09-003947PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Michael Anthony Facendo Status: Closed Recommended Order on Tuesday, March 30, 2010.

Summary: Petitioner failed to prove Respondent appraiser committed breach of trust or culpable negligence in preparing appraisal report; although proof sufficient to establish violation of USPAP recordkeeping rule, USPAP 2006 could not be used to prove violation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-3947PL

)

MICHEAL ANTHONY FACENDO, )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

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

on October 21, 2009, by video teleconference, with the parties

appearing in Fort Lauderdale, Florida, before Patricia M. Hart,

a duly-designated Administrative Law Judge of the Division of

Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert Minarcin, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801-1757

For Respondent: Norman Malinski, Esquire

Law Offices of Norman Malinski, P.A.

2875 Northeast 191st Street, Suite 508

Aventura, Florida 33180

STATEMENT OF THE ISSUE

Whether the Respondent committed the violations stated in

the Administrative Complaint dated March 13, 2009, and, if so,

the penalty that should be imposed.

PRELIMINARY STATEMENT

In an eight-count Administrative Complaint dated March 13,

2009, the Department of Business and Professional Regulation,

Division of Real Estate ("Department"), charged Michael Anthony

Facendo with having violated Sections 475.6221(1); 475.623; and

475.624(1), (2), (4) and (14), Florida Statutes (2006) 1 ; and the

Uniform Standards of Professional Appraisal Practice ("USPAP")

(2006) Record Keeping Section of the Ethics Rule; the Competency

Rule; Standards Rule 1-1(b) and (c); Standards Rule 2-1(a) and

(b); and Standards Rule 2-2(b)(viii). The charges related to an

Individual Condominium Unit Appraisal Report ("Appraisal

Report") prepared on or about November 30, 2006, on property

located at 281 Southwest Palm Drive, Unit 106, Port St. Lucie,

Florida 34986 ("Palm Drive property").

The Department alleged the following facts in the

Administrative Complaint to support the violations charged:

4. On or about November 20, 2006, Michael

Facendo . . . developed and communicated an

appraisal report (Report) for property

commonly known as 281 Southwest Palm Drive,

Unit 106, Port St. Lucie, Florida 34986,

(Subject Property), and estimated its value

as $283,000.00. . . .

5. Respondent made the following errors and

omissions on the Report:

A) Respondent states in Subject

section of the Report that Subject Property

has been offered for sale in the past twelve

months, but fails to provide date(s) or

offering price(s) on the Report;

B) Respondent states in the Contract

section of the Report that the sales

contract for the Subject Property was

analyzed, yet the workfile fails to contain

a copy of the sales contract;

C) Failure to provide a listing

history or listing price(s) for the Subject

Property, when Respondents [sic] notes it is

offered for sale in the Report;

D) Failure to state the neighborhood

boundaries in the Neighborhood section of

the Report; and

E) Failure to provide a sketch of the

Subject Property or verify its gross living

area.

6. The workfile lacks a copy of the sales

contract for the Subject Property.

7. There is no documentation in the

workfile to support the One-Unit Housing

data in the Neighborhood section of the

Report.

8. There is no documentation in the

workfile to support the Present Land

Use % data in the Neighborhood section of

the Report.

9. There is no documentation in the

workfile to support the 20 comparable

properties currently offered for sale in the

subject neighborhood as listed in the Sales

Comparison section of the Report.

10. There is no documentation in the

workfile to support the 72 comparable sales

in the subject neighborhood for the past

twelve months as listed in the Sales

Comparison section of Report 1 or

Report 2. [ 2 ]

11. The is no documentation in the workfile

to support the # [of] Units for Sale; # of

Units Sold; # of Units Rented; or # of Owner

Occupied Units in the Project Information

section of the Report.

12. There is no documentation in the

workfile to support the ages for the Subject

Property or any of the comparable sales.

13. There is no documentation in the

workfile to support the $10,000 View

adjustment for comparable sale 3 and

comparable sale 4 in the Sales Comparison

section of the Report. . . . [ 3 ]

14. During the investigation it was learned

that Respondent failed to register his

business name with the Department.

15. During the investigation it was learned

that Respondent failed to ensure that his

trainee had the same business address as

Respondent. . . .

16. Respondent's business address is 13790

NW 4 Street, #101, Sunrise, Florida. The

appraisal was completed on a property

located in Port St. Lucie, Florida, which is

approximately 85 miles away.

17. Respondent failed to note, discuss or

analyze the sale incentives for the Subject

Property as listed in the workfile

documentation.

Mr. Facendo timely disputed the material facts stated in the

Administrative Complaint and requested an administrative

hearing. The Department transmitted the matter to the Division

of Administrative Hearings for assignment of an administrative

law judge, and, pursuant to notice, the final hearing was held

on October 21, 2009.

At the hearing, the Department presented the testimony of

Dawn Luchik and Francois K. Gregoire; Petitioner's Exhibits 1

and 3 through 5 were offered and received into evidence.

Mr. Facendo testified in his own behalf and presented the

testimony of Dawn Luchik; Respondent offered no exhibits into

evidence. At the Department's request, official recognition was

granted to Chapter 475, Part II, Florida Statutes (2006), and to

Florida Administrative Code Rule Chapter 61J1 (2006).

The one-volume transcript of the proceedings was filed with

the Division of Administrative Hearings on November 23, 2009.

The Department timely filed its proposed findings of fact and

conclusions of law. Mr. Facendo failed to file his proposed

findings of fact and conclusions of law timely. On December 18,

2009, Mr. Facendo filed a Motion for Extension of Time to File

Respondent's Proposed Recommended Order, in which he stated that

he did not obtain a copy of the transcript of the proceedings

until December 10, 2009. Mr. Facendo requested an extension

until December 22, 2009, for filing his proposed findings of

fact and conclusions of law. The Department filed a response in

opposition to the request. Having considered the grounds for

the motion and the arguments stated in the response in

opposition to the motion, the Motion for Extension of Time to

File Respondent's Proposed Recommended Order is granted, and

Mr. Facendo's Proposed Recommended Order, filed December 21,

2009, is accepted. The proposed findings of fact and

conclusions of law of both parties have, therefore, been

considered in the preparation of 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 Florida Real Estate Appraisal Board ("Board") is

the entity responsible for licensing, regulating, and imposing

discipline upon real estate appraisers operating in Florida.

