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.
Recommended Order on Tuesday, March 17, 2009.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8DEPARTMENT OF BUSINESS )
12AND PROFESSIONAL REGULATION, )
16DIVISION OF REAL ESTATE, )
21)
22Petitioner, )
24)
25vs. ) Case No. 08-3898PL
30)
31ANDREW S. MELTZER, )
35)
36Respondent. )
38_________________________________)
39RECOMMENDED ORDER
41As previously scheduled, a formal hearing was held in this
51case by video teleconference between Miami and Tallahassee,
59Florida, on October 30, 2008, before Administrative Law Judge
68Eleanor M. Hunter of the Division of Administrative Hearings.
77APPEARANCES
78For Petitioner: Robert Minarcin, Esquire
83Department of Business and
87Professional Regulation
89Division of Real Estate
93400 West Robinson Street
97Suite N801
99Orlando, Florida 32801
102For Respondent: Daniel Villazon, Esquire
107Daniel Villazon, P.A.
1101420 Celebration Boulevard
113Suite 200
115Celebration, Florida 34747
118STATEMENT OF THE ISSUE
122Whether the Respondent, Andrew S. Meltzer, committed the
130violations alleged in the Administrative Complaint involving the
138standards for the development of or the communication of real
148estate appraisals and, if so, what penalty should be imposed.
158PRELIMINARY STATEMENT
160On February 14, 2008, the Petitioner, the Department of
169Business and Professional Regulation, Division of Real Estate
177(Department), filed an eleven-count Administrative Complaint in
184FDBPR Case No. 2007051437 against the Respondent, Andrew S.
193Meltzer, a certified residential real estate appraiser. The
201Administrative Complaint alleged that he violated several
208statutory provisions, including that requiring compliance with
215the Uniform Standards of Professional Appraisal Practice (USPAP),
223by making errors and omissions in appraisal reports for a
233residential parcel of property in Pinecrest, Florida. More
241specifically, the Administrative Complaint alleged that the
248Respondent had violated the following provisions of Florida law:
257Subsection 455.227(1)(a), Florida Statutes (2006)(Count One);
263Subsection 475.624(15), Florida Statutes (2006) (Count Two);
270Section 475.629, and, therefore, Subsection 475.624(4), Florida
277Statutes (2006)(Count Three); Subsection 475.624(2), Florida
283Statutes (2006)(Count Four); Subsection 475.624(14), Florida
289Statutes (2006), by violating the Record Keeping Section of the
299Ethics Rule or other provisions of the USPAP (2006)(Count Five);
309Subsection 475.624(14), Florida Statutes (2006), by violating the
317Conduct Section of the Ethics Rule or other provisions of the
328(2006), by violating Standard 1-1(a), (b) and (c) or other
338provisions of USPAP related to the development or communication
347of real estate appraisal (Count Seven); violated Subsection
355475.624(14), Florida Statutes (2006), of the USPAP, by violating
364Eight); Subsection 475.624(14), Florida Statutes (2006), by
371Subsection 475.624(14), Florida Statutes (2006), by violating
378Standards Rule 2-1(a) and (b) of the USPAP (2006) (Count Ten);
389and Subsection 475.624(14), Florida Statutes (2006), by violating
397On August 12, 2008, the Respondents Petition for Formal
406Hearing was referred to the Division of Administrative Hearings
415by the Department and designated DOAH Case No. 08-3898PL.
424Administrative Law Judge Larry Sartin was assigned to hear the
434case, and as requested by the parties, Judge Sartin set the case
446for hearing for October 30, 2008. Before the hearing, the case
457was re-assigned to the undersigned.
462At the hearing, the Petitioner presented the testimony of
471Raymond Scott Thompson and Phillip Spool, an expert in appraisal
481practice. The Petitioner's Exhibits numbered 1-6 were received
489into evidence. The Respondent testified on his own behalf, and
499the Respondent's Exhibit 1 was received into evidence.
507The Transcript of the proceedings was not filed until
516December 18, 2008. Because of the delay in the expected filing
527date for the transcript, each party filed and was granted an
538extension of time to file Proposed Recommended Orders. Both were
548received on January 20, 2009.
553FINDINGS OF FACT
5561. The Petitioner (Department) is the state agency charged
565with the responsibility of regulating persons holding real estate
574appraisers' licenses in Florida.
5782. At all times material to the allegations of this matter
589the Respondent has been a State-certified residential real estate
598appraiser holding license number 3190. He is 38 years old and
609has been a real estate appraiser for approximately seventeen
618years. During that time, he has never been disciplined nor has
629he been removed from a bank's approved list of appraisers.
6393. On or about October 23, 2006, the Respondent prepared a
650Uniform Residential Appraisal Report for property located at
6589900 Southwest 72nd Avenue, Pinecrest, Florida ("the subject
667property"), for the F S Lending Group.
