03-003824PL Department Of Business And Professional Regulation, Division Of Real Estate vs. D. Phil Jones Status: Closed Recommended Order on Wednesday, March 17, 2004.

Summary: Respondent`s appraisal was overvalued, misleading, and inaccurate. Respondent failed to exercise reasonable diligence in developing his report.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No . 03 - 3824PL

)

D. PHIL JONES, )

)

Respondent. )

)

RECOMMENDED ORDER

A formal hearing was conducted in this case on January 13,

2004, in Milton, Florida, before Suzanne F. Hood, Administrative

Law Judge with the Division of Administrative Hearings (DOAH).

APPEARANCES

For Pet itioner: S. L. Smith, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 802N

Orlando, Florida 32801

For Respondent: Robert E. Thielhelm, Jr., Esquire

Baker and Hostetler, LLP

Post Office Box 112

Orlando, Florida 32801 - 0112

STATEMENT OF THE ISSUES

The issues are as follows: (a) whether Respondent violated

a standard for the development or communication of a real estate

appraisal or other provision of the Uniform Standards of

Professional Appraisal Practice (USPAP) in violation of

Section 475.624(14), Florida Statutes (1995); (b) whether

Respondent failed to exercise reasonable diligence in developing

an appraisal in violation of Section 475.624(15), Florida

Statutes (1995); and (c) whether Respondent is guilty of

culpable negligence or breach of trust in a business transaction

in violation of Sectio n 475.624(2), Florida Statutes (1995).

PRELIMINARY STATEMENT

On April 20, 1999, Petitioner, Department of Business and

Professional Regulation, Division of Real Estate (Petitioner),

filed an Administrative Complaint against Respondent D. Phil

Jones (R espondent). Said Complaint alleged as follows: (a) in

Count I that Respondent was guilty of violating a standard for

the development or communication of a real estate appraisal or

other provision of USPAP, specifically USPAP Standard 1, Rules

1 - 1(a), 1 - 1 (b), 1 - 1(c), and 1 - 2(a) and USPAP Standard 2, Rule 2 -

1(a), as well as USPAP's competency and ethics provisions, in

violation of Section 475.624(14), Florida Statutes (1995), and

(b) in Count II, that Respondent was guilty of having failed to

exercise reaso nable diligence in developing an appraisal report

in violation of Section 475.624(15), Florida Statutes (1995).

Respondent subsequently requested an administrative hearing to

contest the allegations of the initial Administrative Complaint.

On Augu st 13, 1999, Administrative Law Judge Don W. Davis

issued a Notice of Hearing, scheduling the hearing in DOAH Case

No. 99 - 2968 for November 2, 1999. On September 23, 1999,

Respondent filed an Agreed Request for Continuance. An Order

dated September 29, 1 999, granted this motion.

In an Order dated October 27, 1999, Administrative Law

Judge Charles C. Adams rescheduled the final hearing in DOAH

Case No. 99 - 2968 for March 6 and 7, 2000. In a motion dated

February 9, 2000, Petitioner sought a continuanc e of the formal

hearing. Judge Adams granted the motion and rescheduled the

final hearing for May 25 and 26, 2000.

In a motion dated March 3, 2000, Petitioner moved again to

reschedule the formal hearing. Judge Davis granted the motion

and reschedul ed the final hearing for May 24 and 24, 2000.

In a motion dated April 28, 2000, Petitioner sought another

continuance. On May 1, 2000, Judge Davis granted the

continuance and placed the case in abeyance. Pursuant to Judge

Davis’ Order, the parties w ere required to advise Judge Davis no

later than October 2, 2000, as to the status of the matter. In

a motion dated October 2, 2000, Petitioner sought an extension

of time to file a status report. In an Order dated October 6,

2000, Judge Davis closed the file in DOAH Case No. 99 - 2968.

On May 18, 2001, Petitioner filed an Amended Administrative

Complaint, alleging as follows:

Count 1

Based upon the foregoing, Respondent has

violated a standard for the development or

communication of a real estate a ppraisal or

other provision of the Uniform Standards of

Professional Appraisal Practice (1996) in

violation of Section 475.624(14), Florida

Statutes (1995).

COUNT II

Based on the foregoing, Respondent is guilty

of having failed to exercise reasonable

dil igence in developing an appraisal report

in violation of Section 475.624(15), Florida

Statutes (1995).

