96-000834
Florida Real Estate Appraisal Board vs.
Beverly J. Merchant
Status: Closed
Recommended Order on Thursday, September 5, 1996.
Recommended Order on Thursday, September 5, 1996.
1STATE OF FLORIDA
4DIVISION OF ADMINISTRATIVE HEARINGS
8DEPARTMENT OF BUSINESS AND )
13PROFESSIONAL REGULATION, FLORIDA )
17REAL ESTATE APPRAISAL BOARD, )
22)
23Petitioner, )
25)
26vs. ) CASE NO. 96-0834
31)
32BEVERLY J. MERCHANT, )
36)
37Respondent. )
39__________________________________)
40RECOMMENDED ORDER
42Pursuant to notice, a formal hearing was conducted in this case at Miami,
55Florida, on May 1, 1996, before Michael M. Parrish, a duly designated Hearing
68Officer of the Division of Administrative Hearings.
75APPEARANCES
76For Petitioner: Steven W. Johnson, Esquire
82Department of Business and Professional
87Regulation, Division of Real Estate
92Post Office Box 1900
96Orlando, Florida 32802
99For Respondent: Ms. Beverly J. Merchant, pro se
107Merchant Associates, Inc.
1105730 Southwest 74th Street, Suite 500
116South Miami, Florida 33143-5381
120STATEMENT OF THE ISSUES
124This is a license discipline case in which the Petitioner, by means of a
138three count Administrative Complaint, seeks to take disciplinary action against
148the Respondent on the basis of alleged violations of subsections (2), (14), and
161(15) of Section 475.624, Florida Statutes.
167PRELIMINARY STATEMENT
169At the formal hearing on May 1, 1996, the Petitioner presented the
181testimony of two witnesses; Mr. Jack Katsikos (a state certified general
192appraiser) and Mr. Kenneth Rehm (an investigative supervisor for the
202Petitioner's Division of Real Estate). The Petitioner also offered six
212exhibits, all of which were received in evidence.
220The Respondent testified on her own behalf and also presented the testimony
232of Mr. John Blazejack (a state certified general appraiser). The Respondent
243also offered seventeen exhibits, of which fourteen were received in evidence.
254(Respondent's exhibits R-4, R-7, and R-14 were not received in evidence and are
267included in the record as rejected exhibits.)
274At the conclusion of the formal hearing the parties were allowed twenty
286days from the filing of the transcript within which to file their proposed
299recommended orders. The transcript of the formal hearing was filed with the
311Hearing Officer on May 31, 1996. On June 20, 1996, both parties filed their
325respective proposed recommended orders. The parties' proposals have been
334carefully considered during the preparation of this Recommended Order. Proposed
344findings of fact are specifically addressed in the appendix to this Recommended
356Order.
357The Respondent's proposed recommended order also incorporates a Motion For
367The Payment Of Respondent's Costs. That motion is addressed in the conclusions
379of law portion of this Recommended Order.
386FINDINGS OF FACT
3891. The Petitioner is a state government licensing and regulatory agency
400charged with the responsibility and duty to prosecute Administrative Complaints
410pursuant to the laws of the State of Florida, in particular Section 20.165,
423Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules
435promulgated pursuant thereto.
4382. Respondent Beverly J. Merchant is currently a Florida state certified
449general appraiser, having been issued license number 000141 in accordance with
460Chapter 475, Part II, Florida Statutes.
4663. The last license issued to Respondent was as a state certified general
479appraiser with a home address of 548 San Esteban Avenue, Coral Gables, Florida
49233146.
4934. On January 14, 1994, Graimark/MIG Joint Venture and/or Crown Revenue,
504Inc., ordered Respondent to perform an appraisal of Sunrise Gardens, an adult
516congregate living facility (ACLF), in Miami, Florida.
5235. On March 31, 1994, the Respondent completed the appraisal of the
535property.
5366. The Respondent's appraisal report made several references to zoning
"546variances." The use of the term "variances" was reasonable under the
557circumstances of the subject appraisal.