6754. In September 2007, an investigator for the Department
684received a copy of an appraisal report (Report One) from a
695closing agent. The report showed that "Aida Martinez" was the
705name of the buyer. Based on his investigation and her
715admissions, the investigator found that Martinez was a "straw
724buyer" and was paid $10,000 for the use of her name and credit
738report. The person who is alleged to have paid her was not
750available to talk to investigators due to possible criminal
759proceedings, but the Department's investigator made it clear that
768he found no evidence of a connection between that person and the
780Respondent. A copy of the contract, also provided by the closing
791agent, showed a different name for the buyer, "Aida Barrero" or
"802Aida Barren," as best the handwriting and poor quality of the
813copy could be read. In addition, an addendum to the contract for
825a purchase price of $999,000, provided that "seller will
835contribute [provide concessions in the amount of] $173,000 at
845closing with (sic) to the buyer (for repair of subject property
856and buyer closing costs). The amount that seller will receive
866for the property will be $825,000 less seller (sic) closing costs
878and mortgage payoff if any." Report One has the Respondent's
888digital signature on it. A mortgage loan on the subject property
899is now in foreclosure, but no one from the Department contacted
910the lender to see what appraisal was the basis for making the
922loan.
9235. Based on the fact that the property was listed for sale,
935Report One has an incorrect "no" answer on page 1 to a question
948regarding a current or other sales listings in the last 12
959months. Based on the provisions in the contract, it also has an
971incorrect "no" answer to whether there are seller's concessions.
9806. When an investigator showed Report One to him, the
990Respondent immediately retrieved what has been designated "Report
998Two" from his computer files. Report Two on page 1 named the
1010buyer as "Barren" using only the last name as is customary for
1022the Respondent, and using the same name that was on the appraisal
1034order form sent to the Respondent. Report Two has what appears
1045to be a signed transmittal page to F S Lending Group. It also
1058has a correct "yes" answer on page 1 to the question regarding a
1071current or sales listings in the last 12 months, unlike Report
1082One. Like Report One, it erroneously has a "no" answer on page 1
1095regarding seller's concessions and is, in all other respects, the
1105same as Report One. The witnesses agreed that the most likely
1116explanation for Report One is that page 1 was altered
1126fraudulently after Report Two was no longer within the
1135Respondent's control.
11377. The Respondent's appraisal work file for the subject
1146property included another report (Report Three) that also listed
"1155Barren" as the buyer, but had no signature on it, and was an
1168earlier draft of Report Two. Although the Department's expert
1177said an oral communication of its contents could make Report
1187Three an appraisal, he and the Department's investigator had no
1197evidence of that and agreed that it was not an appraisal.
12088. A three-page excerpt of the contract in the Respondent's
1218work file did not include and did not refer to the addendum to
1231the contract with concessions that indicated work needed to be
1241done on the house and that the purchase price was reduced. The
1253three pages were clearly not the entire sales contract, based on
1264missing page and item numbers on the standard form. The
1274Respondent admitted that he only instructs clients to send the
"1284first page, signature pages, addendum pages, and anything that
1293would [a]ffect the purchase price." He said that he only asks
1304for pertinent pages and he could not survive in the industry if
1316he reviewed seventy or a hundred page construction contracts,
1325although he checked the box on the appraisal from that says, "I
1337did analyze the contract for sale of the subject property."
13479. The Department's expert prepared a One-Unit Residential
1355Appraisal Field Report (field report) to evaluate Report One that
1365is, except for the name of the buyer and the answer regarding the
1378sales listing, applicable to Report Two. He cited numerous
1387errors and omissions in Report One. He admitted, however, that
1397his work was "sloppy" because he listed the incorrect property
1407address as 12745 Southwest 72 Avenue, the address for the subject
1418property, not 9900 Southwest 72nd Avenue.
142410. In his review, the Department's expert found that the
1434Respondent incorrectly categorized the pool on the subject
1442property as a structural improvement rather than a site
1451improvement.
145211. Comparable one in Report Two was a superior property,
1462so the Respondent used matched paired sales data that he keeps in
1474his office among other reference material, including the Marshall
1483and Swift publication on cost estimates. He made adjustments for
1493square footage and room count accordingly. The Department's
1501expert testified that USPAP required documentation for any
1509adjustments, and, regarding where the records had to be kept,
1519responded as follows:
1522Q. Now, and again I'm referring to comp
1530number, report number two, comp number one.
1537What documentation does he need in his file
1545to support his adjustment for the site square
1553footage?
1554A. Either -- I would say the best support
1563would be a paired, p-a-i-r-e-d, sales
1569analysis.
1570Q. Does that have to be in the work file?
1580A. Yes. No-no-no-no. It does not have to be
1589in the work file. It could be somewhere in
1598your office readily accessible . . .
