09-006821PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Fred R. Catchpole Status: Closed Recommended Order on Wednesday, May 19, 2010.

Summary: Petitioner did not show by clear and convincing evidence that Respondents failed to use reasonable diligence in developing a real estate appraisal report.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case Nos. 09-6821PL

) 09-6823PL

FRED R. CATCHPOLE AND )

GWENDOLYN BARKER, )

)

Respondents. )

)

RECOMMENDED ORDER

An administrative hearing was conducted in this case on

March 16, 2010, in Jacksonville, Florida, before

James H. Peterson, III, Administrative Law Judge with the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robert Minarcin, Esquire

Department of Business and

Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

For Respondent: Fred Catchpole, pro se

5449 Marcia Circle

Jacksonville, Florida 32210

Gwendolyn Barker, pro se

2005 Cardiff Lane

Middleburg, Florida 32068

STATEMENT OF THE ISSUE

Whether Fred Catchpole and Gwendolyn Barker (Respondents)

should be subject to disciplinary action as licensed residential

real estate appraisers by the Department of Business and

Professional Regulation, Division of Real Estate (Petitioner)

for failure to exercise reasonable diligence in developing an

appraisal report in violation of Section 475.623(15), Florida

Statutes (2004). 1 /

PRELIMINARY STATEMENT

In October 2009, Petitioner filed an Administrative

Complaint against Respondent, Fred Catchpole, and an

Administrative Complaint against Respondent, Gwendolyn Barker.

Both complaints were based upon the same appraisal report and

contained 12 identical counts against Respondents. Respondents

timely filed requests for administrative hearings and, on

December 15, 2009, the cases were forwarded by Petitioner to the

Division of Administrative Hearings (DOAH). The cases were

originally assigned to Administrative Law Judge Lisa Shearer

Nelson, who consolidated the two cases. On February 19, 2010,

the consolidated cases were transferred to the undersigned to

conduct the administrative hearing.

At the beginning of the administrative hearing in this

matter held on March 16, 2010, Petitioner withdrew Counts 2

through 12 of both Administrative Complaints (Administrative

Complaints) and announced that it was proceeding against

Respondents on Count One only, alleging that Respondents “failed

to exercise reasonable diligence” in preparing an appraisal

report. Petitioner presented the testimony of two witnesses and

offered eight exhibits that were received into evidence as

Petitioner’s Exhibits P-1 through P-8. Exhibits P-1 (complaint

against Respondent Catchpole) and P-5 (complaint against

Respondent Barker) were received with the caveat that any

hearsay within the exhibits would not be used as a basis for a

finding of fact unless corroborative of admissible evidence.

Both Respondents testified on their own behalf and offered

34 exhibits that were received into evidence as Respondents’

exhibits R-1 through R-3, R-7, R-9, R-11, R-12, R-14, R-15, R-16

(pages 48 and 49), R-18, R-23 (excluding hearsay within R-23

unless corroborative of admissible evidence), R-26, R-30, R-37,

RA-1 through RA-12, RB-1, and RC-1 through RC-8.

The evidentiary portion of the hearing concluded on

March 16, 2010. The parties were given until April 21, 2010, to

file their respective proposed recommended orders. The

transcript (T.) of the final hearing was filed on April 5, 2010.

Petitioner and Respondents timely filed their Proposed

Recommended Orders, which have been considered in the

preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the licensing authority for real estate

appraisers in Florida with revocation and disciplinary authority

over its licensees pursuant to Section 20.165 and Chapter 475,

Florida Statutes.

2. On or about September 16, 2004, Respondents Fred

Catchpole and Gwendolyn Barker prepared, signed and communicated

an appraisal report (Report) for the property, including a

manufactured home, located at 209 Ponderosa Pine Court,

Georgetown, Florida 32139 (Subject Property).

