108 Wash. App. 712 | Wash. Ct. App. | 2001
Fred B. Eidson is a licensed real estate appraiser. The Department of Licensing (the Department) received a complaint regarding two appraisal reports Eidson signed. After a hearing, the Department concluded that Eidson violated the Certified Real Estate Appraiser Act, revoked his license for three years, and imposed a $300 fine. Eidson appeals. We affirm the conclusion that Eidson violated the Act. Because, however, we find that some of the
FACTS
In September 1997, the Department received a complaint from another appraiser regarding two appraisal reports Eidson signed. The complainant alleged that Eidson did npt perform one of the appraisals even though he signed it and that he made fraudulent misrepresentations in the other. The appraisals are referred to as the Patterson appraisal and the Erickson appraisal.
Denise Hoage, who was assigned to investigate the complaint, requested by letter dated February 8, 1998 that Eidson provide her copies of both appraisals and work files. In March 1998, Eidson produced the Patterson appraisal and work file. He informed Hoage that he could not find the Erickson appraisal and work file, so Hoage granted him an extension of time to produce it. Eidson did not, however, produce these materials by the extended due date.
By letter dated May 11, 1998, Hoage made a "demand” that Eidson produce the Erickson materials.
In June 1999, Eidson met with an assistant attorney general in Olympia. Eidson stated he made a copy of the Erickson file and left it with her after the meeting. As it turned out, however, the materials Eidson left were materials from the Patterson file, not the Erickson file.
Hoage eventually received a copy of the Erickson appraisal from the complainant. She forwarded the information she collected regarding both appraisals to Michael Robinson, a state-certified residential appraiser. Robinson conducted a “desk review,” meaning he did not physically inspect the two properties, and issued a report opining that Eidson’s value conclusions were not supported and that the appraisals contained “significant errors and/or deficiencies.”
In March 1999, the Department issued a Statement of Charges to Eidson. The statement alleged that the Patterson and Erickson appraisals contained various deficiencies, showing a lack of due diligence in the preparation of the appraisals in violation of RCW 18.140.160(6), and that Eidson failed to produce records on demand as required by RCW 18.140.160(9). The original and first amended Statements of Charges incorrectly indicated that the Department wanted Eidson to produce the Patterson appraisal and work file. The second amended Statement of Charges corrected the error and indicated that the Department wanted the Erickson appraisal and work file.
Eidson requested a hearing. He filed the Erickson appraisal and work file as hearing exhibits just prior to the commencement of the hearing. After the hearing, the Administrative Law Judge (ALJ) issued findings of fact, conclusions of law, and an initial order. The ALJ sustained the Statement of Charges, revoked Eidson’s real estate apprais
Eidson filed a petition for review of the ALJ’s initial order with the Director of the Department.
Eidson petitioned for judicial review of the Director’s Final Order in Superior Court. The trial court granted Eidson’s motion to stay the order revoking his license pending further order of the court. In March 2001, the trial court issued a memorandum opinion in which it affirmed the Director’s Final Order. The trial court adopted the ALJ’s findings of fact and conclusions of law, as adopted by the Director. The court noted its disagreement with the three-year license revocation and stated that it would reduce the length of the revocation if it had the power to do so. But, the court concluded, because it could not say that the sanction was arbitrary and capricious, it was bound to affirm it. The trial court denied Eidson’s motion for a stay of the Final Order pending appeal.
Eidson appealed to this court. A commissioner granted Eidson’s motion for a stay pending appeal of the Department’s order revoking his license, subject to his payment of the $300 fine.
DISCUSSION
Standard of Review
Judicial review of this matter is governed by the
Standard of Proof
Citing Bang D. Nguyen v. Department of Health,
We decline to extend Nguyen’s holding to encompass proceedings under the Certified Real Estate Appraiser Act. Although the practice of medicine and the real estate appraisal practice are both regulated professions, obvious differences exist between them. These differences should not be ignored in determining the standard of proof applicable in disciplinary proceedings against members of those professions. Accordingly, rather than broadly interpreting Nguyen as applying to all disciplinary proceedings, regardless of the profession involved, we believe the better approach is to examine the profession involved in order to determine whether the interests of both the license holder and the public require application of the clear and convincing standard or the preponderance of the evidence standard of proof.
Courts of other states have recognized that it is neither
Another significant distinction between the medical disciplinary proceeding involved in Nguyen and the appraiser disciplinary proceeding involved here is the conduct upon which the sanctions were based. In Nguyen, the Commission based its charges on “incompetency, negligence, malpractice, moral turpitude, dishonesty, and corruption,” virtually completely subjective standards.