See §§ 475.613(2) and .624, Fla. Stat.

2. The Department is the state agency responsible for

investigating complaints and, upon a finding of probable cause

by the Board, issuing administrative complaints and prosecuting

disciplinary actions involving real estate appraisers in

Florida. See § 455.225(1)(a), (4), and (6), Fla. Stat.

3. At all times pertinent to these proceedings,

Mr. Facendo was a state-certified real estate appraiser, having

been issued license number RD-2598, and his business office

was located in 6950 Cypress Road, Suite 206, Plantation,

Florida 33317. Subsequent to November 19, 2008, Mr. Facendo's

business address was 13790 Northwest 4th Street, # 101, Sunrise,

Florida 33325

4. From November 6, 2007, until the time of the final

hearing in this case, Traci Lyn Trueman, a registered trainee

real estate appraiser, was supervised by Mr. Facendo, and she

worked full-time in Mr. Facendo's business office. Msueman

registered with the Department her home address of 183 Southwest

3rd Street, Pompano Beach, Florida, 33060, rather than the

business address of Mr. Facendo's office. As soon as

Mr. Facendo learned that Msueman had registered her home

address with the Department, he had her change the address to

her business address.

5. In 1988, Mr. Facendo moved to Fort Lauderdale, Florida.

He obtained his real estate sales license, and he sold real

estate in the Fort Lauderdale area until approximately 1990,

when he moved to Port St. Lucie, Florida. Mr. Facendo sold real

estate in the Port St. Lucie area for several years, and,

because he lived and sold real estate in the Port St. Lucie

area, Mr. Facendo became familiar with the real estate market in

that area.

6. In 1992, Mr. Facendo moved back to the Fort Lauderdale

area and began training in order to become certified as a real

estate property appraiser. Mr. Facendo received his

certification in 1995, and he has appraised primarily

residential real estate in Miami-Dade County, Broward County,

Palm Beach County, and Port St. Lucie.

7. In November 2006, Mr. Facendo's office received a

request from South Florida Lending Group for an appraisal on the

Palm Drive property, which is located in The Club at St. Lucie

West Condominium. The Appraisal Report prepared by Mr. Facendo

pursuant to the request had an effective date of November 30,

2006, and it was signed December 11, 2006. Mr. Facendo also

compiled a workfile to support the information contained in the

Appraisal Report.

8. After receiving the request to prepare an appraisal of

the Palm Drive property, Mr. Facendo consulted St. Lucie County

public records and other online services available in his

business office and verified that the Club at St. Lucie West

Condominium was a condominium conversion project in which rental

apartments built in 2003 were converted into condominium

apartments in October 2005. Mr. Facendo did not include

reference to the sources of the information or copies of the

documentation from which he obtained the information because the

sources were ones commonly used and were considered to be

accurate.

9. Mr. Facendo visited the Club at St. Lucie West

Condominium sales office and met with Lori Bennett and a man

named Jack. Mr. Facendo was taken to Unit 106 by Jack, where he

took several pictures of the exterior of Unit 106 and inspected

the unit's interior.

10. As part of his inspection of Unit 106, Mr. Facendo

looked at the floor plan and the condition of the property; made

a count of the number of rooms and their functions; and noted

the type of flooring, the type of amenities, and the upgrades in

the unit.

11. Mr. Facendo did not measure the floor space in

Unit 106 because he had previously prepared appraisals of

several units in the Club at St. Lucie West Condominium that

were the same model as Unit 106, which was the Kingston model,

and he had previously measured a unit whose floor plan and

square footage were identical to those of Unit 106. Mr. Facendo

included with the Appraisal Report a copy of the floor plan of

the Kingston model, which showed both the total square feet and

the square feet under air conditioning of the unit. It is not

unusual, in appraisals of condominium units, to include a pre-

printed sketch of the unit's floor plan rather than a sketch of

the floor plan prepared by the appraiser.

12. After inspecting the Palm Drive property, Mr. Facendo

met with Ms. Bennett, who was the sales representative for Club

at St. Lucie West Condominium who handled all of the appraisals

for the project. Mr. Facendo and Ms. Bennett met in the Club at

St. Lucie West Condominium's sales office, and Ms. Bennett gave

Mr. Facendo access to a log book maintained in the sales office

listing individual buyers and information regarding each unit of

Club at St. Lucie West Condominium.

13. The Club at St. Lucie West Condominium property was

purchased by SunVest, LLC, in or about September 2005. The

property consisted of rental apartments built in 2003 that the

new owner converted into condominium apartments in October 2005.

At the times pertinent to this matter, the developer was

offering the condominium units for sale, and Mr. Facendo noted

in the Subject section of the Appraisal Report that Unit 106 had

been offered for sale during the twelve months prior to

November 30, 2006, the effective date of Mr. Facendo's appraisal

of the unit.

14. Mr. Facendo did not include in the Appraisal Report

any data source, offering price, or dates related to the sales

history because there was no sales history on Unit 106.

According to the information obtained by Mr. Facendo from the

Club at St. Lucie West Condominium sales office and by checking

the online version of the multiple listing services available in

Mr. Facendo's business office, the developer was directly

marketing and selling the condominium units and had not listed

them with a multiple listing service. Mr. Facendo, therefore,

stated in the sales history portion of the Appraisal Report only

that "subject has been offered for sale by the developer of the

condo development."

15. Mr. Facendo reviewed the log book for the condominium

units maintained in the Club at St. Lucie West Condominium sales

office, and he reviewed the sales and purchase contract for

Unit 106. From this information, he verified the name of the

buyer, as well as the contract price of $282,990.00.

Mr. Facendo also verified that the sales and purchase contract

provided that the buyer was to receive $4,500.00 in sales

concessions on Unit 106. 4 Ms. Bennett did not allow Mr. Facendo

to make a copy of the contract, and, as a result, Mr. Facendo

did not include a copy of the sales and purchase contract for

Unit 106 in the workfile he prepared for the appraisal.

16. Mr. Facendo did not define the neighborhood boundaries

in the Neighborhood section of the Appraisal Report by reference

to streets, highways, or landmarks. Rather, in the neighborhood

boundaries portion of the Neighborhood section, Mr. Facendo

described the neighborhood as being "located in a residential

neighborhood with good access to family amenities," and he

referenced the location map attached to the Appraisal Report.