160512. Adjustments to comparable two were reasonable based on
1614the Respondent's observation that it was "a lot more superior,"
1624and his determination, after talking to the realtor that it was
1635completely "renovated like new" which he wrote in his notes. The
1646MLS listing also reported that the renovations were made in 2006.
1657The Respondent received conflicting information from two
1664different data sources concerning the square footage for
1672comparable two, so he called the realtor and used the figure that
1684the realtor verified in his analysis, as the Department's expert
1694testified he should have done. No adjustment was made based on
1705his note that the comparable was "similar in square footage" and
1716less than a 100-square foot difference.
172213. The Department's expert differed with the selection and
1731adjustment of comparables three and four due to lot sizes and
1742bedroom/bathroom counts. The subject property is on a lot of
175215,832 square feet, or less than half an acre, has four bedrooms
1765and two and a-half baths, with 2,639 square feet of livable, air
1778conditioned space. Comparable three has a lot size of 32,670
1789square feet, although the living area is similar, and it has only
1801one half bath more than the subject. Although comparable three
1811has a much larger site, the sales price was only $25,000
1823difference, because of its condition. So the Respondent
1831reasonably made a consistent negative adjustment based on sales
1840history.
184114. Comparable four is within a half mile of the subject
1852property, in the Pinecrest area, but it has a lot size of 33,541
1866square feet, has five bedrooms and four full baths, and has 4,283
1879square feet of livable space.
188415. The Respondent agreed that, as a rule, comparables
1893should have not more than a ten percent adjustment, and that, as
1905the Department's expert noted, lenders require only three
1913comparables. To provide as much information as possible, the
1922Respondent included a fourth comparable with a greater adjustment
1931down because it had a tar and gravel roof, and because the
1943realtor told him "it needed updating." He made it the fourth
1954comparable because it was the least desirable one, but he did not
1966include the fact that it had a tennis court, as he should have.
1979He failed to note that it was gated property, although the
1990Department's expert agreed that whether a gate adds or does not
2001add value to property is "a matter of professional opinion." He
2012also agreed that the differences between a tar and gravel roof
2023and a tile roof would not usually be documented in a work file.
2036It was appropriate to make adjustments based on the condition of
2047the property. As USPAP required, the Respondent inspected the
2056comparables from the street.
206016. In reviewing the Respondent's work, the Department's
2068expert observed only the subject property from the street, but
2078not the comparables and testified as follows:
2085Q. But you did not inspect each of the
2094comparable sales at least from the street?
2101A. Correct, correct.
2104* * *
2107Q. -- you testified that you did not inspect
2116the comparables?
2118A. I agree.
2121* * *
2124Q. Correct. And that goes to the whole
2132point where you were earlier discussing that
2139it's hard to verify what he did because you
2148actually didn't go out and see the
2155comparables?
2156A. Correct.
2158Q. Which is contrary to what you were
2166supposed to do?
2169A. Correct.
217117. The Respondent made a mathematical error in the
2180calculation of the depreciation at 22% when it should have been
219120%, resulting in an underestimate of $8,541.
219918. Although he correctly noted that the subject property
2208was listed for sale for $999,000, the Respondent failed to
2219include the Multiple Listing Service (MLS) history, including,".
2228. . data source(s), offering price(s), and date(s)" of listings
2238in the twelve months prior to the effective date of the
2249appraisal.
225019. The sales prices for the subject property were listed
2260as $885,000 in June 2006; reduced to $875,000 in July 2006,
2273reduced again to $849,990 in August 2006; and increased to
2284$999,000 on October 14, 2006. The Department's investigator
2293testified that the listing broker said she raised the price based
2304on an appraisal that was faxed to her, but he agreed that it
2317could not have been based on the Respondent's appraisal since the
2328price increase took effect on October 14, 2006, and the
2338Respondent's appraisal report was dated October 23, 2006.
234620. Concerning the MLS listings, the Respondent said he
2355called and asked the realtor why the listing price was increased.
2366He accepted the realtor's explanation that improvements in the
2375last six months, a new roof and a new garage door, would justify
2388the increase in the sales price. In his notes, the Respondent
2399wrote "property renovated" and "big realtor" because the realtor
2408was well-known and he believed he could rely on her
2418representations. He also saw the new roof himself, and it made
2429sense to him that a million dollar house could have a 10%
2441increase in value because of those improvements. While this may
2451have been a logical explanation, the Respondent failed to
2460document it in his work file despite the fact that the MLS
2472fluctuations were a "red flag," possibly indicating fraud.
248021. The Department's expert found no support in the work
2490files for the Respondent's allocation of 61% of the total value
2501of $903,100, or $550,000 ($34.74), to the site value, but agreed
2514that differences in value based on what buyers might pay for
2525additional land is a matter of legitimate differences in
"2534appraiser opinion."
