twelve months, was proved by clear and convincing evidence.
Count Three, a violation of Section 475.629, Florida Statutes (2006), and, therefore, a violation of Subsection 475.624(4), Florida Statutes (2006), the failure to retain a record of the complete sales contract is proved by clear and convincing evidence.
Count Four, alleged a violation of Subsection 475.624(2), Florida Statutes (2006), by fraud, misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence, or breach of trust. The Department has not introduced and, its witnesses testified that it did not have, evidence of fraud, concealment, false promises, false pretences, or dishonest conduct by the Respondent. In the absence of further statutory or rule guidance, reference has been made in an earlier case to definitions in Black's Law Dictionary, Fifth Edition, the term culpable negligence is defined as follows:
Failure to exercise that degree of care rendered appropriate by the particular circumstances, and which a man of ordinary prudence in the same situation and with equal experience would not have omitted.
Breach of trust is defined in the same source as follows:
Any act done by a trustee contrary to the terms of his trust, or in excess of his authority and to the detriment of the trust; or the wrongful omission by a trustee of any act required of him by the terms of the trust. Also the wrongful misappropriation by a trustee of any fund or property which had been lawfully committed to him in a fiduciary character. Every violation by a trustee of a duty which equity lays upon him, whether willful and fraudulent, or done through negligence, or arising through mere oversight and forgetfulness, is a "breach of trust."
Department of Professional Regulation, Division of Real Estate v. Alfert, DOAH Case. No. 87-3189 (R.O. 12/7/87; F.O. 1/19/88).
Because of the errors and omission committed by the Respondent, the Department has proved clearly and convincingly, as alleged in Count Four, that culpable negligence and a breach of trust, as those terms are used in Subsection 475.624(2), Florida Statutes (2006), led to the Respondent's misrepresentations, but not fraud, concealment, false promises, false pretences, or dishonest conduct.
Counts Five through Eleven, alleged violations of Subsection 475.624(14), Florida Statutes (2006), by failing comply with various provisions of USPAP.
As alleged in Count Five, the record keeping standard was violated because a complete contract is not in the Respondent's work file.
As alleged in Count Six, based on the Respondent's errors and omissions, the standard for development and communication of a real estate appraisal was violated.
Count Seven, the alleged violation of Standards Rule 1- 1(a), (b), and (c) were violated based on the Respondent's failure to use proper techniques, his errors of omission and commission, and his carelessness and negligence.
Count Eight, an alleged violation of Standards Rule 1- 4(a) and (b)(i), (ii), (iii), was proved based on the Respondent's failure to collect and analyze all information necessary, and failure to include all information about a comparable sale.
Count Nine, a violation of Standards Rule 1-5(a), concerning the failure to analyze all agreements for sale, was proved.
Count Ten, a violation of Standards Rule 2-1(a) and (b), providing that an appraisal should not be misleading and should contain sufficient information for the intended user, was proved.
Count Eleven, a violation of Standards Rule 2- 2(b)(viii), regarding summarizing and analyzing data to provide useful information to the intended user is clearly and convincingly established, by the failure to review the entire sales contract, failure to include seller's concessions, and failure to analyze and summarize fluctuations in listing prices.
Therefore, as established in Counts Five through Eleven, the Department proved by clear and convincing evidence that the Respondent violated Subsection 475.624(14), Florida Statutes (2006), by violating USPAP Standards Rules 1-1 (a), (b) and (c); 1-4 (a) and (b)(i), (ii), and (iii); 1-5 (a); 2-1 (a) and (b); and 2-2(b)(viii).
Appropriate Discipline:
The appropriate disciplinary action to be taken by the Florida Real Estate Appraisal Board is effectively restricted and limited by the guidelines set forth Florida Administrative Code Rule 61J1-8.002. 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."); and § 455.227(5), Fla. Stat.
The usual discipline for a violation of Subsection 455.227(1), making a misrepresentation, is a penalty up to revocation and a fine of $5,000. Fla. Admin. Code R. 61J1- 8.002(3)(d).
The usual penalty for a violation of 475.624(15), is suspension of five years to revocation and a fine not to exceed
$1,000.00. Fla. Admin. Code R. 61J1-8.002(3)(r).
The guideline for a violation of Subsection 475.624(4), Florida Statutes, by violating Section 475.629, Florida Statutes,
is a penalty of up to revocation and a fine up to $5,000.00. Fla. Admin. Code R. 61J1-8.002(3)(g).
The penalty guideline for a violation of Section 475.624(2), Florida Statutes, by culpable negligence or breach of trust, as opposed to fraud, dishonest conduct, and concealment is a fine of $1,000.00 to a one-year suspension. Fla. Admin. Code R. 61J1-8.002(3)(e).
