09-005356PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Howard Klahr Status: Closed Recommended Order on Wednesday, February 24, 2010.

Summary: Clear and convincing evidence proved property appraiser who was paid in advance did not communicate appraisal and breached trust in a business transaction. $1,000 fine, 90-day suspension, 18-month probation with education, and restitution penalty.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-5356PL

)

HOWARD KLAHR, )

)

Respondent. )

)

RECOMMENDED ORDER

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

on December 16, 2009, by video teleconference at sites in Miami

and Tallahassee, Florida, and on January 26, 2010, by telephone

conference to hear closing arguments, before John D. C. Newton,

II, a duly-designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Robert Minarcin

Assistant General Counsel

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N801

Orlando, Florida 32801

For Respondent: Howard Klahr, pro se

East Hill Valuation and Consulting

5645 Coral Ridge Drive, No. 120

Coral Springs, Florida 33076

STATEMENT OF THE ISSUES

1. Did the Respondent, Howard Klahr, fail to deliver or

communicate appraisals of properties located at 5821 Southwest

20th Street, Miami, Florida and 2761-63 Southwest 31 Place,

Miami, Florida 33133?

2. Did Respondent, Howard Klahr, commit or make fraud,

misrepresentation, concealment, false promises, false pretenses,

dishonest conduct, culpable negligence, or breach of trust in

his business relationship with Jane Asorey.

3. What is the proper discipline, if any, to be imposed on

Respondent, Howard Klahr (Mr. Klahr)?

PRELIMINARY STATEMENT

On December 10, 2008, the Petitioner, Department of

Business and Professional Regulation, Division of Real Estate

(DBPR) issued an Administrative Complaint that alleged Mr. Klahr

had contracted to and been paid to develop and deliver

appraisals of properties located at 5821 Southwest 20th Street,

Miami, Florida, and 2761-63 Southwest 31st Place, Miami, Florida

33133. The Complaint alleged that Mr. Klahr did not develop or

deliver the appraisals and did not return the money he was paid

in advance for them.

Count I of the Complaint alleged that Mr. Klahr violated

Section 475.624(16), Florida Statutes (2007) 1 , by failing to

communicate an appraisal without good cause. Count II of the

Complaint alleged that Mr. Klahr violated Section 475.624(2),

Florida Statutes, by fraud, misrepresentation, concealment,

false promises, false pretenses, dishonest conduct, culpable

negligence or breach of trust in a business transaction.

Count III of the Complaint alleged that Mr. Klahr violated

Florida Administrative Code Rule 61J1-7.004 and Section

475.624(4), Florida Statutes, by failing to timely advise DBPR

of a change in address. DBPR withdrew Count III at the

hearing’s onset.

Mr. Klahr filed a Petition for Formal Hearing and “Election

of Rights” form dated January 14, 2009, with DBPR. On

September 29, 2009, DBPR sent both documents to the Division of

Administrative Hearings (Division) for conduct of the requested

hearing. The Division set the hearing for December 16, 2009,

and conducted the hearing as scheduled.

November 10, 2009, the Division issued its Order Directing

Filing of Exhibits. The Order required the parties to file

copies of all exhibits with the Division no later than five days

before the hearing. The fifth day before the hearing date was

December 11, 2009. DBPR filed its exhibits on December 10,

2009. Mr. Klahr sent his exhibits to the Division and DBPR by

facsimile transmission the night of December 15, 2009. The

Division accepted the exhibits as received on December 16, 2009.

DBPR objected to admission of any of Mr. Klahr’s Exhibits

because they were untimely filed depriving DBPR of a fair

opportunity to rebut them or cross examine about them. The

Administrative Law Judge reserved ruling on the objections and

recessed the hearing mid-morning to permit counsel an

opportunity to examine the proposed exhibits and consult with

others. The Administrative law Judge also took an extended

lunch recess for the same purpose. All parties presented their

evidence during the December 16 hearing. The Administrative Law

Judge continued the hearing for the sole purpose of allowing

rebuttal evidence, responses to the rebuttal evidence, and

closing arguments.

The continued hearing was set for January 15, 2010, by

video conference. Mr. Klahr moved to reschedule the continued

hearing. In a telephone conference held January 6, 2010, the

DBPR withdrew its request to present rebuttal evidence. The

parties agreed that they could present closing arguments in a

telephone hearing. The hearing was rescheduled to January 26,

2010 for closing argument by the parties that choose to present

argument.

