08-003898PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Andrew S. Meltzer Status: Closed Recommended Order on Tuesday, March 17, 2009.

Summary: Respondent failed to review entire sales contract, including addendum for seller`s concessions, failed to report complete MLS history, and made other errors and omissions in violation and USPAP. Recommend a 30-day suspension, probation, fine and costs.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS )

AND PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 08-3898PL

)

ANDREW S. MELTZER, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

As previously scheduled, a formal hearing was held in this

case by video teleconference between Miami and Tallahassee,

Florida, on October 30, 2008, before Administrative Law Judge

Eleanor M. Hunter of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robert Minarcin, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street

Suite N801

Orlando, Florida 32801

For Respondent: Daniel Villazon, Esquire

Daniel Villazon, P.A.

1420 Celebration Boulevard

Suite 200

Celebration, Florida 34747

STATEMENT OF THE ISSUE

Whether the Respondent, Andrew S. Meltzer, committed the

violations alleged in the Administrative Complaint involving the

standards for the development of or the communication of real

estate appraisals and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On February 14, 2008, the Petitioner, the Department of

Business and Professional Regulation, Division of Real Estate

(Department), filed an eleven-count Administrative Complaint in

FDBPR Case No. 2007051437 against the Respondent, Andrew S.

Meltzer, a certified residential real estate appraiser. The

Administrative Complaint alleged that he violated several

statutory provisions, including that requiring compliance with

the Uniform Standards of Professional Appraisal Practice (USPAP),

by making errors and omissions in appraisal reports for a

residential parcel of property in Pinecrest, Florida. More

specifically, the Administrative Complaint alleged that the

Respondent had violated the following provisions of Florida law:

Subsection 455.227(1)(a), Florida Statutes (2006)(Count One);

Subsection 475.624(15), Florida Statutes (2006) (Count Two);

Section 475.629, and, therefore, Subsection 475.624(4), Florida

Statutes (2006)(Count Three); Subsection 475.624(2), Florida

Statutes (2006)(Count Four); Subsection 475.624(14), Florida

Statutes (2006), by violating the Record Keeping Section of the

Ethics Rule or other provisions of the USPAP (2006)(Count Five);

Subsection 475.624(14), Florida Statutes (2006), by violating the

Conduct Section of the Ethics Rule or other provisions of the

(2006), by violating Standard 1-1(a), (b) and (c) or other

provisions of USPAP related to the development or communication

of real estate appraisal (Count Seven); violated Subsection

475.624(14), Florida Statutes (2006), of the USPAP, by violating

Eight); Subsection 475.624(14), Florida Statutes (2006), by

Subsection 475.624(14), Florida Statutes (2006), by violating

Standards Rule 2-1(a) and (b) of the USPAP (2006) (Count Ten);

and Subsection 475.624(14), Florida Statutes (2006), by violating

On August 12, 2008, the Respondent’s Petition for Formal

Hearing was referred to the Division of Administrative Hearings

by the Department and designated DOAH Case No. 08-3898PL.

Administrative Law Judge Larry Sartin was assigned to hear the

case, and as requested by the parties, Judge Sartin set the case

for hearing for October 30, 2008. Before the hearing, the case

was re-assigned to the undersigned.

At the hearing, the Petitioner presented the testimony of

Raymond Scott Thompson and Phillip Spool, an expert in appraisal

practice. The Petitioner's Exhibits numbered 1-6 were received

into evidence. The Respondent testified on his own behalf, and

the Respondent's Exhibit 1 was received into evidence.

The Transcript of the proceedings was not filed until

December 18, 2008. Because of the delay in the expected filing

date for the transcript, each party filed and was granted an

extension of time to file Proposed Recommended Orders. Both were

received on January 20, 2009.

FINDINGS OF FACT

1. The Petitioner (Department) is the state agency charged

with the responsibility of regulating persons holding real estate

appraisers' licenses in Florida.

2. At all times material to the allegations of this matter

the Respondent has been a State-certified residential real estate

appraiser holding license number 3190. He is 38 years old and

has been a real estate appraiser for approximately seventeen

years. During that time, he has never been disciplined nor has

he been removed from a bank's approved list of appraisers.

