The Issue Whether the Respondent committed the violations alleged in the Administrative Complaint dated May 3, 2000, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department is the state agency responsible for investigating complaints filed against registered, licensed, or certified real estate appraisers and for prosecuting disciplinary actions against such persons. Section 455.225, Florida Statutes (2000). The Florida Real Estate Appraisal Board is the state agency charged with regulating, licensing, and disciplining real estate appraisers registered, licensed, or certified in Florida. Section 475.613(2), Florida Statutes (2000). At the times material to this proceeding, Mr. Smalley was a registered assistant real estate appraiser in Florida. Since November 1999, Mr. Smalley has been a certified residential real estate appraiser in Florida. Mr. Lance Campbell was registered with the Department as Mr. Smalley's supervisory appraiser from approximately October 1997 to October 1999;2 both Mr. Campbell and Mr. Smalley were employed at the time by Southeastern Property Appraisals. In order for a licensed or certified appraiser to be registered as the supervisory appraiser for a registered assistant appraiser, a form furnished by the Department must be completed and signed by both the registered assistant appraiser and the certified appraiser, and the form must be filed with the Department. In order for Mr. Campbell to become registered with the Department as his supervisory appraiser, Mr. Smalley completed the portion of the registration form to be completed by the registered assistant appraiser and gave it to Mr. Campbell so he could complete the remaining portion of the form. Mr. Campbell submitted the completed form to the Department. After the first few months of their professional relationship, Mr. Campbell was not necessarily aware of Mr. Smalley's appraisal assignments because Mr. Smalley usually received assignments directly from the client. Once Mr. Smalley completed an appraisal report, it was his practice to hand in the report and the accompanying workfile for Mr. Campbell's review and signature. It was Mr. Campbell's practice to review Mr. Smalley's appraisal reports and workfiles, sign the reports, process them, and send them to the clients. As Mr. Smalley's supervisory appraiser, Mr. Campbell found that Mr. Smalley always did a thorough job on his appraisal reports and maintained complete workfiles that included the data necessary to support his appraisal reports. In Mr. Campbell's opinion, Mr. Smalley is a very qualified appraiser. In June 1999, Mr. Smalley was retained by Allstate Mortgage Corporation ("Allstate") to appraise residential property located at 15315 Southwest 178th Terrace, Miami, Florida. Allstate requested that Frank Otero sign the appraisal as Mr. Smalley's supervisory appraiser. At the times material to this proceeding, Mr. Otero was a state-certified residential real estate appraiser who was employed by Southeastern Property Appraisals. Mr. Otero was not registered as a supervisory appraiser for Mr. Smalley when Allstate requested that he act as Mr. Smalley's supervisory appraiser for the subject appraisal. Consequently, Mr. Smalley obtained a copy of the Department registration form from Mr. Campbell, completed his portion of the form, and gave it to Mr. Otero so he could complete his portion of the form. Mr. Smalley assumed that Mr. Otero had done so and that Mr. Otero had submitted the form to the Department. The USPAP contain a provision requiring real estate appraisers to keep records of each appraisal they perform. The Ethics Rules of the 1999 edition of the USPAP include the following provision: Record Keeping An appraiser must prepare a workfile for each assignment. The workfile must include the name of the client and the identity, by name or type, of any other intended users; true copies of any written reports, documented on any type of media; summaries of any oral reports or testimony, or a transcript of testimony, including the appraiser's signed and dated certification; all other data, information, and documentation necessary to support the appraiser's opinions and conclusions and to show compliance with this rule and all other applicable Standards, or references to the location(s) of such other documentation. An appraiser must retain the workfile for a period of at least five (5) years after preparation or at least two (2) years after final disposition of any judicial proceeding in which testimony was given, whichever period expires last, and have custody of his or her workfile, or make appropriate workfile retention, access, and retrieval arrangements with the party having custody of the workfile. Comment: A workfile preserves evidence of the appraiser's consideration of all applicable data and statements required by USPAP and other information as may be required to support the findings and conclusions of the appraiser. For example, the content of a workfile for a Complete Appraisal must reflect consideration of all USPAP requirements applicable to the specific Complete Appraisal assignment. However, the content of a workfile for a Limited Appraisal need only reflect consideration of the USPAP requirements from which there has been no departure and that are required by the specific Limited Appraisal assignment. A photocopy or an electronic copy of the entire actual written appraisal, review, or consulting report sent or delivered to a client satisfies the requirement of a true copy. As an example, a photocopy or electronic copy of the Self-Contained Appraisal Report, Summary Appraisal Report, or Restricted Use Appraisal Report actually issued by an appraiser for a real property Complete Appraisal or Limited Appraisal assignment satisfies the true copy requirement for that assignment. Care should be