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 In this disciplinary proceeding, the issues are, first, whether Respondent, a certified real estate appraiser, committed various disciplinable offenses in connection with three residential appraisals; and second, if Respondent is guilty of any charges, whether she should be punished therefor.
Findings Of Fact The Florida Real Estate Appraisal Board ("Board") is the state agency charged with regulating real estate appraisers who are, or want to become, licensed to render appraisal services in the State of Florida. The Department of Business and Professional Regulation ("Department") is the state agency responsible for investigating and prosecuting complaints against such appraisers. At all times relevant to this proceeding, Elsa Cartaya ("Cartaya") was a Florida-certified residential real estate appraiser. Her conduct as an appraiser in connection with the matters presently at issue falls squarely within the Board's regulatory jurisdiction. Case No. 04-1680 In the Administrative Complaint that initiated DOAH Case No. 04-1680, the Department charged Cartaya with numerous statutory violations relating to her appraisal of a residence located at 930 East Ninth Place, Hialeah, Florida (the "Hialeah Property"). Specifically, the Department made the following allegations against Cartaya:1 Respondent developed and communicated an appraisal report (Report) for the property commonly known as 930 E. 9 Place, Hialeah, Florida 33010. A copy of the report is attached hereto and incorporated herein as Administrative Complaint Exhibit 1. On the Report, Respondent represents that: she signed it on July 27, 2000, the Report is effective as of July 27, 2000. On or about October 26, 2001, Respondent provided a "Report History" to Petitioner's investigator. A copy of the report history is attached hereto and incorporated herein as Administrative Complaint Exhibit 2. On the Report History, Respondent admits that she completed the report on August 7, 2000. On Report, Respondent represents that there were no prior sales of subject property within one year of the appraisal. Respondent knew that a purchase and sale transaction on subject property closed on July 28, 2000. Respondent knew that the July 28, 2000, transaction had a contract sales price of $82,000. A copy of the closing statement is attached hereto as Administrative Complaint Exhibit 3. Respondent knowingly refused to disclose the July 28, 2000, sale on Report. On [the] Report, Respondent represented that the current owner of subject property was Hornedo Lopez. Hornedo Lopez did not become the title- owner until on or about July 28, 2000, but before August 7, 2000. On [the] Report, Respondent represents that quality of construction of subject property is "CBS/AVG." The public records reflect that subject property is of mixed construction, CBS and poured concrete. On [the] Report, Respondent represents: "The income approach was not derived due to lack of accurately verifiable data for the mostly owner occupied area." The multiple listing brochures indicate as follows: for comparable one: "Main House 3/2 one apartment 1/1 (Rents $425) and 2 efficiencies each at $325. Live rent free with great income or bring your big family." A copy of the brochure for comparable one is attached hereto and incorporated herein as Administrative Complaint Exhibit 4. for comparable three: "Great Rental . . . two 2/1 two 1/1 and one studio. Total rental income is $2,225/month if all rented." A copy of the brochure for comparable three is attached and incorporated as Administrative Complaint Exhibit 5. On or about October 23, 2001, Petitioner's investigator inspected Respondent's work file for Report. The investigation revealed that Respondent failed to maintain a true copy of Report in the work file. On [the] Report, Respondent failed to analyze the difference between comparable one's listing price, $145,000, and the sale price, $180.000. On [the] Report History, Respondent admits to having received a request for appraisal of subject property indicting a contract price of $195,000. On [the] Report History, Respondent admits that the multiple listing brochure for subject property listed the property for $119,900, as a FANNIE MAE foreclosure. On [the] Report History, Respondent also admits that she had a multiple listing brochure in the file, listing subject property for $92,000. On [the] Report History, Respondent admits that she did not report the listings in Report. On [the] Report History, Respondent admits knowledge that comparable three was "rebuilt as a 2/1 with two 1/1 & 1 studio receiving income although zoned residential." On [the] Report, Respondent failed or refused to explain or adjust for comparable three's zoning violations. On the foregoing allegations, the Department charged Cartaya under four counts, as follows: COUNT I Based upon the foregoing, Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence, or breach of trust in any business transaction in violation of Section 475.624(2), Florida Statutes.