3. At the time of the Report, Respondent Catchpole was

licensed by Petitioner as a State Licensed Real Estate

Appraiser, and Respondent Barker was licensed by Petitioner as a

State Certified Residential Real Estate Appraiser. Both

Respondents are currently licensed by Petitioner as State

Certified Residential Real Estate Appraisers.

4. The Report was prepared for Pass and Associates in

connection with refinance of a loan secured by the Subject

Property. Respondents issued a corrected version of the Report

(Corrected Report) with changes and additions requested by the

client in 2004, prior to refinancing the loan on the Subject

Property.

5. In October 2004, a One-Unit Residential Appraisal Field

Review (Field Review) of the Report was conducted on behalf of

Chase Manhattan Mortgage Corp., who was listed in the Field

Review as the “Lender/Client.”

6. Between 2004 and 2009, Respondents provided rebuttal

and rebuttal materials to address the Field Review.

7. In 2009, Chase Home Lending (Chase Manhattan Mortgage

Corp. and Chase Home Lending are both referred to herein as

The complaint consisted of a cover letter from Larry Handley

with Chase Home Lending, a copy of the Report, and a copy of the

Field Review.

8. The complaint was found legally sufficient and

forwarded to Petitioner’s investigator. Petitioner’s

investigator did not receive a copy of the Corrected Report.

T. 15, 204. Following the investigation, the Administrative

Complaints were filed against Respondents.

9. Count I of the Administrative Complaints relies on a

number of alleged problems with the Report or the supporting

workfiles (Workfiles), as detailed in the “Essential Allegations

of Material Fact” section of the Administrative Complaints.

After dismissing Counts 2 through 12 of the Administrative

Complaints at the beginning of the hearing, Petitioner did not

provide an Amended Administrative Complaint for either

Respondent. Count I of the Administrative Complaints is based

solely upon Respondents’ alleged failure “to exercise reasonable

diligence in developing an appraisal report in violation of

Section 475.624(15).” Instead of providing Amended

Administrative Complaints, during the final hearing and in its

proposed recommended order, Petitioner addressed the following

alleged problems with the Report or Workfiles:

a. The address of comparative sale 2,

listed in the Sales Comparison Analysis

section of the Report, was incorrect.

b. The Subject Property has a zoning

classification of R-2, which is mixed

residential, which was incorrectly stated in

the Report.

c. The Workfiles for comparable sales 1, 2,

3, 4, 5 and 6 listed in the Sales Comparison

Analysis section of the Report are not

supported by documentation contemporaneous

to the effective date of the Report.

d. Multiple Listing Services (MLS) is

listed as a data source in the Sales

Comparison Analysis section of the Report

for comparable sales 3, 5 and 6, but the

Workfiles lack MLS documentation for those

comparative sales.

e. The Sales Comparison Analysis section of

the Report failed to identify features for

comparable sale 2 that were noted in the

Workfiles.

f. The Workfiles lack data to support the

gross living area for comparable sale 6

noted in the Sales Comparison Analysis of

the Report.

g. The Report failed to note fences on the

comparable sales, failed to make adjustments

for the fences in the Sales Comparison

Analysis section of the Report, and failed

to address whether the fences had an

influence on the price.

h. The Report contains inconsistent Cost

Approach data.

i. The Workfiles lack documentation

supporting the Estimated Site Value, Lump

Sum, and As-Is Value data for the Subject

Property in the Cost Approach sections of

the Report.

j. The Workfiles lack documentation

supporting the Site Value for the Subject

Property listed in the Cost Approach

sections of the Report.

k. The Workfiles lack documentation

supporting the market trends outlined in the

Sales Comparison Analysis section of the

Report.

l. The Report lacks internal consistency.

10. At the final hearing, Respondents addressed each of

the above-listed allegations.

Alleged Incorrect Address in Comparable Sale 2

11. The incorrect address was a minor typographical error.

The address listed for comparable sale 2 was only one number off

the actual street address. The Report listed the street address

as 815 CR 30 9 B instead of the correct street address of 815 CR

30 8 B. [underlines added]. The Corrected Report corrected the

typographical error in the street address.