3. On or about October 23, 2006, the Respondent prepared a

Uniform Residential Appraisal Report for property located at

9900 Southwest 72nd Avenue, Pinecrest, Florida ("the subject

property"), for the F S Lending Group.

4. In September 2007, an investigator for the Department

received a copy of an appraisal report (Report One) from a

closing agent. The report showed that "Aida Martinez" was the

name of the buyer. Based on his investigation and her

admissions, the investigator found that Martinez was a "straw

buyer" and was paid $10,000 for the use of her name and credit

report. The person who is alleged to have paid her was not

available to talk to investigators due to possible criminal

proceedings, but the Department's investigator made it clear that

he found no evidence of a connection between that person and the

Respondent. A copy of the contract, also provided by the closing

agent, showed a different name for the buyer, "Aida Barrero" or

"Aida Barren," as best the handwriting and poor quality of the

copy could be read. In addition, an addendum to the contract for

a purchase price of $999,000, provided that "seller will

contribute [provide concessions in the amount of] $173,000 at

closing with (sic) to the buyer (for repair of subject property

and buyer closing costs). The amount that seller will receive

for the property will be $825,000 less seller (sic) closing costs

and mortgage payoff if any." Report One has the Respondent's

digital signature on it. A mortgage loan on the subject property

is now in foreclosure, but no one from the Department contacted

the lender to see what appraisal was the basis for making the

loan.

5. Based on the fact that the property was listed for sale,

Report One has an incorrect "no" answer on page 1 to a question

regarding a current or other sales listings in the last 12

months. Based on the provisions in the contract, it also has an

incorrect "no" answer to whether there are seller's concessions.

6. When an investigator showed Report One to him, the

Respondent immediately retrieved what has been designated "Report

Two" from his computer files. Report Two on page 1 named the

buyer as "Barren" using only the last name as is customary for

the Respondent, and using the same name that was on the appraisal

order form sent to the Respondent. Report Two has what appears

to be a signed transmittal page to F S Lending Group. It also

has a correct "yes" answer on page 1 to the question regarding a

current or sales listings in the last 12 months, unlike Report

One. Like Report One, it erroneously has a "no" answer on page 1

regarding seller's concessions and is, in all other respects, the

same as Report One. The witnesses agreed that the most likely

explanation for Report One is that page 1 was altered

fraudulently after Report Two was no longer within the

Respondent's control.

7. The Respondent's appraisal work file for the subject

property included another report (Report Three) that also listed

"Barren" as the buyer, but had no signature on it, and was an

earlier draft of Report Two. Although the Department's expert

said an oral communication of its contents could make Report

Three an appraisal, he and the Department's investigator had no

evidence of that and agreed that it was not an appraisal.

8. A three-page excerpt of the contract in the Respondent's

work file did not include and did not refer to the addendum to

the contract with concessions that indicated work needed to be

done on the house and that the purchase price was reduced. The

three pages were clearly not the entire sales contract, based on

missing page and item numbers on the standard form. The

Respondent admitted that he only instructs clients to send the

"first page, signature pages, addendum pages, and anything that

would [a]ffect the purchase price." He said that he only asks

for pertinent pages and he could not survive in the industry if

he reviewed seventy or a hundred page construction contracts,

although he checked the box on the appraisal from that says, "I

did analyze the contract for sale of the subject property."

9. The Department's expert prepared a One-Unit Residential

Appraisal Field Report (field report) to evaluate Report One that

is, except for the name of the buyer and the answer regarding the

sales listing, applicable to Report Two. He cited numerous

errors and omissions in Report One. He admitted, however, that

his work was "sloppy" because he listed the incorrect property

address as 12745 Southwest 72 Avenue, the address for the subject

property, not 9900 Southwest 72nd Avenue.

10. In his review, the Department's expert found that the

Respondent incorrectly categorized the pool on the subject

property as a structural improvement rather than a site

improvement.