In sum, we find that sufficient distinctions exist between the practice of medicine and the real estate appraisal practice such that we do not feel constrained to apply Nguyen in this case. Requiring the Department to prove its
Failure to Produce Documents on Demand
Under the Certified Real Estate Appraiser Act, the Director may impose a sanction, including a fine and license revocation, if an appraiser fails, “upon demand, to disclose any information within his or her knowledge to, or to produce any document, book, or record in his or her possession for inspection of the director or the director’s authorized representatives acting by authority of law.”
Eidson argues that the Department erred by sanctioning him under this provision because the archive company, not Eidson himself, was responsible for his inability to produce the Erickson appraisal and work file. By imposing the sanction under these circumstances, he claims, the Department erroneously held him to a strict liability standard. He argues that we should construe RCW 18.140.160(9) to require that, before the Department may impose a sanction for violation of this section, the Department must prove that the appraiser knowingly or intentionally created the conditions that caused the failure to produce the records.
We may grant relief from an agency order if we determine that the agency has erroneously interpreted or applied the law.
Where the language of a statute is plain and unambiguous, it is not subject to judicial construction.
There is nothing in the language of RCW 18-.140.160(9) to suggest that, in order to be sanctioned under it, the appraiser must have acted knowingly or intentionally in failing to produce documents and records in his or her possession.
Next, Eidson argues that the Department’s reliance on the Statement of Charges that charged him with failing to produce the Patterson file, rather than the Erickson file, deprived him of notice that the failure to produce the Erickson file was the basis of the license revocation pro
Failure to Exercise Reasonable Diligence
The Certified Real Estate Appraiser Act allows the Department to sanction an appraiser for “[failure or refusal without good cause to exercise reasonable diligence in developing an appraisal, preparing an appraisal report, or communicating an appraisal.”
A. Findings of fact.
We may grant relief from an agency’s order if “[t]he order is not supported by evidence that is substantial when viewed in light of the whole record before the court.”
Eidson challenges the portion of finding of fact 28 that deals with an adjustment he made in the value of two comparables used in the Erickson appraisal (referred to as the Wandering Creek comparables) without showing the derivation of the adjustment. The Director found: “The respondent derived the $2,500 adjustment from ‘other previous sales I had done in the plat’. . . . Nothing in the work file shows the derivation of the $2,500.”
The ALJ stated to Eidson that although his Erickson appraisal showed how he chose the comparable, it “doesn’t show how you decided on the adjustment.”
THE WITNESS: That was based on the appraisals I have done in Wandering Creek, and I have other sales in Wandering Creek.
In other words, I derive my Wandering Creek value from other previous sales I had done in the plat.
ALJ: Anything shown in the work papers?
THE WITNESS: I don’t see anything in this file.[30 ]
The Director’s finding that nothing in Eidson’s work file showed the derivation of the $2,500 adjustment is supported by substantial evidence.
Eidson challenges the Director’s finding that Eidson failed to discuss in the appraisal differences between the
The Director’s finding that Eidson erred by failing to discuss the gated community and the homeowner’s dues is supported by Robinson’s testimony. Robinson testified that Eidson should have discussed the fact that the comparables were in a gated, seniors-only community with secure access and with a significant amount of greenbelt area. He stated that Wandering Creek contains “ponds or lakes, walking trails, open areas, et cetera, that may have necessitated an adjustment.”
Eidson did not discuss the fact that one of the comparables in the Erickson appraisal contained a wetland and pond. The Director found that his failure to “disclose, discuss, and potentially value the wetland/pond features” of the comparable was error.
With respect to the Patterson appraisal, Eidson challenges the Director’s finding that Eidson erred by failing to determine whether the values of two comparables should have been adjusted to reflect their location adjacent to commonly-owned property that, while not particularly scenic, could not be developed in the future and acted as a buffer between those homes and neighboring homes.
The Department does not address this portion of the challenged finding. Rather, it focuses on Eidson’s designation of the Patterson property as on a greenbelt and argues that because the adjacent land was privately owned and subject to development, Eidson erred by calling it a greenbelt. But, the Director explicitly found that Eidson’s labeling of the feature as a “greenbelt” did not make his analysis incorrect. Rather, in the Director’s opinion, the error was the fact that Eidson failed to determine whether the value of two of the comparables should have been adjusted to account for their location adjacent to commonly-owned property. We find no testimony that directly supports this finding. Although Robinson testified about the definition of a greenbelt, from which it can be concluded that a greenbelt enhances the value of adjacent properties and that a value adjustment should have been made, neither he
Eidson argues that he should not have been sanctioned based on the Director’s finding that he failed to support his $5,000 adjustment to the value of the Patterson property by his testimony or work files because this is not among the allegations in the Statement of Charges. “The APA requires that the parties be put on notice of the issues to be litigated.”
Next, Eidson challenges the Director’s finding that he erroneously characterized a comparable used in the Patterson appraisal as a two-story house when it was really a split entry or split level. Because he does not assign error to any finding relating to this characterization, we need not address his argument. Where a party fails to specifically assign error to a finding of fact, that finding becomes an established fact.
