06-002275PL Department Of Business And Professional Regulation, Florida Real Estate Appraisal Board vs. Alfredo Peyno Status: Closed Recommended Order on Tuesday, November 14, 2006.

Summary: Respondent did not violate the records retention requirement. The factual predicate was not established for the other alleged violations.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

FLORIDA REAL ESTATE APPRAISAL )

BOARD, )

)

Petitioner, )

)

vs. ) Case No. 06 - 2275PL

)

ALFREDO PEYNO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case on

October 6 , 2006, by video teleconference at sites in Orlando,

Miami , and Tallahassee, Florida, before Administrative Law Judge

Claude B. Arrington of the Division of Administrative Hearings

(DOAH).

APPEARANCES

For Petitioner: Raquel White, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite 801N

Orlando, Florida 32801 - 1757

For Respondent: John O. Sutton, Esquire

Jamerson & Sutton, LLP

2655 Le Jeune Road, Penthouse II

Coral Gables, Florida 33134

STATEMENT OF THE ISSUE

Whether Respondent, an appraiser, committed the offenses

alleged in Counts I, II, and IV of the Amended Administrative

Complaint 1 and, if so, the penalties that should be imposed.

P RELIMINARY STATEMENT

Petitioner’s Amended Administrative Complaint , which was

served on Respondent prior to the referral of the proceeding to

DOAH, alleged certain facts pertaining to an appraisal report

( the Report) signed by Respondent and Celso Paul Mes a dated

November 30, 1998. Petitioner alleged that the R eport contained

certain specified errors. Specifically, paragraph 5 of the

Amended Administrative Complaint referenced the subject R eport

and alleged the following deficiencies :

5. The Report con tained the following

errors:

a. There was no documentation in the work

filed to support the negative adjustment

made to comparable sale 1 for its pool;

b. There was no documentation in the work

file to support the negative adjustments

made to compara ble sales 1, 2, and 3 for

their larger site lots;

c. There was no documentation in the work

file to support the values reached under the

Cost Approach;

d. Respondent failed to state the

intended use of the Report, and the intended

users of the Report ;

e. Respondent failed to keep and maintain

an original copy of the Report as

communicated to the client.

B ased on the deficiencies alleged in paragraph 5,

Petitioner alleged in Counts I, II, and IV the following:

Count I: Based upon the foregoing,

Respondent has violated a standard for the

development or communication of a real

estate appraisal, specifically Standard Rule

1 - 2(a) and (b), or other provisions of the

Uniform Standards of Professional Appraisal

Practice (1998) (USPAP) in violation of

Se ction 475.624(14), Florida Statutes

(1998). [ 2 ]

Count II: Based upon the foregoing,

Respondent has violated a standard for the

development or communication of a real

estate appraisal, specifically Standard Rule

1 - 4(a) and (b), or other provisions of USPAP

in violation of Section 475.624(14), Florida

Statutes

Count IV: Based upon the foregoing,

Respondent is guilty of failing to retain,

for at least five years, original or true

copies of any contracts engaging the

appraiser’s services, appraisal reports, and

supporting data assembled and formulated by

the appraiser in preparing appraisal reports

in violation of Section 475.629, Florida

Statutes, and, therefore, in violation of

Section 475.624(4), Florida Statutes.

Respondent timely requested a formal he aring , to challenge

the allegations of the Amended Administrative Complaint, the

matter was referred to DOAH, and this proceeding followed.

At the final hearing, Petitioner presented the testimony of

one witness, Kathleen Koeb e rich, who is both Chief of

Enforcement for Petitioner’s Division of Real Estate (which

includes appraisers) and the custodian of records. This witness

served only to authenticate Petitioner’s exhibits, as she had no

direct know ledge of the investigation that culminated in the

filin g of the Amended Administrative Complaint , and she was not

called to give expert testimony . Petitioner presented three

E xhibits. Petitioner’s Exhibit 1 was the Investigative Report

prepared by Tibizay Morales, an investigator who is no longer

employed by Petitioner . Petitioner’s Exhibit 2 was a

Supplemental Investigative Report prepared by Ms. Morales.

Petitioner’s Exhibit 3 was Respondent’s certification as an

appraiser.

Respondent presented the testimony of Diana DeFonzo, who

was qualified and accep ted as an expert. Respondent offered

one composite E xhibit , consisting of the Amended Administrative

Complaint and the attachments thereto.

