Alabama Real Estate Appraisers Board v. Joshua M. Smith

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REL: 10/5/12 Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , A l a b a m a A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2012-2013 2110718 Alabama Real E s t a t e A p p r a i s e r s Board v. Joshua M. Smith Appeal from Randolph C i r c u i t Court (CV-11-900009) BRYAN, J u d g e . The appeals Alabama R e a l from a Estate Appraisers judgment Board o f t h e Randolph ("the B o a r d " ) Circuit Court m o d i f y i n g a n o r d e r o f t h e B o a r d d i s c i p l i n i n g J o s h u a M. S m i t h . We r e v e r s e a n d remand. 2110718 Smith i s a c e r t i f i e d r e s i d e n t i a l - r e a l - p r o p e r t y appraiser. I n 2006, S m i t h was a c t i n g as a "mentor a p p r a i s e r " t o W i l l i a m Jaggers, appraiser. who was Smith l i c e n s e d as a t r a i n e e assigned Jaggers c o n t a i n i n g a s i n g l e - f a m i l y house Fruithurst. Jaggers appraisal, and report"). he Both Jaggers appraise the work the and real-property a ("the p r o p e r t y " ) conducted prepared to November 2006, and t h e r e p o r t l i s t s property located i n necessary appraisal Smith Charles f o r the report signed the ("the report in J a g g e r s as t h e a p p r a i s e r and S m i t h as t h e " s u p e r v i s o r y a p p r a i s e r . " As t h e s u p e r v i s o r y a p p r a i s e r , S m i t h c e r t i f i e d i n t h e r e p o r t t h a t he h a d d i r e c t l y s u p e r v i s e d J a g g e r ; t h a t he a g r e e d w i t h t h e a n a l y s i s , o p i n i o n s , statements, and accepted f u l l conclusions in the report; r e s p o n s i b i l i t y f o r the contents I n A u g u s t 2008, t h e B o a r d r e c e i v e d Smith concerning the report, c o n d u c t e d an i n v e s t i g a t i o n . an administrative report. provisions 27A-1 the that against a complaint Board Smith he of the report. against subsequently I n A u g u s t 2010, t h e B o a r d complaint The c o m p l a i n t and and concerning filed the a l l e g e d t h a t S m i t h had v i o l a t e d c e r t a i n o f t h e Alabama R e a l e t s e q . , A l a . Code 1975, 2 Estate Appraisers and c e r t a i n r u l e s A c t , § 34governing 2110718 appraisers. The Board appointed a hearing o f f i c e r to hold e v i d e n t i a r y h e a r i n g , and t h e h e a r i n g o f f i c e r h e l d t h e in October evidence, 2010. the After r e c e i v i n g ore hearing officer tenus issued a w h i c h t h e B o a r d a d o p t e d as i t s d e c i s i o n . made e x t e n s i v e violated f a c t u a l f i n d i n g s and various rules and and hearing documentary recommended order, The B o a r d ' s d e c i s i o n concluded that Smith statutory provisions had governing r e a l - e s t a t e a p p r a i s e r s ; t h o s e f i n d i n g s and c o n c l u s i o n s w i l l discussed i n more d e t a i l b e l o w . appraiser's l i c e n s e f o r one administrative The August modifying 25, the appraiser's month and levied a g a i n s t him the 2011, period. the circuit modified The month p e r i o d , court entered B o a r d ' s p u n i s h m e n t o f S m i t h by l i c e n s e f o r s i x months, p e r m i t t e d him an f i n e of $5,000. p u b l i c l y reprimanding stayed be Board suspended Smith's Smith appealed the Board's d e c i s i o n t o the c i r c u i t On an him. order an of Smith order suspending him $2,500, However, t h e c i r c u i t c o u r t ' s punishment to continue fining court. and order f o r s i x months t o w o r k as an a p p r a i s e r d u r i n g f u r t h e r s t a t e d : "At t h e end i f [ S m i t h ] has had no of the s i x f u r t h e r f i n d i n g s by his and that (6) the B o a r d , t h e n t h e f i n d i n g s , c o n c l u s i o n s , p u n i s h m e n t s and p u b l i c 3 2110718 reprimand be of the [ C i r c u i t ] Court DISMISSED." 