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OAH 3-1005-20206-2 |
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AP2802697/TH |
STATE
OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF COMMERCE
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In the Matter of the Certified Residential Real Property Appraisal License of John Sutherland |
FINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATION |
This matter came on for hearing
before Administrative Law Judge Kathleen D. Sheehy on June 26, 2009, at the
Office of Administrative Hearings,
Michael
J. Tostengard, Assistant Attorney General,
STATEMENT OF ISSUES
Is
the Respondent’s certified residential real property appraisal license subject
to discipline because:
1. The Respondent failed to analyze
purchase agreements, in violation of Uniform Standards of Professional
Appraisal Practice (USPAP) Standards Rule 1-5a (2006), Minn. Stat. § 82B.20,
subd. 2(13) (2008), and Minn. R. 2808.6000, subp. 1 (2007); [1]
2. The Respondent failed to summarize
information analyzed and make adjustments that reflect the market’s reaction
between the subject property and comparable sales, in violation of USPAP
Standards Rule 2-2(b)(viii) (2006), Minn. R. 2808.6000, subp. 3 A(6),
3. The Respondent reported inaccurate
sales data, in violation of USPAP Standards Rule 1-1(c) (2006), Minn. R.
2808.6000, subp. 3 A(1),
4. The Respondent used comparable sales
that are not physically and by location the most similar to the subject
property, in violation of USPAP Standards rule 1-4(a) (2006), Minn. R.
2808.6000, subp. 3 A(4),
Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:
FINDINGS OF FACT
1.
On January 21, 2009, a copy of the Notice of and Order for Hearing,
Order for Prehearing Conference, Order to Show Cause, and Statement of Charges (Notice
and Order for Hearing) was delivered via first class mail to John Sutherland.[2] The Notice and Order for Hearing scheduled a
prehearing conference to take place on February 19, 2009.
2.
Before the prehearing conference, the Respondent contacted
the Administrative Law Judge and made arrangements to participate in the
prehearing conference by telephone. The
Respondent stated he had moved from
3.
The prehearing conference took place as scheduled on
February 19, 2009. The Respondent
participated by telephone. At that time
the Respondent requested that the hearing be scheduled to take place after he
completed the necessary training for a new job.
Based on his request, the hearing was scheduled to take place on June
19, 2009.[3]
4.
The hearing was subsequently rescheduled to take place on
June 26, 2009, to accommodate the schedule of the Department’s witness.[4]
5.
The Notice and Order for Hearing contained the following
notice:
Respondent’s failure to appear at the prehearing conference or hearing
may result in a finding that Respondent is in default, that the Department’s
allegations contained in the Statement of Charges may be accepted as true, and
that its proposed disciplinary action may be upheld.[5]
6.
The Notice and Order for Hearing also provided that Respondent
must show cause why his real property appraisal license, No. 20376081, should
not be revoked or suspended and why he should not be subject to a civil
penalty, as provided in Minn. Stat. § 45.027, subd. 6 (2008).[6]
7.
On June 26, 2009, the Respondent failed to appear at the hearing
or have an appearance made on his behalf.
The Respondent did not contact the Administrative Law Judge prior to the
hearing to request a different date or time.
8.
The Respondent is in default because he failed to appear at
the hearing. Pursuant to Minn. R.
1400.6000, the allegations contained in the Notice and Order for Hearing are
taken as true and incorporated by reference into these Findings of Fact.
Based
upon the foregoing Findings of Fact, the Administrative Law Judge makes the
following:
CONCLUSIONS
1.
The Administrative Law Judge and the Commissioner of
Commerce are authorized to consider the charges against the Respondent under
Minn. Stat. §§ 45.027, subd. 1, 45.024, and 14.50.
2.
Respondent received due, proper, and timely notice of the
charges against him, and of the time and place of the hearing. This matter is, therefore, properly before
the Commissioner and the Administrative Law Judge.
3.
The Department has complied with all relevant procedural
legal requirements.
4.
Under Minn. R. 1400.6000, a contested case may be decided
adversely to a party who defaults. A
default occurs when a party fails to appear at the hearing without the prior
consent of the judge. On default, the
allegations and the issues set out in that Notice of and Order for Hearing or
other pleading may be taken as true or deemed proved without further evidence.
5.
The Respondent is in default herein as a result of his
failure, without the prior consent of the Administrative Law Judge, to appear
at the hearing.
6.
The license of a licensed real estate appraiser may be
denied, revoked, or suspended, or the person may be otherwise disciplined for
violating standards of professional practice or for engaging in acts prohibited
by rule.[7] “Standards of professional practice” means,
in relevant part, the uniform standards of professional appraisal practice (USPAP)
of the Appraisers Standards Board of the Appraisal Foundation.[8]
7.