Alleged Wrong Zoning Classification for the Subject Property

12. The Subject Property is zoned “R-2, mixed residential”

in the public records of Putnam County. Page one of the Report,

consisting of the first page of the Uniform Residential

Appraisal Report, Freddie Mac Form 70, revised 6-93, the Report

lists as the specific zoning classification and description,

“single family residential R-2.” At the final hearing,

Respondent’s investigator, who pointed out the alleged error in

the Report, admitted that he had not had training in filling out

the Freddie Mac Form 70.

13. The description used in the Report is consistent with

the public tax record information on the web, which describes

Exhibit R-18.

14. In addition, the One-Unit Residential Appraisal Field

Review Report of the Report, which was prepared to determine the

correctness of the procedures used by the original appraisal,

specifically stated, “The zoning is correct.” Exhibit R-37.

Alleged Lack of Contemporaneous

Documentation Supporting Comparative Sales

15. Petitioner’s witness, Francois K. Gregoire, a real

estate appraiser who reviewed the Report, provided testimony to

support a number of the factual allegations in the

Administrative Complaints. Based upon his credentials,

Mr. Gregoire was allowed to offer opinions on the Report as an

expert in residential real estate appraisals.

16. An appraiser’s workfile must be contemporaneous with

the development and communication of the appraisal report.

17. In addressing this allegation, Mr. Gregoire referenced

comparable sales data in the Workfiles taken from Win2Data and

Putnam County tax rolls in 2008, approximately four years after

the effective date of the Report, which was issued in September

2004.

18. Although Petitioner’s expert opined that since the

data was retrieved in 2008, it could not be contemporaneous, the

2008 data included comparable sales contemporaneous with the

Report.

19. The fall 2004 issue of the Florida Real Estate

Appraisal Board News & Report included a question and answer

from the Appraisal Standards Board (ASB) relating to the Uniform

Standards of Professional Appraisal Practice (USPAP). The

question and pertinent parts of the answer stated:

Question:

Recently I have considered maintaining only

electronic workfiles (i.e. saving only

electronic versions of my reports and

supporting data, and scanning any paper

documents used so that copies may be stored

on electronic media). Is this prohibited by

USPAP?

Response:

No. There is nothing in USPAP that would

prohibit an appraiser from maintaining only

electronic versions of workfiles. The

Record Keeping section of the ETHICS RULE

states, in part:

The workfile must include:

the name of the client and the

identity, by name or type, of any other

intended users;

true copies of any written reports,

documented on any type of media;

summaries of any oral reports or

testimony, or a transcript of

testimony, including the appraiser’s

signed and dated certification;

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.

As long as an electronic workfile contained

these items, it would be sufficient. An

appraiser must also be mindful of the

requirement to have access to the workfile

for the applicable required time period.

The appraiser must ensure that the proper

software is maintained to allow access to

the electronic files. (Italics in original.)

20. October 2008, the ASB issued a sequel its 2004

opinion, in the following response to the following question:

Question:

In the course of preparing my appraisals, I

often research Multiple listing Service

(MLS) and other data sources. I use this

information to develop conclusions regarding

neighborhood value ranges and market trends.

Is it necessary for me to include copies of

this information in my workfile?

Alternatively, can I simply reference the

data sources in my workfile.

Response:

References in the workfile to the location

of documentation used to support an

appraiser’s analysis, opinions, and

conclusions can be adequate. It is not

always necessary for the appraisal workfile

to include all the documentation provided

the referenced material is retrievable by

the appraiser throughout the workfile

retention period. Care should be exercised

in the selection of the format and location

of documentation.

21. The Workfiles reflect that Respondents used MLS,

Win2Data, and MLS public records to support the Report. While

contemporaneous paper copies may not have been maintained of all

the data, they were retrievable as reflected in the workfiles.