Eidson next challenges the Director’s finding that he
Finally, Eidson challenges the Director’s finding that he failed to indicate that one of the comparables in the Patterson appraisal was not an arm’s length transaction but rather was a Department of Housing and Urban Development repossession. He does not, however, challenge the fact that he did not so indicate. Rather, he argues that his failure to do so was not significant and does not support a sanction. Accordingly, the issue with respect to this finding is whether the finding supports the conclusion of lack of reasonable diligence, which is discussed next.
B. Reasonable diligence.
Eidson challenges the Director’s conclusion that Eidson failed without good cause to exercise reasonable diligence in developing the Erickson and Patterson appraisals and in preparing the appraisal reports. The statute does not define “reasonable diligence.” Eidson argues that we should use the definition of “reasonable diligence” applicable to a plaintiff’s obligation to attempt service on a party under service of process statutes, under which the term means making “ ‘honest and reasonable efforts to locate the defendant.’ ”
The Director concluded that Eidson violated USPAP Standards Rule 1-1 which provides:
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;
(c) not render appraisal services in a careless or negligent manner, such as a series of errors that, considered individually, may not significantly affect the results of an appraisal, but which, when considered in the aggregate, would be misleading.[42 ]
The Director also found that Eidson violated USPAP Standards Rule 2-1:
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 person(s) who receive or rely on the report to understand it properly;
(c) clearly and accurately disclose any extraordinary assumption or limiting condition that directly affects the appraisal and indicate its impact on value.[43 ]
Sanctions
Eidson argues that the Director erred as a matter of law by sanctioning him for acts and omissions that had no effect on his determinations of the value of the properties. We disagree.
Nothing in RCW 18.140.160 indicates that in order to warrant sanctions, the conduct that forms the basis of the sanction must have affected the appraiser’s ultimate determination of value. Rather, the statute also encompasses, and makes sanctionable, an appraiser’s conduct other than in connection with the determination of value. For example, an appraiser can be sanctioned for negligence or incompetence in developing an appraisal, preparing an appraisal report, or communicating an appraisal, without regard to whether the negligence or incompetence affected the ultimate determination of value.
Eidson also argues that the Department’s revocation of his license for three years was an arbitrary and capricious act and therefore must be reversed.
Attorney fees
Eidson seeks an award of attorney fees pursuant to RCW 4.84.350(1), under which a qualified party
CONCLUSION
We affirm the Director’s conclusion that Eidson violated RCW 18.140.160(6) and .160(9). We remand this matter to the Director for reconsideration, in light of our decision, of the sanction imposed. We award Eidson attorney fees on appeal pursuant to RCW 4.84.350. He is directed to comply with RAP 18.1.
Baker and Cox, JJ., concur.
After modification, father reconsideration denied November 21, 2001.
The “demand” language refers to RCW 18.140.160(9), discussed below, under which an appraiser’s failure to produce, upon demand, documents for inspection by the Director of the Department is grounds for the imposition of a sanction, including suspension or revocation of the appraiser’s license.
Admin. R. (AR) at 353. Specific facts or information in the appraisals that are the subject of challenged findings of fact will be discussed below.
The Real Estate Appraiser Program also filed a petition for review, challenging the ALJ’s interpretation of the technical assistance act, chapter 43.05 RCW. That issue is not involved in this appeal.
The Director ordered stricken findings of fact 23, 24, 26, 27, 34, 35, 36, and the last sentence of 49. The Director ordered stricken conclusions of law 6 through 11, 14 through 16, and 22.
See RCW 34.05.510 (providing that the APA establishes the exclusive means of judicial review of agency action except in three situations, not applicable here).
Postema v. Pollution Control Hr’gs Bd., 142 Wn.2d 68, 77, 11 P.3d 726 (2000).
144 Wn.2d 516, 29 P.3d 689 (2001).
In re Revocation of License of Polk, 90 N. J. 550, 449 A.2d 7, 17 (1982) (quoting Sender v. Or. Bd. of Dental Exam’rs, 294 U.S. 608, 610-11, 55 S. Ct. 570, 571, 79 L. Ed. 1086 (1935)). See also Eaves v. Bd. of Med. Exam’rs, 467 N.W.2d 234, 237 (Iowa 1991); In re Grimm, 138 N.H. 42, 635 A.2d 456, 462 (1993) (also recognizing that a state may treat different professions differently).
See, e.g., Gandhi v. State Med. Examining Bd., 168 Wis. 2d 299, 483 N.W.2d 295 (1992); In re Polk, 449 A.2d at 17; Eaves v. Bd. of Med. Exam’rs, 467 N.W.2d at 237; In re Grimm, 635 A.2d at 462.
