Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.30, Florida Statutes and Chapters 120, 455 and 475, Florida Statutes and rules promulgated pursuant thereto. Respondent, David J. Zachem, is now, and was at all times material hereto, a licensed real estate broker in Florida, having been issued license number 0194936. The last license issued was as a broker c/o Sunstate Tax Consultants, Inc., 220 East Madison Street #512, Tampa, Florida, Respondent, during times material, was licensed as a broker/salesperson with Gary Levone Hall, t/a Gary L. Hall & Associates, 243 Timberland Avenue, Longwood, Florida. On or about July 24, 1991, the Resolution Management Associates, Inc. of Atlanta, Georgia, engaged Henry Mazas, the principal of H.R. Mazas & Associates, an accounting firm to perform an appraisal of real property located in Seminole, Florida (called Seminole Landing) which was owned or controlled by the Federal Resolution Trust Corporation, the federally affiliated agency which is selling off failed savings and loan associations financed or mortgaged properties. While Respondent was licensed as a broker/salesperson with Hall, Mazas engaged Respondent to assist in the appraisal of the Seminole Landing property. Respondent assisted Mazas by doing what is commonly referred to in the trade as the "leg work" such as visually inspecting the property, reviewing public records, compiling comparables and other raw data which was utilized by Mazas in completing his appraisal. Respondent signed on the appraisal letter evidencing his assistance as a consultant who assisted Mazas in completing his appraisal. C.W. Marlow, contracts manager of Resolution Management Associates, received a bill from Mazas for the appraisal service in the amount of $4,830.00, which amount was paid to Mazas on or about October 29, 1991. Mazas deposited the check into his account and thereafter paid Respondent $2,321.11 via a check dated November 5, 1991. On November 8, 1991, Respondent and his wife, Patricia Zachem, endorsed the check for payment. At the time that Respondent assisted Mazas in compiling the raw data to complete his appraisal, Mazas was unaware of Respondent's affiliation with Gary Hall. Respondent signed off on the appraisal to fully disclose to everyone concerned that he consulted with Mazas in compiling the raw data for the appraisal. Gary L. Hall, is a licensed real estate broker since approximately 1982. Hall has known Respondent since 1988. They are friends who assist and consult with each other primarily about political activities. Respondent placed his license with Hall as a matter of convenience and was never active in either buying, leasing or selling real property to the public. Respondent and Hall had no agreement respecting the splitting of fees that Respondent would earn for commissions that he received. According to Hall, Respondent "would have been able to keep the entire commissions that he receive for any work that he performed." Hall knew that Respondent was active in preparing appraisals when he became affiliated with his agency. Respondent is the holder of a real estate salesman's license since 1978 and a broker since 1979. Respondent while licensed as a broker, joined the Pinellas County Property Appraiser's Office. Respondent has been employed in two county property appraiser's offices (Broward and Pinellas counties). Respondent was a senior deputy in Broward County with his employment commencing sometime in 1981. He was so employed until January 1989 when he was employed by Pinellas County. In Pinellas County, Respondent was the chief deputy and the chief appraiser. Since 1980, Respondent has principally been a "mass appraiser" while working in Broward and Pinellas counties. Respondent is the qualifier for Sunstate Tax Consultants, which he is the president. Respondent is a Certified Florida Evaluator (CFE). To be qualified as a CFE, one must have worked in a property appraiser's office in the mass appraisal element for a period in excess of two years and have successfully passed four appraisal courses which are designated courses. Specifically, these courses are income to evaluation, the mechanical application of appraisals, appraisal assessment jurisdiction and vacant land. After successfully completing these courses, the property appraiser for whom the applicant is employed writes a letter of recommendation to the certification committee of the Department of Revenue. That committee reviews the applicant's qualifications and either grant or deny the CFE certificate. Respondent primarily placed his real estate license with Hall such that he could qualify as an expert in the numerous petitions filed with the Value Adjustment Board where the evaluation of properties are subject to litigation. Those appraisers who have an active broker license is an indication that they are fully qualified in the appraisal and real estate business. Respondent, as stated, never engaged in the typical brokerage business of buying, selling, leasing or renting property to the public. Specifically, Respondent's understanding with Hall was that if