Alleged failure to include MLS Listings in the Workfiles

When Listed as a Source for Comparative Sales 3, 5 and 6

22. As noted in Finding of Fact 21, supra , while MLS and

other supporting data contemporary with comparative sales 3 and

5 listed in the Report may not have been kept in the Workfiles,

they were retrievable. See , e.g. , Exhibit R-20, pp. 74-75

(listing 2009 tax data showing comparative sale 5 on 6/8/2004

for $92,000 and MLS data retrieved on 2/28/10 showing subsequent

sale of the property on 7/20/05 for $110,000).

23. Moreover, contrary to the allegation, the Report does

not list MLS as a data source for comparative sale 6. Rather,

the Sales Comparison Analysis section of the Report lists

“WINDAT/PUB REC/DRIVEBY” as the data and/or verification source

for comparative sale 6. See Exhibit P-2, p. 3.

Alleged Failure of Report to Identify

Features for Comparable Sale 2 Noted in the Workfiles

24. Paragraphs 6(R) and 6(S) of the Administrative

Complaints allege that the Report failed “to note that

comparable sale 2 had a hot tub,” and failed “to note the

renovated status of comparable sale 2, as outlined in workfile

documentation.”

25. According to Mr. Gregoire, “in Comparable Sale

Number 2, the MLS printout indicates some features that were not

described in the appraisal report. There’s inconsistency

between the work file data and what was reported in the

appraisal.” T. 93-94.

26. While the MLS listing in the Workfiles provided

additional information, there is no indication that the

information was “inconsistent” with the Report.

27. At the final hearing, Respondent Catchpole explained

their rating in the Report of comparative sale 2 as “good,”

accurately reflected recent renovations in that sale when

compared to the “good” rating given to the Subject Property,

which, at the time of the Report, had new floors, new carpets,

and a new AC system. T. 202.

Alleged Lack of Data in the Workfiles to Support

Gross Living Area Listed in Report for Comparable Sale 6

28. The gross living area reported in the Report for

comparable sale 6 is 840 square feet. At the final hearing,

Petitioner’s expert, Mr. Gregoire, testified that there is no

contemporaneous data to support that figure, and noted that the

contemporaneous Win2Data in the Workfiles lists the square

footage for comparable sale 6 as 2,380 square feet. In making

his observation, however, Mr. Gregoire conceded that Win2Data

sometimes rolls non-living areas into the reported living area.

T. 99.

29. The 2008 tax data in Respondents’ Workfiles for

comparative sale 6 shows that the “base” square footage for the

mobile home on comparative sale 6 was 840 square feet, which is

the same square footage reported in the Report. Exhibit P-3,

p. 60

30. While the tax data print-out is not contemporaneous

with the sale, the tax data on that print-out reflects the 2003

sale for $89,000 listed in the Report, and provides a basis for

the reported 840 square feet for comparable sale 6. As noted

above, electronic data that has retrievable information

contemporaneous with the Report is acceptable.

Alleged Failure of the Report to Note

or Make Adjustments for Fences on the Comparable Sales

31. Respondent Catchpole explained at the final hearing

that, in addition to reviewing public sources and MLS listings,

Respondents based their Report on actual drive-bys of the

comparative sales. According to Mr. Catchpole, as memory served

him from six years before when the Report was written, only one

fence was visible from the road.

32. Mr. Catchpole further explained that they did not add

any value to the comparative sales for the fences which they saw

because they considered them to be personal property and were

not a 100 percent sure that the fences they observed belonged on

the comparative sale property, as opposed to adjacent land.

33. According to Mr. Gregoire, whether or not comparative

sales had fences should have been reported in the Report,

“because to some buyers, that may have had an influence on the

say whether or not there should have been an adjustment, because

I haven’t done an appraisal in this area.” Id.