11. Comparable one in Report Two was a superior property,

so the Respondent used matched paired sales data that he keeps in

his office among other reference material, including the Marshall

and Swift publication on cost estimates. He made adjustments for

square footage and room count accordingly. The Department's

expert testified that USPAP required documentation for any

adjustments, and, regarding where the records had to be kept,

responded as follows:

Q. Now, and again I'm referring to comp

number, report number two, comp number one.

What documentation does he need in his file

to support his adjustment for the site square

footage?

A. Either -- I would say the best support

would be a paired, p-a-i-r-e-d, sales

analysis.

Q. Does that have to be in the work file?

A. Yes. No-no-no-no. It does not have to be

in the work file. It could be somewhere in

your office readily accessible . . .

12. Adjustments to comparable two were reasonable based on

the Respondent's observation that it was "a lot more superior,"

and his determination, after talking to the realtor that it was

completely "renovated like new" which he wrote in his notes. The

MLS listing also reported that the renovations were made in 2006.

The Respondent received conflicting information from two

different data sources concerning the square footage for

comparable two, so he called the realtor and used the figure that

the realtor verified in his analysis, as the Department's expert

testified he should have done. No adjustment was made based on

his note that the comparable was "similar in square footage" and

less than a 100-square foot difference.

13. The Department's expert differed with the selection and

adjustment of comparables three and four due to lot sizes and

bedroom/bathroom counts. The subject property is on a lot of

15,832 square feet, or less than half an acre, has four bedrooms

and two and a-half baths, with 2,639 square feet of livable, air

conditioned space. Comparable three has a lot size of 32,670

square feet, although the living area is similar, and it has only

one half bath more than the subject. Although comparable three

has a much larger site, the sales price was only $25,000

difference, because of its condition. So the Respondent

reasonably made a consistent negative adjustment based on sales

history.

14. Comparable four is within a half mile of the subject

property, in the Pinecrest area, but it has a lot size of 33,541

square feet, has five bedrooms and four full baths, and has 4,283

square feet of livable space.

15. The Respondent agreed that, as a rule, comparables

should have not more than a ten percent adjustment, and that, as

the Department's expert noted, lenders require only three

comparables. To provide as much information as possible, the

Respondent included a fourth comparable with a greater adjustment

down because it had a tar and gravel roof, and because the

realtor told him "it needed updating." He made it the fourth

comparable because it was the least desirable one, but he did not

include the fact that it had a tennis court, as he should have.

He failed to note that it was gated property, although the

Department's expert agreed that whether a gate adds or does not

add value to property is "a matter of professional opinion." He

also agreed that the differences between a tar and gravel roof

and a tile roof would not usually be documented in a work file.

It was appropriate to make adjustments based on the condition of

the property. As USPAP required, the Respondent inspected the

comparables from the street.

16. In reviewing the Respondent's work, the Department's

expert observed only the subject property from the street, but

not the comparables and testified as follows:

Q. But you did not inspect each of the

comparable sales at least from the street?

A. Correct, correct.

* * *

Q. -- you testified that you did not inspect

the comparables?

A. I agree.

* * *

Q. Correct. And that goes to the whole

point where you were earlier discussing that

it's hard to verify what he did because you

actually didn't go out and see the

comparables?

A. Correct.

Q. Which is contrary to what you were

supposed to do?

A. Correct.

17. The Respondent made a mathematical error in the

calculation of the depreciation at 22% when it should have been

20%, resulting in an underestimate of $8,541.

18. Although he correctly noted that the subject property

was listed for sale for $999,000, the Respondent failed to

include the Multiple Listing Service (MLS) history, including,".

. . data source(s), offering price(s), and date(s)" of listings

in the twelve months prior to the effective date of the

appraisal.

19. The sales prices for the subject property were listed

as $885,000 in June 2006; reduced to $875,000 in July 2006,

reduced again to $849,990 in August 2006; and increased to

$999,000 on October 14, 2006. The Department's investigator

testified that the listing broker said she raised the price based

on an appraisal that was faxed to her, but he agreed that it

could not have been based on the Respondent's appraisal since the

price increase took effect on October 14, 2006, and the

Respondent's appraisal report was dated October 23, 2006.