he engaged in any business that was governed by Petitioner, Hall would be notified. Respondent was never engaged to conduct an appraisal or to act as an appraiser for Mazas or the Resolution Management Associates. Respondent would have so advised Hall had he been involved in such a relationship or any activity that was governed by Chapter 475, Florida Statutes. Eugene Davidson, an ad valorem tax consultant. was tendered and received as an expert appraiser. Davidson was one of three founders that founded the National Society of Fee Appraisers more than 35 years ago. Davidson holds a senior designation as an ASA member. Davidson is a member of the Institute of Real Estate Management and hold the designation as a certified property manager (CPM). Davidson is certified with Florida as a general real estate appraiser. Davidson was a professor at the University of Miami, the University of Florida and in the Bahamas (Nassau and Freeport). Davidson knows Respondent as a person on high morals and integrity and who is knowledgeable in real e stte and appraisinng. Davidson has known Respondent more than twelve years. An appraisal is the act or process of estimating value, or an opinion of value. Consulting is the act or process of providing information, analysis of real estate data and recommendations or conclusions on diversified problems in real estate other than estimating value. Respondent's engagement, to compile raw data, was as a consultant. He was not engaged, nor did he offer an opinion of value or an estimate of value. It is normal industry practice for consultants to sign appraisals when they provide or otherwise furnish significant information to the appraiser and, in doing so, complies with standard 2-3 of Chapter 475, Part II. See Sections 475.611 and 475.624, Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Petitioner enter a Final Order dismissing Counts I-IV of the Administrative Complaint filed herein. 1/ DONE and ORDERED this 31st day of March, 1993, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1993.
The Issue Whether Respondent violated section 475.624(15), Florida Statutes (2010), as alleged in the Administrative Complaint; and if so, the appropriate penalty.1/
Findings Of Fact Department is the state agency charged with regulating the practice of real estate appraisal pursuant to section 20.165 and chapters 455 and 475, Florida Statutes. Mr. Butterfield is licensed as a state-certified general real estate appraiser, holding state license number RD 1063. Consequently, he is certified to give residential and commercial appraisals in Florida. Further, Mr. Butterfield has been a licensed appraiser in Florida since 1991. In addition to being licensed in Florida, Mr. Butterfield is licensed in 11 other states, holding seven active and four inactive licenses. There is no evidence that Mr. Butterfield has any prior discipline. On April 26, 2010, Mr. Butterfield issued the Appraisal Report, which is at issue in this administrative hearing. He prepared the Appraisal Report for Charles Morgan, P.A., a law firm located in North Miami Beach, Florida. The Appraisal Report identified the law firm as the intended user and that the appraisal would be used in litigation. The stated purpose of the Appraisal Report was to provide a market value for the subject property. The subject property of the appraisal is located at 1500 Brickell Avenue, Miami, Florida.2/ The subject property is a unique parcel located on Brickell Avenue, near the heart of Miami's Financial District. The subject property's site is approximately 15,286 square feet with a 6,497 square foot building. The building is a French Chateau home constructed in 1928 by John Murrell, a prominent Miami attorney that helped develop Miami and Coral Gables. The subject property was the home of Mr. Murrell and his wife Ethel Murrell. Ms. Murrell was a noted attorney, author, lecturer and known as one of Florida's leading feminists. Consequently, the subject property has significant historical value. The building, as described by the Appraisal Report, "contains two octagonal towers with tent roof, parpet roof and dormers, crenellated garage roof, and trefoil arch windows with leaded and stained glass." Clearly, this is a unique historical building situated on one of Miami's most prestigious streets, Brickell Avenue. The Appraisal Report does not identify whether it is a self-contained appraisal report, a summary appraisal report or a restricted use appraisal report, as required by Standards Rule 2-2 of USPAP. Similarly, Mr. Butterfield's work file does not identify the type of appraisal he performed on the subject property. Rather, Mr. Butterfield's work file shows that he contracted to provide a "Commercial Narrative Appraisal Report." Mr. Butterfield's uncontradicted testimony that the Appraisal Report is a summary appraisal report for the intended user, a law firm, is credible. The complaint against Mr. Butterfield was instigated by Scott Taylor (Mr. Taylor). Mr. Taylor, a licensed residential appraiser, initially contacted Mr. Butterfield requesting assistance in appraising