[2] COUNT II Based upon the foregoing, Respondent is guilty of having failed to use 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 having accepted an appraisal assignment if the employment itself is contingent upon the appraiser reporting a predetermined result, analysis, or opinion, or if the fee to be paid for the performance of the appraisal assignment is contingent upon the opinion, conclusion, or valuation reached upon the consequent resulting from the appraisal assignment in violation of Section 475.624(17), Florida Statutes.[3] In her Answer and Affirmative Defenses, Cartaya admitted the allegations set forth in paragraphs 5-9, 11, 13-15, 17-19, and 23-25 of the Amended Complaint. Based on Cartaya's admissions, the undersigned finds these undisputed allegations to be true. Additional findings are necessary, however, to make sense of these particular admissions and to determine whether Cartaya committed the offenses of which she stands accused. In April 2000, Southeast Financial Corporation ("Southeast") asked Cartaya to prepare an appraisal of the Hialeah Property for Southeast's use in underwriting a mortgage loan, the proceeds of which would be applied by the prospective mortgagor(s) towards the $205,000 purchase price that he/she/they had agreed to pay Hornedo Lopez ("Hornedo") for the residence in question.4 In preparing the appraisal, Cartaya discovered that the putative seller, Hornedo, was actually not the record owner of the Hialeah Property. Rather, title was held in the name of the Federal National Mortgage Association ("Fannie Mae"). The Hialeah Property was "in foreclosure." Cartaya informed her contact at Southeast, Marianella Lopez ("Marianella"), about this problem. Marianella explained that Hornedo was in the process of closing a sale with Fannie Mae and would resell the Hialeah Property to a new buyer soon after acquiring the deed thereto. Cartaya told Marianella that, to complete the appraisal, she (Cartaya) would need to be provided a copy of the closing statement documenting the transfer of title from Fannie Mae to Hornedo. No further work was done on the appraisal for several months. Then, on July 25, 2000, Marianella ordered another appraisal of the Hialeah Property, this time for Southeast's use in evaluating a mortgage loan to Jose Granados ("Granados"), who was under contract to purchase the subject residence from Hornedo for $195,000. Once again, Cartaya quickly discovered that Fannie Mae, not Hornedo, was the record owner of the Hialeah Property. Once again, Cartaya immediately informed Marianella about the situation. Marianella responded on July 26, 2000, telling Cartaya that the Fannie Mae-Hornedo transaction was scheduled to close on July 28, 2000. On July 27, 2000, Marianella faxed to Cartaya a copy of the Settlement Statement that had been prepared for the Fannie Mae sale to Hornedo. The Settlement Statement, which confirmed that the intended closing date was indeed July 28, 2000, showed that Hornedo was under contract to pay $82,000 for the Hialeah Property——the property which he would then sell to Granados for $195,000, if all the pending transactions closed as planned. Upon receipt of this Settlement Statement, Cartaya proceeded to complete the appraisal. In the resulting Appraisal Report, which was finished on August 7, 2000,5 Cartaya estimated that the market value of the Hialeah Property, as of July 27, 2000, was $195,000. The Department failed to prove by clear and convincing evidence that the house at the Hialeah Property was, in fact, constructed from CBS and poured concrete, as alleged.6 At the time Cartaya gave the Department a copy of her workfile for this appraisal assignment, the workfile did not contain a copy of the competed Appraisal Report.7 (The workfile did, however, include a working draft of the Appraisal Report.) The allegation, set forth in paragraph 21 of the Administrative Complaint, that Cartaya "failed to analyze the difference between comparable one's listing price, $145,000, and the sale price, $180,000," was not proved by clear and convincing evidence. First, there is no nonhearsay evidence in the record that "comparable one" was, in fact, listed at $145,000 and subsequently sold for $180,000. Instead, the Department offered a printout of data from the Multiple Listing Service ("MLS"), which printout was included in Cartaya's workfile. The MLS document shows a listing price of $145,550 for "comparable one" and a sales price of $180,000 for the property——but it is clearly hearsay as proof of these matters,8 and no predicate was laid for the introduction of such hearsay pursuant to a recognized exception to the hearsay rule (including Section 475.28(2)). Further, the MLS data do not supplement or explain other nonhearsay evidence.9 At best, the MLS document, which is dated