09-003685PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Harvey W. Sigmond Status: Closed Recommended Order on Tuesday, January 12, 2010.

Summary: Respondent failed to sufficiently analyze a previous sale of the property he was appraising.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-3685PL

)

HARVEY W. SIGMOND, )

)

Respondent. )

)

RECOMMENDED ORDER

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

on, September 17, 2009, in Naples, Florida, before Susan B.

Harrell, a designated Administrative Law Judge of the Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Donna Christine Lindamood, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N801

Orlando, Florida 32801-1757

For Respondent: Steven W. Johnson, Esquire

Steven W. Johnson, P.A.

20 North Orange Avenue, Suite 700

Orlando, Florida 32801

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent violated

Subsections 475.624(2), 475.624(14), and 475.624(15), Florida

Statutes (2005), 1 and, if so, what discipline should be imposed.

PRELIMINARY STATEMENT

On March 2, 2009, Petitioner, Department of Business and

Profess Professional Regulation, Division of Real Estate

(Department), filed a ten-count Administrative Complaint,

alleging that Respondent, Harvey W. Sigmond (Mr. Sigmond),

violated Subsections 475.624(2), 475.624(14), and 475.624(15),

Florida Statutes, concerning an appraisal report developed and

communicated by Mr. Sigmond on or about January 6, 2006.

Mr. Sigmond requested an administrative hearing, and the case

was forwarded to the Division of Administrative Hearings on

July 13, 2009, for assignment to an Administrative Law Judge.

At the final hearing, the Department called Deborah Terry

and Dennis J. Black as its witnesses. Petitioner’s Exhibits 1

through 7 were admitted in evidence. Mr. Sigmond testified in

his own behalf and called the following witnesses: Harry

Henderson, Michael Timmerman, Christi Bryant, and Burkhard

Kleim. Respondent’s Exhibits 1 through 3 were admitted in

evidence.

The one-volume Transcript of the final hearing was filed on

October 19, 2009. The parties agreed to file their proposed

recommended orders within 30 days of the filing of the

Transcript. The Department filed its Proposed Recommended Order

on November 16, 2009, and Mr. Sigmond filed his Proposed

Recommended Order on November 17, 2009. The parties’ Proposed

Recommended Orders have been considered in the preparation of

this Recommended Order.

FINDINGS OF FACT

1. Mr. Sigmond is now and was, at all times material to

this proceeding, a state-certified residential real estate

appraiser in the State of Florida, having been issued license

number 2479 in 1994. Mr. Sigmond has never had any prior

disciplinary action taken against him.

2. On January 2, 2006, Rels Valuation, an appraisal

management company for Wells Fargo Bank, ordered an appraisal

from Mr. Sigmond of a condominium unit located at 2740 Cypress

Trace Circle, Unit 2715, Naples, Florida (Subject Property).

The client for the appraisal was Wells Fargo Bank. The purpose

of the appraisal was for mortgage lending.

3. On or about January 6, 2006, Mr. Sigmond developed and

communicated an appraisal report (Report) on the Subject

Property valuing the Subject Property at $375,000.

4. The Subject Property is a two-bedroom, two-bath unit

with 1,171 square feet of gross living area. The unit is

located on the first floor of the building and has a carport.

At the time of the Report, the Subject Property was one year

old. The unit was freshly painted, had ceramic floor tile in

the foyer, living room, kitchen, and dining areas. The bedrooms

were carpeted. The foyer, living room, dining, and kitchen

areas had crown molding.

5. The Subject Property was appraised as unfurnished and

listed for sale as unfurnished; however, some furniture was left

in the unit. Mr. Sigmond stated in his report:

As stated in contract: “Property is being

sold ‘turnkey.’ Furnishings have little or

no value and are being left as a convenience

to the seller.” Also buyer agrees to pay

$1,500 for kitchen set at closing.