the subject property. Because the subject property appeared to be a commercial property, Mr. Taylor was not qualified to give an appraisal. Consequently, Mr. Taylor requested Mr. Butterfield's assistance. Mr. Taylor assisted Mr. Butterfield in the preparation of the appraisal with the taking of photographs and gathering of information. However, Mr. Taylor became unhappy with Mr. Butterfield concerning the payment of Mr. Taylor's fee. According to Mr. Butterfield, Mr. Taylor threatened to file a complaint with the Department, if Mr. Butterfield did not pay the fee. Mr. Butterfield refused to pay the disputed amount. Consequently, Mr. Taylor filed a complaint against Mr. Butterfield for perceived errors in the appraisal. The record contains no evidence that the intended user, the law firm, had any complaint concerning the quality of the work or that the law firm was misled by the Appraisal Report. The Department's expert witness, Mr. Spool, has 39 years of experience as an appraiser in the Miami-Dade, County area. Further, he has taught appraisal practice at Miami-Dade College, and published numerous articles concerning appraisal practice. Mr. Spool identified USPAP as the standards used by appraisers in conducting real estate appraisals. Further, he credibly testified that USPAP standards related to an appraiser using "reasonable diligence" in preparing an appraisal by requiring that the appraiser correctly use recognized methods and techniques to create a credible appraisal. The Appraisal Report contains Mr. Butterfield's certification that the appraisal was conducted in compliance with USPAP. The Department's case at the hearing proceeded to show that Mr. Butterfield did not use reasonable diligence in the preparation of the Appraisal Report along the following four general lines: The Highest and Best Use section of the Appraisal Report did not contain any supporting analyses or discussion; The Zoning section of the Appraisal Report did not contain any supporting analyses or discussion; The comparables used by Mr. Butterfield were inappropriate, and that he used an incorrect methodology for determining the subject property's market value; and The Appraisal Report contained numerous errors that call into question its credibility. Each of these areas is discussed separately in this Recommended Order. Highest and Best Use The Appraisal Report here sets out the Highest and Best Use of the subject property as following: The Highest and Best Use of the subject property could accommodate office usages. The structure represents a significant portion of the total value of the whole property. Therefore, due to the contributory value of the improvements and our estimate of the Highest and Best use of the subject property is its present usage, as would benefit an owner occupant, or as present building may generate lease income. The Appraisal Report's discussion of the subject property's highest and best use contains what could be best described as "boilerplate language," setting out definitions and the appropriate tests to be applied when reviewing the subject property.3/ Mr. Spool's criticism of the Appraisal Report is not that Mr. Butterfield reached an inappropriate conclusion, but rather the lack of analysis. Mr. Butterfield credibly testified, however, that this appraisal was a summary appraisal report, and that further analysis was not required. The undersigned rejects Mr. Spool's testimony that a more detailed analysis needed to be contained in the Appraisal Report because the report is a summary. A review of the appraisal shows that it summarized the highest and best use of subject property as its existing use. Consequently, the undersigned finds that Mr. Butterfield's determination of the subject property's highest and best use complied with USPAP 2-2(b). Moreover, the Comment to Standard 2-2(b)(vii) provides that "[b]ecause intended users' reliance on a appraisal may be affected by the scope of work, the report must enable them to be properly informed and not misled." In the instant case, the Department did not bring forward any evidence showing that the intended user, a law firm, had been misled by Mr. Butterfield's determination of the subject property's highest and best use. The record shows that the Department did not prove by clear and convincing evidence that Mr. Butterfield failed to use reasonable diligence in the preparation of the appraisal's determination of highest and best use. Zoning Mr. Butterfield specifically identified the subject property's zoning, at the time of the appraisal, as "R-3 Multi- Family with HC-Residential Office Heritage Conservation District overlay." Mr. Spool's criticism of the Appraisal Report's zoning section is that Mr. Butterfield's analysis is lacking. A review Appraisal Report's section titled zoning again includes mostly "boilerplate language" without analysis, as to the meaning of the zoning and historical overlay. However, considering that the Appraisal Report here is a summary appraisal report prepared for a law firm, the Department did not prove by clear and convincing evidence