July 25, 2000, establishes that Cartaya was on notice that "comparable one" might have sold for more than the asking price, but Cartaya has not been charged with overlooking MLS data. Second, in any event, in her Report History, Cartaya stated that she had analyzed the putative asking price/sales price differential with respect to "comparable one" and concluded that there was no need to make adjustments for this because available data relating to other sales persuaded her that such differentials were typical in the relevant market. Cartaya's declaration in this regard was not persuasively rebutted. Since the evidence fails persuasively to establish that Cartaya's conclusion concerning the immateriality of the putative asking price/sales price differential as a factor bearing on the value of "comparable one" was wrong; and, further, because the record lacks clear and convincing evidence that an appraiser must, in her appraisal report, not only disclose such information, even when deemed irrelevant to the appraisal, but also expound upon the grounds for rejecting the data as irrelevant, Cartaya cannot be faulted for declining to explicate her analysis of the supposed price differential in the Appraisal Report. The evidence is insufficient to prove, clearly and convincingly, that Cartaya "failed or refused to explain or adjust for "comparable three"'s zoning violations." This allegation depends upon the validity of its embedded assumption that there were, in fact, "zoning violations."10 There is, however, no convincing evidence of such violations in the instant record. Specifically, no copy of any zoning code was offered as evidence, nor was any convincing nonhearsay proof regarding the factual condition of "comparable three" offered. Cartaya cannot be found guilty of failing or refusing to explain or adjust for an underlying condition (here, alleged "zoning violations") absent convincing proof of the underlying condition's existence-in-fact. Case No. 04-1148 In the Administrative Complaint that initiated DOAH Case No. 04-1148, the Department charged Cartaya with numerous statutory violations relating to her appraisals of residences located at 1729 Northwest 18th Street, Miami, Florida ("1729 NW 18th St") and 18032 Northwest 48th Place, Miami, Florida ("18032 NW 48th Place"). These appraisals will be examined in turn. With regard to 1729 NW 18th St, the Department alleged as follows: On or about April 29, 1999, Respondent developed and communicated a Uniform Residential Appraisal Report for the property commonly known as 1729 NW 18th Street, Miami, Florida. A copy of the report is attached hereto and incorporated herein as Administrative Complaint Exhibit 1. On or about March 18, 2001, David B. C. Yeomans, Jr., A.S.A., and Mark A. Cannon, A.S.A., performed a field review of the report. A copy of the review is attached hereto and incorporated herein as Administrative Complaint Exhibit 2. The review revealed that unlike it states in the Report, the subject property’s zoning was not "Legal," but "legal noncomforming (Grandfathered use)." The review further revealed that Respondent failed to report that if the improvements sustain extensive damage or demolishment or require renovation which exceeds 50% of the depreciated value, it is likely that a variance would be necessary to build a new dwelling. The review further revealed that Respondent failed to report that subject property has two underground gas meters. The review further revealed that unlike Respondent states in Report, subject property’s street has gutters and storm sewers along it. The review further revealed that subject property is a part of a "sub-market" within its own neighborhood due to its construction date of 1925. Respondent applied three comparables built in 1951, 1953, and 1948, respectively, all of which reflect a different market, without adjustment. Respondent applied comparables which have much larger lots than the subject, which is of a non-conforming, grandfathered use. Respondent failed to adjust for quality of construction even though subject is frame and all three comparables are of concrete block stucco construction. Respondent failed to note on the Report that comparables 1 and 2 had river frontage. Respondent failed to adjust comparables 1 and 2 for river frontage. The review revealed that at the time of the Report there were at least five sales more closely comparable to Subject than those which Respondent applied. On the foregoing allegations, the Department brought the following three counts against Cartaya: COUNT I Based upon the foregoing, Respondent is guilty of having failed to use reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT II 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 III Based upon the foregoing, Respondent is guilty of culpable negligence in a business transaction in violation of Section 475.624(2), Florida Statutes. Cartaya admitted the allegations