253622. In summary, the Department's expert established that
2544Report Two was inaccurate and misleading because it (1) did not
2555include the terms of the entire contract that affected the price;
2566(2) did not show the value of the pool in the appropriate
2578category; (3) did not report the MLS listings history for the
2589subject property for the past year; (4) had an incorrect value
2600for depreciation; and (5) did not show the tennis court on
2611comparable four.
261323. Based on the evidence, the Department did not show, as
2624alleged in paragraph 7 (A) through (D) of the Administrative
2634Complaint, that the Respondent made errors and omissions on
2643Report One other than those carried over from Report Two, before
2654it was altered. Report One was not alleged or proven to be the
2667document communicated by the Respondent's client.
267324. Based on the evidence, Report Two is the only accurate
2684representation of the Respondent's work appraising the subject
2692property. Paragraph 8 (A) of the Administrative Complaint
2700alleging that the name of the borrower was incorrect is not
2711supported by the evidence. The Department's assertion in
2719paragraph 8 (B) that the MLS listing history is incomplete is
2730clearly and convincingly supported by the evidence. Paragraph 8
2739(C) of the Administrative Complaint, alleging that the Respondent
2748failed to review all agreements for sale, and paragraph 8 (D),
2759regarding the misstatement on seller's concessions, are clearly
2767and convincingly established by the evidence.
277325. The Department's allegations in paragraphs 9 (A)-(D),
2781related to Report Three, are not established by clear and
2791convincing evidence based on the witnesses' agreement that Report
2800Three was not an appraisal report.
280626. With regard to Report Two, the only appraisal report
2816for the subject property that was shown to have been developed
2827and communicated by the Respondent, the evidence is not clear and
2838convincing that the Respondent made the following errors and
2847omissions: as alleged in paragraph 10 (A) and (B), that
2857adjustments for room count and square footage were not explained
2867for comparable sales one and that discrepancies were not resolved
2877for comparable sale two; in paragraph 10 (C), that room count and
2889square footage adjustments for comparable three are not accurate
2898and supported; and in paragraph 10 (D), that room count and
2909square footage adjustments for comparable four are not accurate
2918and supported.
292027. With regard to Report Two, the evidence is clear and
2931convincing, as alleged, in paragraph 10 (E) and (F), that the
2942Respondent omitted the tennis court on comparable four and showed
2952no adjustment or reasonable explanation for not doing so.
296128. The evidence was not clear and convincing, as alleged
2971in paragraph 10 (G), that different comparables should have been
2981used.
298229. The evidence is clear and convincing that the
2991Respondent made a mathematical error in determining the amount of
3001depreciation in Report Two, as alleged in paragraph 11 (A).
3011Depreciation of improvements, as alleged in paragraph 11 (b), is
3021not clearly and convincingly shown to be erroneous.
302930. The comparisons of Reports One, Two, and Three in
3039paragraph 12 are rejected as irrelevant, because Report One is
3049altered except for the mistakes carried over from Report Two, and
3060Report Three was a draft. Charges related to Report Three are
3071also not proved for the same reason.
307831. Paragraph 13 is established by clear and convincing
3087evidence because the entire sales contract is not in the working
3098files for the subject property.
310332. Paragraphs 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24,
311625 and 26, all related to the absence of documentation for
3127comparable adjustments, the square footage price, value of
3135improvements, and condition are not supported by clear and
3144convincing evidence based on the testimony of Department's expert
3153regarding the required documentation and his incomplete review of
3162the comparables.
316433. Paragraph 27, alleging that Aida Martinez was a "straw
3174buyer" is supported by the undisputed evidence presented by the
3184Department.
3185CONCLUSIONS OF LAW
318834. The Division of Administrative Hearings has
3195jurisdiction over the parties to and the subject matter of these
3206proceedings. §§ 120.569 and 120.57, Florida Statutes.
321335. The Petitioner, the Department, is the state agency
3222authorized to regulate the practice of real estate appraisal in
3232Florida, pursuant to Chapter 475, Part II, Florida Statutes
3241(2006).
324236. Because license disciplinary proceedings are penal, the
3250Petitioner bears the burden of proof in this case to establish by
3262clear and convincing evidence the allegations of the
3270Administrative Complaint. Department of Banking and Finance v.
3278Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996); Ferris v.
3290Turlington , 510 So. 2d 292 (Fla. 1987); Munch v. Department of
3301Professional Regulation , 592 So. 2d 1136 (Fla. 1st DCA 1992).
331137. The courts have held that:
3317[C]lear and convincing evidence requires
3322that the evidence must be found to be
3330credible; the facts to which the witnesses
3337testify must be distinctly remembered; the
3343testimony must be precise and explicit and
3350the witnesses must be lacking in confusion as
3358to the facts in issue. The evidence must be
3367of such weight that it produces in the mind
3376of the trier of fact a firm belief or
3385conviction, without hesitancy, as to the
3391truth of the allegations sought to be
3398established. In Re Davey , 645 So. @d 398,
3406404 (Fla.1994), quoting, with approval,
3411Slomowitz v. Walker , 429 So. 2d 797 (Fla. 4th
3420DCA 1984).