2012, (Capitalization 1 more t h a n circuit court Although the action in original.) s i x months a f t e r entered circuit appealing actually as s e t o u t i n t h i s c a s e modified a dismissing purported to Board's the decision, Board's case together with the August m o d i f i e d t h e B o a r d ' s p u n i s h m e n t and p u n i s h m e n t f o r s i x months. the decision. c o n c l u s i o n b y r e a d i n g t h e M a r c h 15, 2012, the simply 25, then March 15, entered, i t s o r d e r was judgment court the On will the the dismiss circuit We case. reach the court this judgment d i s m i s s i n g 2011, order s t a y e d the that modified By s t a y i n g t h e m o d i f i e d p u n i s h m e n t and t h e n d i s m i s s i n g t h e c a s e a f t e r t h e e x p i r a t i o n o f t h e s i x month s t a y , t h e c i r c u i t c o u r t e f f e c t i v e l y n e g a t e d t h e B o a r d ' s punishment period. The of Smith and replaced Board appealed the i t with circuit a court's probationary judgment to The p a r t i e s d i s p u t e w h e t h e r t h e o r d e r o f A u g u s t 25, 2011, was a f i n a l j u d g m e n t . Because t h a t order d i d not f i n a l l y r e s o l v e t h e i s s u e o f S m i t h ' s p u n i s h m e n t , t h a t o r d e r was n o t a f i n a l judgment. " ' I t i s w e l l established that a final j u d g m e n t i s a " t e r m i n a l d e c i s i o n w h i c h d e m o n s t r a t e s t h e r e has been a complete a d j u d i c a t i o n of a l l m a t t e r s i n c o n t r o v e r s y between the l i t i g a n t s . " ' " W i l l i a m s Power, I n c . v. J o h n s o n , 880 So. 2d 459, 461 ( A l a . C i v . App. 2003) ( q u o t i n g Dees v. S t a t e , 563 So. 2d 1059, 1061 ( A l a . C i v . App. 1 9 9 0 ) , q u o t i n g i n t u r n T i d w e l l v. T i d w e l l , 496 So. 2d 91, 92 ( A l a . C i v . App. 1986)). 1 4 2110718 this court. At the hearing, Samuel Davis, an investigator f o r the B o a r d , t e s t i f i e d t h a t he h a d i n v e s t i g a t e d S m i t h ' s a p p r a i s a l o f the property. D a v i s ' s t e s t i m o n y s e r v e d as t h e p r i m a r y of the Board's f i n d i n g s . The B o a r d f o u n d , i n p e r t i n e n t basis part: " T h e r e were two d i s c r e p a n c i e s b e t w e e n d a t a s e t f o r t h i n t h e r e p o r t r e g a r d i n g t h e ... p r o p e r t y and t h e a c t u a l s t a t e o f t h e ... p r o p e r t y . [Smith] a r g u e s t h a t i t i s i m p o s s i b l e f o r t h e B o a r d t o know t h e s t a t e o f t h e ... p r o p e r t y i n 2006, [when t h e appraisal was conducted,] because [ D a v i s , ] the B o a r d ' s i n v e s t i g a t o r [ , ] d i d n o t make h i s i n s p e c t i o n u n t i l 2009. However, w i t h r e s p e c t t o t h e s e two particular discrepancies, this argument i s n o t p e r s u a s i v e f o r reasons that w i l l be s e t f o r t h herein. The d i s c r e p a n c i e s a r e as f o l l o w s : "... The r e p o r t s t a t e s t h a t t h e ... p r o p e r t y h a d two u p s t a i r s bedrooms. ... The r e p o r t c o n t a i n s a printed b u i l d i n g sketch That s k e t c h i n d i c a t e s t h a t a c l o s e t e x i s t s i n the o u t s i d e c o r n e r o f each of these bedrooms. [Davis], upon inspection, determined that t h e r e a r e no c l o s e t s i n these bedrooms. W h i l e he was unable to enter the s t r u c t u r e , he was a b l e t o l o o k t h r o u g h t h e windows. He a l s o t o o k p h o t o g r a p h s t h r o u g h t h e windows o f t h e i n t e r i o r o f t h e s e bedrooms. T h e r e were no c l o s e t s i n these corners. A