On December 24, 2009, the court reporter filed the

Transcript of the hearing held December 16, 2009. On

January 10, 2010, the court reporter filed a corrected

Transcript.

At the January 26, 2010, hearing conducted by telephone

conference call, Petitioner’s Exhibits 1 through 9 were admitted

into evidence without objection. Respondent’s Exhibits 1, 2,

and 3 were admitted over objection. Respondent's Exhibits 4, 5,

and 6 were admitted into evidence without objection.

Respondent’s Exhibits 7, 8, and 9 were not admitted. Both

parties rested. Only Mr. Klahr offered closing argument.

On February 15, 2010, DBPR timely filed its Proposed

Recommended Order. On February 16, 2010, Mr. Klahr filed his

untimely Proposed Recommended Order. Despite being untimely, it

has been considered.

FINDINGS OF FACT

1. Respondent, Howard Klahr, is a Florida state certified

general real estate appraiser trading as Easthill Valuation and

Consulting. He holds license number RZ-2678 and has since

August 2003.

2. On January 7, 2007, Jane Asorey, now Jane Zuleta, met

with Mr. Klahr and engaged him to provide appraisal evaluations

of two properties and to provide expert witness and consulting

services for Ms. Asorey’s dissolution of marriage case.

3. One property was the marital home, a single family

residence located at 5821 Southwest 20th Street, Miami, Florida.

4. The other property was a duplex located at 2761-2763

Southwest 31st Place, Miami, Florida.

5. The duplex appraisal evaluation was to be

“retrospective” and evaluate the worth of the duplex in 1991,

1999, and 2005. The appraisal evaluation of the single family

residence was to be for the value in 2005. The evaluations were

also to include a review of appraisals prepared by others.

6. Ms. Asorey paid Mr. Klahr a retainer of $1,000.00 for

the appraisal evaluation and services on November 7, 2007,

including a $500.00 charge for the appraisal evaluation. Ms.

Asorey made the check out to Mr. Klahr’s company, Easthill

Valuation and Consulting.

7. Mr. Klahr accepted the payment and cashed Ms. Asorey’s

check.

8. In a November 5, 2007, e-mail, Ms. Asorey provided

Mr. Klahr the telephone number and e-mail address for her

attorney.

9. That November 5, 2007, e-mail explained that the work

was for dissolution of marriage trial scheduled for December 14,

2007.

10. Mr. Klahr and Ms. Asorey did not enter into a written

engagement agreement.

11. Despite repeated efforts by Ms. Asorey to obtain the

evaluations, Mr. Klahr never provided her or her attorney the

appraisal evaluation he agreed to provide and for which he had

been paid.

12. Mr. Klahr attended the deposition of an appraiser in

the legal proceeding. Ms. Asorey paid him an additional $750.00

for that service.

13. Ms. Asorey spoke to Mr. Klahr on December 20, 2007,

and reminded him of the need for his report and a December 28,

2007, deadline for filing the evaluation in her case.

14. Because Mr. Klahr did not provide the appraisal

evaluation, Ms. Asorey missed exhibit deadlines in her case and

had to continue the trial.

15. On January 2, 2008, Ms. Asorey sent Mr. Klahr an e-

mail importuning him to call her, advising him of her repeated

efforts to reach him by telephone since December 20, 2007, and

emphasizing the urgent need for the report which was overdue.

16. There is no evidence that Mr. Klahr responded to that

e-mail.

17. Because Mr. Klahr did not provide the appraisal

evaluation, Ms. Asorey had to engage and pay another appraiser

to provide the evaluations.

18. On July 26, 2008, the Department advised Mr. Klahr of

its investigation and provided him a copy of the complaint.

19. The complaint specified that Mr. Klahr had not

provided the appraisal reports and described Ms. Asorey’s

efforts to communicate with him.

20. Bernardo Yepes, the Department Investigator, spoke to

Mr. Klahr October 15, 2008. Mr. Klahr stated that he had sent

the DBPR documents responding to the complaint. Mr. Yepes

advised Mr. Klahr that the Department had not received the

documents. He asked Mr. Klahr to send them by facsimile

transmission.

21. Mr. Klahr did not send the responsive documents to the

DBPR by facsimile transmission or any other means.