The location map showed the Palm Drive property and three of the

comparables grouped around an arrow located east of U.S.

Interstate Highway 95. 5

17. Mr. Facendo noted in the Present Land Use % portion of

the Neighborhood section of the Appraisal Report that one-unit

residences composed 60 percent of the present land use in the

neighborhood. He did not include any documentation in the

workfile for the Appraisal Report to support this information.

18. In the Project Information section of the Appraisal

Report, Mr. Facendo noted that, in the Club at St. Lucie West

Condominium, 160 units were offered for sale, 220 units had been

sold, five percent of the units were rented, and 95 percent of

the units were occupied by the owners. There is no

documentation in Mr. Facendo's workfile for this appraisal to

support this information.

19. Mr. Facendo noted in the Appraisal Report that there

were 20 comparable properties currently offered for sale in the

subject neighborhood, ranging in price from $210,000.00 to

$300,000.00. He obtained this data from information provided by

the developer that he reviewed in the condominium sales office.

He did not include in his workfile any documentation related to

these properties and their offering prices.

20. Mr. Facendo chose four properties as comparable sales

to determine the value of the Palm Drive property through a

comparable-sales analysis. The four properties chosen as

comparable to the Palm Drive property were located in the Club

at St. Lucie West Condominium and were virtually identical to

Unit 106. The Palm Drive property and three of the four

comparable-sales properties were located on the first floor of

the condominium project, and one comparable-sales property was

located on the second floor of the condominium project.

21. All four comparable-sales properties were the Kingston

Model, the same model condominium unit as Unit 106, and the

comparable-sales properties were virtually identical to the Palm

Drive property. Mr. Facendo noted in the Appraisal Report,

however, that Unit 106 had been upgraded with granite

countertops, stainless steel appliances, and new flooring.

22. The sales price of the Palm Drive property was noted

in the Appraisal Report as $282,990.00; the sales prices of the

three first-floor comparable-sales properties were $272,990.00,

285,990.00, and $291,990.00, and the sales price of the second-

floor comparable-sales property was $254,990.00.

23. Mr. Facendo verified these sales prices by reviewing

the log book maintained in the Club at St. Lucie West

Condominium sales office and by information obtained from the

HUD-1 Settlement Statements prepared for the sales transaction

for each of the comparable-sales properties. The workfile

contained copies of the HUD-1 Settlement Statements.

Mr. Facendo also noted in the Prior Sale History section of the

Appraisal Report that there was no sales history on the

comparable-sales properties because they were all located in the

Club at St. Lucie West Condominium.

24. Mr. Facendo made a $10,000.00 adjustment for the view

in the sales price of comparable sale # 3, a unit on the second

floor of the Club at St. Lucie West Condominium, raising its

adjusted sale price to $264,990.00. Mr. Facendo also made a

$10,000.00 adjustment for the view in the sales price of

comparable sale # 4, the unit next to Unit 106, raising its

adjusted sale price to $295,990.00. Mr. Facendo did not include

any documentation in the workfile to support these adjustments.

25. Mr. Facendo looked at comparable sales outside the

Club at St. Lucie West Condominium, but he decided not to use

these properties as comparable-sales properties. Mr. Facendo

chose four comparables in the same condominium project because

the Club at St. Lucie West was a condominium conversion and was

unique in the area. In his opinion, the sales prices of units

in the Club at St. Lucie West Condominium would be most reliable

in gauging the value of Unit 106.

26. Based on his analysis of the four comparable-sales

properties, Mr. Facendo valued the Palm Drive property at

$283,000.00.

27. Documentation was included in the workfile for the

Appraisal Report that identified a sales incentive program

offered to buyers by the developer of the Club at St. Lucie West

Condominium. The sales incentives for buyers included payment

by the developer of a three percent contribution at closing; the

cost of documentary stamps and recording of the deed; owners

title insurance; one year's homeowners' association fees; a

one year's warranty; and a decorator's credit within 30 days of

closing, the amount depending on the type of unit purchased.

The page in the workfile listing the sales incentives was not

dated and appeared to be part of sales literature provided by

the developer. Mr. Facendo did not note, discuss, or analyze

the sales incentives for the Palm Drive property in the

Appraisal Report.

28. The definition of "market value" contained in the

Appraisal Report requires that the price of the property that is

the subject of the appraisal reflect the "normal consideration

for the property sold unaffected by special or creative

financing or sales concessions granted by anyone associated with

the sale." To this end, appraisers must make adjustments to the

comparable-sales properties, but the dollar amount of the

adjustments "should approximate the market's reaction to the

financing or concessions based on the appraiser's judgment."

Mr. Facendo did not make any adjustments to the price of the

comparable-sales properties in determining the value of the Palm

Drive property.

29. The Ethics Rule of the USPAP (2006) provides in

pertinent part as follows:

Record Keeping

An appraiser must prepare a workfile for

each appraisal, appraisal review, or

appraisal consulting assignment. The

workfile must include:

• the name of the client and the

identity, by name or type, or 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; and

• 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.

30. The Competency Rule of the USPAP (2006) provides as

follows:

Prior to accepting an assignment or entering

into an agreement to perform any assignment,

an appraiser must properly identify the

problem to be addressed and have the

knowledge and experience to complete the

assignment competently; or alternatively,

must:

1. disclose the lack of knowledge

and/or experience to the client before

accepting the assignment;

2. take all steps necessary or

appropriate to complete the assignment

competently; and

3. describe the lack of knowledge

and/or experience and the steps taken to

complete the assignment competently in the

report. [ 6 ]

31. USPAP (2006) Standards Rule 1-1(b) and (c) provides:

In developing a real property appraisal, an

appraiser must:

* * *

(b) not commit a substantial error of

omission or commission that significantly

affects an appraisal; and

(c) not render appraisal services in a

careless or negligent manner, such as by

making a series of errors that, although

individually might not significantly affect

the results of an appraisal, in the

aggregate affects the credibility of those

results.

32. USPAP (2006) Standards Rule 2-1(a) and (b) provides:

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 intended users of the appraisal

to understand the report properly[.]

33. USPAP (2006) Standards Rule 2-2(b)(viii) provides:

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 Appraisal Report, or

Restricted Use Appraisal Report.[footnote

omitted.]