20. Concerning the MLS listings, the Respondent said he

called and asked the realtor why the listing price was increased.

He accepted the realtor's explanation that improvements in the

last six months, a new roof and a new garage door, would justify

the increase in the sales price. In his notes, the Respondent

wrote "property renovated" and "big realtor" because the realtor

was well-known and he believed he could rely on her

representations. He also saw the new roof himself, and it made

sense to him that a million dollar house could have a 10%

increase in value because of those improvements. While this may

have been a logical explanation, the Respondent failed to

document it in his work file despite the fact that the MLS

fluctuations were a "red flag," possibly indicating fraud.

21. The Department's expert found no support in the work

files for the Respondent's allocation of 61% of the total value

of $903,100, or $550,000 ($34.74), to the site value, but agreed

that differences in value based on what buyers might pay for

additional land is a matter of legitimate differences in

"appraiser opinion."

22. In summary, the Department's expert established that

Report Two was inaccurate and misleading because it (1) did not

include the terms of the entire contract that affected the price;

(2) did not show the value of the pool in the appropriate

category; (3) did not report the MLS listings history for the

subject property for the past year; (4) had an incorrect value

for depreciation; and (5) did not show the tennis court on

comparable four.

23. Based on the evidence, the Department did not show, as

alleged in paragraph 7 (A) through (D) of the Administrative

Complaint, that the Respondent made errors and omissions on

Report One other than those carried over from Report Two, before

it was altered. Report One was not alleged or proven to be the

document communicated by the Respondent's client.

24. Based on the evidence, Report Two is the only accurate

representation of the Respondent's work appraising the subject

property. Paragraph 8 (A) of the Administrative Complaint

alleging that the name of the borrower was incorrect is not

supported by the evidence. The Department's assertion in

paragraph 8 (B) that the MLS listing history is incomplete is

clearly and convincingly supported by the evidence. Paragraph 8

(C) of the Administrative Complaint, alleging that the Respondent

failed to review all agreements for sale, and paragraph 8 (D),

regarding the misstatement on seller's concessions, are clearly

and convincingly established by the evidence.

25. The Department's allegations in paragraphs 9 (A)-(D),

related to Report Three, are not established by clear and

convincing evidence based on the witnesses' agreement that Report

Three was not an appraisal report.

26. With regard to Report Two, the only appraisal report

for the subject property that was shown to have been developed

and communicated by the Respondent, the evidence is not clear and

convincing that the Respondent made the following errors and

omissions: as alleged in paragraph 10 (A) and (B), that

adjustments for room count and square footage were not explained

for comparable sales one and that discrepancies were not resolved

for comparable sale two; in paragraph 10 (C), that room count and

square footage adjustments for comparable three are not accurate

and supported; and in paragraph 10 (D), that room count and

square footage adjustments for comparable four are not accurate

and supported.

27. With regard to Report Two, the evidence is clear and

convincing, as alleged, in paragraph 10 (E) and (F), that the

Respondent omitted the tennis court on comparable four and showed

no adjustment or reasonable explanation for not doing so.

28. The evidence was not clear and convincing, as alleged

in paragraph 10 (G), that different comparables should have been

used.

29. The evidence is clear and convincing that the

Respondent made a mathematical error in determining the amount of

depreciation in Report Two, as alleged in paragraph 11 (A).

Depreciation of improvements, as alleged in paragraph 11 (b), is

not clearly and convincingly shown to be erroneous.

30. The comparisons of Reports One, Two, and Three in

paragraph 12 are rejected as irrelevant, because Report One is

altered except for the mistakes carried over from Report Two, and

Report Three was a draft. Charges related to Report Three are

also not proved for the same reason.

31. Paragraph 13 is established by clear and convincing

evidence because the entire sales contract is not in the working

files for the subject property.

32. Paragraphs 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24,

25 and 26, all related to the absence of documentation for

comparable adjustments, the square footage price, value of

improvements, and condition are not supported by clear and

convincing evidence based on the testimony of Department's expert

regarding the required documentation and his incomplete review of

the comparables.

