01-001086PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Dale Smalley Status: Closed Recommended Order on Friday, August 31, 2001.

Summary: Department failed to carry its burden of proof, and the Administrative Complaint should be dismissed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION , )

DIVISION OF REAL ESTATE , )

)

Petitioner , )

)

vs. ) Case No. 01-1086PL

)

DALE SMALLEY , )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

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

on May 21, 2001, by video teleconference, in Miami and

Tallahassee, Florida, before Patricia Hart Malono, a duly-

designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner : Rania A. Soliman, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-308

Hurston Building, North Tower

Orlando, Florida 32801

For Respondent : Harold M. Braxton

Qualified Representative

9132 Southwest 78th Place

Miami, Florida 33156

STATEMENT OF THE ISSUE

Whether the Respondent committed the violations alleged in

the Administrative Complaint dated May 3, 2000, and, if so, the

penalty that should be imposed.

PRELIMINARY STATEMENT

In an Administrative Complaint dated May 3, 2000, the

Department of Business and Professional Regulation, Division of

Real Estate, ("Department") charged in Count I that Dale Smalley

violated a standard for the development or communication of a

real estate appraisal or other provision of the Uniform

Standards of Professional Appraisal Practice, in violation of

Section 475.624(14), Florida Statutes (1999); the Department

charged in Count II of the Administrative Complaint that

Mr. Smalley is guilty of culpable negligence or a breach of

trust in a business transaction, in violation of

Section 475.624(2), Florida Statutes (1999). These violations

are based on the factual allegations that Mr. Smalley knew or

should have known that the signature of the supervisory

appraiser on an appraisal report was not genuine and that he

failed to maintain a workfile for the appraisal report.

Mr. Smalley timely filed a request for a formal hearing, and the

Department transmitted the matter to the Division of

Administrative Hearings for assignment of an administrative law

judge. The formal hearing was held on May 21, 2001.

At the hearing, the Department presented the testimony of

Brian A. Piper and Lance Campbell, and Petitioner's Exhibits 1

through 4 were offered and received into evidence. Mr. Smalley

testified in his own behalf, and Respondent's Exhibit 1 was

offered and received into evidence but was then withdrawn. At

the Department's request, official recognition was taken of

Chapters 120, 455, and 458, 1 Florida Statutes (1999). Subsequent

to the hearing, after notice and an opportunity to be heard, the

undersigned, on her own motion, took official recognition of

that portion of the Ethics Rule contained in the 1999 edition of

the Uniform Standards of Professional Appraisal Practice

("USPAP") promulgated by the Appraisal Standards Board of the

Appraisal Foundation entitled " Record Keeping ."

The one-volume transcript of the proceedings was filed with

the Division of Administrative Hearings on June 25, 2001, and

the parties timely filed proposed findings of fact and

conclusions of law, which have been considered in preparing this

Recommended Order.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. The Department is the state agency responsible for

investigating complaints filed against registered, licensed, or

certified real estate appraisers and for prosecuting

disciplinary actions against such persons. Section 455.225,

Florida Statutes (2000). The Florida Real Estate Appraisal

Board is the state agency charged with regulating, licensing,

and disciplining real estate appraisers registered, licensed, or

certified in Florida. Section 475.613(2), Florida Statutes

(2000).

2. At the times material to this proceeding, Mr. Smalley

was a registered assistant real estate appraiser in Florida.

Since November 1999, Mr. Smalley has been a certified

residential real estate appraiser in Florida.

3. Mr. Lance Campbell was registered with the Department

as Mr. Smalley's su pervisory appraiser from approximately

October 1997 to October 1999; 2 both Mr. Campbell and Mr. Smalley

were employed at the time by Southeastern Property Appraisals.