Alleged Inconsistent Cost Approach data in the Report

34. Petitioner’s expert witness, Mr. Gregoire, noted

during his direct examination that there were inconsistent

values between the Estimated Site Value of $15,000 set forth on

page 2 of the Report and the Market Value of Subject Site

reported as $10,000 on page 5 of the Report. He also noted that

the value for “Lump Sum” of $8,000 set forth on page 2 of the

Report was different from the $5,000 value for “Lump Sum”

reported on page 5 of the Report. Finally, he noted that the

“As is” value of $15,000 for site improvements set forth on page

2 of the Report was different from the $10,000 value reported on

page 5 of the Report for “other depreciated site improvements.”

Exhibit P-2, pp. 2, 5. According to Mr. Gregoire, these

internal inconsistencies made the Report misleading and

demonstrated a lack of due diligence in its preparation.

T. 107-110.

35. Mr. Gregoire’s observations, however, did not take

into account the fact that Respondents issued a Corrected Report

with changes and additions requested by the client in 2004,

prior to refinancing the loan on the Subject Property. T. 15;

Exhibit R-1. The Corrected Report corrected the inconsistencies

pointed out by Mr. Gregoire. Exhibit R-1, pp. 2, 9 (the

Value of Subject Site” as $15K; reports the “Lump Sum” value

consistently as $8K; and consistently reports both “As is Value

of Site improvements” and “Market Value of Subject Site” as

$15K).

Alleged lack of documentation in Workfiles supporting the

Estimated Site Value, Lump Sum, and As-Is Value data for the

Subject Property in the Cost Approach sections of the Report .

36. The record citations provided in the Proposed

Recommended Order submitted by Petitioner do not clearly

indicate the alleged problem with the estimated site value,

other than the inconsistency, which was corrected in the

Corrected Report. Petitioner’s PRO, ¶ 22. Nevertheless, there

were six comparable sales listed in the Report, and Corrected

Report, with supporting data in the Workfiles from which

estimated site cost data could be derived. As further noted by

Respondent Catchpole, site data was addressed in an addendum to

the Workfiles noting:

Where difference in the size of the site did

not afford additional utility, there was no

adjustment taken, it was considered excess

land. (P-3, p. 4)

37. Mr. Gregoire also stated that there was no

identification as to what “lump sum” is, either in the Report or

the Workfiles. T. 109. At the final hearing, in his cross-

examination of Mr. Gregoire, Respondent Catchpole indicated that

the lump sum figure included porches and the air-conditioning

system. In response, Mr. Gregoire stated that, if that was the

case, it should have been disclosed. T. 139. There is no

evidence, however, in the Field Review, that the “lump sum”

category was criticized. In fact, the Field Review reported

that “the data in the improvements section [is] complete and

evidence that the lender asked for further explanation prior to

refinancing the loan on the Subject Property.

38. As far as the alleged failure of supporting

documentation for the “as is” value of site improvements on page

2 of the Report, although noting that it was not specifically

identified in the report, Mr. Gregoire conceded that the value

“easily corresponds with the way it’s described on Page 5 of

[the Report] as Other Depreciated Site Improvements. But there

is no explanation as to why in one - - it goes from $15,000 [on

page 2] to $10,000 [on page 5 of the Report].” T. 110. As

noted above, however, the Corrected Report, which Mr. Gregoire

did not review, corrected the inconsistency between the two “as

is” values set forth in the Report.

Alleged Lack of Support for the Site Value for the Subject

Property listed in the Cost Approach sections of the Report

39. As noted in Finding of Fact 30, supra , the Workfiles

contain comparable sales supporting the site value for the

Subject Property, with an explanation in an addendum in the

Workfiles.

40. In addition, the Field Review of the Report prepared

contain the appropriate prior sale(s) and/or prior listings(s)

of the subject property and comparable sales?” Exhibit R-37,

p. 1.

41. Aside from the comparative sales, there was also data

in the Workfiles showing other land sales in the area. Exhibit

P-3, pp. 64-65.

Alleged lack of documentation supporting the Market Trends

outlined in the Sales Comparison Analysis section of the Report.