COUNT III

Based on the foregoing, Respondent is guilty

of culpable negligence or breach of trust in

a business transaction in violation of

Section 475. 624(2), Florida Statutes (1995).

On August 17, 2001, Respondent filed a Response to Amended

Complaint and Request for Formal Hearing in the instant case.

Petitioner referred the case to the Division of Administrative

Hearings on October 16, 2003.

On November 14, 2003, Judge Adams issued a Notice of

Hearing, scheduling the hearing for January 13 and 14, 2004.

The Division of Administrative Hearings subsequently transferred

this case to the undersigned.

When the hearing commenced, Petition er requested official

recognition of applicable provisions of USPAP. Respondent

objected because the Amended Administrative Complaint did not

allege that Respondent had violated any specific USPAP

standards.

Respondent also made an ore tenus Motion to Dismiss all

allegations that he violated USPAP. Respondent argued that the

Amended Administrative Complaint is insufficient because it

lacks specificity and does not describe a violation of the

counts charged.

The undersigned reserved ruling on the request for official

recognition, which is hereby granted. Additionally, the Motion

to Dismiss was hereby denied.

Under the facts of this case, it is clear that Respondent

had sufficient notice of the charges against him, including

notice that his alleged actions or inactions violated applicable

provisions of USPAP. See Seminole County Bd. of County

Comm'rs v. Long , 422 So. 2d 938,940 (Fla. 5th DCA

1982)(administrative complaints are not required to meet the

technical standards of pleading in civil or criminal court).

The Amended Administrative Complaint afforded Respondent more

than reasonable certainty about the nature of the charges

against him, and gave him a reasonable opportunity to defend

against them. See Sandin v. Florida Real Estate Comm. , 187 So.

2d 355, 358 (Fla. 2nd DCA 1966), citing Florida Bd. of Massage

v. Thrall , 164 So. 2d 20, 22 (Fla. 3rd DCA 1964) and State ex

rel. Williams v. Whitman , 156 So. 2d 705, 709 (Fla. 1934).

During the hearing, Petitioner presented the test imony of

three witnesses and offered 11 exhibits, which were accepted

into evidence. Respondent testified in his own behalf and

presented the testimony of one additional witness. Respondent

presented three exhibits, which were accepted into evidence.

A copy of the transcript was filed on February 6, 2004.

Petitioner filed its Proposed Recommended Order on February 20,

2004. Respondent filed his Proposed Recommended Order on

February 23, 2004.

FINDINGS OF FACT

1. Petitioner is the agency cha rged with the duty of

licensing and regulating real estate appraisers in the State of

Florida.

2. Respondent is and was at all times material hereto a

state - certified general real estate appraiser, having been

issued License RZ0001233 in accordance w ith Chapter 475, Part II

of the Florida Statutes.

3. Respondent has been appraising real property in the

State of Florida since 1985 and has conducted over 5,000

appraisals. During that period of time, Respondent has not been

charged with any disc iplinary action or proceeding as an

appraiser other than with respect to this particular case.

4. Respondent is the sole shareholder of McCall Realty and

Investment, Inc. (McCall Realty). Eighty percent of McCall

Realty’s business is appraisals, while 20 percent is

attributable to real estate sales, rentals and property

management. Respondent is the sole appraiser in his office, but

does have two trainees. Imposition of a fine or suspension of

Respondent’s license would cause a great degree of f inancial

hardship in that the Respondent and McCall Realty would have to

file bankruptcy.

5. On or about March 10, 1996, Respondent developed and

communicated an appraisal report (Report) for property

identified on the cover page as 5600 Bubba Lane , Milton, Florida

32570 (Subject Property) to Ward Brewer.

6. In his Report, Respondent estimated the market value of

the subject property as of February 20, 1996, as $1,095,000.00.

The Report contained three separate appraisal form reports as

follows: (a) an appraisal of parcel 1, an alleged 160 - acre

vacant land site valued at $800,000 (Appraisal 1); (b) an

appraisal of parcel 2, an alleged 7 - acre site with a 1,508

square - foot residence valued at $95,000 (Appraisal 2); and

(c) an appraisal of parcel 3 , an alleged 25 - acre vacant land

site valued at $200,000 (Appraisal 3) (the Park Property). Each

of the form reports indicated that Respondent was appraising a

fee simple interest.