In order for a licensed or certified appraiser to be registered

as the supervisory appraiser for a registered assistant

appraiser, a form furnished by the Department must be completed

and signed by both the registered assistant appraiser and the

certified appraiser, and the form must be filed with the

Department. In order for Mr. Campbell to become registered with

the Department as his supervisory appraiser, Mr. Smalley

completed the portion of the registration form to be completed

by the registered assistant appraiser and gave it to

Mr. Campbell so he could complete the remaining portion of the

form. Mr. Campbell submitted the completed form to the

Department.

4. After the first few months of their professional

relationship, Mr. Campbell was not necessarily aware of

Mr. Smalley's appraisal assignments because Mr. Smalley usually

received assignments directly from the client. Once Mr. Smalley

completed an appraisal report, it was his practice to hand in

the report and the accompanying workfile for Mr. Campbell's

review and signature. It was Mr. Campbell's practice to review

Mr. Smalley's ap praisal reports and workfiles, sign the reports,

process them, and send them to the clients.

5. As Mr. Smalley's supervisory appraiser, Mr. Campbell

found that Mr. Smalley always did a thorough job on his

appraisal reports and maintained complete workfiles that

included the data necessary to support his appraisal reports.

In Mr. Campbell's opinion, Mr. Smalley is a very qualified

appraiser.

6. In June 1999, Mr. Smalley was retained by Allstate

Mortgage Corporation ("Allstate") to appraise residential

property located at 15315 Southwest 178th Terrace, Miami,

Florida. Allstate requested that Frank Otero sign the appraisal

as Mr. Smalley's supervisory appraiser.

7. At the times material to this proceeding, Mr. Otero was

a state-certified residential real estate appraiser who was

employed by Southeastern Property Appraisals. Mr. Otero was not

registered as a supervisory appraiser for Mr. Smalley when

Allstate requested that he act as Mr. Smalley's supervisory

appraiser for the subject appraisal. Consequently, Mr. Smalley

obtained a copy of the Department registration form from

Mr. Campbell, completed his portion of the form, and gave it to

Mr. Otero so he could complete his portion of the form.

Mr. Smalley assumed that Mr. Otero had done so and that

Mr. Ot ero had submitted the form to the Department.

8. The USPAP contain a provision requiring real estate

appraisers to keep records of each appraisal they perform. The

Ethics Rules of the 1999 edition of the USPAP include the

following provision:

Record Keeping

An appraiser must prepare a workfile for

each assignment. The workfile must include

the name of the client and the identity, by

name or type, of any other intended users;

true copies of any written reports,

documented on any type of media; summaries

of any oral reports or testimony, or a

transcript of testimony, including the

appraiser's signed and dated certification;

all other data, information, and

documentation necessary to support the

appraiser's opinions and conclusions and to

show compliance with this rule and all other

applicable Standards, or references to the

location(s) of such other documentation.

An appraiser must retain the workfile for a

period of at least five (5) years after

preparation or at least two (2) years after

final disposition of any judicial proceeding

in which testimony was given, whichever

period expires last, and have custody of his

or her workfile, or make appropriate

workfile retention, access, and retrieval

arrangements with the party having custody

of the workfile.

Comment: A workfile preserves evidence of

the appraiser's consideration of all

applicable data and statements required by

USPAP and other information as may be

required to support the findings and

conclusions of the appraiser. For example,

the content of a workfile for a Complete

Appraisal must reflect consideration of all

USPAP requirements applicable to the

specific Complete Appraisal assignment.

However, the content of a workfile for a

Limited Appraisal need only reflect

consideration of the USPAP requirements from

which there has been no departure and that

are required by the specific Limited

Appraisal assignment.

A photocopy or an electronic copy of the

entire actual written appraisal, review, or

consulting report sent or delivered to a

client satisfies the requirement of a true

copy. As an example, a photocopy or

electronic copy of the Self-Contained

Appraisal Report, Summary Appraisal Report,

or Restricted Use Appraisal Report actually

issued by an appraiser for a real property

Complete Appraisal or Limited Appraisal

assignment satisfies the true copy

requirement for that assignment.

Care should be exercised in the selection of

the form, style, and type of medium for

written records, which may be handwritten

and informal, to ensure they are retrievable

by the appraiser throughout the prescribed

record retention period.