* * *

(b) The content of a Summary Appraisal

Report must be consistent with the intended

use of the appraisal and, at a minimum:

* * *

(viii) summarize the information analyzed,

the appraisal methods and techniques

employed, and the reasoning that supports

the analyses, opinions, and conclusions;

exclusion of the sales comparison approach,

cost approach, or income approach must be

explained.

CONCLUSIONS OF LAW

34. 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 (2009).

35. In the Administrative Complaint, the Department seeks

to suspend or revoke Mr. Facendo's appraiser's certificate and

to impose an administrative fine. Accordingly, the Department

must prove the charges against Mr. Facendo by clear and

convincing evidence. Department of Banking & Finance, Div. of

Securities & Investor Protection v. Osborne Stern & Co. , 670 So.

2d 932, 933-34 (Fla. 1996)(citing Ferris v. Turlington , 510 So.

2d 292, 294-95 (Fla. 1987)); Nair v. Department of Business &

Prof'l Regulation , 654 So. 2d 205, 207 (Fla. 1st DCA 1995).

36. In Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla.

4th DCA 1983), the court defined clear and convincing evidence

as follows:

Clear 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 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 trier of fact a firm belief or

conviction, without hesitancy, as to the

truth of the allegations sought to be

established.

Id. The Florida Supreme Court adopted the description of the

clear and convincing evidence standard of proof set forth in

Slomowitz in Inquiry Concerning a Judge No. 93-62 , 645 So. 2d

398, 404 (Fla. 1994), and the court in Westinghouse Electric

Corp., Inc. v. Shuler Bros., Inc. , 590 So. 2d 986, 988 (Fla.

1st DCA 1991), rev . denied , 599 So. 2d 1279 (1992)(citation

omitted), followed the Slomowitz test, adding the interpretive

comment that "[a]lthough this standard of proof may be met where

the evidence is in conflict, . . . it seems to preclude evidence

that is ambiguous."

37. In Counts One, Three, Four, Five, Six, Seven, and

Eight of the Administrative Complaint, the Department charged

Mr. Facendo with having violated Section 475.624(2), (4),

and (14), Florida Statutes, 7 which provides in pertinent part:

The board may 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 separate 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

registered trainee, licensee, or

certificateholder:

* * *

(2) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest

conduct, culpable negligence, or breach of

trust in any business transaction in this

state or any other state, nation, or

territory; has violated a duty imposed upon

her or him by law or by the terms of a

contract, whether written, oral, express, or

implied, in an appraisal assignment; has

aided, assisted, or conspired with any other

person engaged in any such misconduct and in

furtherance thereof; or has formed an

intent, design, or scheme to engage in such

misconduct and committed an overt act in

furtherance of such intent, design, or

scheme. It is immaterial to the guilt of

the registered trainee, licensee, or

certificateholder that the victim or

intended victim of the misconduct has

sustained no damage or loss; that the damage

or loss has been settled and paid after

discovery of the misconduct; or that such

victim or intended victim was a customer or

a person in confidential relation with the

registered trainee, licensee, or

certificateholder, or was an identified

member of the general public.

* * *

(4) Has violated any of the provisions of

this part or any lawful order or rule issued

under the provisions of this part or chapter

455.

* * *

(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.

38. As a disciplinary statute, Section 475.624, Florida

Statutes, "must be construed strictly, in favor of the one

against whom the penalty would be imposed." Munch v. Department

of Prof'l Regulation, Div. of Real Estate , 592 So. 2d 1136, 1143

(Fla. 1st DCA 1992).

I. Violation of Section 475.624(2), Florida Statutes.

39. In Count Seven of its Administrative Complaint, the

Department alleged: "Based upon the foregoing, Respondent is

guilty of fraud, misrepresentation, culpable negligence, or

breach of trust in any business transaction in violation of

Section 475.624(2), Florida Statutes." The "foregoing"

apparently was intended to encompass all of the factual

allegations in the Administrative Complaint, 8 and, even though

the violations charged in Count Seven were stated in the

disjunctive, the Department did not identify in the

Administrative Complaint which of the prohibited actions and/or

conduct was at issue. In its Proposed Recommended Order,

however, the Department elected to pursue the charges of

culpable negligence and breach of trust in a business

transaction against Mr. Facendo. 9

A. Breach of trust

40. In the second sentence of paragraph 47 of its Proposed

Recommended Order, the Department asserts that Mr. Facendo

breached the trust of his client by, among other things,

"failing to disclose the array of sales concessions offered for

the Subject property." 10 Based on the findings of fact herein,

the Department has proven by clear and convincing evidence that

Mr. Facendo did fail, as alleged in paragraph 17 of the

Administrative Complaint, "to note, discuss or analyze the sale

incentives" for the Palm Drive property and the comparable-sales

properties. This omission is not, however, sufficient to

establish that Mr. Facendo violated Section 475.624(2) by

committing a breach of trust in his appraisal of the Palm Drive

property.

41. In Munch v. Department of Professional Regulation , 592

So. 2d 1136, 1143-44 (Fla. 1973), the court was concerned with a

disciplinary action against a real estate broker who was charged

with having violated Section 475.25(1)(b), Florida Statutes

(1989) by committing "fraud, misrepresentation, concealment,

false promises, false pretenses, dishonest dealing by trick,

scheme or device, culpable negligence or breach of trust in a

business transaction," language that is virtually identical to

that of Section 475.624(2), Florida Statutes. The court in

Munch stated:

It is clear that Section 475.25(1)(b) is

penal in nature. As such, it must be

construed strictly, in favor of the one

against whom the penalty would be imposed.

Holmberg v. Department of Natural Resources ,

503 So.2d 944 (Fla. 1st DCA 1987). Reading

the first clause of Section 475.25(1)(b)

(the portion of the statute which appellant

was charged with having violated in Count I

of the complaint), and applying to the words

used their usual and natural meaning, it is

apparent that it is contemplated that an

intentional act be proved before a violation

may be found. See Rivard v. McCoy , 212

So.2d 672 (Fla. 1st DCA), cert. denied, 219

So.2d 703 (Fla. 1968).