7. On November 28, 1995, Ward Brewer called Respondent’s

secretary and indicated that he needed Respondent to do an

appraisal. Mr. Brewer indicated that the Subject Property was

between 159 and 200 acres and owned by J. W. Hawkins. According

to Mr. Brewer, there also was an alleged 25 - acre park that was

owned by J. W. Hawkins but leased to the State of Florida.

Shortly after receiving this message from his secretary,

Respondent returned Ward Brewer’s call and confirmed that

Mr. Brewer wanted Respondent to appraise the property owned by

J. W. Hawkins totaling between 15 9 to 200 acres, as well as an

adjacent park owned by J. W. Hawkins and leased to the State of

Florida. Also in that conversation, Mr. Brewer indicated he

needed this property to be worth $1 million.

8. In making his investigation for the appraisal,

Res pondent determined that the Park Property was actually owned

by the State of Florida. Respondent then called Mr. Brewer and

informed him that Mr. Hawkins did not own the Park Property.

Mr. Brewer indicated that the owner, Mr. Hawkins, had donated

the Par k Property to the State, but that Mr. Hawkins was going

to get it back through a reversionary interest because he was

having problems with the State of Florida. Mr. Brewer then

instructed Respondent to appraise the Park Property as if

Mr. Hawkins owned th e property in fee simple.

9. Respondent also contacted the property owner,

Mr. Hawkins, to determine Mr. Hawkins’ understanding of the

reversionary interest. Mr. Hawkins confirmed that he was

expecting to get the property back from the State through th e

reversionary interest. Respondent also inquired of the owner,

Mr. Hawkins, as to the size of the property, and Mr. Hawkins

indicated that it was somewhere between 150 and 200 acres.

10. Respondent walked the Subject Property on two separate

occa sions. During his physical inspection of the Subject

Property, Respondent walked all over the property except for the

island portion. He only viewed the island from the shoreline.

He then used an aerial photograph to confirm his understanding

of the isl and.

11. Respondent asked Mr. Brewer if he had a survey of the

Subject Property. Mr. Brewer indicated that he did not have a

survey. Respondent was not aware that Mr. Brewer was in the

process of obtaining a survey. In fact, Appraisal 2 in the

R eport states that no survey was available.

12. Additionally, the Report contains a disclaimer, which

states as follows:

This appraiser is not qualified to, nor does

the appraisal warrant, the following:

* * *

6. The actual location of its de signated

flood hazard or designated area without a

current survey. . . .

* * *

It is recommended that these items and areas

be checked by professionals who specialize

in these various fields. It is also

recommended that any and all reports

prepared by others be made available to this

appraiser for consideration in the appraisal

process. This appraiser reserves a right of

review and/or revision subject to any

outside reports submitted on the property

appraised.

13. Respondent then began the pro cess of compiling

comparable sales.

14. After receiving the Report from the Respondent,

Mr. Brewer and others obtained title to a portion of the Subject

Property. The purchase price for this phase of the purchase was

$300,000. Mr. Brewer and his counsel had the Report and a

survey before closing on the Subject Property. Neither

Mr. Brewer nor his counsel provided the Respondent with a copy

of the survey.

15. Thereafter, Mr. Brewer and the other owners decided to

finance the purchase of th e remaining portion of the Subject

Property. The bank requested Mr. R. Shawn Brantley, to prepare

an appraisal of a portion of the Subject Property. Mr. Brantley

valued a portion of the Subject Property as of May 2, 1997, at

$380,000. Thereafter, Mr. Br antley prepared two additional

appraisals of the balance of the Subject Property for $69,000

and $70,000, respectively. Accordingly, Mr. Brantley’s

appraised value of the Subject Property a little more than a

year after the Report was $519,000.

16. Mr. Brewer and others completed the purchase of the

remaining property by paying an additional $270,000, for a total

of $570,000. Thereafter, Mr. Brewer and others filed a civil

lawsuit against Respondent and McCall Realty. In a settlement

of the lawsu it, Mr. Brewer and the other owners received a

$300,000 settlement. According to Mr. Brewer, one - half of the

settlement amount paid attorneys' fees and costs. The other

half of the settlement amount was to offset their losses.

17. Because of the disparity in the appraised values,

Mr. Brantley’s client, SunTrust Bank, insisted on knowing why

there was a difference in the values. Mr. Brantley subsequently

prepared a Review Appraisal Report.