Gandhi v. State Med. Examining Bd., 168 Wis. 2d 299, 483 N.W.2d 295, 300 (1992). Unlike in Nguyen, the court in Gandhi found that application of a less stringent standard of proof in medical disciplinary proceedings is more protective of the public interest in individual life and heath.
In re Revocation of License of Polk, 90 N.J. 550, 449 A.2d 7 (1982). In re Grimm, 138 N.H. 42, 635 A.2d 456, 462 (1993). For example, a psychologist spends the vast majority of his or her time with individual patients in a private office, while virtually all aspects of an attorney’s practice are subject to scrutiny.
The court in Nguyen recognized that the loss or suspension of a physician’s license “deprives the doctor of the benefit of a degree for which he or she has spent countless hours and probably tens (if not hundreds) of thousands of dollars pursuing.” Nguyen, 144 Wn.2d at 527. The same cannot be said of the loss or suspension of an appraiser’s license.
Id. at 531. Indeed, the Supreme Court noted that it would be “difficult to imagine a more subjective and relative standard.” Id.
RCW 18.140.160(9).
RCW 34.05.570(3)(d).
Postema, 142 Wn.2d at 77.
Berger v. Sonneland, 144 Wn.2d 91, 105, 26 P.3d 257 (2001).
id.
Eidson does not argue that the Erickson file was not “in his possession” as that term is used in the statute.
An appraiser may be sanctioned for “[procuring or attempting to procure state licensure or certification under this chapter by knowingly making a false statement, knowingly submitting false information, or knowingly making a material misrepresentation on any application filed with the director.” RCW 18.140.160(2).
AR at 374.
The case Eidson cites, Reeb, Inc. v. Washington State Liquor Control Board, 24 Wn. App. 349, 600 P.2d 578 (1979), is distinguishable and not helpful. The issue before the court in Reeb was not, as here, whether the regulation at issue contained a knowledge requirement. Neither party in Reeb disputed the fact that it did. Rather, the issue was what kind of knowledge was required, actual or constructive.
Such findings include finding 4, that Hoage directed Eidson by letter to provide her with copies of the appraisals and work files for the subject properties; finding 7, that upon producing the Patterson file, Eidson informed Hoage that he could not locate the Erickson file, whereupon Hoage gave him an extension of time to provide it to her; and findings 8 and 10, that Hoage sent Eidson two letters demanding the Erickson file.
Postema, 142 Wn.2d at 100.
RCW 18.140.160(6).
RCW 34.05.570(3)(e).
Plum Creek Timber Co. v. Forest Practices Appeals Bd., 99 Wn. App. 579, 591, 993 P.2d 287 (2000).
AR at 357. As noted, the Director adopted most of the ALJ’s findings and conclusions and ordered some stricken in part or in their entirety. The Director made no findings or conclusions of his own. Because our review is of the Director’s Final Order, we refer to the findings and conclusions as the Director’s rather than the ALJ’s.
AR at 302.
AR at 302 (emphasis added).
These are findings of fact number 30 and 31.
Contrary to Eidson’s assertion, it is not undisputed that Wandering Creek’s gate is always open during the day and that it is therefore not a true “gated” community. Michael Robinson, the appraiser who testified on behalf of the Department, stated that he lives near Wandering Creek and there is “no way to get in there without someone letting you in.” AR at 144. Also, we note that in both opening and reply briefs, Eidson cites AR at 145 as containing Robinson’s statement that the Wandering Creek amenities did not necessitate an adjustment in the Erickson property’s fair market value. No such statement appears there, nor could such a statement be located.
AR at 145.
Finding of Fact 31, AR at 358.
AR at 141. Robinson also stated: “And normally, if we are going to use a property that has a water feature, we would either try to — we would comment that it has that. And if we believed that that is a positive feature, we would adjust for it. At least we should discuss it.” AR at 142.
The Director rejected the Department’s assertion that the comparables’ location on greenbelts automatically required an adjustment.
McDaniel v. Dep’t of Soc. & Health Servs., 51 Wn. App. 893, 898, 756 P.2d 143 (1988).
In re Discipline of Brown, 94 Wn. App. 7, 13, 972 P.2d 101 (1998).
Id.
Crystal, China & Gold, Ltd. v. Factoria Ctr. Invs., Inc., 93 Wn. App. 606, 611,
WAC 308-125-200(1).
AR at 369.
AR at 371.
According to Michael Robinson, Eidson’s failure to disclose that one of the comparables he used was not an arm’s-length transaction violated another USPAP. The text of this rule is not in the record, however, and we are unable to address this issue.
RCW 18.140.160(7).
See RCW 34.05.570(3)(i) (providing that we may grant relief from an agency’s order in an adjudicative proceeding if the order is arbitrary or capricious).
A “qualified party” is “an individual whose net worth did not exceed one million dollars at the time the initial petition for judicial review was filed.” RCW 4.84.340(5).
RCW 4.84.350(1).