97-003556 Florida Real Estate Appraisal Board vs. James M. Milliken Status: Closed Recommended Order on Thursday, December 24, 1998.

Summary: Respondent unlawfully operated as an appraiser while registration was expired.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

REAL ESTATE APPRAISAL BOARD, )

)

Petitioner, )

)

vs. ) Case No. 97-3556

)

JAMES M. MILLIKEN, JR., )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on November 9, 1998, in Inverness, Florida, before Donald R.

Alexander, the assigned Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Steven W. Johnson, Esquire

Post Office Box 1900

Orlando, Florida 32802-1900

For Respondent: J. Murray Milliken, Esquire

Post Office Box 174

Floral City, Florida 34436-0174

STATEMENT OF THE ISSUE

The issue is whether Respondent's license as a state

certified general real estate appraiser should be disciplined for

the reasons cited in the Administrative Complaint filed on

March 5, 1997.

PRELIMINARY STATEMENT

This matter began on March 5, 1997, when Petitioner,

Department of Business and Professional Regulation, Real Estate

Appraisal Board, issued an Administrative Complaint alleging that

Respondent, James M. Milliken, Jr., had operated as a registered

appraiser without being the holder of a valid and current

registration, in violation of Section 475.626(1)(a), Florida

Statutes. Respondent denied the allegation and requested a

formal hearing under Section 120.569, Florida Statutes, to

contest the charges. The matter was referred by Petitioner to

the Division of Administrative Hearings on August 5, 1997, with a

request that an Administrative Law Judge be assigned to conduct a

formal hearing.

By Notice of Hearing dated August 15, 1997, a final hearing

was scheduled on November 21, 1997, in Inverness, Florida. At

Respondent's request, the matter was continued to January 29,

1998. The matter was then abated while the parties attempted to

reach a settlement. After a settlement stipulation was rejected

by the agency, the hearing was rescheduled to November 9, 1998,

at the same location.

At final hearing, Petitioner presented the testimony of

Beverly Ridenaur, a consumer complaint analyst; Brian Lee, an

agency investigator; and Alan C. Plush, a certifed real estate

appraiser. Also, it offered Petitioner's Exhibits 1-7. All

exhibits were received in evidence. Respondent testified on his

own behalf.

There is no transcript of hearing. At Respondent's request,

the time for filing proposed findings of fact and conclusions of

law was extended to December 21, 1998. The same were timely

filed by Petitioner, and they have been considered by the

undersigned in the preparation of this Recommended Order. None

were filed by Respondent.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of

fact are determined:

1. In 1994, Respondent, James M. Milliken, Jr., was

licensed as a state registered appraiser, having been issued

license no. RI-0001148 by Petitioner, Department of Business and

Professional Regulation, Real Estate Appraisal Board (Board). As

such, Respondent could perform appraisal services under the

supervision of a licensed or certified appraiser. When the

events herein occurred, Respondent was employed as a registered

appraiser by Gulf/Atlantic Valuation Services, Inc., in Sarasota,

Florida. His supervisor was Alan C. Plush, a state certified

general appraiser. After the events herein occurred, Respondent

obtained his licensure as a certified general appraiser. His

most recent license number is 0002351, also issued by the Board.

Respondent also held a real estate license during this period of

time, but it was inactive when the alleged misconduct occurred.

2. Pursuant to a change in state law, all registered

appraiser licenses automatically expired on November 30, 1994.

Renewal notices were sent by the Board to each licensee

approximately sixty to ninety days before that date. Unless a

licensee renewed his license by the expiration date, he was

unable to lawfully "operate" as an appraiser.

3. The evidence shows that Respondent's registration

expired on November 30, 1994, and it was not renewed until

March 9, 1995, after Respondent had sent a check and application

to the Board, and his registration was then renewed. Therefore,

between December 1994 and when the license was renewed, he was

not authorized to have his name appear on an appraisal report or

operate as an appraiser.

4. Respondent later applied for licensure as a certified

general appraiser. As a part of that process, he was required to

provide evidence of appropriate experience obtained as a

registered appraiser. To establish his experience, Respondent

provided, among other things, copies of two appraisals he

performed in December 1994. Those appraisals have been received

in evidence as Petitioner's Exhibits 4 and 5. Respondent's name

is found on both documents as being one of the appraisers

preparing the reports.

5. As a part of a routine, random audit to verify

Respondent's experience to qualify as a certified general

appraiser, a Board analyst reviewed his file and discovered that

the above two appraisals had apparently been performed when

Respondent's registration had expired. This prompted an

investigation.