42. The Neighborhood section of the Report indicates that

the subject property is in a suburban area with 25 to 75 percent

build-up and stable growth, and with stable property values,

demand and supply in balance, and a marketing time of three to

six months. Exhibit P-3, p. 1 (top third); T. 110.

43. The Report finds that the following factors affect the

marketability of the properties in the neighborhood:

MSA 3600 the area located in south Putnam

County, is convenient to major

transportation routes which offer easy

access to employment opportunities, schools,

and most residential services. The homes in

the area exhibit average to good quality and

appeal and are typically frame, manufactured

or masonry construction and are generally

well maintained. P-3, p. 1.

44. The Report states as market conditions in the subject

neighborhood:

The market is currently stable with mortgage

funds available to qualified buyers at

competitive rates. There is no evidence of

concessions, buydowns, or discounts which

would affect market value. Property values

are relatively stable with no changes

expected in the market in the near term.

Recent fluctuations in mortgage lending

rates do not appear to have affected market

values in the subject market. Exhibit P-3,

p. 1.

45. According to Mr. Gregoire, referring to the Workfiles,

he “couldn’t develop any trend here based on the way it’s

maintained, whether it’s stable or not.” In addition,

Mr. Gregoire opined that the Workfiles contain poor support for

the reported single-family price range. T. 111.

46. Mr. Gregoire acknowledged, however, that the Workfiles

include, “in addition to the comparable sales that we discussed,

some what I call on-line printouts.” Mr. Gregoire also

acknowledged that the Workfiles contained several sales in the

above $200,000 price which are indicated as being the high

price. According to Mr. Gregoire, however, “it doesn’t

necessarily show a predominant value there.” T. 110-111.

47. The on-line printouts referenced by Mr. Gregoire

appear on pages 26 through 30 of the Workfiles for improved

property, and pages 64 and 65 of the Workfiles for land sales.

Exhibit P-1, pp. 26-30, 64-65. The on-line printouts were

derived from Win2Data, which Mr. Gregoire admitted was a

recognized service for extracting market data. While

Mr. Gregoire suggested that the “RealQuest” data source he

utilizes was superior because it has updated on-line data, on-

line Win2Data is also available and was utilized by Respondents.

T. 150. The evidence did not show that the market data utilized

by Respondents was deficient.

48. Respondent Catchpole is also expert in real estate

appraisal. He has a master’s degree in business administration,

has testified as an expert before Congress, the United States

District Courts in Georgia and Florida, and before the United

States Bankruptcy Court in the Middle District of Florida. He

has testified in numerous circuit courts in Florida. He has

been a member of the Appraisal Institute. He has appraised

nuclear power plants, been an advisor for real estate investment

trusts, and has been an appraiser for Whirlpool, Citi Corp and

Shearson Lehman.

49. In the exchange during Mr. Gregoire’s cross-

examination by Respondent Catchpole, it was clear that they had

a difference of opinion as to how to best support an appraisal.

See T. 115-167; see also T. 196-198. The evidence was

insufficient to show that Mr. Gregoire’s approach was superior

to the method utilized by Respondents in conducting the

appraisal reflected in the Report or that Respondents did not

use reasonable diligence in its preparation.

Alleged Failure of Respondents

to Maintain Internal Consistency in the Report

50. In support of this allegation, Petitioner cites to

Mr. Gregoire’s testimony at the final hearing that “it is the

appraiser’s responsibility to ensure internal consistency and to

ensure that the report reflects their opinions and conclusion

before they affix their name to the report or certification.

Petitioner’s PRO, p. 12; T. 135.

51. Aside from the fact that Mr. Gregoire’s opinion did

not reflect the Corrected Report, it is apparent his opinion did

not consider other information provided by Respondents in

support of the Report.

52. While the Field Review was critical of a number of

aspects of the Report, Respondents provided rebuttal to that

Field Review prior to the complaint by Chase initiating this

action.

53. Some of the rebuttal included information indicating

that the reviewer who prepared the Field Review had used

comparable sales that were not arm’s length transactions.