that Mr. Butterfield did not use reasonable diligence. There was no evidence that Mr. Butterfield's identification of the zoning, without further analysis, was a lack of reasonable diligence in the context of a summary. Moreover, there was no evidence that the intended user, the law firm, was misled by Mr. Butterfield's identification of the proper zoning, without a further analysis. Market Value Determination The Department questioned Mr. Butterfield's choice of his direct sales and rental comparisons, and his methodology in determining the subject property's market value. Mr. Spool offered properties that, in his opinion, were more appropriate comparisons with the subject property and questioned Mr. Butterfield's methodology. The discussion of each test used to determine the subject property's market value is discussed separately. Direct sales comparison The Appraisal Report here shows that Mr. Butterfield identified the three approaches used by appraisers to determine a property's market value: 1) the cost approach; 2) direct sales comparisons; and 3) an income approach. Further, the Appraisal Report shows that Mr. Butterfield used a direct sales comparison methodology and income approach to determine the subject property's market value. In the direct sales comparison, the Appraisal Report shows that Mr. Butterfield used four comparable direct sales within the location of the subject property for his analysis. Of the four comparable sales identified by Mr. Butterfield, one involved an office and three involved residential homes. The record shows that Mr. Butterfield chose to use both an office and residential properties in the sales comparison because both uses were permitted by the subject property's zoning. At the time of the appraisal, the subject property could have been used as either a residence or an office. Consequently, the direct sales comparison which included both office and residential sales was appropriate for valuing the subject property. Based on Mr. Butterfield's testimony and the Appraisal Report, the key consideration in choosing these comparable sales was the proximity to the subject property's Brickell Avenue address. Further, a review of Mr. Butterfield's work file shows that he considered numerous properties for direct sales comparisons in developing his market value opinion. The key factor for Mr. Butterfield in preparing his sales comparisons was the Brickell Avenue location. The undersigned finds Mr. Butterfield's testimony concerning his use of the comparative properties and methodology credible. Mr. Spool's first criticism was that Mr. Butterfield used an incorrect methodology in conducting the direct sales comparison. Specifically, Mr. Spool testified that the highest and best use of the property, as identified by Mr. Butterfield, was an office. Consequently, Mr. Butterfield used an incorrect methodology when he used direct sales from residences for comparison. In essence, the correct methodology required that any comparison be made with direct sales of office space or rather compare "apples to apples and oranges to oranges." Mr. Spool's criticism that Mr. Butterfield used an incorrect methodology is rejected because it is based on a wrong premise. Mr. Butterfield did not identify the subject property's highest and best use as only an office. The record shows that Mr. Butterfield identified the subject property's highest and best use as its permissible uses, which at the time was either a residence or office. Mr. Butterfield used reasonable diligence in comparing direct sales from nearby residences and an office in his analysis. Next, Mr. Spool identified other properties, which in his opinion, were more appropriate as sales comparisons, such as a historic home near the Miami River that had been converted into office space. However, the identification of other properties that could have been used by Mr. Butterfield does not show that Mr. Butterfield did not use reasonable diligence in preparing his report. It is noted that the properties offered by Mr. Spool did not share the Brickell Avenue address, which is highly desirable. Consequently, the undersigned finds that the Department did not prove by clear and convincing evidence that Mr. Butterfield failed to use reasonable diligence in the preparation of his direct sales comparison. Income approach Next, the Appraisal Report shows that Mr. Butterfield used an income approach to determine the subject property's market value. The record credibly shows that Mr. Butterfield identified four rental comparables all located on Brickell Avenue within close proximity to the subject property, and verified the rental rate per square foot in the range of $24.00 to $37.00 per square foot. Mr. Spool offered alternative properties that in his opinion were more appropriate for making a rental comparison. The crux of the Department's testimony was that Mr. Butterfield's use of rental space from new high rises was inappropriate for comparing with the subject property, which is an older property. The undersigned, however, finds that Mr. Butterfield's explanation that