(Emphasis in original.) Therefore, to sustain the charge that

Mr. Facendo violated Section 475.624(2), Florida Statutes, by

committing a breach of trust, the Department must prove as an

element of the charge that Mr. Facendo had the intent to commit

the acts giving rise to the prohibited conduct.

42. As noted above, the Department has proven that

Mr. Facendo failed to disclose sales incentives that may have

been available to persons purchasing condominium units in the

Club at St. Lucie West Condominium. The only evidence that

sales incentives were available was a sheet of paper included in

the workfile Mr. Facendo compiled when preparing the Appraisal

Report. The Department did not present any evidence to

establish that the sales incentives were actually available to

the purchaser of the Palm Drive property, nor did it present

evidence to establish that the failure to disclose the sales

incentives in the Appraisal Report was material to the purpose

of the Appraisal Report. The Department's expert witness

testified only that sales incentives would be relevant to

determining the market value of the Palm Drive property, but he

did not explain how they would be relevant. The Department's

expert witness did not disagree with the valuation of

$283,000.00 that Mr. Facendo put on the Palm Drive property, and

he did not explain any negative effects Mr. Facendo's failure to

disclose the sales incentives had on the validity of his

Appraisal Report. Furthermore, the Department did not present

any evidence from which it could be reasonably inferred that

Mr. Facendo intentionally failed to disclose the sales

incentives.

43. The court in Munch , when considering disciplinary

action taken by the Florida Real Estate Commission against a

real estate broker for violation of those provisions of

Section 475.25(1)(b), Florida Statutes, pertinent to this

proceeding, stated:

Chapter 475 vests in the Florida Real Estate

Commission a broad discretionary power and

authority to supervise the privileged

business of real estate broker and to deal

firmly with those engaged in it, even to the

point of taking away their means of

livelihood by revocation or suspension of

license. But such potent administrative

weapons must always be reasonably and

cautiously, and even sparingly, utilized.

The administrative processes of the

Commission should be aimed at the dishonest

and unscrupulous operator, one who cheats,

swindles, or defrauds the general public in

handling real estate transactions. Accord

Pauline v. Borer , 274 So.2d 1 (Fla. 1973).

592 So. 2d at 1144-45. Similarly, the business of real estate

appraiser is a privileged business, and a real estate appraiser

owes a duty of care to both his clients and to the general

public. In this case, the Department proved Mr. Facendo's

failure to disclose sales incentive, but it failed to establish

that the omission had an adverse effect on the client's

interests or affected the validity of the appraised value of the

Palm Drive property or of the comparable-sales properties. It

must be concluded that the Department failed to prove by clear

and convincing evidence that Mr. Facendo is guilty of breach of

trust in a business transaction.

B. Culpable negligence

44. In the fourth sentence in paragraph 47 of its Proposed

Recommended Order, the Department asserts that Mr. Facendo

committed culpable negligence "by failing to maintain the

required documentation in the work file." 11 Based on the

findings of fact herein, the Department proved by clear and

convincing evidence that Mr. Facendo failed to include

documentation required by the USPAP (2006) in his workfile.

This failure does not, of itself, constitute culpable negligence

in the preparation of the Appraisal Report or misrepresentation

of the information contained in that report.

45. The act of culpable negligence incorporates the notion

of wrongdoing in the sense that, to commit culpable negligence,

a person must act with reckless disregard of the interests of

another. See Department of Bus. & Prof's Regulation v. Cartaya ,

DOAH Case Nos. 04-1148PL and 04-1680PL, paragraphs 52-53

(Recommended Order Nov. 24, 2004)( citing Carrin v. State , 875

So. 2d 719, 721 (Fla. 1st DCA 2004). 12 The proof offered by the

Department falls far short of showing that the omission from

Mr. Facendo's workfile of some of the documentation supporting

his opinions and conclusions in the Appraisal Report

demonstrates a reckless disregard for the interests of his

client. The Department did not allege in the Administrative

Complaint that the lack of documentation in Mr. Facendo's

workfile, which he is required to maintain in his office,

materially affected the accuracy of the Appraisal Report or of

the value Mr. Facendo placed on the Palm Drive property, nor did

the Department submit any evidence on this point. The

Department has, therefore, failed to prove that Mr. Facendo's

omitting documentation from the workfile constituted culpable

negligence because it failed to prove that the lack of

documentation adversely affected the interests of his client.

46. Based on the foregoing discussion, the Department has

failed to prove that Mr. Facendo violated Section 475.624(2),

Florida Statutes, by committing culpable negligence or breach of

trust, and Count Seven of the Administrative Complaint should be

dismissed.

II. Violation of Section 475.624(4), Florida Statutes.

47. In Count One of its Administrative Complaint, the

Department alleged: "Based upon the foregoing, Respondent is

guilty of failure of the primary or secondary supervisory

appraiser to have the same business address as the registered

trainee appraiser in violation of Section 475.6221(1), Florida

Statutes and, therefore, in violation of Section 475.624(4),

Florida Statutes."

48. Section 475.6221(1), Florida Statutes (2009), provides

in pertinent part:

1) A registered trainee real estate

appraiser must perform appraisal services

under the direct supervision of a licensed

or certified appraiser who is designated as

the primary supervisory appraiser. The

primary supervisory appraiser may also

designate additional licensed or certified

appraisers as secondary supervisory

appraisers. A secondary supervisory

appraiser must be affiliated with the same

firm or business as the primary supervisory

appraiser and the primary or secondary

supervisory appraiser must have the same

business address as the registered trainee

real estate appraiser. . . .

49. Section 475.623, Florida Statutes (2009), provides

that "[e]ach appraiser registered, licensed, or certified under

this part shall furnish in writing to the department each firm

or business name and address from which she or he operates in

the performance of appraisal services." Based on the findings

of fact herein, the address provided to the Department by

Msueman, the registered trainee real estate appraiser who

began working with Mr. Facendo in November 2007, was not the

business address from which she worked with Mr. Facendo but was,

rather, Msueman's home address.

50. The registered trainee appraiser is responsible for

providing his or her business address to the Department

pursuant to Section 475.623, Florida Statutes (2009).

Section 475.6221(1), Florida Statutes (2009), requires only that

the primary or secondary supervisor of a registered trainee

appraiser actually have the same business address as the

registered trainee real estate appraiser. Based on the findings

of fact herein, Mr. Facendo and Msueman did have the same

business address, regardless of whether she provided that

business address to the Department, and the Department has cited

no authority requiring Mr. Facendo to ensure that the address

Msueman provided the Department was the appropriate one.