Although Petitioner’s investigator saw the information provided

by Respondent Catchpole indicating that the reviewer’s

comparables were not arm’s length transactions (T. 53),

Mr. Gregoire did not review that information.

54. Mr. Gregoire admitted that he was aware that

Respondents provided a written rebuttal with documentation to

Chase to the Field Review conducted in 2004. At the time of his

testimony in this case, however, Mr. Gregoire had not reviewed

any correspondence related to the rebuttal. T. 117-118.

55. One document in particular, Exhibit R-30, that was

provided to Petitioner’s investigator from Respondents’

Workfiles, contained notes from Respondent Catchpole

contemporaneous to the Report indicating that Respondent

Catchpole had contacted the property appraiser’s office to

resolve differences in comparable sale 2 between the MLS listing

and public records. T. 65-66. Mr. Gregoire was not provided

this further evidence of Respondents’ diligence prior to his

testimony. T. 121-122.

56. In addition, the Workfiles submitted as Exhibits P-3

and P-7, were offered as the same documents. T. 25. It is

clear, however, that a number of documents in P-7 were not in

P-3. P-3 consists of 78 pages, whereas P-7 has 94 pages. It

is apparent from Mr. Gregoire’s testimony and reference to

Exhibit P-3, that his opinions were based upon his review of

P-3.

57. There was also evidence that there were a number of

documents provided to Petitioner’s investigator, but not placed

in Exhibit P-3 for review by Mr. Gregoire for his analysis.

Exhibits RA-1 through RA-12, RB-1, and RC-1 through RC-8. While

ultimately not used as comparative sales, the documents are

additional evidence of Respondents’ efforts and diligence in

preparing the Report.

58. In addition, the refinanced loan for which the Report

was provided has never gone into default.

59. In sum, the evidence adduced at the final hearing was

far less than convincing that Respondents did not use reasonable

diligence in preparing the Report.

CONCLUSIONS OF LAW

60. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding. See §§ 120.569, 120.57(1), 120.60(5), and

455.225(5), Florida Statutes (2009).

61. Petitioner is responsible for prosecuting disciplinary

cases against licensed real estate appraisers. See

§ 475.021(1), Fla. Stat. (2009).

62. The Florida Real Estate Appraisal Board (Board) is

responsible for taking agency action in disciplinary cases

against licensed real estate appraisers. See §§ 475.613(2),

475.624, Fla. Stat. (2009).

63. Petitioner, as the party asserting the affirmative in

this proceeding, has the burden of proof. See , e.g. , Balino v.

Dept. of Health & Rehabilitative Services , 348 So. 2d 349 (Fla.

1st DCA 1977). Because the Petitioner is seeking to prove

violations of a statute and impose administrative fines or other

penalties, it has the burden to prove the allegations in the

complaint by clear and convincing evidence. Ferris v.

Turlington , 510 So. 2d 292 (Fla. 1987).

64. Clear and convincing evidence:

requires that 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 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.

In re Henson , 913 So. 2d 579, 590 (Fla. 2005), quoting Slomowitz

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

65. Section 475.624(15), Florida Statutes, provides:

475.624 Discipline . --The [B]oard 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:

(15) Has failed or refused to exercise

reasonable diligence in developing an

appraisal or preparing an appraisal report.

66. “There is no statute, rule or USPAP [Uniform Standards

of Professional Appraisal Practice] standard that defines

Real Estate v. Guilfoyle , Case No. 07-0683PL (DOAH August 22,

2007), adopted in toto (DBPR Final Order October 24, 2007). In

this case, Count I of the Administrative Complaints relies

solely on an alleged violation of Section 475.624(15), Florida

of Real Estate v. Murciano , Case No. 09-2491PL (DOAH November 2,

2009), adopted in toto (DBPR Final Order February 9, 2010):

It was therefore incumbent upon Petitioner,

in order to meet its burden of burden of

proving that Respondent[s] deviated from the

required standard of diligence in violation

of Section 475.624(15), Florida Statutes, to

present ‘competent evidence . . . from a

person with sufficient insight into what

constitutes reasonable diligence on the part

of a certified real estate appraiser when

developing an appraisal or in preparing an

appraisal report’ under the circumstances

that Respondent[s] faced in the instant

case.