set forth in paragraph 4 of the Administrative Complaint. Those undisputed allegations, accordingly, are accepted as true. The rest of the allegations about this property were based upon a Residential Appraisal Field Review Report (the "Yeomans Report") that David B.C. Yeomans, Jr. prepared in March 2001 for his client Fannie Mae. The Yeomans Report is in evidence as Petitioner's Exhibit 2, and Mr. Yeomans testified at hearing. Mr. Yeomans disagreed with Cartaya's opinion of value regarding 1729 NW 18th St, concluding that the property's market value as of April 29, 1999, had been at the low end of the $95,000-to-$115,000 range, and not $135,000 as Cartaya had opined. The fact-findings that follow are organized according to the numbered paragraphs of the Administrative Complaint. Paragraphs 6 and 7. The form that Cartaya used for her Appraisal Report regarding 1729 NW 18th St contains the following line: Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal No zoning Cartaya checked the "legal" box. Mr. Yeomans maintains that she should have checked the box for "legal nonconforming" use because, he argues, the property's frontage and lot size are smaller than the minimums for these values as prescribed in the City of Miami's zoning code. The Department failed, however, to prove that Cartaya checked the wrong zoning compliance box. There is no convincing nonhearsay evidence regarding either the frontage or the lot size of 1729 NW 18th St.11 Thus, there are no facts against which to apply the allegedly applicable zoning code provisions. Moreover, and more important, the Department failed to introduce into evidence any provisions of Miami's zoning code. Instead, the Department elicited testimony from Mr. Yeomans regarding his understanding of the contents of the zoning code. While Mr. Yeomans' testimony about the contents of the zoning code is technically not hearsay (because the out-of-court statements, namely the purported code provisions, consisted of non-assertive declarations12 that were not offered for the "truth" of the code's provisions13), such testimony is nevertheless not clear and convincing evidence of the zoning code's terms.14 And finally, in any event, Cartaya's alleged "mistake" (which allegation was not proved) was immaterial because, as Mr. Yeomans conceded at hearing, in testimony the undersigned credits as true, the alleged "fact" (again, not proved) that 1729 NW 18th St constituted a grandfathered use would have no effect on the property's market value. Paragraphs 8 and 9. The Yeomans Report asserts that "[b]ased on a physical inspection as of March 17, 2001[,] it appears that the site has two underground gas meters and there were gutters and storm sewers along the subject's street." It is undisputed that Cartaya's Appraisal Report made no mention of underground gas meters or storm water disposal systems. While the Department alleged that Cartaya's silence regarding these matters constituted disciplinable "failures," it offered no convincing proof that Cartaya defaulted on her obligations in any way respecting these items. There was no convincing evidence that these matters were material, affected the property's value, or should have been noted pursuant to some cognizable standard of care. Paragraphs 10 and 11. The contention here is that Cartaya chose as comparables several homes that, though relatively old (average age: 48 years), were not as old as the residence at 1729 NW 18th St (74 years). Mr. Yeomans asserted that older homes should have been used as comparables, and several such homes are identified in the Yeomans Report. The undersigned is persuaded that Mr. Yeomans' opinion of value with respect to 1729 NW 18th St is probably more accurate than Cartaya's. If this were a case where the value of 1729 NW 18th St were at issue, e.g. a taking under eminent domain, then Mr. Yeomans' opinion might well be credited as against Cartaya's opinion in making the ultimate factual determination. The issue in this case is not the value of 1729 NW 18th St, however, but whether Cartaya committed disciplinable offenses in appraising the property. The fact that two appraisers have different opinions regarding the market value of a property does not mean that one of them engaged in misconduct in forming his or her opinion. Based on the evidence presented, the undersigned is not convinced that Cartaya engaged in wrongdoing in connection with her appraisal of 1729 NW 18th St, even if her analysis appears to be somewhat less sophisticated than Mr. Yeomans'. Paragraphs 12 through 16. The allegations in these paragraphs constitute variations on the theme just addressed, namely that, for one reason or another, Cartaya chose inappropriate comparables. For the same reasons given in the preceding discussion, the undersigned is not convinced, based on the evidence presented, that Cartaya engaged in wrongdoing in connection with her appraisal of 1729 NW 18th St, even