3422Applicable Statutes and USPAP Rules:
342738. Section 475.628, Florida Statutes, provides:
3433Each appraiser registered, licensed, or
3438certified under this part shall comply with
3445the Uniform Standards of Professional
3450Appraisal Practice. Statements on appraisal
3455standards which may be issued for the purpose
3463of clarification, interpretation,
3466explanation, or elaboration through the
3471Appraisal Foundation shall also be binding on
3478any appraiser registered, licensed, or
3483certified under this part.
348739. Subsection 455.627(1)(a) and Section 475.629, Florida
3494Statutes, are statutes applicable to the charges against the
3503Respondent in this case, and are as follows:
3511455.227 Grounds for discipline; penalties;
3516enforcement.--
3517(1) The following acts shall constitute
3523grounds for which the disciplinary actions
3529specified in subsection (2) may be taken:
3536(a) Making misleading, deceptive, or
3541fraudulent representations in or related to
3547the practice of the licensee's profession.
3553475.629 Retention of records.--An appraiser
3558registered, licensed, or certified under this
3564part shall retain, for at least 5 years,
3572original or true copies of any contracts
3579engaging the appraiser's services, appraisal
3584reports, and supporting data assembled and
3590formulated by the appraiser in preparing
3596appraisal reports.
359840. The Department in the Administrative Complaint also
3606charged that the Respondent should be disciplined because he
3615violated the following Subsections of 475.624, Florida Statutes:
3623(2) Has been guilty of fraud,
3629misrepresentation, concealment, false
3632promises, false pretenses, dishonest conduct,
3637culpable negligence, or breach of trust in
3644any business transaction ...
3648* * *
3651(4) Has violated any of the provisions of
3659this part or any lawful order or rule issued
3668under the provisions of this part or chapter
3676455.
3677* * *
3680(14) Has violated any standard for the
3687development or communication of a real estate
3694appraisal or other provision of the Uniform
3701Standards of Professional Appraisal Practice.
3706(15) Has failed or refused to exercise
3713reasonable diligence in developing an
3718appraisal or preparing an appraisal report.
372441. The USPAP standards, applicable to the charges are as
3734follows:
3735Standards Rule 1-1 (a), (b) and (c) that provide:
3744In developing a real property appraisal, an
3751appraiser must:
3753(a) be aware of, understand, and correctly
3760employ those recognized methods and
3765techniques that are necessary to produce a
3772credible appraisal;
3774(b) not commit a substantial error of
3781omission or commission that significantly
3786affects an appraisal;
3789(c) not render appraisal services in a
3796careless or negligent manner, such as by
3803making a series of errors that, although
3810individually might not significantly affect
3815the results of an appraisal, in the aggregate
3823affects the credibility of those results.
3829In developing a real property appraisal, an
3836appraiser must collect, verify, and analyze
3842all information necessary for credible
3847assignment results.
3849(a) When a sales comparison approach is
3856necessary for credible assignment results, an
3862appraiser must analyze such comparable sales
3868data as are available to indicate a value
3876conclusion.
3877(b) When a cost approach is necessary for
3885Credible assignment results, an appraiser
3890must: (i) develop an opinion of site value by
3899an appropriate appraisal method or technique;
3905(ii) analyze such comparable cost data as are
3913available to estimate the cost new of the
3921improvements (if any); and (iii) analyze such
3928comparable data as are available to estimate
3935the difference between the cost new and the
3943present worth of the improvements (accrued
3949depreciation).
3950Standards Rule 1-5 (a) that provides:
3956When the value opinion to be developed is
3964market value, an appraiser must, if such
3971information is available to the appraiser in
3978the normal course of business:
3983(a) analyze all agreements of sale,
3989options, and listings of the subject property
3996current as of the effective date of the
4004appraisal
4005Standards Rule 2-1 (a) and (b) that provide:
4013Each written or oral real property
4019appraisal report must:
4022(a) clearly and accurately set forth the
4029appraisal in a manner that will not be
4037misleading;
4038(b) contain sufficient information to
4043enable the intended users of the appraisal to
4051understand the report properly.