6. During the course of the Board investigation, a Board

investigator interviewed Respondent, who acknowledged that he had

performed the two appraisals in question, one dated December 9,

1994, and the other dated December 15, 1994. Thereafter, an

administrative complaint was issued.

7. At hearing, Respondent indicated that when his

registration expired on November 30, 1994, he was attempting to

secure a date from the Board on when he could be examined for

licensure as a certified general appraiser. Because he did not

want to pay a fee for both his current registration and the new

licensure, he delayed sending in his registration renewal

application and check. When Respondent could not get a

satisfactory date for the examination, he forwarded a check to

the Board in February 1995 to renew his registration.

9. Respondent contended that he was under the impression

that there was a grace period in which he could renew his

registration without having his license expire. Testimony at

hearing established, however, that no such grace period existed.

10. Respondent also contended that the Board failed to

prove that he prepared the reports since his signature does not

appear on either document copy. However, his name, title, and

license number are typed on the front page of each report, and

witness Plush established that Respondent's signature would only

appear on the original copy sent to the client, while copies

retained by the appraiser's office are customarily unsigned.

Further, his supervisor confirmed that Respondent actively

participated in the two projects, and as noted above, Respondent

acknowledged to an investigator that he worked on both reports.

Finally, in seeking a new license, Respondent represented to the

Board that he had prepared the two reports.

11. It can be reasonably inferred from the evidence that at

least a portion of the appraisal work for the two reports in

question was performed by Respondent prior to November 30, 1994,

when his registration was still active. Even so, the remainder

of the work was completed after his registration had expired. By

doing so, Respondent operated as an appraiser without being

registered.

12. Both reports make reference to the fact that they were

prepared in conformity with "all regulations issued by the

appropriate regulatory entities, regarding the enactment of Title

XI of the Financial Institution Reform, Recovery and Enforcement

Act of 1989 ( FIRREA)." It is fair to assume, then, that the two

matters are federally related transactions within the meaning of

the law. Each of the two evaluations exceeded one million

dollars. Without offering a specific citation, the Board analyst

"believed" that the threshold under the federal law in 1994 was

$150,000.00, and that any federally related transaction exceeding

that value required the use of a state licensed appraiser. If

this is correct, Respondent had to be licensed in order to

perform appraisal services on the two subject properties.

13. In mitigation, it is noted that this is the first time

Respondent has ever been subject to disciplinary action by the

Board. In addition, no member of the public or user of the

reports suffered harm by virtue of the violation. The violation

also appears to be somewhat minor, and there is only one count in

the complaint. Finally, Respondent is presently a law student

attending school on student loans, and he will suffer financial

hardship as a result of the imposition of a fine.

CONCLUSIONS OF LAW

14. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties hereto

pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

15. Because Respondent is subject to penal sanctions,

including the loss of his license and the imposition of an

administrative fine, Petitioner bears the burden of proving by

clear and convincing evidence that the allegations in the

complaint are true. See , e . g ., Osborne Stern & Co., Inc., v.

Dep't of Banking and Finance , 670 So. 2d 932, 933 (Fla. 1996).

16. The complaint alleges that Respondent "is guilty of

operating as a registered, licensed, or certified appraiser

without being the holder of a valid and current registration,

license or certification in violation of s. 475.626(1)(a), Fla.

Stat." That provision makes it unlawful for a person to "operate

. . . as a registered . . . appraiser without being the holder of

a valid and current registration."

17. The factual allegations underpinning this charge are

that Respondent's registration expired on November 30, 1994, and

that "[b] etween November 30, 1994 and March 9, 1995, the

Respondent's name appeared on two appraisals, dated December 9,

1994 and December 15, 1994 as a 'state registered appraiser.'"

18. By clear and convincing evidence, Petitioner has

established that Respondent operated as a registered appraiser

while preparing a part of the two appraisal reports in

December 1994. Therefore, the charge that Respondent violated

Section 475.626(1)(a), Florida Statutes (1993), has been

sustained.

19. In reaching this conclusion, the undersigned has given

careful consideration to Respondent's contention, made at final

hearing, that under Section 475.612(2), Florida Statutes (1993),

he was authorized to perform the work in question under a real

estate salespersons' license he then held. But Respondent's real

estate license was inactive in December 1994, and in any event,

the statutory exception applies only when the realtor does "not

represent [himself] as certified or licensed under [Part II,

Chapter 475]." On the cover sheets of both reports, Respondent

is represented as being a licensed appraiser.