33. Paragraph 27, alleging that Aida Martinez was a "straw

buyer" is supported by the undisputed evidence presented by the

Department.

CONCLUSIONS OF LAW

34. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of these

proceedings. §§ 120.569 and 120.57, Florida Statutes.

35. The Petitioner, the Department, is the state agency

authorized to regulate the practice of real estate appraisal in

Florida, pursuant to Chapter 475, Part II, Florida Statutes

(2006).

36. Because license disciplinary proceedings are penal, the

Petitioner bears the burden of proof in this case to establish by

clear and convincing evidence the allegations of the

Administrative Complaint. Department of Banking and Finance v.

Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v.

Turlington , 510 So. 2d 292 (Fla. 1987); Munch v. Department of

Professional Regulation , 592 So. 2d 1136 (Fla. 1st DCA 1992).

37. The courts have held that:

[C]lear and convincing evidence requires

that the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

testimony must be precise and explicit and

the witnesses must be lacking in confusion as

to the facts in issue. The evidence must be

of such weight that it produces in the mind

of the trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established. In Re Davey , 645 So. @d 398,

404 (Fla.1994), quoting, with approval,

Slomowitz v. Walker , 429 So. 2d 797 (Fla. 4th

DCA 1984).

Applicable Statutes and USPAP Rules:

38. Section 475.628, Florida Statutes, provides:

Each appraiser registered, licensed, or

certified under this part shall comply with

the Uniform Standards of Professional

Appraisal Practice. Statements on appraisal

standards which may be issued for the purpose

of clarification, interpretation,

explanation, or elaboration through the

Appraisal Foundation shall also be binding on

any appraiser registered, licensed, or

certified under this part.

39. Subsection 455.627(1)(a) and Section 475.629, Florida

Statutes, are statutes applicable to the charges against the

Respondent in this case, and are as follows:

455.227 Grounds for discipline; penalties;

enforcement.--

(1) The following acts shall constitute

grounds for which the disciplinary actions

specified in subsection (2) may be taken:

(a) Making misleading, deceptive, or

fraudulent representations in or related to

the practice of the licensee's profession.

475.629 Retention of records.--An appraiser

registered, licensed, or certified under this

part shall retain, for at least 5 years,

original or true copies of any contracts

engaging the appraiser's services, appraisal

reports, and supporting data assembled and

formulated by the appraiser in preparing

appraisal reports.

40. The Department in the Administrative Complaint also

charged that the Respondent should be disciplined because he

violated the following Subsections of 475.624, Florida Statutes:

(2) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest conduct,

culpable negligence, or breach of trust in

any business transaction ...

* * *

(4) Has violated any of the provisions of

this part or any lawful order or rule issued

under the provisions of this part or chapter

455.

* * *

(14) Has violated any standard for the

development or communication of a real estate

appraisal or other provision of the Uniform

Standards of Professional Appraisal Practice.

(15) Has failed or refused to exercise

reasonable diligence in developing an

appraisal or preparing an appraisal report.

41. The USPAP standards, applicable to the charges are as

follows:

Standards Rule 1-1 (a), (b) and (c) that provide:

In developing a real property appraisal, an

appraiser must:

(a) be aware of, understand, and correctly

employ those recognized methods and

techniques that are necessary to produce a

credible appraisal;

(b) not commit a substantial error of

omission or commission that significantly

affects an appraisal;

(c) not render appraisal services in a

careless or negligent manner, such as by

making a series of errors that, although

individually might not significantly affect

the results of an appraisal, in the aggregate

affects the credibility of those results.

In developing a real property appraisal, an

appraiser must collect, verify, and analyze

all information necessary for credible

assignment results.

(a) When a sales comparison approach is

necessary for credible assignment results, an

appraiser must analyze such comparable sales

data as are available to indicate a value

conclusion.