A Transcript of the Hearing was filed October 3 0, 2006.

Both parties timely filed Proposed Recommended Orders , w hich

have been duly considered by the undersigned in the preparation

of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the agency of the State of Florida

charged with regulating and enforcing the statutory provisions

pertaining to persons hol ding licenses as real estate

appraisers . Petitioner is charged with the duty to prosecute

administrative complaints pursuant to Chapters 20, 120, 455, and

475, Florida Statutes, and the rules promulgated pursuant

thereto.

2. The Report was dated Novemb er 30, 1998. At th at time ,

Respondent was a registered appraiser who could only perform

appraisals under the supervision of a certified appraiser. As

of November 30, 1998, Mr. Mesa served as the certified appraiser

who supervised Respondent. Respondent ’ s expert witness

described Respondent’s status while he worked for Mr. Mesa as

being a “trainee , ” “apprentice , ” or “journeyman . ”

3. Both Respondent and Mr. Mesa signed the Report. Above

Respondent’s signature is the designation “Appraiser . ” Under

Resp ondent’s signature is his state license number and a

designation indicating his status as a registered real estate

appraiser. Above Mr. Mesa’s signature is the designation

“Supervisory Appraiser . ” Under Mr. Mesa’s signature is his

state license number an d a designation indicating his status as

a certified real estate appraiser. At the top of the Report

were the words “Mesa Appraisals . ” On the bottom of the Report

were the words “Mesa Appraisals, Inc.”

4. Petitioner failed to prove the factual predicate se t

forth in p aragraph 5(a) of the Amended Administrative Complaint.

The testimony of Ms. DeFonzo established that there was adequate

documentation contained within the Report to support the

negative adjustment to comparable sale 1 because that compara ble

had a swimming pool and the subject property did not.

5. Petitioner failed to prove the factual pred icate set

forth in p aragraph 5(b ) of the Amended Administrative Complaint.

The testimony of Ms. DeFonzo established that there was adequate

document ation contained within the Report to support the

negative adjustments to comparable sales 1, 2, and 3 because

those comparable sales were sited on larger lots than the

subject property.

6. Petitioner failed to prove the factual predicate set

forth in p ara graph 5(c) of the Amended Administrative Complaint.

The testimony of Ms. DeFonzo established that there was adequate

documentation contained within the Report to support the values

reached under the cost approach methodology.

7. Petitioner failed to pr ove the factual predicate set

forth in p aragraph 5(d) of the Amended Administrative Complaint.

The testimony of Ms. DeFonzo established that the Report

reflected the intended use of the Report and the intended users

of the Report. The Report reflects tha t it was for lending

purposes and identifies the lender /client.

8. As to paragraph 5(e), t he testimony of Ms. DeFonzo

established that industry practice was for the certified

appraiser to maintain the original appraisal file and for the

registered apprai ser not to keep a copy of the original file

because of the confidential and proprietary information that may

be contained in appraisal file . There was no competent evidence

that Respondent acted inconsistently with that industry

practice. 3

CONCLUSIONS O F LAW

9. The Division of Administrative Hearings has

jurisdiction over the subject matter of and the parties to this

proceeding pursuant to Section s 120.569 and 120.57(1), Florida

Statutes (2006) .

10. Petitioner bears the burden of proving that Responde nt

committed the violations alleged in the administrative complaint

by clear and convincing evidence. See Department of Banking and

Finance, Division of Securities and Investor Protection v.

Osborne Stern and Company , 670 So. 2d 932, 935 (Fla. 1996); Pic

N' Save of Central Florida v. Department of Business Regulation ,

601 So. 2d 245, 249 (Fla. 1st DCA 1992); and Section

120.57(1)(j), Florida Statutes.

11. Clear and convincing evidence "requires more proof

than a 'preponderance of the evidence' but less t han 'beyond and

to the exclusion of a reasonable doubt.'" In re Graziano , 696

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

Id. For proof to be considered "'clear and convincing' . . .

the evidence must be found to be credible; the fac ts to which

the witnesses testify must be distinctly remembered; the

testimony must be precise and explicit ; and the witnesses must

be lacking in confusion as to the facts in issue. The evidence

must be of such weight that it produces in the mind of the t rier

of fact a firm belief or conviction, without hesitancy, as to

the truth of the allegations sought to be established." In re

Davey , 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval,

from Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA

19 83).