20. In its proposed order, Petitioner has argued that even

if Respondent's real estate license was active in December 1994,

and this could arguably sanction his activities under

Section 475.612(2), the two reports were "federally related

transactions," and "Respondent's valuations exceed the FIERREA

[sic] de minimus level," and thus they cannot qualify as an

exception. In making this argument, Petitioner has cited no

provision within the federal law which preempts state law on this

matter, or any provision in Part II, Chapter 475 or the federal

law itself, which holds that federally related transactions in

excess of a certain valuation require the use of a state licensed

appraiser. An independent review of FIRREA by the undersigned,

however, has revealed that "a State certified appraiser shall be

required for all federally related transactions having a value of

$1,000,000.00 or more." See 12 U.S.C.S. s. 3342(1). Because the

two properties in question had a valuation in excess of that

threshold, the appraisal had to be performed by a State certified

appraiser.

21. Respondent also contended at final hearing that his

activities were sanctioned under Section 475.612(1), Florida

Statutes (1993). That subsection provides that "the work upon

which an appraisal report is based may be performed by a person

who is not a certified, licensed, or registered appraiser if the

report is approved and signed by a certified or licensed

appraiser." But that part of the statute must be read in pari

materia with the other language in the section which states that

a person may not use the title "registered real estate appraiser,

. . . or words to that effect" unless he is actually registered.

Here, both reports in question reflect that they were prepared by

"James M. Milliken, Associate, State-Registered Appraiser

0001148."

22. At hearing, Respondent further contended that if a

violation occurred, the infraction involved Section 475.612,

Florida Statutes (1993), and not Section 475.626(1)(a), Florida

Statutes (1993), as alleged in the complaint. He further argued

that the agency's disciplinary guidelines do not contain a

suggested penalty for a violation of Section 475.612, thus

implying that no penalty should be imposed. However, the

language in Section 475.626(1)(a) is very specific and makes it

unlawful for a person to "operate as a registered, licensed, or

certified appraiser without being the holder of a valid and

current registration, license, or certification." Respondent's

conduct clearly fits within the parameters of this statute. In

addition, the statute itself provides that a violation of its

terms may be the basis for disciplinary action under Chapter 120,

Florida Statutes. Specifically, Subsection (2) provides that

"a denial, revocation, or suspension proceeding may arise out of

[a violation of Subsection (1)(a)]," which is the essence of this

proceeding. Therefore, the suggestion that the conduct here

cannot equate to a violation of Section 475.626(1)(a) has been

rejected.

23. Finally, at hearing, Respondent cited to an opinion

prepared by an Assistant Attorney General and published in a

trade publication which ostensibly authorized his conduct. The

opinion, however, was not made a part of this record, and

therefore it has not been considered.

24. Section 475.624, Florida Statutes, provides that the

Board may "reprimand, fine, revoke, or suspend, for a period not

to exceed 10 years, the registration, license, or certification

of any such appraiser" who violates the law.

25. Rule 61J1-8.002(3), Florida Administrative Code,

provides the penalty guidelines that the Board must follow in

disciplinary actions such as this. For a violation of Section

475.626(1)(a), "[t]he usual action of the Board shall be to

impose a penalty from a 5 year suspension to revocation and an

administrative fine of $1000." However, Paragraph (4) of the

same rule authorizes the Board "to deviate from the above

guidelines" when aggravating or mitigating circumstances are

shown.

26. As noted in Finding of Fact 13, mitigating

circumstances are present which clearly justify a deviation from

the disciplinary guidelines. The licensee has a previously

unblemished record; the offense does not appear to be severe

since much of the work on the two reports would have been

completed prior to November 30, 1994, or before the registration

expired; no member of the public or user of the reports was

harmed by the offense; the complaint contains but a single count;

as a law student on student loans Respondent will suffer

financial hardship if a monetary penalty is imposed; and

Respondent operated under the erroneous impression that he could

continue working during a grace period until his registration was

renewed.

27. Given the foregoing circumstances, a reprimand is

appropriate.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Real Estate Appraisal Board enter a

Final Order finding that Respondent violated Section 475.

626(1)(a), Florida Statutes, and that he be given a reprimand.

DONE AND ENTERED this 24th day of December, 1998, in

Tallahassee, Leon County, Florida.

___________________________________

DONALD R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 24th day of December, 1998.

COPIES FURNISHED:

Steven W. Johnson, Esquire

Post Office Box 1900

Orlando, Florida 32802-1900

J. Murray Milliken, Esquire

Post Office Box 174

Floral City, Florida 34436-0174

James Kimbler, Acting Director

Division of Real Estate

Post Office Box 1900

Orlando, Florida 32802-1900

Lynda L. Goodgame, Esquire

Department of Business and

Professional Regulation

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 Division of Real

Estate.