22. The first time that Mr. Klahr provided any person

copies of the appraisal reports that he maintains he prepared

was on December 15, 2009; that was the night before the final

hearing when Mr. Klahr submitted them to the Clerk of the

Division of Administrative Hearings and to the DBPR attorney.

23. Mr. Klahr held a real estate license in 2002 and 2003.

He was disciplined for violations of real estate licensing laws

in 2002 or 2003.

24. Mr. Klahr had a previous complaint, similar to the

complaint in this matter, filed against him. It was dismissed

after an administrative hearing.

CONCLUSIONS OF LAW

25. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties pursuant to Sections 120.569 and 120.5791, Florida

Statutes (2009).

26. Section 475.624, Florida Statutes, permits the Florida

Real Estate Appraisal Board to impose a fine of up to $5,000 and

to revoke or suspend the license of a licensed or registered

appraiser for the 18 offenses that it lists. Section

475.624(16), Florida Statutes, identifies one offense with which

Mr. Klahr is charged. It provides for discipline of an

appraiser who "[h]as failed to communicate an appraisal without

good cause.”

27. Section 475.624(2), Florida Statutes, identifies

another offense with which Mr. Klahr is charged. It provides

for discipline of an appraiser who “[h]as 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. . . .”

28. The Department must prove the alleged violations by

clear and convincing evidence. Dep't of Banking & Fin., Div. of

Sec. & Investor Prot. v. Osborn , 670 So. 2d 932 (Fla. 1996).

Clear and convincing evidence must be credible. The memories of

witnesses must be clear and not confused. The evidence must

produce a firm belief that the truth of allegations has been

established. Slomowiitz v. Walker , 429 So. 2d 797, 800 (Fla.

4th DCA 1983). Evidence that conflicts with other evidence may

be clear and convincing. The trier of fact must resolve

conflicts in the evidence. G.W.B. v. J.S.W. (in Re Baby

E.A.W.) , 658 So. 2d 961, 967 (Fla. 1995).

29. The evidence that Mr. Klahr did not communicate the

appraisal reports without good cause to Ms. Asorey is clear and

convincing, despite his conflicting testimony and the purported

transmittal e-mail and evaluations produced the night before the

hearing. There are several reasons that the evidence is clear

and convincing. They involve demonstrated credibility of Ms.

Asorey and Mr. Klahr’s lack of credibility.

30. In contrast to Mr. Klahr, Ms. Asorey’s demeanor was

credible. The copies of e-mails are consistent with her

testimony. There is no dispute that Ms. Asorey sent the e-mails

that she says she sent. And Mr. Klahr had copies of them.

31. Ms. Asorey’s contemporaneous actions confirm that

Mr. Klahr did not provide the appraisal evaluations. She

incurred the expense of engaging another appraiser to provide

the reports that Mr. Klahr did not. A copy of the court docket

also supports her testimony that she had to continue her

dissolution trial.

32. The timing of Mr. Klahr’s production of the appraisal

evaluations he claims that he communicated belies his claim. At

the hearing Mr. Klahr testified that he had e-mailed appraisal

reports to Ms. Asorey on December 25, 2007. The Department

advised Mr. Klahr of the investigation and provided him a copy

of the complaint on July 26, 2008. In an interview on

October 15, 2008, Mr. Klahr said he had submitted documents

responding to the complaint. The investigator advised Mr. Klahr

then that the documents had not been received and asked him to

resubmit them. He did not.

33. At the hearing Mr. Klahr offered and testified about a

purported e-mail transmitting the appraisal reports as

attachments. The first time Mr. Klahr provided the reports to

anyone was when he submitted them as exhibits for the hearing in

this cause.

34. Mr. Klahr is a licensed professional. He is familiar

with the Department’s investigation and disciplinary process

because he previously faced disciplinary charges by the Board of

Property Appraisers, through an administrative hearing, and the

Board of Realtors. It is incredulous to believe that in the

span of two years and two months Mr. Klahr would not have

produced the two documents that directly refuted the charges

against him until the night before the hearing on the charges.

35. Mr. Klahr’s purported e-mail of December 25, 2007,

transmitting the two purported reports states, “Please send a

reply message to confirm receipt.” Mr. Klahr does not claim

that he received a reply message. And he does not claim that he

took any further actions to verify or ensure delivery of the

report as a result of not receiving a reply message. By his own

claims and documents offered, Mr. Klahr was unsure as of

December 25, 2007, whether Ms. Asorey had received the appraisal

reports. Yet he offered no evidence of any further efforts to

determine if Ms. Asorey had received them. This conflict

between a written acknowledgement of uncertainty about the

effectiveness of communicating the appraisal reports and the

absence of any effort to ensure the communication further

supports the conclusion that Mr. Klahr did not communicate the

appraisal reports.