6. The Subject Property was sold prior to the issuance of

the Report. The first sale was a preconstruction purchase on

December 2, 2004, for a purchase price of $213,900. The Subject

Property was listed on September 27, 2005, for $342,900, and the

Subject Property was under contract for sale by October 10,

2005. The second sale was closed on December 13, 2005, and the

sale price was $335,000. The buyers in the second sale entered

into a sale and purchase contract with John Schrenkel on

December 20, 2005, to sell the Subject Property for $375,000.

7. After the sale of the Subject Property on December 13,

2005, the buyers put crown molding in the unit, painted all the

walls of the unit, put in ceiling fans, and upgraded some

electrical fixtures.

8. Mr. Sigmond valued the Subject Property for $40,000

more than the Subject Property sold on December 13, 2005. He

considered the upgrades that were made to the Subject Property

after the December 13, 2005, sale, and the amount of time that

had elapsed from the listing of the Subject Property in

September 2005 for the sale that closed on December 13, 2005,

and the date of the appraisal. Mr. Sigmond testified that he

did not know the actual execution date of the sales contract for

the December 13, 2005, sale. However, in his response to the

Department dated July 16, 2008, he acknowledged that the pending

date for the December 13 sale was October 10, 2005. He did not

include the pending sale date in his Report.

9. Mr. Sigmond did not adequately explain in his Report

the $40,000 difference in valuation from the last sale of the

Subject Property and his appraisal valuation. He admitted in

his letter dated July 16, 2008, to the Department’s investigator

that that he did not include an analysis of the December 13 sale

in his Report. He stated:

The prior sales of the subject property were

identified in the addendum to the appraisal,

however, the analysis of the 12/13/05 sale

was inadvertently omitted from the addendum.

The following comment was originally in the

appraisal report: “At the time of the

inspection, the subject property had been

renovated since its previous sale on

12/13/05. The subject improvements were:

Custom crown molding throughout,

updated/additional electrical repairs and/or

replacement throughout the subject unit; the

interior had been completely repainted;

replaced and/or upgraded light fixtures and

ceiling fans. The subject has been well

maintained and is considered to be in good

physical condition with no functional

inadequacies noted. No external

inadequacies were noted in the subject’s

immediate area.” That comment should not

have been omitted from the appraisal,

however, it did not materially affect the

reporting standards or the opinion of the

market value as the condition of the subject

was referred to as good throughout the

report.

10. The Subject Property is part of a condominium complex

known as Terrace IV at Cypress Trace. Terrace IV consists of

60 units. Cypress Trace is a conglomerate of individual

condominium projects that have banded together through an

agreement to share certain common amenities. The total number

of condominiums in the conglomerate is 799.

11. There are three methods for valuing all forms of real

estate: the cost approach, the sales comparison approach, and

the income approach. Mr. Sigmond used the sales comparison

approach, which is the appropriate method for valuating

condominium units such as the Subject Property. The goal of a

sales comparison approach is to find a set of comparable sales

as similar as possible to the property being appraised.

Mr. Sigmond selected and listed three properties in his Report,

which he considered to be comparable to the Subject Property.

12. The first property listed as a comparable sale was

located at Veranda III at Cypress Trace (Comparable Sale 1),

less than .01 mile northwest of the Subject Property. It is a

two-bedroom, two-bath unit with 1,414 square feet of gross

living area located on the second floor of the building. The

unit has a detached garage. At the time of the Report,

Comparable Sale 1 was two years old.

13. A contract for sale was entered into on July 5, 2005,

for $399,000. The sale of Comparable Sale 1, which included

furniture, was closed on September 23, 2005.

14. Mr. Sigmond adjusted the value of Comparable Sale 1

downward by $15,000 for the detached garage and by $17,000 for

the additional square footage. He also made a positive time

adjustment for Comparable Sale 1 of $15,900.

