11-006007F Victor Jesus Monzon vs. Department Of Business And Professional Regulation, Division Of Real Estate Status: Closed DOAH Final Order on Friday, March 30, 2012.

Summary: Costs and fees denied because agency was substantially justified in bring administrative complaint and because petitioner failed to prove his status as a small business party.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VICTOR JESUS MONZON , )

)

Petitioner , )

)

vs. ) Case No. 11 - 6007F

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE , )

)

Respondent . )

)

FINAL ORDER

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

on January 27, 2012, by telephone conference call at sites

located in Fort Lauderdale, Orlando, and Tallahassee, Florida,

before Claude B. Arrington, a designa ted Administrative Law

Judge of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Daniel Villazon, Esquire

Daniel Villazon, P.A.

1420 Celebration Boulevard, Suite 200

Celebration, Florida 34747

For Respondent: Jennifer Leigh Blakeman, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street

Orlando, Florida 32801

STATEMENT OF THE ISSUE

Whether Petitioner, Victor Jesus Monzon (Mr. Monzon),

should be awarded attorney ' s fees and costs pursuant to section

57.111, Florida Statutes (2011). Because of a stipulation

reached by the parties, t he only issues are (1) whether

Mr. Monzon qualified as a " small business party, " and (2)

whether the Department of Business and Professional Regulation

(the Department) was " substantially justified " in initiating the

disciplinary proceedings against Mr. Mo nzon that culminated in

DOAH Case No. 10 - 9926PL.

PRELIMINARY STATEMENT

On September 27, 2011, the Florida Real Estate Appraisal

Board entered Final Order No. 2011 - 06623, adopting the Findings

of Fact and Conclusions of Law contained in the Recommended

Ord er entered by the undersigned in DOAH Case No. 10 - 9926PL (the

disciplinary proceeding). That Recommended Order found that the

Department had failed to prove by clear and convincing evidence

that Mr. Monzon committed the violations that had been alleged

in the Administrative Complaint.

On November 21, 2011, Mr. Monzon filed with DOAH

" Petitioner ' s Florida Statute 57.111 Motion for Attorney

Fees/Costs in DOAH Case No. 10 - 9926PL, " which was assigned DOAH

Case No. 11 - 6007F (the fee case). The parties stipulat ed that

the disciplinary action against Mr. Monzon were instituted by a

state agency, that the state agency was not a nominal party,

that Mr. Monzon was the prevailing party in disciplinary

proceeding, that there are no circumstances that would make the

aw ard of fees and costs unjust, and that the amount of fees and

costs ($10,485.00 and $237.00, respectively) being sought were

reasonable.

At the formal hearing, the Department presented five

consecutively - numbered exhibits, each of which was admitted

withou t objection. Mr. Monzon testified on his own behalf, but

presented no additional exhibits. Arthur Soule, an investigator

employed by the Department, testified on behalf of the

Department. Mr. Soule investigated the complaint that led to

the disciplinary matter, compiled the materials submitted to the

probable cause panel, and prepared an investigative report that

was presented to the probable cause panel.

A Transcript of the proceedings consisting of one volume

was filed on February 21, 2012. The partie s timely filed

Proposed Final Orders which have been duly considered by the

undersigned in the preparation of this Final Order.

Unless otherwise noted, all statutory references are to

Florida Statutes (2011).

FINDING OF FACT

1. At the times relevant to t his proceeding, Mr. Monzon

has been a licensed real estate appraiser and the owner of a

business known as Heartland Appraisal Group, Inc. On

February 11, 2009, the Department received a complaint from an

employee of Chase Home Lending (Chase) about an app raisal report

(the Report) that was at issue in the disciplinary proceeding.

The Report was dated as of April 23, 2007, and is described by

the Recommended Order entered in DOAH Case No. 10 - 9926PL.

2. On April 3, 2009, Mr. Soule provided Mr. Monzon a cop y

of the Chase complaint. Mr. Soule subsequently gathered

documentation relevant to the complaint and obtained a complete

copy of Mr. Monzon ' s work file for the Report.

3. The Administrative Complaint in the disciplinary

proceeding was dated July 7, 2010 , and filed with the Department

on July 20, 2010. Mr. Monzon ' s Election of Rights Form appears

to have been faxed to the Department on August 6, 2010, and

filed with DOAH on October 27, 2010. The formal hearing in the

disciplinary proceeding was held Mar ch 9, 2011.