36. Clear and convincing evidence establishes that

Mr. Klahr failed to communicate his appraisal to Ms. Asorey.

The facts that establish the failure to communicate establish

that Mr. Klahr is guilty of a breach of trust in the business

transaction with Ms. Asorey.

37. Mr. Klahr accepted payment in advance for his

appraisal evaluations. He knew the evaluations were necessary

evidence in Ms. Asorey’s dissolution proceeding. He knew the

importance of timely producing them in December. Ms. Asorey

trusted Mr. Klahr to perform the work she had paid for in a

timely fashion. Mr. Klahr breached that trust by not performing

the work and not communicating about delays in any fashion.

This is a violation of Section 475.624(2), Florida Statutes.

38. Florida Administrative Code Rule 61J1-8.002

establishes disciplinary guidelines for Chapter 475. For a

violation of Section 475.624(2), breach of trust, it provides

that: “The usual action of the Board shall be to impose a

penalty from a $1000 fine to a 1 year suspension.” For a

violation of Section 475.624 (16), failure to communicate

appraisal, Florida Administrative Code Rule 61J1-8.002 provides

the same range of penalties. Florida Administrative Code Rule

61J1-8.002(2) also provides for probation in addition to any

other penalty imposed.

39. Florida Administrative Code Rule 61J1-8.002(4)

identifies mitigating and aggravating circumstances. Clear and

convincing evidence establishes the aggravating circumstance of

a degree of harm to Ms. Asorey, two counts in the Administrative

Complaint, and a discipline of Mr. Klahr for violation of

Florida real estate licensing laws in 2002 or 2003. But the

evidence does not establish the reason for or severity of the

discipline. Neither party gave notice of intent to introduce

aggravating or mitigating circumstances as contemplated by

Florida Administrative Code Rule 61J1-8.002(4)(a) before

admission of the evidence. But the evidence that establishes

the aggravating circumstances is evidence admitted to establish

the offenses themselves.

40. In light of the aggravating circumstances and the

disciplinary guidelines a 90-day suspension of Mr. Klahr’s

license and a $1,000 fine for Count I, a $1,000.00 fine and a

90-day suspension for Count II, and concurrent terms for each

count of 18 months' probation during which Mr. Klahr must

satisfactorily complete 15 hours of education coursework in the

areas of Florida Law and Ethics are appropriate. Requiring

restitution of $1,000.00 to Ms. Asorey is appropriate corrective

action as permitted by Section 455.227(2)(g), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is recommended that the Florida Department of Business

and Professional Regulation, Division of Real Estate enter a

final order that:

1. Dismisses Count III;

2. Finds that Mr. Klahr violated 475.624(2), Florida

Statutes, and imposes a fine of $1,000, 90-day suspension of

Mr. Klahr’s license, an 18-month term of probation during which

Mr. Klahr must satisfactorily complete 15 hours of education

coursework in the areas of Florida Law and Ethics;

3. Finds that Mr. Klahr violated Section 475.624 (16),

Florida Statutes, and imposes a fine of $1,000, 90-day

suspension of Mr. Klahr’s license, an 18-month term of probation

during which Mr. Klahr must satisfactorily complete 15 hours of

education coursework in the areas of Florida Law and Ethics;

4. Makes the terms of probation and periods of suspension

concurrent with the probation beginning after the period of

suspension concludes; and

5. Requires Mr. Klahr to pay Jane Zuleta $1,000.00 within

30 days of the date of the final order.

DONE AND ENTERED this 24th day of February, 2010, in

Tallahassee, Leon County, Florida.

S

JOHN D. C. NEWTON, II

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 24th day of February, 2010.

ENDNOTE

1 / All statute citations are to the 2007 Florida Statutes unless

otherwise noted.

COPIES FURNISHED :

Robert Minarcin, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801-1757

Howard Klahr

5645 Coral Ridge Drive, No. 120

Coral Springs, Florida 33076

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 802, North

Orlando, Florida 32801

Reginald Dixon, 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 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.