he chose comparable rental properties based on the Brickell Avenue address credible. Again, the fact that other properties may be used as comparable properties does not show that Mr. Butterfield did not prepare the Appraisal Report without reasonable diligence. Next, Mr. Spool's explanation that Mr. Butterfield used an incorrect methodology for determining an income approach by using residential properties is rejected. As found earlier, Mr. Butterfield determined that the subject property's highest and best use could be either as an office or residence. Therefore, it was appropriate to determine the rental income from residences and office space. Moreover, the record shows that Mr. Butterfield gathered information to determine the per square-foot income. Therefore, the Department did not prove by clear and convincing evidence that Mr. Butterfield failed to use reasonable diligence in the preparation of the appraisal's income approach analysis. Miscellaneous Errors The Appraisal Report does contain several admitted errors. Examples of the errors are that the Appraisal Report wrongly indicates that ingress and egress to the subject property was from Brickell Avenue; that Brickell Avenue was a minor north-south thoroughfare; that the three residences used for direct sales comparison were "historic," as opposed to being located in "historic South Miami"; that it failed to designate the type of appraisal that was conducted; and that it did not state in the certification that Mr. Butterfield had not personally viewed the subject property. The undersigned finds that these errors do not rise to the level of showing a lack of reasonable diligence or could mislead the intended user. For example, the Appraisal Report attached photographs of the three residences used in the direct sales comparison. The photographs clearly show that the three residences were not historical homes, but modern construction. Therefore, it is clear that Mr. Butterfield took steps to insure that the intended user of the report would know the type of residences which were being used for comparison with the subject property. Moreover, concerning the errors about Brickell Avenue, one could safely assume that a law firm in Miami Beach would know that Brickell Avenue is a major and desirable location in Miami. Therefore, the undersigned finds that although the appraisal contains errors, which were admitted by Mr. Butterfield, those errors are not of such a nature as to show a lack of reasonable diligence.
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 dismissing the Administrative Complaint against Mr. Butterfield. DONE AND ENTERED this 12th day of December, 2012, in Tallahassee, Leon County, Florida. S THOMAS P. CRAPPS 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 12th day of December, 2012.
The Issue The issue is what penalty should be imposed for a violation by Respondent of the Uniform Standards of Professional Appraising Practice.
Findings Of Fact At all material times, Respondent has been a certified general real estate appraiser, holding license number 000894. He has worked as an appraiser for 14 years and has held his real estate license for 15 years. He has never previously been disciplined. By letter dated March 16, 1995, Respondent sent what he entitled as a "letter of opinion of value for property located at [address omitted]." The letter of opinion states that the document "is not a Real Estate Appraisal Report, rather [it is] an opinion of value." The letter estimates the value of appraised property as $65,000-$70,000. The client for whom the letter of opinion was prepared was satisfied with the process by which Petitioner prepared the letter of opinion and the letter of opinion itself. The letter of opinion caused no one any damage or inconvenience. Standard 2-2 of the Uniform Standards of Professional Appraisal Practice (USPAP) states: "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 Appraisal Report." SMT-7, which is commentary that accompanies certain standards of the USPAP, provides: Various nomenclature has been developed by clients and client groups for certain appraisal assignments. The development of this Statement on Appraisal Standards is a response to inquiries about several types of appraisal assignments, and it is appropriate to clarify the meaning of these terms for future reference. The term Letter Opinion of Value has been used to describe a one-page letter sent to a client that stated a value estimate and referenced the file information and experience of the appraiser as the basis for the estimate. This type of service does not comply with USPAP, and should be eliminated from appraisal practice. USPAP recognizes that the results of any appraisal assignment may be presented in a letter format provided that the content items in one of the three report options under Standards Rule 2-2 are addressed. The Restricted Report is the minimum report format and replaces the concept of the Letter Opinion of Value. Respondent has stipulated to a violation of USPAP Standard 2-2 in the preparation of the March 15, 1995, letter.