15. A time adjustment is an adjustment for the amount of

time that has elapsed since the property last sold. In a market

which is climbing, an upward adjustment for appreciation would

be appropriate, but, if the market has peaked and is declining,

a positive adjustment would not be appropriate. Mr. Sigmond

made time adjustments from the time that the contracts for sale

were entered for the properties used as comparables. The time

adjustments were 1 percent per month from the date of the

pending sale.

16. The second property listed as a comparable sale was

located at Terrace II at Cypress Trace (Comparable Sale 2),

approximately .35 miles northeast of the Subject Property.

Comparable Sale 2 is a two-bedroom, two-bath unit consisting of

1,194 square feet of gross living area located on the third

floor of the building. The unit was two years old at the time

of the report. Comparable Sale 2 has a carport.

17. Comparable Sale 2 was sold furnished in November 2005.

The multiple listing for Comparable Sale 2 described the

furnishings as follows: “This 3rd floor condo has over

$20,000.00 in furnishings including Tommy Bahama style furniture

and drapes.” Mr. Sigmond or his assistant contacted the listing

agent for Comparable Sale 2 and was told that the value of the

furniture was nominal. Mr. Dennis J. Black, expert for the

Department, contacted the owner of Comparable Sale 2, who

advised Mr. Black that one of the selling points of the unit was

the furnishings.

18. A contract for sale for Comparable Sale 2 was pending

on October 3, 2005, and the sale closed on November 16, 2005,

for $355,000. Mr. Sigmond made a $15,000 positive adjustment to

Comparable Sale 2 for options and upgrades and a positive time

adjustment of $7,100. Mr. Sigmond made no adjustments for

differences in floor locations, feeling that the floor location

is typically a personal preference of the buyer. He also made

no adjustments for the furniture that was sold with the unit.

19. Comparable Sale 2 was the most current sale of a basic

unit exactly like the Subject Property; however, Comparable

Sale 2 did not have crown molding, was not freshly painted, and

had carpet as opposed to ceramic tile in the living areas. The

multiple listing for Comparable Sale 2 did indicate that the

unit had some ceramic tile, but did not specify in what areas

the tile was located.

20. The third property listed as a comparable sale was

located at Carrington at Stonebridge (Comparable Sale 3),

approximately 2.1 miles southwest of the Subject Property.

Comparable Sale 3 is a two-bedroom, two-bath unit consisting of

1,184 square feet of gross living area located on the first

floor of the building. The unit has a carport and, at the time

of the Report, was nine years old.

21. A contract for sale of Comparable Sale 3, unfurnished,

was entered into on June 22, 2005, and the sale was closed on

July 13, 2005, for $350,000.

22. Mr. Sigmond chose Comparable Sale 1 to bracket the

sale price in order to meet an underwriting guideline of Wells

Fargo Bank, which requires that a similar unit be listed which

has a value that is more than what the appraiser may value the

property being appraised. Bracketing is a common and accepted

appraisal practice in the Collier County area when doing

appraisals for mortgage lenders. He felt that Comparable Sale 2

was the most recent similar sale in the project. He went out of

the project for Comparable Sale 3, because he felt that the

banks wanted to have a comparable sale out of the project.

23. Mr. Sigmond’s Report contained a description of the

general market conditions as follows:

There are no loan discounts, interest buy

downs or concessions noted in the

marketplace at this time. Conventional

financing is readily available and interest

rates are at competitive levels. Demand

outweighs supply at this time, and market

values have been increasing.

The marketing time for condominium[s] in

this area has ranged from one to three

months and is considered to be typical.

24. Mr. Sigmond also discussed the increasing market in

the Sales Comparison Approach section of the Supplemental

Addendum of the Report.

Time adjustments were necessary due to a

market in which demands [sic] exceeds

supply, and properties are commonly sold

within 60 days of their listing. These

adjustments were calculated at a

conservative 1% per month from “pending”

date. A 25%-40% increase in the Naples Real

Estate market over the last 12 months has

been well documented by MLS and local print

media.