5627. The Respondent's appraisal report stated that the highest and best use
574of the property was not as an adult congregate living facility (ACLF), but as
588some other institutional use. Under the circumstances of the subject appraisal,
599the Respondent provided adequate support to indicate that under the applicable
610zoning provisions "another institutional use" was probably permissible by
619variance.
6208. The Respondent's appraisal report included a cost approach that
630utilized a cost factor for "convalescent hospital space," even though the
641highest and best use was a use other than an ACLF. The use of that cost factor
658was reasonable under the circumstances of the subject appraisal.
667CONCLUSIONS OF LAW
6709. The Division of Administrative Hearings has jurisdiction over the
680subject matter of and the parties to this proceeding. Section 120.57(1),
691Florida Statutes.
69310. The nature of the standard of proof which must be met in a case of
709this type was addressed earlier this year by the Florida Supreme Court in
722Department of Banking and Finance v. Osborne Stern and Company, 21 Fla. L.
735Weekly S142 (Fla. March 28, 1996). There the court first reaffirmed its
747conclusion in Ferris v. Turlington, 510 So.2d 292 (Fla. 1987), that in cases
760involving the revocation of a professional license the clear and convincing
771evidence standard must be applied. It then went further and extended the clear
784and convincing evidence standard to cases involving the imposition of
794administrative fines. At page S143 the Osborne court concluded:
803Unlike the denial of an applicant's registra-
810tion, an administrative fine deprives the
816person fined of substantial rights in property.
823Administrative fines, like the ones imposed
829upon respondents in this case, are generally
836punitive in nature. See Santacroce v. State,
843Department of Banking and Finance, 608 So.2d
850134, 137 (Fla. 4th DCA 1992). Because the
858imposition of administrative fines . . .,
865like license revocation proceedings, are
870penal in nature and implicate significant
876property rights, the extension of the clear
883and convincing evidence standard to justify
889the imposition of such a fine is warranted.
897Accordingly, we agree with the district court
904that, because the Department's final order
910imposing a $5,000 fine for each of the four
920statutes respondents allegedly violated does
925not indicate that it was based upon a clear
934and convincing evidence standard, the case
940must be remanded for the application of the
948proper burden of proof.
952Consistent with the foregoing, in a case of this nature the Petitioner must
965prove its charges by clear and convincing evidence. 1/
97411. The nature of clear and convincing evidence has been described as
986follows in Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983):
999We therefore hold that clear and convincing
1006evidence requires that the evidence must be
1013found to be credible; the facts to which the
1022witnesses testify must be distinctly remembered;
1028the testimony must be precise and explicit and
1036the witnesses must be lacking in confusion as
1044to the facts in issue. The evidence must be
1053of such weight that it produces in the mind
1062of the trier of fact a firm belief or convic-
1072tion, without hesitancy, as to the truth of
1080the allegations sought to be established.
1086See also, Smith v. Department of Health and Rehabilitative Services, 522 So.2d
1098956 (Fla. 1st DCA 1988), which, at page 958, quotes with approval the above-
1112quoted language from Slomowitz. The Smith case also includes the following at
1124page 958:
1126'Clear and convincing evidence' is an inter-
1133mediate standard of proof, more than the
1140'preponderance of the evidence' standard used
1146in most civil cases, and less than the 'beyond
1155a reasonable doubt' standard used in criminal
1162cases. See State v. Graham, 240 So.2d 486
1170(Fla. 2d DCA 1970).
117412. Section 475.624, Florida Statutes (1993), reads as follows, in
1184pertinent part:
1186The board may deny an application for regis-
1194tration, licensure, or certification; inves-
1199tigate the actions of any appraiser registered,
1206licensed, or certified under this section; and
1213may reprimand, fine, revoke, or suspend, for a
1221period not to exceed 10 years, the registration,
1229license, or certification of any such appraiser,
1236or place any such appraiser on probation if it
1245finds that the registrant, licensee, or
1251certificateholder:
1252* * *
1255(2) Has been guilty of . . . culpable negligence,
1265or breach of trust in any business transaction.