if he is inclined to agree that Mr. Yeomans' opinion of value is the better founded of the two. With regard to 18032 NW 48th Place, the Department alleged as follows: On or about August 9, 1999, Respondent prepared and communicated a Uniform Residential Appraisal Report for the Property commonly known as 18032 NW 48th Place, Miami, Florida, 33055. (Report) A copy of the Report is attached hereto and incorporated herein as Administrative Complaint Exhibit 3. On the Report, Respondent incorrectly stated that the property is in a FEMA Zone X flood area. In fact, the property is in an AE Zone. In Report, Respondent states: "Above sales were approximately adjusted per market derived value influencing dissimilarities as noted." Respondent failed to state in Report, that comparables 1 and 3 have in-law quarters. In [the] Report, Respondent represented comparable 1 had one bath, where in fact it has at least two. In [the] Report, Respondent failed to state that comparable 1 has two in-law quarters. In [the] Report, Respondent stated that comparable 3 is a two-bath house with an additional bath in the in-law quarters. On the foregoing allegations, the Department brought the following three counts against Cartaya: COUNT IV 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 V Based upon the foregoing, Respondent is guilty of having failed to use reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT VI Based upon the foregoing, Respondent is guilty of culpable negligence in a business transaction in violation of Section 475.624(2), Florida Statutes. Cartaya admitted the allegations set forth in paragraphs 18 and 20 of the Administrative Complaint. Those undisputed allegations, accordingly, are accepted as true. The rest of the allegations about this property were based upon a Residential Appraisal Field Review Report (the "Marmin Report") that Frank L. Marmin prepared in May 2001 for his client Fannie Mae. The Marmin Report is in evidence as Petitioner's Exhibit 5. Mr. Marmin did not testify at hearing, although his supervisor, Mark A. Cannon, did. Mr. Marmin disagreed with Cartaya's opinion of value regarding 18032 NW 48th Place, concluding that the property's market value as of August 9, 1999, had been $100,000, and not $128,000 as Cartaya had opined. The fact-findings that follow are organized according to the numbered paragraphs of the Administrative Complaint. Paragraph 19. Cartaya admitted that she erred in noting that the property is located in FEMA Flood Zone "X," when in fact (she agrees) the property is in FEMA Flood Zone "AE." She did, however, include a flood zone map with her appraisal that showed the correct flood zone designation. Cartaya's mistake was obviously unintentional——and no more blameworthy than a typographical error. Further, even the Department's expert witness conceded that this minor error had no effect on the appraiser's opinion of value. Paragraphs 20 through 24. The Department asserts that two of Cartaya's comparables were not comparable for one reason or another. The Department failed clearly and convincingly to prove that its allegations of fact concerning the two comparables in question are true. Thus, the Department failed to establish its allegations to the requisite degree of certainty. Ultimate Factual Determinations Having examined the entire record; weighed, interpreted, and judged the credibility of the evidence; drawn (or refused to draw) permissible factual inferences; resolved conflicting accounts of what occurred; and applied the applicable law to the facts, it is determined that: Applying the law governing violations arising under Section 475.624(2), Florida Statutes, to the historical facts established in the record by clear and convincing evidence, it is found as a matter of ultimate fact that Cartaya did not commit culpable negligence in connection with the appraisals at issue. Applying the law governing violations arising under Section 475.624(15), Florida Statutes, to the historical facts established in the record by clear and convincing evidence, it is found as a matter of ultimate fact that Cartaya did not fail to exercise reasonable diligence in developing the appraisals at issue. Applying the law governing violations arising under Section 475.624(14), Florida Statutes, to the historical facts established in the record by clear and convincing evidence, it is found as a matter of ultimate fact that, in connection with the Appraisal Report relating to the Hialeah Property, Cartaya did commit one unintentional violation of Standards Rule 2- 2(b)(vi) of Uniform Standards of Professional Appraisal Practice and two unintentional violations of Standards Rule 2-2(b)(ix).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board enter a final order finding that: As to Case No. 04-1148, Cartaya is not guilty on Counts I through VI, inclusive; As to Case No. 04-1680, Cartaya is not guilty on Counts I, II, and IV; she is, however, guilty, under Count III, of one unintentional violation of Standards Rule 2-2(b)(vi) and two unintentional violations of Standards Rule 2-2(b)(ix). As punishment for the violations established, Cartaya's certificate should be suspended for 30 calendar days, and she should be placed on probation for a period of one year, a condition of such probation being the successful completion of a continuing education course in USPAP. In addition, Cartaya should be ordered to pay an administrative fine of $500. DONE AND ENTERED this 10th day of November, 2004, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 10th day of November, 2004.