4055Standards Rule 2-2 (b) (viii) that provides:
4062Each written real property appraisal report
4068must be prepared under one of the following
4076three options and prominently state which
4082option is used: Self-Contained Appraisal
4087Report, Summary Appraisal Report, or
4092Restricted Use Appraisal Report. The content
4098of a Summary Appraisal Report must be
4105consistent with the intended use of the
4112appraisal and, at a minimum: (viii)
4118summarize the information analyzed, the
4123appraisal methods and techniques
4127employed, and the reasoning that supports the
4134analyses, opinions, and conclusions;
4138exclusion of the sales comparison approach,
4144cost approach, or income approach must be
4151explained
4152Conclusions on Counts One through Eleven:
415842. Because of their penal nature, the foregoing provisions
4167must be strictly construed, with any reasonable doubts as to
4177their meaning, resolved in favor of the Respondent. See Jonas v.
4188Florida Department of Business and Professional Regulation , 746
4196So. 2d 1261, 1262 (Fla. 3d DCA 2000); and Capital National
4207Financial Corporation v. Department of Insurance , 690 So. 2d
42161335, 1337 (Fla. 3d DCA 1997).
422243. Count One, a violation of Subsection 455.227(1)(a),
4230Florida Statutes (2006), making misleading representations
4236related to the licensee's profession, was proved by clear and
4246convincing evidence, as alleged, that the Respondent failed to
4255analyze the complete sales contract.
426044. Count Two, a violation of Subsection 475.624(15),
4268Florida Statutes (2006), failing to exercise reasonable
4275diligence, by not requesting the entire sales contract and by not
4286disclosing the entire history of listing within the prior twelve
4296months, was proved by clear and convincing evidence.
430445. Count Three, a violation of Section 475.629, Florida
4313Statutes (2006), and, therefore, a violation of Subsection
4321475.624(4), Florida Statutes (2006), the failure to retain a
4330record of the complete sales contract is proved by clear and
4341convincing evidence.
434346. Count Four, alleged a violation of Subsection
4351475.624(2), Florida Statutes (2006), by fraud, misrepresentation,
4358concealment, false promises, false pretenses, dishonest conduct,
4365culpable negligence, or breach of trust. The Department has not
4375introduced and, its witnesses testified that it did not have,
4385evidence of fraud, concealment, false promises, false pretences,
4393or dishonest conduct by the Respondent. In the absence of
4403further statutory or rule guidance, reference has been made in an
4414earlier case to definitions in Black's Law Dictionary, Fifth
4423Edition, the term culpable negligence is defined as follows:
4432Failure to exercise that degree of care
4439rendered appropriate by the particular
4444circumstances, and which a man of ordinary
4451prudence in the same situation and with equal
4459experience would not have omitted.
4464Breach of trust is defined in the same source
4473as follows:
4475Any act done by a trustee contrary to the
4484terms of his trust, or in excess of his
4493authority and to the detriment of the trust;
4501or the wrongful omission by a trustee of any
4510act required of him by the terms of the
4519trust. Also the wrongful misappropriation by
4525a trustee of any fund or property which had
4534been lawfully committed to him in a fiduciary
4542character. Every violation by a trustee of a
4550duty which equity lays upon him, whether
4557willful and fraudulent, or done through
4563negligence, or arising through mere oversight
4569and forgetfulness, is a "breach of trust."
4576Department of Professional Regulation, Division of Real Estate v.
4585Alfert , DOAH Case. No. 87-3189 (R.O. 12/7/87; F.O. 1/19/88).
459447. Because of the errors and omission committed by the
4604Respondent, the Department has proved clearly and convincingly,
4612as alleged in Count Four, that culpable negligence and a breach
4623of trust, as those terms are used in Subsection 475.624(2),
4633Florida Statutes (2006), led to the Respondent's
4640misrepresentations, but not fraud, concealment, false promises,
4647false pretences, or dishonest conduct.
465248. Counts Five through Eleven, alleged violations of
4660Subsection 475.624(14), Florida Statutes (2006), by failing
4667comply with various provisions of USPAP.
467349. As alleged in Count Five, the record keeping standard
4683was violated because a complete contract is not in the
4693Respondent's work file.
469650. As alleged in Count Six, based on the Respondent's
4706errors and omissions, the standard for development and
4714communication of a real estate appraisal was violated.
472251. Count Seven, the alleged violation of Standards Rule 1-
47321(a), (b), and (c) were violated based on the Respondent's
4742failure to use proper techniques, his errors of omission and
4752commission, and his carelessness and negligence.
475852. Count Eight, an alleged violation of Standards Rule 1-
47684(a) and (b)(i), (ii), (iii), was proved based on the
4778Respondent's failure to collect and analyze all information
4786necessary, and failure to include all information about a
4795comparable sale.
479753. Count Nine, a violation of Standards Rule 1-5(a),
4806concerning the failure to analyze all agreements for sale, was
4816proved.
481754. Count Ten, a violation of Standards Rule 2-1(a) and
4827(b), providing that an appraisal should not be misleading and
4837should contain sufficient information for the intended user, was
4846proved.