A workfile must be in existence prior to and

contemporaneous with the issuance of a

written or oral report. A written summary

of an oral report must be added to the

workfile within a reasonable time after the

issuance of the oral report.

A workfile must be made available by the

appraiser when required by state enforcement

agencies or due process of law. In

addition, a workfile in support of a

Restricted Use Appraisal Report must be

available for inspection by the client in

accordance with the Comment to Standards

Rule 2-2(c)(ix).

9. As he went about preparing the subject appraisal,

Mr. Smalley compiled a workfile consisting of the data on which

he based his appraisal, including photographs, diagrams, maps,

and printouts on the property sales in the neighborhood, known

as "comparables." Mr. Smalley maintained a hard copy of the

workfile, and he also put the workfile into the office computer.

10. In reporting the results of his appraisal of the

subject property, Mr. Smalley used the "Uniform Residential

Appraisal Report," which is identified as "Freddie Mac Form 70."

Mr. Smalley entered the data on which he based his appraisal and

his conclusion regarding the value of the property on the form,

he typed his name on the line on the second page of the form

reserved for the name of the appraiser, and he typed "Franky

Otero" on the line on the second page of the form reserved for

the name of the supervisory appraiser. The date of "July 1 5,

1999" was typed in the space below the typed names.

11. Mr. Smalley signed his name on the line above his

typed name. Then, as was his usual practice with Mr. Campbell,

Mr. Smalley left the report and the workfile in a designated

area for Mr. Otero to pick up so he could review the appraisal

report and the workfile and sign the appraisal report.

12. After he completed the appraisal report, Mr. Smalley

included in the hard-copy of the workfile a copy of the two-page

report. The copy of the appraisal report Mr. Smalley retained

in the workfile was printed from the workfile he maintained on

the computer, and this copy of the report did not contain either

his signature or that of Mr. Otero.

13. On August 12, 1999, the Department received an

anonymous complaint in which it was asserted that the value

assigned in the appraisal report to the property located at

15315 Southwest 178th Terrace, Miami, Florida, was too high; a

copy of the appraisal report containing signatures purporting to

be those of Mr. Small ey and Mr. Otero was attached to the

complaint filed with the Department. The Department forwarded a

copy of the complaint to Mr. Otero.

14. At some point after he received notification of the

complaint, Mr. Otero telephoned Mr. Campbell to advise

Mr. Ca mpbell that he, Mr. Otero, was being investigated by the

Department with respect to a complaint it had received about an

appraisal report prepared by Mr. Smalley. Mr. Campbell set up a

meeting with Mr. Otero and Mr. Smalley. Prior to the meeting,

Mr. Ote ro sent Mr. Campbell a copy of the subject appraisal

report by facsimile transmittal. The copy of the report that

Mr. Otero sent to Mr. Campbell contained signatures above the

typed names of Mr. Smalley and of Mr. Otero.

15. Mr. Otero's primary concern a t the meeting, and the

focus of the discussion, was the allegation in the complaint

that the value assigned to the property in the appraisal report

was too high. There was also some discussion about whether

Mr. Otero had signed the appraisal report.

16. The first time Mr. Smalley saw a copy of the report

containing a signature above Mr. Otero's typed name was at the

meeting with Mr. Campbell and Mr. Otero.

17. The Department's investigator interviewed Mr. Smalley

on March 9, 2000. During the interview, the investigator

reviewed Mr. Smalley's workfile on the subject appraisal and

copied selected documents from the file, with Mr. Smalley's

assistance. One document that the investigator copied from

Mr. Smalley's workfile was the copy of the two-page apprai sal

report that Mr. Smalley had printed from the workfile he

maintained on the computer, which copy did not contain

signatures of Mr. Smalley and Mr. Otero.