18. Respondent asserts that he had developed one p rior

appraisal involving wetlands or property with similar

characteristics. Respondent did not produce this prior

appraisal as requested by Petitioner's investigator. As a

result of this entire experience, the Respondent has limited his

appraisal practic e to single - family residential.

19. Respondent identified the Subject Property in the

Report by tax identification numbers, metes and bounds

descriptions, aerial photographs and a depiction of the property

on a zoning map. Tax identification numbe rs are found in the

Report on the tax roll assessment information sheet. With

regard to parcel 2, the assessor’s parcel number is identified

as 35 - 2N - 28 - 0000 - 00500 - 0000 on the form report itself. On

parcels 1 and 3, the property is identified on the firs t page of

each form appraisal by metes and bounds in Section 35, Township

1 North, Range 28 West and by reference to the “attached aerial

photograph.” On the aerial photograph, the Respondent wrote in

1, 2 and 3 corresponding to the separate parcel number s that he

was appraising.

20. Additionally, the Report includes a zoning map that

identifies the Subject Property with 1, 5, or 5.3, corresponding

to the respective tax identification numbers for the three

parcels being appraised.

21. The tax roll assessment information sheet in the

Report provides a tax identification number of 35 - 2N - 28 - 0000 -

00100 - 0000 for parcel 1. One can then go to the zoning map,

which identifies parcel 1 by a no. 1 on the zoning map. Parcel

2 is also identified in the Repor t as containing assessor’s

parcel no. 35 - 2N - 28 - 0000 - 00500 - 0000. Here again, this property

can be seen on the zoning map and is depicted with a number 5.

Finally, parcel 3, the Park Property, is identified as being

zoned P - 2 and then further identified as the property on the

zoning map where the zoning is indicated as P - 2.

22. Respondent's effort to identify and describe the

Subject Property is inadequate in at least two important

respects. First, the Report described the property as 192 acres

whe n it is in fact much smaller, approximately 99 acres.

Correct acreage is a fundamental way to describe and identify a

property.

23. Second, the Report fails to reveal the existence of

wetlands, which were readily apparent. The Report states that

the alleged 160 - acre tract is bordered by the Blackwater River

to the East but fails to specify the following: (a) the

property contains seven ponds; (b) a bayou intersects the

property; and (c) over half of the property is an island

surrounded by at leas t 50 feet of water. When reading the

Report, the only way to discern these characteristics is by

reference to the Report's attachments. At the very least,

Respondent should have made some attempt to describe the portion

of the property that is dry upland and the portion that is

covered with water.

24. Respondent did not physically walk the entire length

of the island. Instead, he viewed the island across the river

and then used an aerial photograph to become familiar with the

island. The use of aerial photographs in some instances may be

a valuable resource where an appraiser finds it impossible to

penetrate every square yard of the property. In this case

Respondent did not make an effort to gain access to the island

or to navigate around it by boat.

25. Mr. Brewer specifically requested that Respondent

appraise the Park Property as if J. W. Hawkins owned it in fee

simple. Respondent and Mr. Hawkins discussed the donation of

the Park Property and the alleged reversionary interest under

w hich Mr. Hawkins expected to get the property back.

26. Respondent's report failed to disclose the basis of

his appraisal of the Park Property. The Report did not mention

that the State of Florida had any kind of interest in the land.

The report did not refer to a lease or a warranty deed with a

reversionary interest. In complying with Mr. Brewer's request

regarding the estimated market value of the Park Property,

Respondent should have made these disclosures.

27. Respondent failed to pro vide an adequate analysis and

overvalued the Subject Property in part because he failed to

consider the impact that wetlands would have on the value of the

Subject Property. Respondent did not have to be an

environmental or ecological expert to know that property covered

by so much water would contain wetlands.

28. Respondent’s Report contains a statement of

limitations regarding adverse conditions "such as, needed

repairs, depreciation, the presence of hazardous wastes, toxic

substances, etc." Th is statement does not refer to wetlands.