484755. Count Eleven, a violation of Standards Rule 2-
48562(b)(viii), regarding summarizing and analyzing data to provide
4864useful information to the intended user is clearly and
4873convincingly established, by the failure to review the entire
4882sales contract, failure to include seller's concessions, and
4890failure to analyze and summarize fluctuations in listing prices.
489956. Therefore, as established in Counts Five through
4907Eleven, the Department proved by clear and convincing evidence
4916that the Respondent violated Subsection 475.624(14), Florida
4923Statutes (2006), by violating USPAP Standards Rules 1-1 (a), (b)
4933a)
4934and (b); and 2-2(b)(viii).
4938Appropriate Discipline:
494057. The appropriate disciplinary action to be taken by the
4950Florida Real Estate Appraisal Board is effectively restricted and
4959limited by the guidelines set forth Florida Administrative Code
4968Rule 61J1-8.002. See Parrot Heads, Inc. v. Department of
4977Business and Professional Regulation , 741 So. 2d 1231, 1233 (Fla.
49875th DCA 1999)("An administrative agency is bound by its own rules
4999. . . creat[ing] guidelines for disciplinary penalties."); and §
5010455.227(5), Fla. Stat.
501358. The usual discipline for a violation of Subsection
5022455.227(1), making a misrepresentation, is a penalty up to
5031revocation and a fine of $5,000. Fla. Admin. Code R. 61J1-
50438.002(3)(d).
504459. The usual penalty for a violation of 475.624(15), is
5054suspension of five years to revocation and a fine not to exceed
5066$1,000.00. Fla. Admin. Code R. 61J1-8.002(3)(r).
507360. The guideline for a violation of Subsection 475.624(4),
5082Florida Statutes, by violating Section 475.629, Florida Statutes,
5090is a penalty of up to revocation and a fine up to $5,000.00.
5104Fla. Admin. Code R. 61J1-8.002(3)(g).
510961. The penalty guideline for a violation of Section
5118475.624(2), Florida Statutes, by culpable negligence or breach of
5127trust, as opposed to fraud, dishonest conduct, and concealment is
5137a fine of $1,000.00 to a one-year suspension. Fla. Admin. Code
5149R. 61J1-8.002(3)(e).
515162. The penalty guideline for a violation of Section
5160475.624(14), Florida Statutes, ranges from a five-year suspension
5168to revocation and a fine of $1,000.00. Fla. Admin. Code R. 61J1-
51818.002(3)(q).
518263. Florida Administrative Code Rule 61J1-8.002(4) provides
5189for the consideration of certain aggravating and mitigating
5197circumstances.
519864. Florida Administrative Code Rule 61J1-8.0002(4) (b )
5206lists the aggravating or mitigating circumstances that include,
5214but are not limited to, the following:
52211. The degree of harm to the consumer or
5230public.
52312. The number of counts in the
5238administrative complaint.
52403. The disciplinary history of the
5246licensee.
52474. The status of the licensee at the time
5256the offense was committed.
52605. The degree of financial hardship
5266incurred by a licensee as a result of the
5275imposition of a fine or suspension of the
5283license.
52846. Violation of the provision of Part II
5292of Chapter 475, F.S., wherein a letter of
5300guidance as provided in Section 455.225(3),
5306F.S. , previously has been issued to the
5313licensee.
531465. There is no evidence of harm caused by Report Two,
5325although the errors and omissions carried over into Report One
5335could have, but have not been shown to have caused a lender to
5348make the loan that is currently in foreclosure. Although the
5358Administrative Complaint has eleven counts, in reality, there
5366were really five mistakes clearly established:(1) not requiring,
5374therefore, not reviewing and retaining the entire contract; (2)
5383not properly categorizing the pool and, therefore, showing it
5392incorrectly on the report; (3) not reporting the MLS listings
5402history for the subject property for the past year; (4)
5412incorrectly calculating depreciation and, therefore, all other
5419values derived from it; and (5) not reporting the tennis court on
5431one of the comparables. Without objection, the Respondent
5439established that he had no past complaints or discipline, has had
5450an active license since 1992, has performed thousands of
5459appraisals, has had his own office since 2000, and earns his
5470living as an appraiser. While the Department proved most of its
5481charges, there is no evidence that the Respondent's actions
5490resulted from participation in fraud or intentional dishonesty.
549866. In the Department's proposed recommended order, the
5506penalty recommended is suspension of the Respondent's appraisal
5514license for a period of three years; requiring the Respondent to
5525pay an administrative fine of $7,500, and to pay costs in the
5538amount of $1,501.50.