18. The Department's investigator obtained a computer

printout of Mr. Smalley's licensure file. A ccording to the

Department's investigator, the printout did not show that

Mr. Otero was registered with the Department as a supervisory

appraiser for Mr. Smalley in July 1999. As a result, the

Department issued to Mr. Smalley a Uniform Disciplinary Citati on

dated March 13, 2000, charging that a Uniform Residential

Appraisal Report was submitted to Mr. Smalley's client with the

signature of a supervisory appraiser who was not registered with

the Department.

Summary

19. The evidence presented by the Department is not

sufficient to establish with the requisite degree of certainty

that Mr. Smalley failed to maintain a workfile for the subject

appraisal, that he failed to maintain a workfile while he was

preparing the appraisal that contained the data on which he

relied in completing the appraisal, or that he was required to

include in the workfile a copy of the signed appraisal report.

20. The evidence presented by the Department is not

sufficient to establish with the requisite degree of certainty

that the signature on the appraisal report was not Mr. Otero's

signature, that Mr. Smalley signed Mr. Otero's signature to the

subject appraisal report, or that Mr. Smalley knew or should

have known that Mr. Otero was not registered as one of his

supervisory appraisers.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes (2000).

22. In its Administrative Complaint, the Department seeks

to impose penalties against Mr. Smalley that include suspension

or revocation of his license and/or the imposition of an

administrative fine. Therefore, the Department has the burden

of proving by clear and convincing evidence that Mr. Smalley

committed the violations alleged in the Administrative

Complaint. Department of Banking and Finance, Division of

Securities and Investor Protection v. Osborne Stern and Co. , 670

So. 2d 932 (Fla. 1996); and Ferris v. Turlington , 510 So. 2d 292

(Fla. 1987).

23. In Evans Packing Co. v. Department of Agriculture and

Consumer Services , 550 So. 2d 112, 116, n. 5 (Fla. 1st DCA

1989), the court defined clear and convincing evidence as

follows:

[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 evidence 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

the firm belief or conviction, without

hesitancy, as to the truth of the

allegations sought to be established.

Slomowitz v. Walker , 429 So. 2d 797, 800

(Fla. 4th DCA 1983).

24. Judge Sharp, in her dissenting opinion in Walker v.

Florida Department of Business and Professional Regulation , 705

So. 2d 652, 655 (Fla. 5th DCA 1998)(Sharp, J., dissenting),

reviewed recent pronouncements on clear and convincing evidence:

Clear and convincing evidence requires more

proof than preponderance of evidence, but

less than beyond a reasonable doubt. In re

Inquiry Concerning a Judge re Graziano ,

696 So. 2d 744 (Fla. 1997). It is an

intermediate level of proof that entails

both qualitative and quantative [sic]

elements. In re Adoption of Baby E.A.W. ,

658 So. 2d 961, 967 (Fla. 1995), cert.

denied , 516 U.S. 1051, 116 S. Ct. 719, 133

L. Ed. 2d 672 (1996). The sum total of

evidence must be sufficient to convince the

trier of fact without any hesitancy. Id.

It must produce in the mind of the trier of

fact a firm belief or conviction as to the

truth of the allegations sought to be

established. Inquiry Concerning Davie , 645

So. 2d 398, 404 (Fla. 1994).

25. Section 475.624, Florida Statutes (1999), provides

that the Florida Real Estate Appraisal Board may, inter alia ,

revoke or suspend the license, registration, or certification of

a real estate appraiser or may reprimand, fine, or put on

probation any such appraiser if the appraiser has committed any

one of several acts enumerated in the statute.

26. Section 475.624 is a penal statute and, as such, must

be strictly construed in favor of Mr. Smalley. See Munch v.