29. The multi - purpose appraisal addendum for federally

regulated transactions contained in the Report, provides as

follows:

ENVIRONMENTAL DISCLAIMER

The value estimated is based on the

assumption that the p roperty is not

negatively affected by the existence of

hazardous substances or detrimental

environmental conditions unless otherwise

stated in this report. The appraiser is not

an expert in the identification of hazardous

substances or detrimental environ mental

conditions. The appraiser’s routine

inspection and inquiries about the subject

property did not develop any information

that indicated any apparent significant

hazardous substances or detrimental

environmental conditions which would affect

the prop erty negatively unless otherwise

stated in this report. It is possible that

tests and inspections made by a qualified

hazardous substance and environmental expert

would reveal the existence of hazardous

substances or detrimental environmental

conditions o n or around the property that

would negatively affect its value.

Considering the general description of the Subject Property,

Respondent was remiss in not directly addressing the existence

of wetlands in his Report and in not expressly stating his

experti se (or lack thereof) in appraising wetland property in

his statement of limitations and/or disclaimers.

30. The Petitioner did not present the testimony of an

ecological or environmental expert to establish the existence of

wetlands on the Subject Property. Instead, Petitioner relied on

the testimony of Mr. Brantley, who is an expert in the appraisal

of wetland property.

31. In his own appraisal performed on a portion of the

Subject Property, Mr. Brantley expressly stated with respect to

ju risdictional wetlands that:

This appraisal is based upon the special

assumption that the appraiser’s estimates

regarding this matter, as set forth herein,

are correct. The reader is expressly

notified that the appraiser does not hold

himself out to be an environmental or

ecological consultant, nor a surveyor, and

the reader is encouraged to employ such

experts for further confirmation of the

conclusions and estimates rendered herein,

if they should so desire or should consider

it practical to do so.

32. Mr. Brantley went on to qualify his own appraisal

further with the following language:

Certain portions of the subject property

consist of jurisdictional wetlands, which

are subject to the rights exercised by the

various environmental agencies and

gov ernments. This appraisal is subject to

the special assumption that that appraiser’s

estimates of the amount of area subject to

environmental scrutiny is accurate. The

appraiser has based these estimates upon

observation of topography and wetlands

species upon the property, as well as review

of various soil and aerial maps. While, the

appraiser is of the opinion that these

estimates are reasonably accurate, he can

assume no responsibility for variations that

may be identified by an environmental audit

and survey of lines established by an

ecological expert. The reader is encouraged

to consult experts in these fields for

professional verification of the appraiser’s

assumptions.

33. During the hearing, Mr. Brantley admitted that he does

not warrant h is conclusions and assumptions regarding

jurisdictional wetlands as a qualified ecologist or

environmentalist. He acknowledged that the Subject Property

possibly was only seasonally wet and could appear dry for as

much as six months out of the year. Howe ver, Mr. Brantley's

persuasive testimony leaves no doubt that Respondent should have

recognized the existence of wetlands in his report and

calculated their impact on the value of the Subject Property.

34. In all three appraisals, Respondent used t he sales

comparison approach to determine the value of each of the three

parcels. In making the comparisons, Respondent asked his

administrative assistant to calculate the acreage of the Subject

Property using the scale on the aerial photograph.

35 . Respondent failed to adequately calculate the area of

certain comparable sales used in the Report. For example,

Respondent used the wrong acreage for each of the comparable

sales used in Appraisal 1, the alleged 160 - acre parcel, and one

comparable sale used in Appraisal 3, the Park Property.

36. Comparable 1 for the alleged 160 - acre parcel should

have been closer to 51 acres instead of the 40 acres reported by

the Respondent. With regard to comparable no. 2 on the alleged

160 - acre parcel the ac reage is closer to 38.5 acres instead of

the 15 acres reported by Respondent. As for the acreage on

comparable no. 3 on the alleged 160 - acre parcel, the actual

acreage was 551 acres and not the 303 acres reported by the

Respondent.

37. As for the acreage for comparable number 1 on parcel 3

(Park Property), the acreage was 20.4 acres rather than the 6

acres reported by the Respondent. Respondent should not have

relied on the owner's assertion that the comparable property

contained 6 acres when Resp ondent knew the tax identification

card indicated 12.91 acres. Apparently, Respondent did not

attempt to confirm either of these numbers by checking the deed,

which indicated 20.4 acres.

38. Respondent relied on inaccurate acreage for each

compara ble referenced above. The discrepancies increased the

cost of comparable price per acre. The final result was a

highly inflated value for the Subject Property.

39. Respondent appraised the value of the Subject Property

as $1,095,000.00 as of Febr uary 20, 1996. Petitioner’s expert,

Mr. Brantley, in his own appraisal of the Subject Property, a

little over a year later, valued the property at $519,000.