USPAP Standards Rule 1-5(a) (2006) provides that in
developing an opinion of market value, an appraiser must, if such information
is available to the appraiser in the normal course of business, analyze all
agreements of sale, options, and listings of the subject property current as of
the effective date of the appraisal.
8.
The Respondent failed to analyze the terms of purchase agreements
for a subject home and a comparable home in accordance with USPAP Standards
Rule 1-5(a) (2006) and thereby violated Minn. Stat. § 82B.20, subd. 2(13), and
Minn. R. 2808.6000, subp. 1.
9.
USPAP Standards Rule 2-2(b) (viii) (2006) provides that when
reporting an opinion of market value, an appraiser must summarize the
information analyzed, the appraisal methods and techniques employed, and the
reasoning that supports the analyses, opinions, and conclusions.
10.
An appraiser must not knowingly use adjustments to the
comparable sales that do not reflect the market’s reaction to the differences
between the subject property and the comparables, or fail to make adjustments
when they are clearly indicated.[9]
11.
The Respondent failed to summarize information analyzed in
accordance with USPAP Standards Rule 2-2(b)(viii) and failed to make
adjustments for quality and age differences between subject properties and
comparable sales, and thereby violated Minn. Stat. § 82B.20, subd. 2(13), and
12.
USPAP Standards Rule 1-1(c) (2006) provides that, in
developing a real property appraisal, an appraiser must 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.
13.
An appraiser must not knowingly include inaccurate or
misleading factual data about the subject neighborhood, site, improvements, or
comparable sales.[10]
14.
The Respondent failed to comply with USPAP Standards Rule
1-1(c) by reporting inaccurate closing dates for comparable sales, and thereby
violated Minn. Stat. § 82B.20, subd. 2(13), and Minn. R. 2808.6000, subp. 3 A(1).
15.
USPAP Standards Rule 1-4(a) (2006) provides that, when a
sales comparison approach is necessary for credible appraisal assignment
results, an appraiser must analyze such comparable sales data as are available
to indicate a value conclusion.
16.
An appraiser must not knowingly select and use inappropriate
comparable sales or fail to use comparables that are physically and by location
the most similar to the subject property.[11]
17.
The Respondent failed to comply with USPAP Standards Rule
1-4(a) by appraising subject properties using comparable sales in a
non-comparable community and thereby violated Minn. Stat. § 82B.20, subd.
2(13), and
8.
Disciplinary action against the Respondent’s license is in
the public interest.
Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:
RECOMMENDATION
IT IS HEREBY
RECOMMENDED: that the Commissioner of Commerce take adverse action against the
Respondent’s certified residential real property appraisal license.
Dated: July 1, 2009.
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s/Kathleen D. Sheehy |
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KATHLEEN D. SHEEHY |
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Administrative Law Judge |
Reported: Default (not recorded)
This
Report is a recommendation, not a final decision. The Commissioner of Commerce will make the
final decision after reviewing the record and may adopt, reject or modify these
Findings of Fact, Conclusions, and Recommendations. Under Minn. Stat. § 14.61, the Commissioner’s
decision shall not be made until this Report has been available to the parties
to the proceeding for at least ten (10) days.
An opportunity must be afforded to each party adversely affected by this
Report to file exceptions and present argument to the Commissioner. Parties should contact
Emmanuel Munson-Regala, Deputy Commissioner, Market Assurance Division, Minnesota Department
of Commerce,
If the Commissioner fails to issue a final decision within 90 days of the close of the record, this report will constitute the final agency decision under Minn. Stat. § 14.62, subd. 2a. The record closes upon the filing of exceptions to the report and the presentation of argument to the Commissioner, or upon the expiration of the deadline for doing so. The Commissioner must notify the parties and the Administrative Law Judge of the date on which the record closes. To comply with Minn. Stat. § 14.62, subd. 2a, the Commissioner must then return the record to the Administrative Law Judge within 10 working days to allow the Judge to determine the discipline to be imposed.
Under Minn. Stat. § 14.62, subd. 1, the agency is required to serve its final decision upon each party and the Administrative Law Judge by first class mail or as otherwise provided by law.
[1] All references to Minnesota Statutes are to the 2008 edition; all references to Minnesota Rules are to the 2007 edition.
[2] Affidavit of Service by First Class Mail (Jan. 21, 2009).
[3] Prehearing Order (Feb. 20, 2009).
[4] Letter from Administrative Law Judge to parties (Mar. 20, 2009).
[5] Notice and Order for Hearing at 5.
[6] Notice and Order for Hearing at 2.
[7]
[8]
[9]
[10]
[11]