Department of Professional Regulation, Division of Real Estate ,

592 So. 2d 1136, 1138 (Fla. 1st DCA 1992),

27. Section 475.628, Florida Statutes (1999), 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.

28. Section 475.624(14), Florida Statutes (1999 ), provides

that disciplinary action may be taken against an appraiser who

"[h ]as violated any standard for the development or

communication of a real estate appraisal or other provision of

the Uniform Standards of Professional Appraisal Practice." The

Department included in its Administrative Complaint the factual

allegation that Mr. Smalley "failed to maintain a workfile for

the appraisal report." This factual allegation is the basis for

the charge in Count I of the Administrative Complaint that

Mr. Sma lley "violated a standard for the development or

communication of a real estate appraisal or other provision of

the Uniform Standards of Professional Appraisal Practice,

specifically the conduct portion of [the] Ethics Rule, in

violation of § 475.624(14), Fla. Stat . (1999)." 3 Based on the

findings of fact herein and for the reasons set forth below, the

Department has failed to satisfy its burden of proving by clear

and convincing evidence that Mr. Smalley violated

Section 475.624(14), Florida Statutes (1999 ), as alleged in the

Administrative Complaint or as argued by the Department in its

Proposed Recommended Order.

29. Although the Administrative Complaint alleges only

that Mr. Smalley failed to maintain a workfile and the

Department stipulated at the hearing that Mr. Smalley maintained

a workfile on the subject appraisal, the Department takes the

position in its Proposed Recommended Order that

[t ]hough Respondent was able to produce a

complete workfile at the hearing,

Inv[estigator] Piper testified that wh en he

reviewed the subject file, the workfile did

not contain signed copies of the appraisal

report or supporting data. . . . Though

Respondent maintained a workfile, he failed

to maintain a complete workfile containing a

signed appraisal report at the time he

developed and communicated the appraisal

report.

30. First, the Department has failed to prove by clear and

convincing evidence the factual allegation that Mr. Smalley

failed to include in his workfile for the subject appraisal the

data required by the USPAP record-keeping rule. At the hearing,

the Department stipulated that Mr. Smalley maintained a workfile

for the subject appraisal, and it stipulated that the workfile

contained those documents identified by Mr. Smalley during his

testimony, which documents included data to support the

appraisal. 4 The testimony of the Department's investigator that

Mr. Smalley's workfile did not contain the data to support the

appraisal and/or that the data in the workfile was accumulated

"after the fact" does not meet the standard for clear and

convincing evidence : The investigator's testimony was not

precise and explicit regarding the documents that were contained

in the file, and his bare assertion in his testimony that the

data in the workfile he examined was collected "after the fact"

is without any point of temporal reference and is unsupported by

any explanation of the basis for his conclusion.

31. Second, although the Department has proven by clear

and convincing evidence that the workfile maintained by

Mr. Smalley did not contain a signed copy of the appraisal

report, this proof is not sufficient to establish that

Mr. Smalley violated the record-keeping provision of the USPAP.

The provision contains a series of items that must be included

in an appraiser's workfile, and each item in the series is set

off from the others by a semi-colon. By its terms, the

provision requires that an appraiser keep "true copies of any

written reports, documented on any type of media"; the

requirement that an appraiser must provide a "signed and dated

certification" applies only to "summaries of any oral reports or

testimony, or a transcript of testimony." The Comment to the

USPAP provision explains that the true copy maintained in the

workfile must be "of the entire actual written appraisal . . .

sent or delivered to the client."

32. The only evidence offered by the Department to support

its contention that the USPAP provision requires an appraiser to

include in his workfile a signed copy of the appraisal report

is, again, the bare assertion of the Department's investigator

in his testimony at the hearing. The Department did not present

any evidence to establish that it is the practice in the

industry to keep a signed copy of the appraisal report in the

workfile, and neither the USPAP provision nor the Comment

contains any such requirement. The Department did not allege in

the Administrative Complaint, and there was no evidence to

establish, that the contents of the copy of the appraisal the

Department's investigator obtained from Mr. Smalley's workfile

were any different from the contents of the copy of the

appraisal sent to the Department with the anonymous complaint. 5

Therefore, the Department has failed to prove that Mr. Smalley's

workfile did not contain a "true copy" of the appraisal report

sent to Mr. Smalley's client.