40. Respondent's and Mr. Brantley's opinions of value are

different. In response to quest ioning from the Court as to

whether the removal of a levee on the Subject Property between

the time the Respondent appraised the Subject Property and the

time that Mr. Brantley appraised the Subject Property affected

the value of the property, Mr. Brantley acknowledged that it

would have decreased the value. Mr. Brantley indicated that the

effect would be the approximate cost that it would take to

bridge that particular area where the levee was removed.

Petitioner never provided any evidence as to the exa ct amount or

approximate cost that it would take to bridge that particular

area. Accordingly, there is no evidence from which the Court

can determine that there is a drastic difference in the reported

value opinions. Even so, the foregoing facts are suff icient to

determine that Respondent's report was misleading and

inaccurate.

CONCLUSIONS OF LAW

41. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding. §§ 120.569, 120.57(1) and 455.2 25(5), Fla. Stat.

(2003).

42. Petitioner has the burden of proving by clear and

convincing evidence that Respondent committed violations of

Chapter 475, Florida Statutes. Ferris v. Turlington , 510 So. 2d

292, 294 (Fla. 1987); Balino v. Department of Health &

Rehabilitative Services , 348 So. 2d 349, 350 (Fla. 1st DCA

1977).

43. Clear and convincing evidence “requires more proof

than a ‘preponderance of the evidence’ but less than ‘beyond and

to the exclusion of a reasonable doubt.’” In re Gra ziano , 696

So. 2d 744, 753 (Fla. 1997). It is an “intermediate standard.”

Id . The "clear and convincing" standard requires:

[T]hat the evidence must be found to be

credible; the facts to which the witnesses

testify must be distinctly remembered; the

tes timony must be precise and explicit and

the witnesses must be lacking in confusion

as to the facts in issue. The evidence must

be of such weight that it produces in the

mind of the trier of fact a firm belief or

conviction, without hesitancy, as to the

tr uth of the allegation to be established .

. . .

In re Davey , 645 So. 2d 398, 404 (Fla. 1994), quoting Slomovitz

v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983).

44. Section 475.624, Florida Statutes (1995), states in

pertinent part:

The board m ay deny an application for

registration, licensure, or certification;

may investigate the actions of any appraiser

registered, licensed or certified under this

part; may reprimand or impose an

administrative fine not to exceed $5,000 for

each count or sepa rate offense against any

such appraiser; and may revoke or suspend,

for a period not to exceed 10 years, the

registration, license, or certification of

any such appraiser, or place any such

appraiser on probation if it finds that the

registrant, licensee o r certificate holder:

* * *

(2) Has been guilty of . . . culpable

negligence or breach of trust in a business

transaction . . . .

* * *

(14) Has violated any standard for the

development or communication of a real

estate appraisal or other provision of the

Uniform Standards of Professional Appraisal

Practice.

* * *

(15) Has failed or refused to exercise

reasonable diligence in developing an

appraisal or preparing an appraisal report.

45. The USPAP Rules (1996 Edition) at issue here are set

forth below, without the Comments:

Standards Rule 1 - 1

In developing a real property appraisal, an

appraiser must:

(a) Be aware of, understand, and employ

those recognized methods and techniques that

are necessary to produce a credible

appraisal;

(b) not commit a substantial error of

omission or commission that significantly

affects an appraisal;

(c) not render appraisal services in a

careless or negligent manner, such as a

series of errors that, considered

individually, may not significantly affec t

the results of an appraisal, but which, when

considered in the aggregate, would be

misleading.

Standards Rule 1 - 2

In developing a real property appraisal, an

appraiser must observe the following

specific appraisal guidelines:

(a) adequately identify the real estate,

identify the real property interest,

consider the purpose and intended use of the

appraisal, consider the extent of the data

collection process, identify any special

limiting conditions, and identify the

effective date of the appraisal;

* * *

(c) consider easements, restrictions,

encumbrances, leases, reservations,

covenants, contracts, declarations, special

assessments, ordinances, or other items of a

similar nature;

Standards Rule 1 - 3

In developing a real property appraisal, an

appra iser must observe the following

specific appraisal guidelines:

(a) consider the effect on use and value of

the following factors: existing land use

regulations, reasonably probable

modifications of such land use regulation,

economic demand, the physical adaptability

of the real estate . . . .