12. Section 475.624(14), Florida Statutes, provides that

an appraiser may be disciplined for violating any provision of

the USPAP.

13. Section 475.629, Florida Statutes, pertains to the

retention of records and provides, in relevant part, as follo ws:

An appraiser registered, licensed, or

certified under this part shall retain, for

at least 5 years, original or true copies of

any contracts engaging the appraiser's

services, appraisal reports, and supporting

data assembled and formulated by the

app raiser in preparing appraisal reports.

The period for retention of the records

applicable to each engagement of the

services of the appraiser runs from the date

of the submission of the appraisal report to

the client. These records must be made

available by the appraiser for inspection

and copying by the department on reasonable

notice to the appraiser. . . .

14. Section 475.624(6), Florida Statutes, provides that an

appraiser may be disciplined for violating any applicable

statute.

15. The alleged vio lation s set forth in Count s I and II of

the Amended Administrative Complaint are predicated on the

factual assertion s set forth in paragraph 5(a) – (d) of the

Amended Administrative Complaint. Petitioner failed to prove

those factual assertions and, conse quently, failed to prove the

alleged violation s set forth in Counts I and II .

16. The prosecution of the alleged violation set forth in

Count II I of the Amended Administrative Complaint was abandoned

by Petitioner.

17. The violation alleged in Count IV of the Amended

Administrative Complaint is based on Petitioner’s construction

of Section 475.629, Florida Statutes , as argued by its counsel .

Petitioner ’s counsel contends that the statute requires

Respondent to keep a copy of the subject appraisal file even

though he was a registered appraiser working under the

supervision of a certified appraiser. Petitioner ’s counsel

correctly argues that an agency’s interpretation of statutes it

is required to enforce is entitled to deference unless the

interpretatio n contradicts the plain meaning of the statute or

is clearly erroneous or contrary to law. See Level 3

Communications, LLC v. Jacobs , 841 So. 2d 447 (Fla. 2003) and

Osorio v. Board of Professional Surveyors and Mappers , 898 So.

2d 188, (Fla. 5th DCA 2005) . However, Petitioner has not cited

any rule or prior agency order that adopts the construction of

the statute argued by its counsel. No deference is required to

be given counsel’s argued construction merely because counsel is

representing an agency. It is concluded that the construction

of the statute as argued by agency counsel is overly broad and

contrary to industry practice. The appropriate construction,

which is consistent with industry practice, would only require

for t he appraisal file to be mai ntained and for the registered

appraiser to have access to the appraisal file , if necessary.

In this proceeding, it is concluded that t he records retention

requirement set forth in Section 475.629, Florida Statutes, was

satisfied because the working file was available for inspection

at Mr. Mesa’s office. Respondent should be found not guilty of

the alleged violation set forth in Count IV.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that Peti tioner enter a Final Order finding

Respondent not guilty of each of the count s set forth in the

Amended Administrative Complaint.

DONE AND ENTERED this 14th day of November , 2006, in

Tallahassee, Leon County, Florida.

S

CLAUDE B. ARRINGTON

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 (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 14th day of November , 2006.

ENDNOTES

1/ Petitioner voluntarily abandoned the prosecution of Count III

of the Amended Administrative Complaint at the beginning of the

formal hearing.

2/ Unless o therwise indicated, all references to statutes are to

Florida Statutes (1998).

3/ Petitioner’s E xhibits reflect that by the time Petitioner

requested a copy of the working file for the appraisal,

Respondent’s licensure status had been elevated from a

reg istered appraiser to a certified appraiser. Respondent had

left the employ of Mr. Mesa’s company and had started his own

company. A letter in the Petitioner’s Exhibit 2 dated March 7,

2002, appears to be from Respondent to Ms. Morales. That letter

refle cts that the original working file was left with Mr. Mesa.

It appears that Ms. Morales subsequently obtained what purports

to be a complete copy of the working file from Mr. Mesa. There

was no evidence that Respondent could not have obtained a copy

of th e working file from Mr. Mesa had he been required to do so.

COPIES FURNISHED :

Raquel White, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite 801N

Orlando, Florida 32801 - 1757

John O . Sutton, Esquire

Jamerson & Sutton, LLP

2655 Le Jeune Road, Penthouse II

Coral Gables, Florida 33134

Frank Gregoire, Chairman

Real Estate Appraisal Board

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 801N

Orlando, Florida 32802 - 1900

Josefina Tamayo, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to sub mit 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.