Mr. Facendo cannot, therefore, be held accountable for the

address Msueman provided to the Department, and the

Department did not, therefore, prove that Mr. Facendo committed

a violation of 475.624(4), Florida Statutes (2009). Count One

of the Administrative Complaint should therefore, be dismissed.

III. Violation of Section 475.624(14), Florida Statutes.

51. In Counts Three, Four, Five, Six, and Eight of the

Administrative Complaint, the Department charged that

Mr. Facendo violated Section 475.624(14), Florida Statutes, by

violating "standard[s] for the development or communication of a

real estate appraisal," specifically, by violating the Record

Keeping Section of the Ethics Rule of the USPAP (2006); the

Competency Rule of the USPAP (2006); Standards Rule 2-1(a)

USPAP (2006); and Standards Rule 1-1(b) and (c) of the

USPAP (2006). As proof of these violations, the Department

presented a copy of the relevant USPAP (2006), which were

effective during the times relevant to these proceedings, and

the testimony of its expert witness, which was based on the

USPAP (2006).

52. Based on the findings of fact herein, the Department

proved by clear and convincing evidence that Mr. Facendo

violated the Record Keeping Section of the Ethics Rule of the

USPAP (2006) by failing to include in his workfile all of the

"data, information, and documentation necessary to support [his]

opinions and conclusions."

53. Based on the findings of fact herein, the Department

failed to prove by clear and convincing evidence that

Mr. Facendo violated the Competency Rule of the USPAP (2006).

In paragraph 35 of its Proposed Recommended Order, the

Department asserted that Mr. Facendo "failed to show geographic

competency" and, thereby, violated the Competency Rule. As

discussed in endnote 10, the Department did not include an

allegation regarding Mr. Facendo's geographic competency in the

Administrative Complaint. Even if it had, the evidence

presented by the Department is insufficient to establish that

Mr. Facendo violated the Competency Rule. The Department's

expert witness simply assumed that Mr. Facendo was

geographically incompetent to appraise property in the Club at

St. Lucie West Condominium because of the distance between

Mr. Facendo's business office and the Palm Drive property, but

Mr. Facendo's testimony regarding his familiarity with the real

estate market in Port St. Lucie, Florida, was not contradicted.

54. Based on the findings of fact herein, the Department

failed to prove by clear and convincing evidence that

Mr. Facendo's appraisal of the Palm Drive property violated

Standards Rule 2-1(a) of the USPAP (2006) because the only

evidence presented by the Department to establish that the

appraisal was set forth in a misleading manner was the

conclusory and unsupported testimony of the Department's expert

witness.

55. Based on the findings of fact herein, the Department

failed to prove by clear and convincing evidence that

Mr. Facendo violated Standards Rule 2-1(b) of the USPAP (2006).

First, there was no proof by the Department that Mr. Facendo's

failure to include in the Appraisal Report information regarding

the sales incentives set out on the document in the workfile

hampered the ability of Mr. Facendo's client, the South Florida

Lending Group, to understand the Appraisal Report. The

Department presented only the conclusory and unsupported

testimony of the Department's expert witness that the sales

incentives should have been disclosed because they were, in some

unexplained manner, relevant to a determination of market value,

but the expert witness never challenged the validity of the

value Mr. Facendo assigned to the Palm Drive property. 13

56. Based on the findings of fact herein, the Department

failed to prove by clear and convincing evidence that

Mr. Facendo violated Standards Rule 2-2(b)(viii) of the

USPAP (2006). The assertions of fact listed by the Department

in paragraph 41 of its Proposed Recommended Order to support its

contention that Mr. Facendo violated Standards Rule 2-2(b)(viii)

of the USPAP (2006) were not alleged in the Administrative

Complaint and cannot, therefore, be the basis on which a

violation may be based. See Cottrill , 685 So. 2d at 1372.

57. Based on the findings of fact herein, the Department

failed to prove by clear and convincing evidence that

Mr. Facendo violated Standards Rule 1-1(b) and (c) of the

USPAP (2006). The Department offered no persuasive evidence to

establish that Mr. Facendo committed "a substantial error of

omission or commission" that affected significantly the validity

of his appraisal of the Palm Drive property or that Mr. Facendo

made "series of errors that . . . affect[ed] the results of

[the] appraisal." First, the Department asserts that

Mr. Facendo violated this Standards Rule because he failed to

include a discussion of the sales concessions that might have

been applicable to the sale of the Palm Drive property and to

the comparable-sales property, but the only evidence it

presented to support the significance of this omission is the

conclusory and unsupported testimony of the Department's expert

witness that this omission was a substantial error. 14 Nowhere in

his testimony did the Department's expert witness challenge the

validity of the value assigned by Mr. Facendo to the Palm Drive

property. Second, the Department asserts that Mr. Facendo's

failure to include the streets and highways forming the

boundaries of the neighborhood in which the Club at St. Lucie

West Condominium was located significantly affected the results

of the appraisal, but the Department failed to present any

evidence to support this contention. Third, the Department

failed to present any persuasive evidence that Mr. Facendo

included a "series of errors" in the Appraisal Report that would

have affected the credibility of the appraisal. Again, the only

evidence presented on this point was the conclusory and

unsupported testimony of the Department's expert witness. 15

58. Finally, even though the Department has proven that

Mr. Facendo violated the Record Keeping Section of the Ethics

Rule of the USPAP (2006), this proof is insufficient to

establish that Mr. Facendo violated Section 475.624(14), Florida

Statutes. The 2006 edition of the USPAP was not applicable to

certified real estate appraisers doing business in Florida in

2007 and 2008. As recently concluded by Administrative Law

Judge Susan B. Harrell in Department of Business and

Professional Regulation v. Sigmond , DOAH Case No. 09-3685PL

(Recommended Order Jan. 12, 2010):

44. In Counts Three through Ten of the

Administrative Complaint, the Department

alleges that Mr. Sigmond has violated

Subsection 475.624(14), Florida Statutes, by

violating provisions of the USPAP (2005).

The Department is obligated to present

evidence of both the standard and the breach

of that standard. Purvis v. Department of

Professional Regulation , 461 So. 2d 134

(Fla. 1st DCA 1984). The Department

submitted in evidence the 2005 USPAP

standards.