1273. . . It is immaterial to the guilt of the
1284registrant, licensee, or certificateholder that
1289the victim or intended victim of the misconduct
1297has sustained no damage or loss; that the damage
1306or loss has been settled and paid after discovery
1315of the misconduct; or that such victim or intended
1324victim was a customer or a person in confidential
1333relation with the registrant, licensee, or
1339certificateholder, or was an identified member
1345of the general public.
1349* * *
1352(14) Has violated any standard for the development
1360or communication of a real estate appraisal or other
1369provision of the Uniform Standards of Professional
1376Appraisal Practice.
1378(15) Has failed or refused to exercise reasonable
1386diligence in developing an appraisal or preparing
1393an appraisal report.
139613. The following statutory definition appears at Section 475.611(1)(m),
1405Florida Statutes (1993):
1408(m) 'Uniform Standards of Professional Appraisal
1414Practice' means the most recent standards approved
1421and adopted by the Appraisal Standards Board of
1429the Appraisal Foundation.
143214. The allegations of misconduct which are asserted to form the factual
1444basis for the three violations alleged in Counts I, II, and III of the
1458Administrative Complaint are set forth in subparagraphs "a" through "e" of
1469paragraph 6 of the Administrative Complaint. The allegations of two of those
1481subparagraphs (subparagraph "a" and subparagraph "c") have been voluntarily
1491withdrawn from the Administrative Complaint. (See page 107 of the transcript of
1503the hearing.) With regard to the remaining subparagraphs of paragraph 6 of the
1516Administrative Complaint, although there are conflicting expert opinions on some
1526issues, the greater weight of the persuasive evidence is to the effect that the
1540subject appraisal report prepared by the Respondent was reasonable under the
1551circumstances. Specifically, the greater weight of the persuasive evidence is
1561to the effect that the subject appraisal report did not suffer from the defects
1575alleged in subparagraphs "b," "d," and "e" of paragraph 6 of the Administrative
1588Complaint. Inasmuch as the evidence is insufficient to prove those defects,
1599there is insufficient proof of the factual basis for the three violations
1611charged in Counts I, II, and III of the Administrative Complaint. Accordingly,
1623all three counts should be dismissed.
162915. The Respondent's proposed recommended order incorporates a motion
1638seeking payment for the costs incurred by the Respondent in the defense of this
1652case. The motion is premature, because the Respondent has not yet achieved the
1665status of "prevailing party" within the meaning of Section 57.111, Florida
1676Statutes. Accordingly, the motion is denied without prejudice to the future
1687filing of a petition seeking an award of costs pursuant to Section 57.111,
1700Florida Statutes. 2/
1703RECOMMENDATION
1704On the basis of all of the foregoing, it is RECOMMENDED that a Final Order
1719be entered in this case dismissing all charges against the Respondent.
1730DONE AND ENTERED this 5th day of September, 1996, at Tallahassee, Leon
1742County, Florida.
1744___________________________________
1745MICHAEL M. PARRISH, Hearing Officer
1750Division of Administrative Hearings
1754The DeSoto Building
17571230 Apalachee Parkway
1760Tallahassee, Florida 32399-1550
1763(904) 488-9675
1765Filed with the Clerk of the
1771Division of Administrative Hearings
1775this 5th day of September, 1996.
1781ENDNOTES
17821/ Even if it were to be concluded that for some reason the holding in Osborne,
1798supra, was not controlling in this case, the clear and convincing standard would
1811still be applicable here for reasons discussed in the Recommended Order in
1823Department of Professional Regulation, Board of Medicine v. James H. Sternberg,
1834M.D., DOAH Case No. 91-5044, (Recommended Order issued January 20, 1993).
18452/ In this regard, attention is directed to Rule 60Q-2.035, Florida
1856Administrative Code, which sets forth the procedural requirements for seeking an
1867award of attorney's fees and/or costs under Section 57.111, Florida Statutes.
1878Inasmuch as the Respondent engages in business through an incorporated entity,
1889attention is also directed to the Final Order in Stephen S. Spector, M.D. v.