33. Section 475.624(2), Florida Statutes (1999), provides

that disciplinary action may be taken against an appraiser when

the appraiser "[h ]as been guilty of . . . culpable negligence,

or breach of trust in any business transaction in this

state . . . ." The Department included in its Administrative

Complaint the factual allegation that Mr. Smalley "knew or

should have known that the signature of the supervisory

appraiser was not the genuine signature of the person it

purported to represent." This factual allegation is the basis

for the Department's charge in Count II of the Administrative

Complaint that Mr. Smalley "is guilty of culpable negligence or

breach of trust in a business transaction in violation of

§ 475.624(2), Fla. Stat. (1999)." Based on the findings of fact

herein and for the reasons set forth below, the Department has

failed to satisfy its burden of proving by clear and convincing

evidence that Mr. Smalley violated Section 475.624(2) , Florida

Statutes (1999), as alleged in the Administrative Complaint or

as argued by the Department in its Proposed Recommended Order.

34. In its Proposed Recommended Order, the Department took

the position that Mr. Smalley committed culpable negligence or a

breach of trust with respect to the subject appraisal, first,

because he forged Mr. Otero's signature to the appraisal report

and, second, because he knew or should have known that Mr. Otero

was not his supervisory appraiser.

35. The Department has failed to prove by clear and

convincing evidence that the signature on the appraisal report

was not Mr. Otero's signature. The Department's investigator

testified that Mr. Otero's attorney told him that Mr. Otero said

he did not sign the subject appraisal report, and the

investigator further testified that Mr. Otero sent him a letter

in which he denied having signed the report; this letter was not

offered into evidence, nor was any document purportedly

containing Mr. Otero's signature offered into evidence to

provide a point of comparison with the signature on the

appraisal report purported to be that of Mr. Otero.

Mr. Campbell testified that Mr. Otero told him that he

(Mr. Otero) had not signed the appraisal report. The testimony

of both the Department's investigator and Mr. Campbell is

hearsay; it would not be admissible over objection in a civil

action; and it does not supplement or explain other evidence.

This testimony is not sufficient, therefore, to support a

finding of fact that the signature on the appraisal report is

not Mr. Otero's signature. See Section 120.57(1)(c), Florida

Statutes (2000).

36. Furthermore, even if the Department had proven that

the signature on the appraisal report is that of Mr. Otero, the

Department has failed to prove by clear and convincing evidence

that Mr. Smalley affixed the signature to the report.

Mr. Campbell's testimony that Mr. Smalley admitted during the

meeting with Mr. Campbell and Mr. Otero that he had signed

Mr. Otero's name to the appraisal was precise and explicit,

however, he did not distinctly remember other details of the

discussion that took place during the meeting. Weighed against

Mr. Campbell's testimony is the testimony of the Department's

investigator that, during his interview with Mr. Smalley on

March 9, 2000, Mr. Smalley denied that he signed Mr. Otero's

signature to the appraisal report and Mr. Smalley's testimony

that he did not sign Mr. Otero's name to the report. Having

considered all of the evidence of record and assessed the

credibility of the witnesses and the persuasiveness of the

testimony, the undersigned is not firmly convinced that

Mr. Smalley signed Mr. Otero's name to the subject appraisal

report, especially since the Department offered no cognizable

proof to establish that the signature on the appraisal report

was not Mr. Otero's signature.

37. Finally, the Department has failed to prove by clear

and convincing evidence that Mr. Smalley knew or should have

known that Mr. Otero was not registered with the Department as

his supervisory appraiser. The Department offered no cognizable

proof to establish that Mr. Otero was not registered with the

Department as a supervisory appraiser for Mr. Smalley. The only

evidence offered to support this contention was the absence of

any mention of Mr. Otero in the "certified" summary of the

contents of the Department's licensure file and the testimony of

the Department's investigator that the computer printout of

Mr. Smalley's licensure file did not show that Mr. Otero was

registered as Mr. Smalle y's supervisory appraiser. The

certified summary of the contents of Mr. Smalley's licensure

file is uncorroborated hearsay, 6 and the investigator's

testimony, likewise, was uncorroborated hearsay, based as it was

solely on the investigator's review of a computer printout that

was not offered into evidence at the hearing, much less

established as a business record maintained by the Department.