(b) When a cost approach is necessary for

Credible assignment results, an appraiser

must: (i) develop an opinion of site value by

an appropriate appraisal method or technique;

(ii) analyze such comparable cost data as are

available to estimate the cost new of the

improvements (if any); and (iii) analyze such

comparable data as are available to estimate

the difference between the cost new and the

present worth of the improvements (accrued

depreciation).

Standards Rule 1-5 (a) that provides:

When the value opinion to be developed is

market value, an appraiser must, if such

information is available to the appraiser in

the normal course of business:

(a) analyze all agreements of sale,

options, and listings of the subject property

current as of the effective date of the

appraisal

Standards Rule 2-1 (a) and (b) that provide:

Each written or oral real property

appraisal report must:

(a) clearly and accurately set forth the

appraisal in a manner that will not be

misleading;

(b) contain sufficient information to

enable the intended users of the appraisal to

understand the report properly.

Standards Rule 2-2 (b) (viii) that provides:

Each written real property appraisal report

must be prepared under one of the following

three options and prominently state which

option is used: Self-Contained Appraisal

Report, Summary Appraisal Report, or

Restricted Use Appraisal Report. The content

of a Summary Appraisal Report must be

consistent with the intended use of the

appraisal and, at a minimum: (viii)

summarize the information analyzed, the

appraisal methods and techniques

employed, and the reasoning that supports the

analyses, opinions, and conclusions;

exclusion of the sales comparison approach,

cost approach, or income approach must be

explained

Conclusions on Counts One through Eleven:

42. Because of their penal nature, the foregoing provisions

must be strictly construed, with any reasonable doubts as to

their meaning, resolved in favor of the Respondent. See Jonas v.

Florida Department of Business and Professional Regulation , 746

So. 2d 1261, 1262 (Fla. 3d DCA 2000); and Capital National

Financial Corporation v. Department of Insurance , 690 So. 2d

1335, 1337 (Fla. 3d DCA 1997).

43. Count One, a violation of Subsection 455.227(1)(a),

Florida Statutes (2006), making misleading representations

related to the licensee's profession, was proved by clear and

convincing evidence, as alleged, that the Respondent failed to

analyze the complete sales contract.

44. Count Two, a violation of Subsection 475.624(15),

Florida Statutes (2006), failing to exercise reasonable

diligence, by not requesting the entire sales contract and by not

disclosing the entire history of listing within the prior twelve

months, was proved by clear and convincing evidence.

45. Count Three, a violation of Section 475.629, Florida

Statutes (2006), and, therefore, a violation of Subsection

475.624(4), Florida Statutes (2006), the failure to retain a

record of the complete sales contract is proved by clear and

convincing evidence.

46. Count Four, alleged a violation of Subsection

475.624(2), Florida Statutes (2006), by fraud, misrepresentation,

concealment, false promises, false pretenses, dishonest conduct,

culpable negligence, or breach of trust. The Department has not

introduced and, its witnesses testified that it did not have,

evidence of fraud, concealment, false promises, false pretences,

or dishonest conduct by the Respondent. In the absence of

further statutory or rule guidance, reference has been made in an

earlier case to definitions in Black's Law Dictionary, Fifth

Edition, the term culpable negligence is defined as follows:

Failure to exercise that degree of care

rendered appropriate by the particular

circumstances, and which a man of ordinary

prudence in the same situation and with equal

experience would not have omitted.

Breach of trust is defined in the same source

as follows:

Any act done by a trustee contrary to the

terms of his trust, or in excess of his

authority and to the detriment of the trust;

or the wrongful omission by a trustee of any

act required of him by the terms of the

trust. Also the wrongful misappropriation by

a trustee of any fund or property which had

been lawfully committed to him in a fiduciary

character. Every violation by a trustee of a

duty which equity lays upon him, whether

willful and fraudulent, or done through

negligence, or arising through mere oversight

and forgetfulness, is a "breach of trust."

Department of Professional Regulation, Division of Real Estate v.

Alfert , DOAH Case. No. 87-3189 (R.O. 12/7/87; F.O. 1/19/88).