Id. , ¶ 71; cf. Purvis v. Dep’t of Bus. & Prof’l Reg. , 461 So. 2d

134, 136 (Fla. 1st DCA 1984)(expert testimony or other competent

evidence of applicable standard required prior to establishing

deviation from that standard).

67. In any event, disciplinary statutes such as Section

475.624(15), Florida Statutes (2004), are penal in nature, and

must be construed in favor of the one against whom the penalty

would be imposed. Munch v. Dep’t of Prof’l Reg. , 592 So. 2d

1136, 1143 (Fla. 1st DCA 1992). A statute imposing a penalty is

never to be construed in a manner that expands the statute.

Hotel & Restaurant Comm’n v. Sunny Seas No. One , 104 So. 2d 570,

571 (1958).

68. In this case, Petitioner failed to prove by clear and

convincing evidence that Respondents violated Section

475.624(15), Florida Statutes, in preparing the Report.

Petitioner’s expert did not review the Corrected Report, 2/ did

not see rebuttal materials submitted by Respondents in the years

prior to the Administrative Complaints, and did not review

Respondents’ complete Workfiles. Therefore, Petitioner’s

expert’s opinion expressed in this proceeding as to whether

Respondents used reasonable diligence in preparing the Report

lacked persuasiveness as well as credibility. Moreover, the

expert opinion of Respondent Catchpole, a real estate appraisal

expert in his own right, 3/ having firsthand knowledge of the

Subject Property and Report at issue, was more persuasive than

that of Petitioner’s expert regarding the Report and Workfiles

at issue. Because Petitioner has not proven the violation as

alleged in Count I of the Administrative Complaints, and all

other counts of the Administrative Complaints were withdrawn at

the beginning of the administrative hearing in this case, the

Administrative Complaints should be dismissed.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Business and

Professional Regulation, Division of Real Estate, enter a Final

Order dismissing the Administrative Complaints.

DONE AND ENTERED this 19th day of May, 2010, in

Tallahassee, Leon County, Florida.

S

JAMES H. PETERSON, III

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 19th day of May, 2010.

ENDNOTES

1 / Unless otherwise indicated, all references to the Florida

Statutes are to the 2004 version, the year in which the

appraisal report at issue was prepared.

2/ The corrected report was backdated to the date of the

inspection. Many lenders require the signature date on an

appraisal report to be the same as the date of the inspection.

T. 219. Petitioner, in its PRO, argues that backdating the

Corrected Report “demonstrates a complete lack of reasonable

Petitioner submitted no evidence whatsoever to support its

contention that backdating the Corrected Report demonstrates a

lack of reasonable diligence or violation of any other

applicable standard.

3 / See , e.g. , Martuccio v. Dep’t of Prof’l Reg. , 622 So. 2d 607,

609-10 (person with pecuniary interest in the proceeding is not

disqualified from testifying as an expert under § 90.702, Fla.

Stat.); cf . Falk v. Beard , 614 So. 2d 1086, 1089 (Fla. 1993)(“It

would be an anomalous situation indeed if the testimony of one

against whom a complaint is lodged could never form the basis

for competent, substantial evidence”).

COPIES FURNISHED :

Robert Minarcin, Esquire

Department of Business

and Professional Regulation

Division of Real Estate

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

Fred Catchpole

5449 Marcia Circle

Jacksonville, Florida 32210

Gwendolyn Barker

2005 Cardiff Lane

Middleburg, Florida 32068

Reginald Dixon, General Counsel

Department of Business

and Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Roger P. Enzor, Chair

Real Estate Commission

Department of Business

and Professional Regulation

400 West Robinson Street, N801

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.