1903Agency For Health Care Administration, Board of Medicine, DOAH Case No. 93-7095F
1915(Final Order issued Nov. 30, 1994), and the cases cited therein.
1926APPENDIX
1927The following are my specific rulings on all proposed findings of fact
1939submitted by all parties.
1943Findings submitted by Petitioner:
1947Paragraphs 1, 2, 3, 4, and 5: Accepted, with the exception of the last
1961sentence of paragraph 5. The subject report is not attached and incorporated as
1974an exhibit to this Recommended Order.Paragraph 6: Rejected as subordinate and
1985unnecessary background details.
1988Paragraph 7: The portion of this paragraph up to the word "appraisal" is
2001rejected as subordinate and unnecessary background details. The portion of this
2012paragraph regarding Mr. Katsikos' "determination" is rejected as irrelevant
2021because, even though he expressed the opinion that the subject appraisal report
2033did not meet minimum USPAP standards, there is no clear and convincing evidence
2046to support that opinion. The opinion testimony of Mr. Katsikos was not found to
2060be very persuasive. His testimony regarding the reasons for his opinions was,
2072for the most part, somewhat sketchy and vague. Further, his testimony was
2084tainted by his admitted "personal motivation against" the Respondent based on
2095her earlier criticisms of one of his appraisal reports. (See transcript pages
210754, 63-64.)
2109Paragraph 8: The first three sentences of this paragraph are rejected as
2121subordinate and unnecessary background details. The last sentence is rejected
2131as constituting an opinion which is contrary to the greater weight of the
2144persuasive evidence.
2146Paragraph 9: Rejected as constituting an opinion which is not supported by
2158clear and convincing evidence and which is, in any event, contrary to the
2171greater weight of the evidence. The use of the term "variances" in the
2184appraisal report was reasonable and sufficient under the circumstances.
2193Paragraph 10: The first two lines of this paragraph are accepted. The
2205remainder of this paragraph is rejected as not supported by clear and convincing
2218evidence and as, in any event, contrary to the greater weight of the evidence.
2232Paragraph 11: Rejected as irrelevant because there is nothing alleged in
2243the Administrative Complaint regarding any failure to address the feasibility of
2254the conversion.
2256Paragraph 12: Rejected as not supported by clear and convincing evidence
2267and as, in any event, contrary to the greater weight of the evidence.
2280Paragraph 13: Rejected as irrelevant because there is nothing alleged in
2291the Administrative Complaint regarding any conflict arising from the use of the
2303cost approach. In any event, the Respondent adequately explained why the cost
2315approach was included in the subject appraisal report.
2323Paragraphs 14 and 15: Rejected as irrelevant because there is nothing
2334alleged in the Administrative Complaint regarding any confusion in the appraisal
2345report. Also rejected because the testimony on this subject was not clear and
2358convincing and appeared to be tainted by the witness's admitted "personal
2369motivation against" the Respondent.
2373Paragraph 16: Rejected as subordinate and unnecessary details.
2381Findings submitted by Respondent:
2385Pages 3 through 10 of the Respondent's proposed recommended order are
2396captioned "Proposed Findings Of Fact." Nevertheless, those pages consist
2405primarily of argument and discussion regarding insufficiencies in the evidence,
2415and they contain very little in the way of actual proposed findings of fact.
2429The few factual assertions on those pages are, for the most part, very
2442intertwined with the arguments. The Hearing Officer has not attempted to
2453identify and specifically rule on each of the proposed findings included on
2465pages 3 through 10 of the Respondent's proposed recommended order. It appears
2477sufficient to note that, on the issues raised by the Administrative Complaint,
2489the Hearing Officer's findings of fact are, in general, in accord with the
2502Respondent's view of the matter, although not necessarily for the same reasons
2514as those argued by the Respondent.
2520COPIES FURNISHED:
2522Steven W. Johnson, Esquire
2526Department of Business and Professional
2531Regulation, Division of Real Estate
2536Post Office Box 1900
2540Orlando, Florida 32802
2543Ms. Beverly J. Merchant
2547Merchant Associates, Inc.