47. Because of the errors and omission committed by the

Respondent, the Department has proved clearly and convincingly,

as alleged in Count Four, that culpable negligence and a breach

of trust, as those terms are used in Subsection 475.624(2),

Florida Statutes (2006), led to the Respondent's

misrepresentations, but not fraud, concealment, false promises,

false pretences, or dishonest conduct.

48. Counts Five through Eleven, alleged violations of

Subsection 475.624(14), Florida Statutes (2006), by failing

comply with various provisions of USPAP.

49. As alleged in Count Five, the record keeping standard

was violated because a complete contract is not in the

Respondent's work file.

50. As alleged in Count Six, based on the Respondent's

errors and omissions, the standard for development and

communication of a real estate appraisal was violated.

51. Count Seven, the alleged violation of Standards Rule 1-

1(a), (b), and (c) were violated based on the Respondent's

failure to use proper techniques, his errors of omission and

commission, and his carelessness and negligence.

52. Count Eight, an alleged violation of Standards Rule 1-

4(a) and (b)(i), (ii), (iii), was proved based on the

Respondent's failure to collect and analyze all information

necessary, and failure to include all information about a

comparable sale.

53. Count Nine, a violation of Standards Rule 1-5(a),

concerning the failure to analyze all agreements for sale, was

proved.

54. Count Ten, a violation of Standards Rule 2-1(a) and

(b), providing that an appraisal should not be misleading and

should contain sufficient information for the intended user, was

proved.

55. Count Eleven, a violation of Standards Rule 2-

2(b)(viii), regarding summarizing and analyzing data to provide

useful information to the intended user is clearly and

convincingly established, by the failure to review the entire

sales contract, failure to include seller's concessions, and

failure to analyze and summarize fluctuations in listing prices.

56. Therefore, as established in Counts Five through

Eleven, the Department proved by clear and convincing evidence

that the Respondent violated Subsection 475.624(14), Florida

Statutes (2006), by violating USPAP Standards Rules 1-1 (a), (b)

a)

and (b); and 2-2(b)(viii).

Appropriate Discipline:

57. The appropriate disciplinary action to be taken by the

Florida Real Estate Appraisal Board is effectively restricted and

limited by the guidelines set forth Florida Administrative Code

Rule 61J1-8.002. See Parrot Heads, Inc. v. Department of

Business and Professional Regulation , 741 So. 2d 1231, 1233 (Fla.

5th DCA 1999)("An administrative agency is bound by its own rules

. . . creat[ing] guidelines for disciplinary penalties."); and §

455.227(5), Fla. Stat.

58. The usual discipline for a violation of Subsection

455.227(1), making a misrepresentation, is a penalty up to

revocation and a fine of $5,000. Fla. Admin. Code R. 61J1-

8.002(3)(d).

59. The usual penalty for a violation of 475.624(15), is

suspension of five years to revocation and a fine not to exceed

$1,000.00. Fla. Admin. Code R. 61J1-8.002(3)(r).

60. The guideline for a violation of Subsection 475.624(4),

Florida Statutes, by violating Section 475.629, Florida Statutes,

is a penalty of up to revocation and a fine up to $5,000.00.

Fla. Admin. Code R. 61J1-8.002(3)(g).

61. The penalty guideline for a violation of Section

475.624(2), Florida Statutes, by culpable negligence or breach of

trust, as opposed to fraud, dishonest conduct, and concealment is

a fine of $1,000.00 to a one-year suspension. Fla. Admin. Code

R. 61J1-8.002(3)(e).

62. The penalty guideline for a violation of Section

475.624(14), Florida Statutes, ranges from a five-year suspension

to revocation and a fine of $1,000.00. Fla. Admin. Code R. 61J1-

8.002(3)(q).

63. Florida Administrative Code Rule 61J1-8.002(4) provides

for the consideration of certain aggravating and mitigating

circumstances.

64. Florida Administrative Code Rule 61J1-8.0002(4) (b )

lists the aggravating or mitigating circumstances that include,

but are not limited to, the following:

1. The degree of harm to the consumer or

public.

2. The number of counts in the

administrative complaint.

3. The disciplinary history of the

licensee.