Standards Rule 1 - 4

In developing a real property appraisal, an

appraiser must observe the following

specific appraisal guidelines, when

applicable:

* * *

(b) collect, verify, analyze, and

reconcile:

* * *

(ii i) such comparable sales data,

adequately identified and described, as are

available to indicate a value conclusion;

* * *

(g) identify and consider the appropriate

procedures and market information required

to perform the appraisal, including all

phys ical, functional, and external market

factors as they may affect the appraisal;

Standards Rule 2 - 1

Each written or oral real property appraisal

report must:

(a) clearly and accurately set forth the

appraisal in a manner that will not be

misleading;

(b ) contain sufficient information to

enable the person(s) who are expected to

receive or rely on the report to understand

it properly;

(c) clearly and accurately disclose any

extraordinary assumptions or limiting

conditions that directly affects the

appr aisal and indicate its impact on value;

Standards Rule 2 - 2

Each written real property appraisal report

must be prepared under one of the following

three options and prominently state which

option is used: Self - Contained Appraisal

Report, Summary Apprai sal Report or

Restricted Appraisal Report.

* * *

(b) The Summary Appraisal Report must:

(i) identify and provide a summary

description of the real estate being

appraised;

46. Respondent violated the above - referenced USPAP

Standard Rules in cont ravention of Section 475.624(14), Florida

Statutes (1995). Additionally, Respondent has failed to

exercise reasonable diligence in developing an appraisal report

in violation of Section 475.624(15), Florida Statutes (1995).

47. Finally, Respondent is guilty of breach of trust

and/or culpable negligence in violation of Section 475.624(2),

Florida Statutes (1995). Respondent breached the trust of his

clients by failing to preserve their interests in preparing an

appraisal that was overvalued, mislea ding, and inaccurate. He

committed culpable negligence by recklessly failing to

administer his affairs in a manner in which he knew or should

have known would cause harm to his clients.

48. The disciplinary guidelines for violation of Section

475.62 4, Florida Statutes (1995), are contained in Florida

Administrative Code Rule 61J1 - 8.002,. The penalty range

associated with a violation of Section 475.624(2), Florida

Statutes (1995), for culpable negligence and breach of trust is

to impose a penalty fro m a $1,000 fine to a one - year suspension.

The penalty range associated with a violation of Section

475.624(14), Florida Statutes (1995), is to impose a penalty

from a five - year suspension to revocation and an administrative

fine of $1,000. The penalty ra nge typically attributed to a

violation of Section 475.624(15), Florida Statutes (1995), is to

impose a penalty from a five - year suspension to revocation and

an administrative fine of $1,000.

49. Florida Administrative Code Rule 61 - J2 - 8.002(4), sets

forth the applicable mitigating factors. Under these guidelines

any penalty bestowed upon the Respondent should be mitigated

because he has been a state - certified general real estate

appraiser since 1992, performing thousands of appraisals since

1985, wit h no prior disciplinary history. Additionally, the

imposition of a fine or suspension of his license would result

in a great degree of financial hardship given the nature of his

business and its dependency on his appraisal practice.

50. In aggrava tion of the penalty, the evidence

establishes the financial harm suffered by Mr. Brewer and the

other owners of the Subject Property. The financial harm

required the initiation and settlement of a civil suit against

Respondent in order to recoup their los ses.

51. On balance, the mitigating factors outweigh the

aggravating factors. This is especially true in light of

Respondent's voluntary restriction of his appraisal practice to

single - family residential appraisals.

RECOMMENDATION

Based upo n the forgoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED:

That Petitioner enter a final order suspending Respondent's

license for one year and imposing an administrative fine in the

amount of $3,000.

DONE AND ENTERED this 17th day of March, 2004, in

Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(8 50) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 17th day of March, 2004.

COPIES FURNISHED :

S. L. Smith, Esquire

Department of Business and

Professional R egulation

400 West Robinson Street, Suite 802N

Orlando, Florida 32801

Robert E. Thielman, Jr., Esquire

Baker & Hostetler, LLP

Post Office Box 112

Orlando, Florida 32801 - 0112

Jason Steele, Director

Division of Real Estate

Department of Business and

Pr ofessional Regulation

400 West Robinson Street

Suite 802, North

Orlando, Florida 32801

Nancy Campiglia, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

NOTI CE 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 t his case.