The penalty guideline for a violation of Section 475.624(14), Florida Statutes, ranges from a five-year suspension to revocation and a fine of $1,000.00. Fla. Admin. Code R. 61J1- 8.002(3)(q).
Florida Administrative Code Rule 61J1-8.002(4) provides for the consideration of certain aggravating and mitigating circumstances.
Florida Administrative Code Rule 61J1-8.0002(4)(b) lists the aggravating or mitigating circumstances that include, but are not limited to, the following:
The degree of harm to the consumer or public.
The number of counts in the administrative complaint.
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, F.S., wherein a letter of guidance as provided in Section 455.225(3),
F.S., previously has been issued to the licensee.
There is no evidence of harm caused by Report Two, although the errors and omissions carried over into Report One could have, but have not been shown to have caused a lender to make the loan that is currently in foreclosure. Although the Administrative Complaint has eleven counts, in reality, there were really five mistakes clearly established:(1) not requiring, therefore, not reviewing and retaining the entire contract; (2) not properly categorizing the pool and, therefore, showing it incorrectly on the report; (3) not reporting the MLS listings history for the subject property for the past year; (4) incorrectly calculating depreciation and, therefore, all other values derived from it; and (5) not reporting the tennis court on one of the comparables. Without objection, the Respondent established that he had no past complaints or discipline, has had an active license since 1992, has performed thousands of appraisals, has had his own office since 2000, and earns his living as an appraiser. While the Department proved most of its charges, there is no evidence that the Respondent's actions resulted from participation in fraud or intentional dishonesty.
In the Department's proposed recommended order, the penalty recommended is suspension of the Respondent's appraisal license for a period of three years; requiring the Respondent to pay an administrative fine of $7,500, and to pay costs in the amount of $1,501.50.
In a recent similar case where there was no finding of "bad motive," but errors and omissions in square footage, the descriptions of the subject property, and documentation for adjustments, the recommended penalty was probation for a period of two years, conditioned on successful completion of the 15-hour USPAP course, and an administrative fine of $2,000. Department of Business and Professional Regulation v. Rodriguez, DOAH Case No. 08-4417PL (R.O. 2/23/09). In a case where the appraiser knowingly failed to disclose a prior sale, foreclosure and the correct owner, the penalty was 30 days' suspension, one year probation, successful completion of a seven-hour USPAP course, and a fine of $500. Department of Business and Professional Regulation v. Cartaya, DOAH Case No. 04-1148PL (R.O. 11/10/04; F.O., on remand, 5/22/06. In Department of Business & Professional Regulation v. D. Phil Jones, DOAH Case No. 03-3824 (R.O. 3/17/04; F.O. 6/8/05), an appraiser failed to inspect adequately the subject property, overvalued it, causing financial harm. The recommended disciplinary penalty was a one year suspension and $3,000 fine. The penalty imposed in the final order was 30 days' suspension, followed by six months probation, a fine of $3,000, and the payment of $2,000 in investigative costs.
Based on the foregoing the penalty recommended in this case is 30 days' suspension, followed by six months' probation, and as requested by the Department, an administrative fine of
$7,500, and the payment of investigative costs in the amount of
$1,501.50.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Appraisal Board:
Finding the Respondent guilty on Counts I, II, III, IV, V, VI, VII, IX, X and XI.
Recommending suspension of the Respondent's appraisal license for a period of 30 days, followed by probation for a period of six months.
Requiring the Respondent to pay an administrative fine of $7,500; and
Requiring the Respondent to pay the investigative costs of $1,501.50.
DONE AND ENTERED this 17th day of March, 2009, in Tallahassee, Leon County, Florida.
S
ELEANOR M. HUNTER
Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 2009.
COPIES FURNISHED:
Robert Minarcin, Esquire Department of Business &
Professional Regulation
400 West Robinson Street, N801 Orlando, Florida 32801-1757
Daniel Villazon, Esquire Daniel Villazon, P.A.
1420 Celebration Boulevard, Suite 200
Celebration, Florida 34747
Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business &
Professional Regulation
400 West Robinson Street, N802 Orlando, Florida 32801-1757
Ned Luczynski, General Counsel Department of Business and
Professional Regulation Northwood Centre
1940 North Monroe Street Tallahassee, Florida 32399-0792
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.
| Issue Date | Document | Summary |
|---|---|---|
| Sep. 02, 2009 | Agency Final Order | |
| Mar. 18, 2009 | Recommended Order | Respondent failed to review entire sales contract, including addendum for seller`s concessions, failed to report complete MLS history, and made other errors and omissions in violation and USPAP. Recommend a 30-day suspension, probation, fine and costs. |