45. Subsection 475.624(14), Florida

Statutes, does not state which version of

the USPAP standards is applicable. A

statute which incorporates standards such as

the USPAP standards can only be interpreted

to mean that the USPAP standards applicable

are the editions of the standards that are

in effect at the time of the enactment of

the statute. See Abbott Laboratories v.

Mylan Pharmaceuticals , 15 So. 3d 642 (Fla.

1st DCA 2009). Subsection 475.642(14),

Florida Statutes, is construed to refer the

USPAP standards in effect in 1991, the year

of the enactment of Subsection 475.642(14),

Florida Statutes. [ 16 ]

46. The Department has failed to present

evidence of the USPAP standards that were in

effect in 1991. The evidence presented

relates to the USPAP standards for 2005 and

cannot provide a basis for discipline for a

violation of Subsection 475.642(14), Florida

Statutes, because they have not been

incorporated into Section 475.628 and

Subsections 475.611(1)(o) and 475.642(14),

Florida Statutes. Counts Three through Ten

of the Administrative Complaint should be

dismissed.

See also Department of Bus. & Prof'l Regulation v. Lester , DOAH

Case No. 09-0642PL (Recommended Order Nov. 24, 2009); Department

of Bus. & Prof'l Regulation v. Otero , DOAH Case No. 05-1258PL

(Recommended Order Aug. 18, 2005).

59. Accordingly, on the basis of the reasoning in Sigmond ,

Counts Three, Four, Five, Six, and Eight of the Administrative

Complaint should be dismissed.

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 all counts of the

Administrative Complaint dated March 13, 2009.

DONE AND ENTERED this 30th day of March, 2010, in

Tallahassee, Leon County, Florida.

___________________________________

PATRICIA M. HART

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 30th day of March, 2010.

ENDNOTES

1 / All references herein to the Florida Statutes are to the

2006 edition unless otherwise indicated.

2 / The appraisal report at issue does not identify "72

comparable sales," nor is there a "Report 2" since there is only

one report identified in the Administrative Complaint. It is

assumed that this allegation was included in the Administrative

Complaint in error. Consequently, no findings of fact or

conclusions of law will be included in this Recommended Order

relative to this allegation.

3 / It is noted that no proof was offered with respect to the

allegations in this paragraph, and these allegations are,

therefore, deemed abandoned.

4 / A handwritten document entitled "Club at St Lucie - Deal

Sheet" was included in the workfile of the Appraisal Report

prepared by Mr. Facendo. See Petitioner's Exhibit 1, page 32.

Mr. Facendo was unable to identify this document except to say

that it was in the workfile, that he had seen the document, and

that it had probably been prepared by his assistant, Pablo. The

document shows that the buyer of Unit 106 was to receive a

"closing cost credit" of $8,489.70. The Deal Sheet is not

signed by either the sales person or the sales manager, and it

is not dated. This document does not, therefore, have

sufficient probative value to contradict Mr. Facendo's testimony

regarding his verification that the concessions offered in the

sales contract for Unit 106 totaled $4,500.00. See Transcript

at page 119.

5 / It is noted that the fourth "comparable" is identified on the

location map as 8339 Mulligan Circle, which is, according to the

location map, located to the west of U.S. Interstate Highway 95.

Mr. Facendo's workfile contains information from the St. Lucie

County property appraiser regarding 8339 Mulligan Circle, and

Mr. Facendo considered using it as a comparable. He rejected

this property, however, because, although it was a condominium

unit, it had not been part of a condominium conversion.

Mr. Facendo chose instead to use Unit 107 of the Club at St.

Lucie West Condominium as comparable 4, but he did not mark it

on the location map.

6 / The Comment to the Competency Rule provides in pertinent part

that "[c]ompetency applies to factors such as, but not limited

to, an appraiser's familiarity with a specific type of property,

a market, a geographic area, or an analytical method."

7 / In Count Two of the Administrative Complaint, the Department

charged Mr. Facendo with having violated Section 475.623,

Florida Statutes, and, therefore, Section 475.624(1), Florida

Statutes. These charges were based on the allegations in

paragraph 14 of the Administrative Complaint. The Department

did not include proposed factual findings regarding the

allegation in paragraph 14 of the Administrative Complaint that

Mr. Facendo failed to register his business name with the

Department, nor did it discuss this charge in the proposed

conclusions of law in its Proposed Recommended Order. The

allegation in paragraph 14 is, therefore, deemed abandoned, and

Count Two of the Administrative Complaint should be dismissed.

8 / In its Administrative Complaint, the Department alleged that

Mr. Facendo failed to include dates and offering prices on the

Palm Drive property even though he indicated in the Appraisal

Report that it had been offered for sale in the previous three

months; that Mr. Facendo failed to provide a listing history or

listing prices for the Palm Drive property, even though he

indicated in the Appraisal Report that it was currently offered

for sale; and that he failed to provide a sketch of the Palm

Drive property or to verify its square footage. See

Administrative Complaint, paragraphs 5(A), (C), and (E). The

Department did not, however, raise these factual issues in its

Proposed Recommended Order as a basis for its assertion that

Mr. Facendo committed a breach of trust or culpable negligence.

It will be presumed, therefore, that the Department has

abandoned these factual allegations as the bases for a violation

of Section 475.624(2), Florida Statutes, and the sufficiency of

these allegations, if proven, to support such a statutory

violation will not be addressed in this Recommended Order.

9 / Because the Department did not address any alleged violations

of Section 475.624(2), Florida Statutes, except those of

culpable negligence and breach of trust, it has effectively

abandoned the charges of fraud and misrepresentation alleged in

Count Seven of the Administrative Complaint. Mr. Facendo is,

therefore, found not guilty of these prohibited acts.

10 / The Department included several other purported

misrepresentations and failures to disclose in the second and

third sentences of paragraph 47 to support its proposed

conclusion that Mr. Facendo committed breach of trust with

respect to the Appraisal Report. The Department asserted that

Mr. Facendo (1) "list[ed] the incorrect age for the Subject

Property"; (2) "failed to disclose the percentage of developer

ownership in the Project"; (3) made "conflicting statements with

regard to the percentage of individual ownership";

(4) "claim[ed] competency when no such proof or documentation

supported this claim/certification"; (5)"fail[ed] to describe

the neighborhood or market area"; and (6) "prepar[ed] an

appraisal report that was misleading." These purported

misrepresentations and failures to disclose information cannot,

however, support the charge that Mr. Facendo committed a breach

of trust in violation of Section 475.624(2), Florida Statutes.