25505730 Southwest 74th Street, Suite 500
2556South Miami, Florida 33143-5381
2560Henry M. Solares, Director
2564Department of Business and Professional
2569Regulation, Division of Real Estate
2574Post Office Box 1900
2578Orlando, Florida 32802
2581Lynda L. Goodgame, General Counsel
2586Department of Business and
2590Professional Regulation
2592Northwood Centre
25941940 North Monroe Street
2598Tallahassee, Florida 32399-0792
2601NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
2607All parties have the right to submit written exceptions to this Recommended
2619Order. All agencies allow each party at least 10 days in which to submit
2633written exceptions. Some agencies allow a larger period within which to submit
2645written exceptions. You should contact the agency that will issue the final
2657order in this case concerning agency rules on the deadline for filing exceptions
2670to this Recommended Order. Any exceptions to this Recommended Order should be
2682filed with the agency that will issue the final order in this case.
- Date
- Proceedings
- Date: 07/11/1997
- Proceedings: Respondent`s Motion to Dismiss Petition for Reimbursement of Expenses (filed via facsimile).
- Date: 01/13/1997
- Proceedings: Letter to Beverly Merchant from MMP (RE: response to letter of 12/9/96, in which Respondent Request information about the submission of a Petition for reimbursement of fees) sent out.
- Date: 12/27/1996
- Proceedings: Final Order filed.
- Date: 12/16/1996
- Proceedings: Letter to MMP from B. Merchant (re: reimbursement of fees) filed.
- Date: 08/05/1996
- Proceedings: Letter to MMP from Beverly Merchant (RE: Request for schedule on completing recommended Order) filed.
- Date: 06/20/1996
- Proceedings: Respondent`s Proposed Recommended Order; Cover letter from B. Merchant filed.
- Date: 06/20/1996
- Proceedings: (Petitioner) Proposed Recommended Order filed.
- Date: 06/06/1996
- Proceedings: Memorandum to Parties of Record from MMP (Re: PRO`s due 6/20/96) sent out.
- Date: 05/31/1996
- Proceedings: Transcript filed.
- Date: 05/28/1996
- Proceedings: (Petitioner) Notice to Hearing Officer filed.
- Date: 05/01/1996
- Proceedings: CASE STATUS: Hearing Held.
- Date: 04/15/1996
- Proceedings: Order Regarding Depositions sent out.
- Date: 04/11/1996
- Proceedings: Letter to S. Johnson from B. Merchant re: Motion for Taking Deposition by phone filed.
- Date: 04/02/1996
- Proceedings: (Petitioner) Motion for Taking Deposition by Telephone filed.
- Date: 03/25/1996
- Proceedings: Letter to HO from B. Merchant Re: Hearing process filed.
- Date: 03/19/1996
- Proceedings: Letter to B. Merchant & CC: S. Johnson from MMP (re: reply to letter of 3/6/96) sent out.
- Date: 03/08/1996
- Proceedings: Letter to HO from B. Merchant Re: Questions concerning hearing filed.
- Date: 03/06/1996
- Proceedings: Notice of Hearing sent out. (hearing set for 5/1/96; 8:45am; Miami)
- Date: 03/04/1996
- Proceedings: (Petitioner) Unilateral Response to Initial Order (Unsigned) filed.
- Date: 02/28/1996
- Proceedings: Ltr. to HO from B. Merchant re: Reply to Initial Order filed.
- Date: 02/21/1996
- Proceedings: Initial Order issued.
- Date: 02/15/1996
- Proceedings: Statement Of Facts; Agency referral letter, (Exhibits); Administrative Complaint filed.
Case Information
- Judge:
- MICHAEL M. PARRISH
- Date Filed:
- 02/15/1996
- Date Assignment:
- 02/21/1996
- Last Docket Entry:
- 07/11/1997
- Location:
- Miami, Florida
- District:
- Southern
- Agency:
- ADOPTED IN TOTO