The Issue Should the Florida Real Estate Appraisal Board (the Board) take action against Respondent, a licensed real estate appraiser (appraiser), for violations set forth in Chapter 475, Part II, Florida Statutes (1995)?
Findings Of Fact Stipulated Facts: Respondent is a state-licensed appraiser. On or about January 9, 1997, Respondent, Fred Catchpole, and Rhonda Guy developed and communicated an appraisal report for property commonly known as 693 Broad Street, Pensacola, Florida 32819. In developing the subject property appraisal report, the Cost Approach and the Sales Comparison Approach were utilized. Additional Facts: Eventually the circumstances concerning the Uniform Residential Appraisal Report (the Report) at the 693 Broad Street, Pensacola, Florida, property (the Property) came to Petitioner's attention upon a complaint. On February 13, 2001, the complaint was made. The complaint was made by Daniel Alvin Ryland, a Florida-licensed appraiser who has provided appraisal services in Escambia and Santa Rosa counties in Florida. The investigation of the complaint covered the period February 20, 2001, through December 26, 2001. Benjamin F. Clanton was the principal investigator. At present, he is an investigator supervisor for Petitioner. He has held that position since 2002. Mr. Clanton started investigating appraisal cases in 1995, when he retired from the Birmingham Police Department in Birmingham, Alabama. In that year, he was employed by the Alabama Real Estate Appraisal Board. While there, he took three courses: the Appraisal of Real Estate, a 45-hour course; the Basic How to Appraise, a 25-hour course; and Uniform Standards of Professional Appraisal Practices (USPAP), a 16-hour course. He took an update in USPAP in 1997, a four-hour course. Mr. Clanton continued with Appraisal Institute courses or courses involving appraisal principles and procedures, basic income capitalization, residential case studies and a national USPAP course and other updates. As part of the investigation, Mr. Clanton interviewed Respondent Harrison. Mr. Clanton sought documentation from the Respondent in the interest of the recreation of the Cost Approach in the Report. Mr. Clanton asked for the work files supporting the Report. Respondent provided work files. Discrete information concerning recreation of the Cost Approach was not received by Mr. Clanton. From his observations related to the Cost Approach within the Report, Mr. Clanton describes problems with the calculations of the Cost Approach where the stated effective age in the comments on the Cost Approach was 25 years. That calculated to be significantly different, in his understanding, than the number used in the depreciation in the Cost Approach. The Report reflected a remaining economic life of 35 years and a total life expectancy of 60 years. He refers to the Report's statement of the effective age of the Property as 15 years. In his testimony, Mr. Clanton describes the age life depreciation method leading to establishment of the effective age but he was never qualified as an expert to allow consideration of the testimony on the age life depreciation method or other issues related to the Cost Approach. Therefore, no further facts are found on that topic. When interviewed by Mr. Clanton, Respondent Catchpole in DOAH Case No. 06-3389PL acknowledged that there were errors in the Cost Approach formulations attributed to Respondent Harrison. The nature of any errors was not explained. Without that explanation they become inconsequential. More particularly, the Property neighborhood is slightly north of Interstate 10 in Pensacola, Florida, west of Pine Forrest Road, to the west side of Highway 29, and south of Alternate 90. The Property is located in what is referred to as the Ensley area. The Property is one of the largest residences in the Ensley area, in particular in Ensley Gardens. Immediately off of Highway 29 are rows of commercial buildings. Behind those rows is a railroad track. The Property is about 200 feet from the railroad track. An Escambia County utilities substation, pumping station, is located north of the Property. The Escambia County public utilities facility is about 200 feet from the Property. The Property is located north of Broad Street. The Property is on a large lot. Homes