554267. In a recent similar case where there was no finding of
"5554bad motive," but errors and omissions in square footage, the
5564descriptions of the subject property, and documentation for
5572adjustments, the recommended penalty was probation for a period
5581of two years, conditioned on successful completion of the 15-hour
5591USPAP course, and an administrative fine of $2,000. Department
5601of Business and Professional Regulation v. Rodriguez , DOAH Case
5610No. 08-4417PL (R.O. 2/23/09). In a case where the appraiser
5620knowingly failed to disclose a prior sale, foreclosure and the
5630correct owner, the penalty was 30 days' suspension, one year
5640probation, successful completion of a seven-hour USPAP course,
5648and a fine of $500. Department of Business and Professional
5658Regulation v. Cartaya , DOAH Case No. 04-1148PL (R.O. 11/10/04;
5667F.O., on remand, 5/22/06. In Department of Business &
5676Professional Regulation v. D. Phil Jones , DOAH Case No. 03-3824
5686(R.O. 3/17/04; F.O. 6/8/05), an appraiser failed to inspect
5695adequately the subject property, overvalued it, causing financial
5703harm. The recommended disciplinary penalty was a one year
5712suspension and $3,000 fine. The penalty imposed in the final
5723order was 30 days' suspension, followed by six months probation,
5733a fine of $3,000, and the payment of $2,000 in investigative
5746costs.
574768. Based on the foregoing the penalty recommended in this
5757case is 30 days' suspension, followed by six months' probation,
5767and as requested by the Department, an administrative fine of
5777$7,500, and the payment of investigative costs in the amount of
5789$1,501.50.
5791RECOMMENDATION
5792Based on the foregoing Findings of Fact and Conclusions of
5802Law, it is RECOMMENDED that a final order be entered by the
5814Florida Real Estate Appraisal Board:
58191. Finding the Respondent guilty on Counts I, II, III, IV,
5830V, VI, VII, IX, X and XI.
58372. Recommending suspension of the Respondent's appraisal
5844license for a period of 30 days, followed by probation for a
5856period of six months.
58603. Requiring the Respondent to pay an administrative fine
5869of $7,500; and
58734. Requiring the Respondent to pay the investigative costs
5882of $1,501.50.
5885DONE AND ENTERED this 17th day of March, 2009, in
5895Tallahassee, Leon County, Florida.
5899S
5900ELEANOR M. HUNTER
5903Administrative Law Judge
5906Division of Administrative Hearings
5910The DeSoto Building
59131230 Apalachee Parkway
5916Tallahassee, Florida 32399-3060
5919(850) 488-9675
5921Fax Filing (850) 921-6847
5925www.doah.state.fl.us
5926Filed with the Clerk of the
5932Division of Administrative Hearings
5936this 17th day of March, 2009.
5942COPIES FURNISHED :
5945Robert Minarcin, Esquire
5948Department of Business &
5952Professional Regulation
5954400 West Robinson Street, N801
5959Orlando, Florida 32801-1757
5962Daniel Villazon, Esquire
5965Daniel Villazon, P.A.
59681420 Celebration Boulevard, Suite 200
5973Celebration, Florida 34747
5976Thomas W. O'Bryant, Jr., Director
5981Division of Real Estate
5985Department of Business &
5989Professional Regulation
5991400 West Robinson Street, N802
5996Orlando, Florida 32801-1757
5999Ned Luczynski, General Counsel
6003Department of Business and
6007Professional Regulation
6009Northwood Centre
60111940 North Monroe Street
6015Tallahassee, Florida 32399-0792
6018NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
6024All parties have the right to submit written exceptions within 15
6035days from the date of this Recommended Order. Any exceptions to
6046this Recommended Order should be filed with the agency that will
6057issue the Final Order in this case.
![](/images/view_pdf.png)
- Date
- Proceedings
-
PDF:
- Date: 03/17/2009
- Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
-
PDF:
- Date: 01/21/2009
- Proceedings: Respondent`s Exhibit 1 (exhibit not available for viewing) filed.
-
PDF:
- Date: 12/23/2008
- Proceedings: Order Granting Extension of Time (proposed recommended orders to be filed by January 20, 2009).
- Date: 12/18/2008
- Proceedings: Transcript filed.
-
PDF:
- Date: 12/16/2008
- Proceedings: Order Granting Extension of Time (proposed recommended orders to be filed by December 26, 2008).
- Date: 10/30/2008
- Proceedings: CASE STATUS: Hearing Held.
-
PDF:
- Date: 10/21/2008
- Proceedings: Index to Petitioner`s Formal Hearing Exhibits (exhibits not available for viewing) filed.
-
PDF:
- Date: 09/22/2008
- Proceedings: Agency`s court reporter confirmation letter filed with the Judge.
Case Information
- Judge:
- ELEANOR M. HUNTER
- Date Filed:
- 08/12/2008
- Date Assignment:
- 10/27/2008
- Last Docket Entry:
- 11/12/2019
- Location:
- Miami, Florida
- District:
- Southern
- Agency:
- Other
- Suffix:
- PL
Counsels
-
Robert Minarcin, Esquire
Address of Record -
Daniel Villazon, Esquire
Address of Record