38. Even if the Department had presented clear and

convincing evidence that Mr. Otero was not registered with the

Department as a supervisory appraiser for Mr. Smalley, the

Department failed to present any evidence to establish that

Mr. Smalley knew that Mr. Otero was not registered as one of his

supervisory appraisers, and it failed to present any evidence

from which it could be inferred that Mr. Smalley should have

known that Mr. Otero was not registered as one of his

supervisory appraisers. In any event, the Department is

precluded from disciplining Mr. Smalley on the basis of this

allegation both because it did not allege facts in its

Administrative Complaint relating to this charge, 7 and because

the Department has already issued Mr. Smalley a citation

charging him with submitting an appraisal report to a client

with the signature of a supervisory appraiser not registered

with the Department.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Real Estate Appraisal

Board enter a final order dismissing the Administrative

Complaint filed against Dale Smalley.

DONE AND ENTERED this 31st day of August, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

PATRICIA HART MALONO

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 31st day of August, 2001.

ENDNOTES

1 / The relevant chapter is actually Chapter 475, Florida

Statutes.

2 / Section 475.611(1)(l), Florida Statutes (1999), defines a

"registered assistant appraiser" as "a person who is registered

with the department as qualified to perform appraisal services

under the supervision of a licensed or certified appraiser."

Rule 61J1-7.006, Florida Administrative Code, provides:

"Whenever a registered appraiser signs an appraisal report, the

registered appraiser's primary or secondary supervising licensed

or certified appraiser(s) must also sign the appraisal report."

3 / Although the Department did not specify in the Administrative

Complaint the specific provision of the USPAP allegedly violated

by Mr. Smalley, he did not request a more definite statement of

the charges against him.

4 / Mr. Smalley offered his workfile into evidence, and it was

received over the objection of the Department as Respondent's

Exhibit 1. Counsel for the Department then stated: "I will

stipulate to everything that's maintained in the file, it does

not have to be admitted, . . . . I don't have a problem with it

not being admitted as actual evidence. I will stipulate to

Mr. Smalley['s] maintaining a workfile." (Tr. at 95.) In

consideration of the Department's stipulation, Mr. Smalley

withdrew Respondent's Exhibit 1.

5 / In fact, a comparison of the first two pages of Petitioner's

Exhibit 2, the copy of the appraisal report the Department's

investigator obtained from Mr. Smalley's workfile, and the first

two pages of Petitioner's Exhibit 4, which was purportedly sent

to the Department attached to the anonymous complaint, reveals

that the contents of the two documents are identical; the only

difference is that Petitioner's Exhibit 4 contains what purport

to be the signatures of Mr. Smalley and Mr. Otero.

6 / The information recited in the "certified" summary of the

contents of Mr. Smalley's licensure file is hearsay when it is

offered to prove the contents of the file. A certification is

properly used to certify the authenticity of the documents

contained in the licensure file and attached to the

certification, see Section 90.902(4), Florida Statutes, and the

hearsay nature of the documents can be overcome by the testimony

of a qualified witness establishing that the documents are

business records. See Section 90.803(8), Florida Statutes.

7 / See Cottrill v. Department of Insurance , 685 So. 2d 1371,

1372 (Fla. 1st DCA 1996)("Predicating disciplinary action

against a licensee on conduct never alleged in an administrative

complaint or some comparable pleading violates the

Administrative Procedure Act.")

COPIES FURNISHED:

Rania A. Soliman, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-308

Hurston Building, North Tower

Orlando, Florida 32801

Harold M. Braxton

Qualified Representative

9132 Southwest 78th Place

Miami, Florida 33156

Patricia J. Birch, Chairperson

Florida Real Estate Appraisal Board

400 West Robinson Street

Post Office Box 1900

Orlando, Florida 32802-1900

Hardy L. Roberts, III, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-22202

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.