First, the only mention in the Administrative Complaint of

item (1), quoted above, was in the context of the absence of

documentation in Mr. Facendo's workfile to support "the ages for

the Subject Property or any of the comparables." Administrative

Complaint at paragraph 12. There was no allegation in the

Administrative Complaint that the information regarding the ages

of the Palm Drive property and the comparable-sales properties

given in the Appraisal Report were incorrect. With respect to

item (5), the Department alleged in paragraph 5(D) of the

Administrative Complaint that Mr. Facendo failed "to state the

neighborhood boundaries in the Neighborhood section of the

Report." There was no allegation in the Administrative

Complaint that Mr. Facendo failed to describe the neighborhood,

and, in fact, Mr. Facendo did include a lengthy description of

the neighborhood in the Neighborhood Description portion of the

Neighborhood section of the Appraisal Report. Finally, there

were no allegations at all in the Administrative Complaint

related to items (2), (3), (4), or (6), quoted above. As a

result, the six asserted grounds quoted above upon which the

Department relies to establish a breach of trust cannot, as a

matter of law, be used by the Department as the basis for a

violation of Section 475.624(2), Florida Statutes, in this case.

See Cottrill v. Department of Ins. , 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.").

In addition, with respect to item (1), quoted above, there

is no persuasive evidence in the record to establish that the

ages of the Palm Drive property and the comparable-sales

properties Mr. Facendo included in the Appraisal Report were

incorrect. The Department's expert witness, Francois Gregoire,

testified that the information he obtained from the public

records established that the Club at St. Lucie West Condominium

was built in 2005, the year the rental apartments were converted

into condominiums. Mr. Gregoire offered no testimony regarding

the date the rental apartments were built. Mr. Gregoire's

testimony did not, therefore, contradict the information

Mr. Facendo included in the Appraisal Report regarding the year

in which the rental apartment complex was built or the year in

which the apartments were converted into condominiums. In any

event, even if the Department had alleged in the Administrative

Complaint that the ages of the Palm Drive property and the

comparable-sales properties Mr. Facendo included in the

Appraisal Report were incorrect, the evidence it presented was

wholly insufficient to support such a finding of fact.

With respect to item (4), quoted above, the Department

alleged in paragraph 16 of the Administrative Complaint only

that the Palm Drive property was located "approximately

85 miles" from Mr. Facendo's business office; there was no

allegation in the Administrative Complaint regarding

Mr. Facendo's competence to appraise the Palm Drive property.

The only issue regarding Mr. Facendo's competence was raised by

Mr. Gregoire, who testified that, because of the distance

between Mr. Facendo's office and the Club at St. Lucie West

Condominium, Mr. Facendo did not have the geographical

competence to appraise the Palm Drive property. Mr. Gregoire's

testimony, however, constituted mere supposition and was

unsupported by any evidence that he had personal knowledge of

Mr. Facendo's familiarity with the Port St. Lucie area. On the

other hand, Mr. Facendo's uncontroverted testimony established

that he had lived and sold real estate in the Port St. Lucie,

Florida, area in the early 1990's and that, since moving to the

Fort Lauderdale area in 1992, he had routinely conducted

appraisals in the Port St. Lucie area. Consequently, even if

the Department had alleged in the Administrative Complaint that

the distance between Mr. Facendo's business office and the Club

at St. Lucie West Condominium rendered Mr. Facendo

geographically incompetent to conduct the appraisal, the

evidence it presented was wholly insufficient to support such a

finding of fact.

11 / The Department also asserts in paragraph 47 of its Proposed

Recommended Order that Mr. Facendo committed culpable negligence

"by failing to verify information used in the Report with

disinterested third parties." The Administrative Complaint

contains no allegation that Mr. Facendo failed to verify

information contained in the report with disinterested third

parties. This allegation appears only in the testimony of the

Department's expert witness, and it cannot, therefore, be used

by the Department as the basis for a violation of

Section 475.624(2), Florida Statutes, in this case. See

Cottrill , 685 So. 2d at 1372.

12 / Certain portions of Administrative Law Judge John G. Van

Laningham's Recommended Order in Cartaya were rejected by the

Real Estate Appraisal Board in its Amended Final Order filed

May 22, 2006, but the paragraphs of the Recommended Order cited

were adopted.

13 / The remaining assertions of fact listed by the Department in

paragraph 38 of its Proposed Recommended Order to support its

contention that Mr. Facendo violated Standards Rule 2-1(b) of

the USPAP (2006) were not alleged in the Administrative

Complaint and cannot, therefore, be the basis on which a

violation may be based. See Cottrill , 685 So. 2d at 1372.

14 / Immediately after this testimony, Mr. Gregoire testified

that this was a "minor" error. See Transcript at page 61.

15 / The Department also asserted in paragraph 50 of its Proposed

Recommended Order that Mr. Facendo's reliance "on unverified

information supplied by interested persons" to support its

contention that Mr. Facendo violated Standards Rule 1-1(b) and

(c) of the USPAP (2006), but this was not alleged in the

Administrative Complaint and cannot, therefore, be the basis on

which a violation may be based. See Cottrill , 685 So. 2d at

1372.

16 / Subsection 475.611(1)(o), Florida Statutes, provides that

the definition of USPAP means the most recent standards adopted

by the Appraisal Standards Board of the Appraisal Foundation.

Section 475.628, Florida Statutes, requires that appraisers

comply with the USPAP standards. Based on the Abbott

Laboratories case, these two statutes must also be interpreted

to mean that the most recent standards refer to the standards

that were in effect at the time of the enactment of the

statutes.

COPIES FURNISHED:

Norman Malinski, Esquire

Law Offices of Norman Malinski, P.A.

2875 Northeast 191st Street, Suite 508

Aventura, Florida 33180

Robert Minarcin, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801-1757

Reginald Dixon, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32300-0792

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

400 West Robinson Street

Suite 802 North

Orlando, Florida 32801

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.