Recommendation It is RECOMMENDED that, in the absence of an agreement of the type described in the preceding paragraph, the Board of Real Estate Appraisers enter a final order reprimanding Respondent. ENTERED on September 30, 1996, in Tallahassee, Florida. ROBERT E. MEALE, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this September 30, 1996. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Steven W. Johnson Senior Attorney Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Attorney Clifford R. Rhoades 227 North Ridgewood Drive Sebring, Florida 33870
Findings Of Fact § 57.111(3)(f) Fla. Stat. (2003) "state agency" DBPR meets the definition found within Section 120.52(1)(b)1, Florida Statutes (2003), as an "agency." § 57.111(3)(b)2. and 3., Fla. Stat. (2003) "initiated by a state agency" As reflected in the file related to DOAH Case No. 06- 3387PL, on August 6, 2003, the Florida Real Estate Appraisal Board in Florida Department of Business and Professional Regulation, Division of Real Estate, Petitioner vs. Victor Harrison, Respondent, FDBPR Case No. 2001-80524, charged Victor Harrison with violations of Chapter 475, Part II, Florida Statutes (2005), in his capacity as a certified real estate appraiser. This was action "initiated by a state agency." The Administrative Complaint was directed to Victor Harrison who held Certificate No. RH-119 issued by DBPR on November 18, 1996. On December 10, 2003, Harrison responded to the Administrative Complaint concerning his position on factual allegations alleging violations found in Counts I through V to the Administrative Complaint. This was treated as a request for formal hearing pursuant to Sections 120.569 and 120.57(1), Florida Statutes (2005). On September 11, 2006, DOAH received the case from DBPR. On March 20, 2007, a formal hearing was held to consider the Administrative Complaint. On May 30, 2007, a Recommended Order was entered recommending that the case be dismissed. § 57.111(3)(c)1., Fla. Stat. (2003) "prevailing small business party" On October 18, 2007, the Division of Real Estate on behalf of the Real Estate Appraisal Board, in the case before DBPR, Florida Department of Business and Professional Regulation, Division of Real Estate, Petitioner, vs. Victor Harrison, Respondent, DBPR Case No. 2001-80524, by Final Order dismissed the Administrative Complaint. § 57.111(3)(d), Fla. Stat. (2003) "small business party" Harrison conducts his appraisal business as Gulf Coast Appraisals, a sole proprietorship. On August 6, 2003, when the Administrative Complaint was signed accusing him, Harrison operated as Gulf Coast Appraisals. At times relevant, he had no other employees and his net worth did not exceed two (2) million dollars. § 57.111(4)(b), Fla. Stat. (2003) "itemized affidavit" An itemized affidavit was submitted, as amended, to DOAH revealing the nature and extent of the services rendered by Harrison's attorney. In all respects concerning the proceeding, the parties agree that the total amount of attorney's fees and costs was $31,919.23. DBPR accepts the amount as reasonable and just, should Harrison prevail in his overall claims, that is should Harrison be found to be a "prevailing small business party," in a setting where it was decided that DBPR was not "substantially justified" in its actions pursuant to the Administrative Complaint in the underlying case. § 57.111(4)(b)2., Fla. Stat. (2003) "filing of the application" The application for attorney's fees and costs was filed on January 16, 2008. § 57.111(4)(d)1., Fla. Stat. (2003) "nominal party" When DBPR undertook its prosecution directed to Harrison, it was not acting as a nominal party. § 57.111(3)(e), Fla. Stat. (2003) "substantially justified" On January 9, 1997, Harrison rendered a Uniform Residential Appraisal Report on property at 693 Broad Street, Pensacola, Florida. Daniel A. Ryland, another real estate appraiser doing business in Pensacola, Florida, made a complaint against Harrison in relation to the appraisal report prepared by Harrison. On November 21, 2001, he was interviewed by Benjamin F. Clanton, an investigator with DBPR concerning the nature of his complaint. During the course of the interview, Ryland provided Clanton a completed Uniform Complaint Form outlining the concerns expressed by Ryland about the aforementioned appraisal at 693 Broad Street in Pensacola, Florida, performed by Harrison. In his remarks, Ryland, in great detail, explained why he thought the earlier appraisal by Harrison was questionable. In carrying out an investigation of the Ryland complaint, Clanton interviewed Harrison, Fred R. Catchpole, and Rhonda Guy, all persons involved with the January 9, 1997, appraisal, and all persons performing various functions as appraisers. Clanton interviewed others as well. He collected a number of exhibits concerning specific information about the appraisal and related data. All of this information was made part of an investigative report completed by Clanton on December 26, 2001, and approved by a supervisor, Sydney B. Miller, two days later. The predicate for the investigative report by Clanton came from Ryland's complaint, in which there was some allusion to a violation of Section 475.624(14), (15) and (17), Florida Statutes, on Harrison's part. In summary, the complaint addressed the contention that the January 9, 1997, appraisal on property at 693 Broad Street, Pensacola, Florida, overvalued the property in comparison with other