4. At the hearing on fees and costs, Mr. Monzon was

questioned as to his finances as of the date of the formal

hearing in the disciplinary proceeding (March 9, 2011) and as of

January 27, 2012. There was no evidence as to his finances or

the number of his employees as of the date the Department

initiated the disciplinary proceedings against him.

5. The Administrative Complaint against Mr. Monzon

contained factual allegations as to the Report, which valued the

fair market value of condominium unit 1803 located at 1331

Brickell Bay Drive, Miami, Florida, as of April 23, 2007. In

addition to references to Florida Statutes (2007), the

Administrative Complaint cited certain Uniform Standards of

Professional Appraisal Practice (USPAP).

6. Count On e of the Administrative Complaint charged that

Mr. Monzon violated section 475.624(2) by culpable negligence or

breach of trust in a business transaction; or violated a duty

imposed upon him by the terms of a contract, whether written,

oral, express or imp lied, in an appraisal assignment, by

certifying that he had complied with the above USPAP Standards

when he did not.

7. Count Two alleged that Mr. Monzon engaged in fraud,

misrepresentation, concealment, or dishonest conduct by

concealing prior sales of t he Subject Property; concealing or

misrepresenting the true ownership of the Subject Property;

acquiescing in the client ' s demand to conceal the true ownership

of the Subject Property, and to alter the Report to reflect a

' change ' in ownership; used a Comp arable Sale 1 that sold under

circumstances suggestive of fraud to arrive at a higher

valuation for the Subject Property; and/or using other

Comparable Sales located in a development noted for fraud, in

violation of section 475.624(2).

8. Count Three alle ged that Mr. Monzon violated section

475.624(15) by failing to practice appraisal with that level of

care and skill which is recognized by a reasonably prudent

appraiser as being acceptable under similar conditions and

circumstances by failing to comply wi th the USPAP provisions

governing the development and communication of the Report.

9. Count Four alleged that Mr. Monzon violated section

475.629 by failing to maintain a copy of the appraisal report

submitted to the client. Count Four was dismissed by t he

Department at the outset of the formal hearing in DOAH Case

No. 10 - 9926PL.

10. Mr. Soule completed an Investigative Report on

August 21, 2009. His report was approved by his supervisor the

same day. The report, which included the documentation he had

gathered, consists of 430 pages.

11. On July 7, 2010, a probable cause panel consisting of

two appraisers, voted to find probable cause after asserting

that they had received Mr. Soule ' s Investigative Report.

12. Both panel members answered in the affir mative to the

following question " Did you thoroughly read and review these

materials and familiarize yourself with the information

presented within? "

13. The panel members were also instructed by attorney

Mary Ellen Clark as follows:

Panel members, you ' re not here to determine

the guilt or innocence of the person who is

the subject of each case, but to decide

whether the facts disclosed by the record

before you constitute probable cause for the

prosecutor to proceed in bringing formal

charges by way of an administrative

complaint against that person.

14. The panel members were provided a draft of an

administrative complaint that, after editing, became the

Administrative Complaint filed in the disciplinary proceeding.

The panel was also presented Mr. Monz on ' s rebuttal to the

allegations against him.

15. After a review of the four counts in the

administrative complaint presented to them by D. Chris

Lindamood, Esquire, a senior attorney employed by the

Department, the panelist discussed with counsel for the

Department the allegations contained in the administrative

complaint. That discussion demonstrated that each panelist had

reviewed the material in the Investigative Report, including the

attachments thereto. Those materials contained different

iteration s of the appraisal report and notations by Mr. Monzon

which were sufficient, along with the other materials attached

to the Investigative Report, to lead a reasonable person to

conclude that there was probable cause to file the charges in

the administrativ e complaint against Mr. Monzon.

CONCLUSIONS OF LAW

16. DOAH has personal and subject matter jurisdiction in

this proceeding pursuant to sections 57.111(4)(b)1, 120.569, and

120.57(1).

17. Mr. Monzon has the burden of proving by a preponderance

of the e vidence that he is entitled to an award of attorney fees

and costs. See Balino v. Dep ' t of H RS , 348 So. 2d 349, 350

(Fla. 1st DCA 1977) and Dep ' t of Transp. v. J.W.C. Co., Inc. ,

396 So. 2d 778 (Fla. 1st DCA 1981).

18. The preponderance of the evidence st andard requires

proof by " the greater weight of the evidence, " Black ' s Law

Dictionary 1201 (7th ed. 1999), or evidence that " more likely

than not " tends to prove a certain proposition. See Gross v.

Lyons , 763 So. 2d 276, 289 n.1 (Fla. 2000).