4. The status of the licensee at the time

the offense was committed.

5. The degree of financial hardship

incurred by a licensee as a result of the

imposition of a fine or suspension of the

license.

6. Violation of the provision of Part II

of Chapter 475, F.S., wherein a letter of

guidance as provided in Section 455.225(3),

F.S. , previously has been issued to the

licensee.

65. There is no evidence of harm caused by Report Two,

although the errors and omissions carried over into Report One

could have, but have not been shown to have caused a lender to

make the loan that is currently in foreclosure. Although the

Administrative Complaint has eleven counts, in reality, there

were really five mistakes clearly established:(1) not requiring,

therefore, not reviewing and retaining the entire contract; (2)

not properly categorizing the pool and, therefore, showing it

incorrectly on the report; (3) not reporting the MLS listings

history for the subject property for the past year; (4)

incorrectly calculating depreciation and, therefore, all other

values derived from it; and (5) not reporting the tennis court on

one of the comparables. Without objection, the Respondent

established that he had no past complaints or discipline, has had

an active license since 1992, has performed thousands of

appraisals, has had his own office since 2000, and earns his

living as an appraiser. While the Department proved most of its

charges, there is no evidence that the Respondent's actions

resulted from participation in fraud or intentional dishonesty.

66. In the Department's proposed recommended order, the

penalty recommended is suspension of the Respondent's appraisal

license for a period of three years; requiring the Respondent to

pay an administrative fine of $7,500, and to pay costs in the

amount of $1,501.50.

67. In a recent similar case where there was no finding of

"bad motive," but errors and omissions in square footage, the

descriptions of the subject property, and documentation for

adjustments, the recommended penalty was probation for a period

of two years, conditioned on successful completion of the 15-hour

USPAP course, and an administrative fine of $2,000. Department

of Business and Professional Regulation v. Rodriguez , DOAH Case

No. 08-4417PL (R.O. 2/23/09). In a case where the appraiser

knowingly failed to disclose a prior sale, foreclosure and the

correct owner, the penalty was 30 days' suspension, one year

probation, successful completion of a seven-hour USPAP course,

and a fine of $500. Department of Business and Professional

Regulation v. Cartaya , DOAH Case No. 04-1148PL (R.O. 11/10/04;

F.O., on remand, 5/22/06. In Department of Business &

Professional Regulation v. D. Phil Jones , DOAH Case No. 03-3824

(R.O. 3/17/04; F.O. 6/8/05), an appraiser failed to inspect

adequately the subject property, overvalued it, causing financial

harm. The recommended disciplinary penalty was a one year

suspension and $3,000 fine. The penalty imposed in the final

order was 30 days' suspension, followed by six months probation,

a fine of $3,000, and the payment of $2,000 in investigative

costs.

68. Based on the foregoing the penalty recommended in this

case is 30 days' suspension, followed by six months' probation,

and as requested by the Department, an administrative fine of

$7,500, and the payment of investigative costs in the amount of

$1,501.50.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered by the

Florida Real Estate Appraisal Board:

1. Finding the Respondent guilty on Counts I, II, III, IV,

V, VI, VII, IX, X and XI.

2. Recommending suspension of the Respondent's appraisal

license for a period of 30 days, followed by probation for a

period of six months.

3. Requiring the Respondent to pay an administrative fine

of $7,500; and

4. Requiring the Respondent to pay the investigative costs

of $1,501.50.

DONE AND ENTERED this 17th day of March, 2009, in

Tallahassee, Leon County, Florida.

S

ELEANOR M. HUNTER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 17th day of March, 2009.

COPIES FURNISHED :

Robert Minarcin, Esquire

Department of Business &

Professional Regulation

400 West Robinson Street, N801

Orlando, Florida 32801-1757

Daniel Villazon, Esquire

Daniel Villazon, P.A.

1420 Celebration Boulevard, Suite 200

Celebration, Florida 34747

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business &

Professional Regulation

400 West Robinson Street, N802

Orlando, Florida 32801-1757

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

issue the Final Order in this case.