properties thought to be superior in their value. As the table of contents associated with the Clanton investigative report describes, Respondent's Exhibit numbered 3, materials in association with the investigation numbered over 320 pages. On August 4, 2003, the Florida Real Estate Appraisal Probable Board meeting on probable cause was held. In the course of that meeting, the matter of Victor Harrison, referred to as item number 200180524 was considered by panel members, with Cynthia A. Wright, sitting as the chairperson, Clay Ketcham, and Mary Calloway, serving as the additional members. At the same time the cases involving Rhonda E. Guy and Fred R. Catchpole were under consideration. In the panel discussion, it was noted that Catchpole and Harrison were licensed real estate appraisers and Guy was a registered trainee appraiser. Discussion was made of the January 9, 1997, appraisal of the aforementioned residential property. Information was imparted concerning the method or approach in performing the appraisal and perceived failings in the process. In the discussion, generally stated, Respondent was charged " . . . with failure to exercise reasonable diligence in developing an appraisal, violating a standard for the development or communication of an appraisal, breach of trust in any business transaction." There was additional discussion that Harrison " . . . failed to produce or provide the data that he (Harrison) and Guy both relied upon in communicating and developing the appraisal." Further there was a discussion to the effect " . . . that Respondent Guy completed an inspection of the property without the assistance of Respondent Harrison. Respondent Harrison did not inspect the comparables until after the report was submitted." As a result, the discussion at the meeting went on to say ". . . we charge Respondent Harrison with failure to obtain records for at least five years, guilty of obstructing or hindering the enforcement of [sic] license law." Then the presenter stated, "We asked that you find probable cause and issue the filing of an Administrative Complaint in Case . . . 200180524, regarding Victor Harrison . . . ". Following the presentation concerning Harrison, the August 4, 2003, excerpt of the meeting indicates: CHAIRPERSON WRIGHT: Mr. Ketcham? MR. KETCHAM: Do you want to take up the first one, the Victor Harrison case first; is that the one we want to deal with. MS. WATKINS: Yes, sir, that's fine. MR. KETCHAM: Okay. I did not really have any questions and I wanted to make sure also we're charging them with failure to maintain records and that's because they didn't deliver a copy of the requested report. MR. SMITH: Yes. If that question is -- I'm sorry for misspeaking. But if that question is designed for me, yes, that's one of the reasons. MR. KETCHAM: Okay. Then I don't have any other questions. And after a complete review of the file, I would find probable cause and recommend the opening of an administrative complaint. CHAIRPERSON WRIGHT: Thank you, Mr. Ketcham. Ms. Calloway? Ms. CALLOWAY: Calloway here. After a complete review of the record I find probable cause recommend the filing of an administrative complaint on Victor Harrison. CHAIRPERSON WRIGHT: And after a complete review of the record I find probable cause and recommend an administrative complaint be filed on Mr. Harrison. (Whereupon, this concludes this portion of Florida Real Estate Appraisal Board Meeting, In Re: Victor Harrison.) The action by the probable cause panel led to the Administrative Complaint in Case No. 200180524 in relation to the January 9, 1997, appraisal report for the property at 693 Broad Street, Pensacola, Florida, for alleged misconduct referred to in the Administrative Complaint. Harrison was alleged to have violated Sections 475.624(2), (4), (14), and (15), and 475.626(1)(f), Florida Statutes, as follows: COUNT I Based upon the foregoing, Respondent is guilty of failure to retain records for at least five years of any contracts engaging the appraiser's services, appraisal reports, and supporting data assembled and formulated by the appraiser in preparing appraisal reports in violation of Section 475.629, Florida Statutes, and, therefore, in violation of Section 475.624(4), Florida Statutes. COUNT II Based upon the foregoing, Respondent is guilty of having failed to exercise reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT III Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal or other provision of the Uniform Standards of Professional Appraisal Practice in violation of Section 475.624(14), Florida Statutes. COUNT IV Based upon the foregoing, Respondent is guilty of misrepresentation, culpable negligence, or breach of trust in any business transaction in violation of Section 475.624(2), Florida Statutes. COUNT V Based upon the foregoing, Respondent is guilty of having obstructed or hindered in any manner the enforcement of Chapter 475, Florida Statutes or the performance of any lawful duty by any person acting under the authority of Chapter 475, Florida Statutes in violation of Section 475.626(1)(f), Florida Statutes. § 57.111(4)(a), Fla. Stat. (2003) "special circumstances" DBPR has made no argument and no evidence was presented by DBPR in this case, to show that special circumstances exist that would make the award of attorney's fees and costs unjust.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint, as amended, and, if so, what penalties should be imposed.