across from the Property on Broad Street are located on smaller lots. The property is not in a Planned Unit Development (PUD). The area of the subject property is not homogenous, in that the homes vary widely in quality, design, age and size. By choice of the appraiser, the Sales Comparison Approach was used in determining the appraisal for the Property. There were three comparable sales. At the time the Report was written the Property was 27 years old. Comparable sale one was two years old. Comparable sale two was 12 years old. Comparable sale three was 9 years old. The Property site was 120 feet by 260 feet according to the Report. This was larger than the comparable sales sites. Respondent, in providing information from the work file related to the Report, included information from a Multiple Listing Service (MLS) for January 1997 from the Pensacola Association of Realtors. In reference to comparable sale one, the MLS refers to the location as Creekside Oaks Subdivision, a luxury home under construction and a Parade Home entry. It refers to a sprinkler system, pantry, cathedral ceilings, security alarm, two+ closets in the master bedroom, separate shower in the master bedroom, an open patio, laundry/utility room, on a golf course, with a two-car garage. It has a whirlpool for the master bedroom bath. It has double pane glass. In relation to comparable sale two, the MLS refers to soaring cathedral ceilings with a fireplace in living room and screen porch, a hot tub and gorgeous yard with pool. The pool is described as an in-ground pool. There is a reference to a unique atrium, an inside laundry, walk-in closets, sprinkler systems, laundry/utility room and security alarm. The MLS pertaining to comparable sale three refers to the Kings Road Subdivision in Cantonment, whereas the Report refers to the location as Pensacola. In relation to comparable sale three on Kings Road in Cantonment, that neighborhood has deed restrictions limiting the type of homes and the size of homes. It has a public sewer. It has underground utilities. It has a concrete curb and gutter. The house is described as having a fireplace, sprinkler system, screen porch, high ceilings, security alarm, two-car garage, with a garden tub in the master bath. It refers to a laundry inside. There is a pool. The Report in the section under the Comparable Sales Approach, under the sales comparison analysis that refers to design and appeal described the Property and the comparables as ranch/average. The Property and the comparable sales properties were all described as suburban-average as to location. The sites were described as average for the Property and inferior for the comparables with a $3000 positive adjustment in each comparable sale to compensate for the difference. The Property did not have a pool. Two of the comparable sales had pools. Mr. Clanton asked the Respondent to provide him with a second appraisal report on the Property. Respondent agreed to provide it and mailed it to Mr. Clanton. A second appraisal report was not received by Mr. Clanton. Nothing more is known about a second appraisal report. In the appraiser certification signed by Respondent as appraiser and signed by Respondent Catchpole, DOAH Case No. 06- 3389PL, as supervisory appraiser, under item 8 it was stated: "I have personally inspected the interior and exterior areas of the subject property . . . ." Within item 8 to the appraisers certification, it went on to say that there was a personal inspection of " . . . the exterior of all properties listed as comparables in the appraisal report " Respondent in this case did not inspect the interior of the Property as part of the appraisal, by contrast to an awareness of the exterior. Respondent Catchpole, DOAH Case No. 06-3389PL, served as the supervisory appraiser and as such did not inspect the Property in any respect. Respondent Fred R. Catchpole, DOAH Case No. 06-3389PL, reviewed comparable property data in relation to the sales comparison analysis but was not involved in the selection process in choosing comparable sales. The form used in preparing the Report is referred to variously as Freddie Mac Form 70 6/93 and Fannie Mae Form 1004 6/93. In the Report in the section involving subject matter, Fred and Juanita Hicks were listed as borrowers and the current owner of the Property. The property rights being appraised were under the heading "fee simple." There was a reference to a lender/client as Home Star Mortgage Lending. The results of the Report did not lead to any direct harm to a consumer, in particular, the listed borrowers, Fred and Juanita Hicks.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a final order be entered dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 30th day of May, 2007, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS 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 May, 2007.
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