25. Based on the overall evidence, the real estate market

was not declining at the time the appraisal was done.

26. There were other units which Mr. Sigmond considered,

but did not use as a comparable sale. One such unit was located

at Terrace IV at Cypress Trace, Unit 2738. Built in 2005, this

unit has two bedrooms and two bathrooms and is located on the

third floor of the building. The living area of the unit is

1,232 square feet. The freshly painted unit has crown molding

and ceramic tile throughout the unit. Unit 2738 was a new

listing on August 5, 2005, for $339,900. A pending sale on

August 16, 2005, showed a selling price of $335,000. The sale

was closed on October 4, 2005.

27. Another unit which Mr. Sigmond considered but did not

use as a comparable sale was located at 2730 Cypress Trace

Circle, Unit 2813. This condominium is a first-floor two-

bedroom, two-bath unit, which was built in 2004. It has ceramic

tile and carpeting. The living area is 1,194 square feet.

Unit 2813 was listed on August 18, 2005, for $339,000. On

September 7, 2005, a sale was pending for $320,000. The sale

closed on November 30, 2005.

28. The evidence does not establish that Mr. Sigmond

intentionally crafted his Report so that his valuation of the

Subject Property would equal the contract price of the Subject

Property.

29. In his Report, Mr. Sigmond certified the following:

I performed this appraisal in accordance

with the requirements of the Uniform

Standards of Professional Appraisal Practice

that were adopted and promulgated by the

Appraisal Standards Board of The Appraisal

Foundation and that were in place at the

time this appraisal report was prepared.

30. The Uniform Standards of Professional Appraisal

Practice (USPAP) (2005), which were in effect at the time the

Report was developed and communicated, provide the following:

Standards Rule 1-1 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

In developing a real property appraisal, an

appraiser must:

(a) be aware of, understand, and correctly

employ those recognized methods and

techniques that are necessary to produce a

credible appraisal.

(b) not commit a substantial error of

omission or commission that significantly

affects an appraisal; 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.

Standards Rule 1-2 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

In developing a real property appraisal, an

appraiser must:

* * *

(e) identify the characteristics of the

property that are relevant to the type and

definition of value and intended use of the

appraisal, including:

* * *

(iii) any personal property, trade

fixtures, or intangible items that are not

real property but are included in the

appraisal;

* * *

Standards Rule 1-4 (This Standards Rule

contains specific requirements from which

departure is permitted. See the DEPARTURE

RULE.)

In developing a real property appraisal, an

appraiser must collect, verify, and analyze

all information applicable to the appraisal

problem, given the scope of the work

identified in accordance with Standards

Rule 1-2(f).

(a) When a sales comparison approach is

applicable, an appraiser must analyze such

comparable sales data as are available to

indicate a value conclusion.

* * *

Standards Rule 1-5 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

In developing a real property appraisal,

when the value opinion to be developed is

market value, an appraiser must, if such

information is available to the appraiser in

the normal course of business:

(a) analyze all agreements of sale,

options, or listings of the subject property

current as of the effective date of the

appraisal; and

(b) analyze all sales of the subject

property that occurred within the last

three (3) years prior to the effective date

of the appraisal.

* * *

Standards Rule 2-1 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

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;

* * *

Standards Rule 2-2 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

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.

* * *

(b) The content of a Summary Appraisal

Report must be consistent with the intended

use of the appraisal and, at a minimum:

* * *

(iii) summarize information sufficient to

identify the real estate involved in the

appraisal, including the physical and

economic property characteristics relevant

to the assignment.

* * *

(viii) clearly and conspicuously:

state all extraordinary assumptions and

hypothetical conditions; and

state that their use might have

affected the assignment results;

* * *

Standards Rule 2-3 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

Each written real property appraisal report

must contain a signed certification that is

similar in content to the following form:

I certify to the best of my knowledge and

belief:

--the statements of fact contained in this

report are true and correct.