Findings Of Fact 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.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is 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 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 30th day of March, 2000.
The Issue The issue presented is whether Petitioner achieved a passing grade on the May 20, 1991, certified residential appraiser examination.
Findings Of Fact Petitioner took the May 20, 1991, certified residential appraiser examination. He was subsequently advised that he had correctly answered 74 out of the 100 questions and had therefore achieved a score of 74. A score of 75 is the passing score on that examination. In the development of the state certified residential appraiser examination, a job analysis was performed by Educational Testing Service of Princeton, New Jersey, a national psychometric company. From that job analysis, a list of tasks routinely performed by appraisers was developed. From that list of tasks, the uniform examination content outline was developed specifying the areas to be covered by the examination. From that uniform content outline, Educational Testing Service then developed a bank of questions to be utilized in the examinations for licensure or certification. Each item in the bank was validated by Educational Testing Service. Once Respondent received that bank of validated test items, it sent all of the items to the Appraiser Qualifications Board of the Appraisal Foundation, an entity involved in establishing uniform standards on a national level for real estate appraisers. Respondent's examination bank was also validated by the Appraiser Qualifications Board. In addition, Respondent has its own validation committee which meets prior to the administration of an examination to review the items on that examination to again verify that the test items are valid, are not ambiguous, and are correct and proper for a residential appraiser certification examination. The five questions challenged by Petitioner are part of the bank that was approved by the Appraiser Qualifications Board. Those five questions have been used on past examinations and have previously been determined to be valid. The five questions challenged by Petitioner ranged from moderately difficult to extremely easy. Subsequent to the filing of Petitioner's examination challenge, Respondent reviewed the questions challenged and performed a statistical item analysis. All of the questions had a positive point biserial correlation. The number of candidates correctly answering each of those questions was approximately the same as the number of candidates correctly answering those questions on previous examinations. For example, 94% of the candidates correctly answered question numbered 4. On previous examinations, 93% to 95% of the candidates had correctly answered that same item. Sixty-seven per cent of the candidates taking the May 20, 1991, certified residential appraiser examination achieved a passing grade. Their examination was a typical examination in that the usual percentage of candidates achieved a passing score. Question numbered 4 required the examinee to identify the item which was not a fixture. The correct answer was "D," which answer specified that the personalty was "unattached." Petitioner chose answer "C," which answer specified that the personalty was attached to the structure. Petitioner's answer was not correct. Question numbered 73 required the examinee to name the cost method defined in the question. The correct answer was "B." Petitioner chose answer "A," which was not a correct answer. Question numbered 32 tested the examinee's understanding of valuing property containing superadequacies and was written in the negative. The correct answer was "C." Petitioner's choice of "D" was not correct since that was one of the approaches that can be used. Question numbered 76 tested the examinee's understanding of the difference between reproduction costs and replacement costs. The correct answer was "B." Petitioner chose answer "D." Petitioner's answer was wrong. Although the testimony at the final hearing indicated that answer "A" may also have been a correct answer to this question, Petitioner did not choose answer "A." Question numbered 93 tested the examinee's knowledge of proper appraisal practices. Answer "A" was the correct answer. Petitioner chose answer "C," which was not correct. Although Petitioner questioned the propriety of this question as part of the residential appraiser examination, the expert testimony indicates that the question was appropriate. Further, the question has been validated as being appropriate by the Appraiser Qualifications Board applying national standards. The parties have stipulated that Petitioner meets all of the requirements for licensure as a certified residential appraiser except for achieving a passing grade on the certification examination.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing the Petitioner's examination question challenges and finding that Petitioner failed to achieve a passing grade on the May 20, 1991, certified residential appraiser examination. DONE and ENTERED this 16th day of March, 1992, at Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SC 278-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of March, 1992. Copies furnished: Mr. Stephen Metro 1841 Northwest 22nd Street Pompano Beach, Florida 33069 Fred H. Wilsen, Chief Staff Attorney DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Darlene F. Keller, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