19. Section 57.111(4)(a), Florida Statutes, provides:

Unless otherwise provided by law, an award

of attorney ' s fees and costs shall be made

to a prevailing small business party in any

adjudicatory proceeding or administrative

proceeding pursuant to chapter 120 initiat ed

by a state agency, unless the actions of the

agency were substantially justified or

special circumstances exist which would make

the award unjust.

20. Subsection 57.111(3)(b) and (c), provide:

(b) The term " initiated by a state agency "

means that the state agency:

1. Filed the first pleading in any state or

federal court in this state;

2. Filed a request for an administrative

hearing pursuant to chapter 120; or

3. Was required by law or rule to advise a

small business party of a clear point of

e ntry after some recognizable event in the

investigatory or other free - form proceeding

of the agency.

21. Section 57.111(3)(d) defines the term " small business

party " as follows:

(d) The term " small business party " means:

1.a. A sole proprietor of an unincorporated

business, including a professional practice,

whose principal office is in this state, who

is domiciled in this state, and whose

business or professional practice has, at

the time the action is initiated by a state

agency, not more than 25 f ull - time employees

or a net worth of not more than $2 million,

including both personal and business

investments;

b. A partnership or corporation, including

a professional practice, which has its

principal office in this state and has at

the time the actio n is initiated by a state

agency not more than 25 full - time employees

or a net worth of not more than $2 million;

or

c. An individual whose net worth did not

exceed $2 million at the time the action is

initiated by a state agency when the action

is brough t against that individual ' s license

to engage in the practice or operation of a

business, profession, or trade . . .

22. To prevail in this proceeding for an award of costs

and fees, Mr. Monzon must first establish that he was a small

business party at the time the Department initiated the

disciplinary proceedings against him. While Mr. Monzon

established that he met the definition of a small business party

at the time of the formal hearing in the disciplinary proceeding

and at the time of the formal h earing in this costs and fees

proceeding, he failed to prove that he met that definition at

the time the Department initiated the disciplinary proceedings

against him. Consequently, he failed to meet his burden of

proof in this proceeding.

23. Substantia l justification is defined in s ection

57.111(3)(e), as " a reasonable basis in law and fact at the time

it was initiated by a state agency. " Substantial justification

requires that the probable cause panel had a " solid though not

necessarily correct basis in fact and law for the position it

took. " Fish v. Dep ' t of Health , 825 So. 2d 421, 423 (Fla. 4th

DCA 2002) (citing McDonald v. Schweiker , 726 F.2d 311, 316 (7th

Cir. 1983)).

24. In arguing that the Department was not substantially

justified in proceedin g against Mr. Monzon, his attorney in his

Proposed Final Order asserts that the probable cause panel did

not comply with the portion of section 455.225(4), which

provides " Any probable cause panel must include one of the

board ' s former or consumer members, if one is available, willing

to serve, and is authorized to do so by the board chair. " Mr.

Monzon has the burden of proving his untimely contention that

the probable cause panel was improperly configured. While the

evidence established that the two memb ers of the probable cause

panel were licensed appraisers, there was no evidence presented

that a consumer member was available or willing to serve.

Consequently, Mr. Monzon ' s contention that the probable cause

panel was improperly configured is rejected d ue to a lack of

proof and because the contention was not timely raised.

25. T he Department established that it was substantially

justified in taking the action that it did in filing the

Administrative Complaint in the disciplinary proceeding.

ORDER

Based on the foregoing, it is ORDERED that Mr. Monzon's

Motion for Attorney's Fees and Costs is denied, and Mr. Monzon

shall recover nothing in the action. The file of the Division of

Administrative Hearings is closed.

DONE AND ORDERED this 30th day of March , 2 012 , in

Tallahassee, Leon County, Florida.

S

CLAUDE B. ARRINGTON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of March , 2012 .

COPIES FURNISHED :

Juana Watkins, Director

Division of Real Estate

400 West Robinson Street, N801

Orlando, Florida 32801

Layne Smith, General Counsle

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Daniel Villazon, Esquire

Daniel Villazon, P.A.

1420 Celebration Boulevard, Suite 200

Cel ebration, Florida 34747

[e-mail]

Jennifer Leigh Blakeman, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street

Orlando, Florida 32801

[e-mail]

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the orig inal notice of administrative appeal with the

agency clerk of the Division of Administrative Hearings within

30 days of rendition of the order to be reviewed, and a copy of

the notice, accompanied by any filing fees prescribed by law,

with the clerk of the District Court of Appeal in the appellate

district where the agency maintains its headquarters or where a

party resides or as otherwise provided by law.