--the reported analyses, opinions, and

conclusions are limited only by the reported

assumptions and limiting conditions and are

my personal, impartial, and unbiased

professional analyses, opinions, and

conclusions.

--I have no (or the specified) present or

prospective interest in the property that is

the subject of this report and no (or

specified) personal interest with respect to

the parties involved.

--I have no bias with respect to the

property that is the subject of this report

or to the parties involved with this

assignment.

--my engagement in this assignment was not

contingent upon developing or reporting

predetermined results.

--my compensation for completing this

assignment is not contingent upon the

development or reporting of a predetermined

value or direction in value that favors the

cause of the client, the amount of the value

opinion, the attainment of a stipulated

result, or the occurrence of a subsequent

event directly related to the intended use

of this appraisal.

--my analyses, opinions, and conclusions

were developed, and this report has been

prepared in conformity with the Uniform

Standards of Professional Appraisal

Practice .

--I have (or have not) made a personal

inspection of the property that is the

subject of this report. (If more than one

person signs this certification, the

certification must clearly specify which

individuals did and which individuals did

not make a personal inspection of the

appraised property.)

--no one provided significant real property

appraisal assistance to the person signing

this certification. (If there are

exceptions, the name of each individual

providing significant real property

appraisal assistance must be stated.)

CONCLUSIONS OF LAW

31. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2009).

32. The Department has the burden to establish the

allegations of the Administrative Complaint by clear and

convincing evidence. Department of Banking and Finance v.

Osborne Stern and Company , 670 So. 2d 932 (Fla. 1998); Ferris v.

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

33. The Department has alleged that Mr. Sigmond violated

Subsections 475.624(2), 475.624(14), and 475.624(15), Florida

Statutes, which provide:

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.

* * *

(14) Has violated any standard for the

development or communication of a real

estate appraisal or other provision of the

Uniform Standards of Professional Appraisal

Practice.

(15) Has failed or refused to exercise

reasonable diligence in developing an

appraisal or preparing an appraisal report.

34. Disciplinary statutes such as Section 475.624, Florida

Statutes, are penal in nature and “must be strictly construed in

favor of the person against whom the penalty would be imposed.”

Munch v. Department of Business and Professional Regulation ,

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 and Restaurant Commission v. Sunny Seas No. One ,

104 So. 2d 570, 571 (Fla. 1958).

35. The Department alleges that Mr. Sigmond made the

following errors and omissions on his appraisal report of the

Subject Property:

A) Respondent failed to analyze the

December 13, 2005[,] prior sale of the

Subject Property for $335,000, stating only

on the supplemental addendum page that “the

second sale of the subject was a resale on

12/13/2005 for the price of $335,000 under

current market conditions”;

B) The Subject Property’s original sale on

December 2, 2004[,] was $121,100 less than

the December 13, 2005[,] sales price of the

Subject Property and in as much as it

occurred within three years of the effective

date of the Report, the original sale should

have been, but was not, analyzed by the

Respondent;

C) Respondent failed to analyze the listing

history of the Subject Property, first

listed at $342,900 on September 27, 2005[,]

and subsequently sold at $335,000 according

to the MLS on December 9, 2005, as shown on

the MLS printout maintained in the

Respondent’s work file. . . .