exercised in the selection of the form, style, and type of medium for written records, which may be handwritten and informal, to ensure they are retrievable by the appraiser throughout the prescribed record retention period. A workfile must be in existence prior to and contemporaneous with the issuance of a written or oral report. A written summary of an oral report must be added to the workfile within a reasonable time after the issuance of the oral report. A workfile must be made available by the appraiser when required by state enforcement agencies or due process of law. In addition, a workfile in support of a Restricted Use Appraisal Report must be available for inspection by the client in accordance with the Comment to Standards Rule 2-2(c)(ix). As he went about preparing the subject appraisal, Mr. Smalley compiled a workfile consisting of the data on which he based his appraisal, including photographs, diagrams, maps, and printouts on the property sales in the neighborhood, known as "comparables." Mr. Smalley maintained a hard copy of the workfile, and he also put the workfile into the office computer. In reporting the results of his appraisal of the subject property, Mr. Smalley used the "Uniform Residential Appraisal Report," which is identified as "Freddie Mac Form 70." Mr. Smalley entered the data on which he based his appraisal and his conclusion regarding the value of the property on the form, he typed his name on the line on the second page of the form reserved for the name of the appraiser, and he typed "Franky Otero" on the line on the second page of the form reserved for the name of the supervisory appraiser. The date of "July 15, 1999" was typed in the space below the typed names. Mr. Smalley signed his name on the line above his typed name. Then, as was his usual practice with Mr. Campbell, Mr. Smalley left the report and the workfile in a designated area for Mr. Otero to pick up so he could review the appraisal report and the workfile and sign the appraisal report. After he completed the appraisal report, Mr. Smalley included in the hard-copy of the workfile a copy of the two-page report. The copy of the appraisal report Mr. Smalley retained in the workfile was printed from the workfile he maintained on the computer, and this copy of the report did not contain either his signature or that of Mr. Otero. On August 12, 1999, the Department received an anonymous complaint in which it was asserted that the value assigned in the appraisal report to the property located at 15315 Southwest 178th Terrace, Miami, Florida, was too high; a copy of the appraisal report containing signatures purporting to be those of Mr. Smalley and Mr. Otero was attached to the complaint filed with the Department. The Department forwarded a copy of the complaint to Mr. Otero. At some point after he received notification of the complaint, Mr. Otero telephoned Mr. Campbell to advise Mr. Campbell that he, Mr. Otero, was being investigated by the Department with respect to a complaint it had received about an appraisal report prepared by Mr. Smalley. Mr. Campbell set up a meeting with Mr. Otero and Mr. Smalley. Prior to the meeting, Mr. Otero sent Mr. Campbell a copy of the subject appraisal report by facsimile transmittal. The copy of the report that Mr. Otero sent to Mr. Campbell contained signatures above the typed names of Mr. Smalley and of Mr. Otero. Mr. Otero's primary concern at the meeting, and the focus of the discussion, was the allegation in the complaint that the value assigned to the property in the appraisal report was too high. There was also some discussion about whether Mr. Otero had signed the appraisal report. The first time Mr. Smalley saw a copy of the report containing a signature above Mr. Otero's typed name was at the meeting with Mr. Campbell and Mr. Otero. The Department's investigator interviewed Mr. Smalley on March 9, 2000. During the interview, the investigator reviewed Mr. Smalley's workfile on the subject appraisal and copied selected documents from the file, with Mr. Smalley's assistance. One document that the investigator copied from Mr. Smalley's workfile was the copy of the two-page appraisal report that Mr. Smalley had printed from the workfile he maintained on the computer, which copy did not contain signatures of Mr. Smalley and Mr. Otero. The Department's investigator obtained a computer printout of Mr. Smalley's licensure file. According to the Department's investigator, the printout did not show that Mr. Otero was registered with the Department as a supervisory appraiser for Mr. Smalley in July 1999. As a result, the Department issued to Mr. Smalley a Uniform Disciplinary Citation dated March 13, 2000, charging that a Uniform Residential Appraisal Report was submitted to Mr. Smalley's client with the signature of a supervisory appraiser who was not registered with the Department. Summary The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that Mr. Smalley failed to maintain a workfile for the subject appraisal, that he failed to maintain a workfile while he was preparing the appraisal that contained the data on which he relied in completing the appraisal, or that he was required to include in the workfile a copy of the signed appraisal report. The evidence presented by the Department is not sufficient to establish with the requisite degree of certainty that the signature on the appraisal report was not Mr. Otero's signature, that Mr. Smalley signed Mr. Otero's signature to the subject appraisal report, or that Mr. Smalley knew or should have known that Mr. Otero was not registered as one of his supervisory appraisers.
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 filed against Dale Smalley. DONE AND ENTERED this 31st day of August, 2001, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 31st day of August, 2001.