D) Respondent failed to analyze the sales

contract for the Subject Property contained

in the Respondent’s work file, . . . wherein

Schrenkel agreed to purchase the Subject

Property on December 18, 2005[,] for

$375,000, which was $40,000 more than the

December 13, 2005[,] sale;

E) Respondent’s valuation of the Subject

Property on January 6, 2006[,] at $375,000

matched exactly the sales contract price,

without explanation;

F) Respondent falsely certified in the

appraiser’s certification that, “5. I

researched, verified, analyzed, and reported

on any current agreement for sale for the

subject property, any offering for the sale

of the subject property in the twelve months

prior to the effective date of this

appraisal, and the prior sales of the

subject property for a minimum of three

years prior to the effective date of this

appraisal, unless otherwise indicated on

this report”;

G) Respondent stated that “primary

consideration in the selection of the

comparable sales went to recent closing of

condominium units which were similar to the

subject in size, amenities and location,”

yet Respondent failed to utilize other more

recent and more similar Comparable Sales in

the Subject Property complex in arriving at

valuation via the Sales Comparison Approach;

H) Comparable Sales 1 and 2 were sold

furnished, yet Respondent failed to adjust

for the furnishing or explain in the Report

why no adjustment was warranted;

I) If the Subject Property had significant

upgrades that made it superior to the

identical model, Comparable Sale 2,

Respondent failed to state in the Report

what those upgrades were, other than a

reference to the Subject Property having

crown molding throughout and a separate

storage unit.

36. The Department has established by clear and convincing

evidence that Mr. Sigmond failed to adequately analyze the

December 13, 2005, sale of the Subject Property in his Report.

He admits the error in his response to the Department dated

July 6, 2008.

37. The Department has established by clear and convincing

evidence that Mr. Sigmond failed to disclose the listing price

of the Subject Property for the December 13, 2005, sale.

38. The Department has established by clear and convincing

evidence that Mr. Sigmond falsely certified that he had analyzed

and reported any offering for sale of the Subject Property for

the last 12 months and that he had reported an analysis of the

December 13, 2005, sale in his Report.

39. The Department has established by clear and convincing

evidence that Mr. Sigmond failed to adequately explain in his

Report the lack of an adjustment for Comparable Sale 2 for the

furnishings which were included in the sale. Although

Mr. Sigmond contacted the listing agent, the reported nominal

valuation by the listing agent does not jibe with the Multiple

Listing Service description, which valued the furnishings at

$20,000.

40. The Department has established by clear and convincing

evidence that Mr. Sigmond failed to list in his Report the

upgrades upon which he based his adjustment for Comparable

Sale 2.

41. The Department did establish by clear and convincing

evidence that the contract price for the Subject Property and

the appraisal valuation were the same. However, this fact does

not equate to a violation of Subsections 475.624(2) and

475.624(15), Florida Statutes.

42. The Department did not establish the other allegations

in the Administrative Complaint by clear and convincing

evidence.

43. The Department has established by clear and convincing

evidence that Mr. Sigmond violated his duty to adhere to the

USPAP standards which were in effect at the time of the

appraisal. He certified in the appraisal that he had followed

the USPAP standards in effect, and he did not. He violated

USPAP Standards Rules 1-1(c) and 1-5(a) and (b), by failing to

include listing information on the Subject Property, failing to

adequately analyze in his Report the December 13, 2005, sale of

the Subject Property, failing to list the upgrades for which he

made an adjustment to Comparable Sale 2, and failing to explain

no adjustment for furnishings for Comparable Sale 2. These

omissions affected the credibility of the Report. Thus, the

Department has established by clear and convincing evidence that

Mr. Sigmond violated Subsections 475.624(2) and 475.624(15),

Florida Statutes.

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. 2 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.

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.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that a final order be entered finding

that Mr. Sigmond violated Subsections 475.624(2) and

475.624(15), Florida Statutes; dismissing Counts Three through

Ten; issuing a public reprimand; and imposing a $5,000

administrative fine.

DONE AND ENTERED this 12th day of January, 2010, in

Tallahassee, Leon County, Florida.

S

SUSAN B. HARRELL

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 12th day of January, 2010.

ENDNOTES

1/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2005 version.

2/ 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 :

Steven W. Johnson, Esquire

Steven W. Johnson, P.A.

20 North Orange Avenue, Suite 700

Orlando, Florida 32801

Donna Christine Lindamood, 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 32399-0792

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 802N

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.