d d i t i o n a l l y , from the e x t e r i o r of the s t r u c t u r e , he m e a s u r e d t h e w a l l length a v a i l a b l e on t h e s e c o r n e r s f o r a c l o s e t . Windows a r e p r e s e n t on b o t h w a l l s c l o s e t o t h e c o r n e r s where t h e s e c l o s e t s were s u p p o s e d t o h a v e b e e n l o c a t e d , which restrict the available space. The measurements t a k e n f r o m t h e o u t s i d e by [ D a v i s ] i n d i c a t e t h a t o n l y one f o o t , s e v e n i n c h e s e x i s t e d on the f r o n t measurement, and two f e e t 10 inches e x i s t e d on t h e s i d e w a l l measurement. T h i s means 5 2110718 t h a t a n y s u c h c l o s e t w o u l d be i m p l a u s i b l y s m a l l . The o n l y way t o make a l a r g e r c l o s e t w o u l d be t o o b s t r u c t t h e windows. N e v e r t h e l e s s , t h e r e i s no i n d i c a t i o n i n t h e photographs taken by [ D a v i s ] and, i n d e e d , [ D a v i s ] o b s e r v e d no s i g n s , t h a t c l o s e t s h a d e v e r b e e n i n t h e s e two c o r n e r s . Indeed, [Smith's w o r k i n g f i l e c o n t a i n s ] a hand s k e t c h o f t h e f l o o r p l a n o f t h i s s t r u c t u r e , w h i c h was p r o b a b l y made [ i n 2006, when t h e a p p r a i s a l was c o n d u c t e d ] . ... The s k e t c h o f t h e s e c o n d f l o o r shows two bedrooms, b u t shows t h a t t h e r e a r e no c l o s e t s . Additionally, [ S m i t h ] o f f e r e d no r e l i a b l e t e s t i m o n y to the e f f e c t that c l o s e t s ever e x i s t e d i n these bedrooms. [Smith] never made an i n s p e c t i o n o f t h e ... property. Therefore, there are f o u r bases f o r f i n d i n g t h a t no c l o s e t s e x i s t e d i n t h e u p s t a i r s bedrooms [ i n 2 0 0 6 ] . Those b a s e s a r e (1) t h e r e was n o t enough room i n t h e s e bedrooms f o r a c l o s e t t o e x i s t ; (2) t h e r e were no c l o s e t s i n 2 0 0 9 [ , when D a v i s i n s p e c t e d t h e p r o p e r t y , ] a n d t h e r e was no p h y s i c a l i n d i c a t i o n t h a t t h e r e had e v e r been any c l o s e t s i n t h e s e c o r n e r s ; (3) t h e h a n d s k e t c h ... c o n t a i n e d i n [ S m i t h ] ' s w o r k i n g f i l e ... d e m o n s t r a t e s t h a t t h e r e were no c l o s e t s i n t h e s e bedrooms a t t h e t i m e t h e s k e t c h was d r a w n ; a n d (4) [ S m i t h ] d i d n o t s u b m i t a n y r e l i a b l e t e s t i m o n y b a s e d on p e r s o n a l k n o w l e d g e t h a t c l o s e t s d i d e x i s t i n t h e s e bedrooms i n 2006. T h e r e f o r e , [ t h e B o a r d ] f i n d s t h a t [ S m i t h ] misrepresented i n the report that c l o s e t s e x i s t e di n t h e u p s t a i r s bedrooms. "... The r e p o r t s t a t e s t h a t t h i s property contained a central heating and c e n t r a l a i r c o n d i t i o n i n g [ ( ' A / C ' ) ] s y s t e m . The r e p o r t i n d i c a t e s that there were two i n d i v i d u a l units which, p r e s u m a b l y , meant t h a t t h e r e were two c e n t r a l A/C compressors. However, t h e i n v e s t i g a t i o n o f t h e B o a r d d e t e r m i n e d t h a t t h i s h o u s e c o n t a i n e d two window units a n d no c e n t r a l heating and a i r conditioning. Again, [Smith] argues that the B o a r d ' s i n s p e c t i o n was made i n 2009, t h r e e y e a r s a f t e r [Smith]'s r e p o r t [was prepared], and t h a t 6 2110718 t h i n g s c o u l d change i n t h e s t r u c t u r e i n t h a t t i m e f r a m e . However, [ t h e B o a r d ] f i n d s t h a t t h e r e was no central heating a n d a i r c o n d i t i o n i n g i n t h e ... p r o p e r t y a t t h e t i m e o f [ S m i t h ] ' s i n s p e c t i o n . When t h e B o a r d made i t s i n s p e c t i o n , t h e r e was a b s o l u t e l y no s i g n t h a t c e n t r a l h e a t i n g a n d a i r c o n d i t i o n i n g ever e x i s t e d i n t h i s s t r u c t u r e . The f l o o r s a n d t h e c e i l i n g were v i s i b l e a n d showed no s i g n s o f d u c t work o r v e n t s . T h e r e was no e v i d e n c e t h a t a n y d u c t s or v e n t s e v e r e x i s t e d i n any p a r t o f t h e s t r u c t u r e . [ S m i t h ] says that perhaps a l l evidence of a preexisting central heating and a i r c o n d i t i o n i n g s y s t e m h a d b e e n removed. However, b a s e d upon t h e condition o f t h e house, such a conclusion is unwarranted. F u r t h e r , t h e r e i s no i n d i c a t i o n t h a t a p a d f o r a c e n t r a l h e a t i n g and a i r c o n d i t i o n i n g u n i t was e v e r s i t u a t e d o u t s i d e t h e s t r u c t u r e . The o n l y i n d i c a t i o n o f h e a t i n g and a i r c o n d i t i o n i n g i n t h e s t r u c t u r e a r e t h e two g r a v i t y u n i t s i n t h e walls. [ S m i t h ] a d m i t s t h a t he r e a l l y does n o t know whether c e n t r a l h e a t i n g and a i r c o n d i t i o n i n g e v e r e x i s t e d i n t h i s s t r u c t u r e b e c a u s e he d i d n o t i n s p e c t it. I t i s untenable t o think that a c e n t r a l heating and a i r conditioning system existed in this structure. Therefore, [ t h e Board] finds that [Smith] misrepresented i n the report the f a c t that c e n t r a l h e a t i n g and a i r c o n d i t i o n i n g e x i s t e d [ o n ] t h e ... p r o p e r t y . "... I n a d d i t i o n t o t h e two d i s c r e p a n c i e s , t h e r e are i n a d e q u a c i e s or f a i l u r e s o f [ S m i t h ] t o p r o p e r l y prepare the report i n accordance with the Uniform Standards of Professional Appraisal Practice [ ( ' U S P A P ' ) ] and t h e r e are other errors i n the factual reporting. These a r e as f o l l o w s : "On Page 2 o f 6 o f t h e ... R e p o r t ... t h e r e i s a b l o c k b e s i d e [ t h e ] 'Sales Comparison Approach' [category] labeled 'Quality of Construction.' The a p p r o p r i a t e r e s p o n s e t o p l a c e i n t h a t b l o c k i s an e v a l u a t i o n as t o w h e t h e r t h e ... p r o p e r t y r a t e s a fair, average, good, or some other similar 7 2110718 designation. I n s t e a d o f a p p r o p r i a t e l y making t h e evaluation i n this fashion, [Smith] indicated that t h e [ q u a l i t y o f c o n s t r u c t i o n ] was ' v i n y l s i d i n g . ' F o r t h e c o m p a r a b l e [ p r o p e r t i e s ] i n t h e same b l o c k he i n d i c a t e d t h a t t h e y were b r i c k / v e n e e r s i d i n g , wood s i d i n g , and wood s i d i n g . [ ] These a r e i n a p p r o p r i a t e designations, and do not comport with the r e q u i r e m e n t s o f USPAP. 2 "On Page 3 o f 6 o f t h e ... R e p o r t ... t h e r e i s a b l o c k b e s i d e t h e d e s i g n a t i o n 'Cost A p p r o a c h ' w h i c h reads ' Q u a l i t y R a t i n g from Cost S e r v i c e . ' In t h i s b l o c k [ S m i t h ] s t a t e d t h a t t h e r a t i n g was a v e r a g e . However, t h i s i s an i n c o r r e c t r a t i n g f o r t h e ... property. As l i s t e d on t h e r e p o r t , t h e s o u r c e o f this cost data i s [ t h e ] Marshall and Swift residential estimator.[ Davis] t e s t i f i e d with r e s p e c t t o t h e M a r s h a l l and S w i f t e s t i m a t o r . ... [ D a v i s ] t e s t i f i e d t h a t t h e ... p r o p e r t y f e l l w i t h i n the f a i r q u a l i t y range, not average. Whereas[] the M a r s h a l l and S w i f t f a i r q u a l i t y c r i t e r i a c a l l e d f o r e i g h t - f o o t i n t e r i o r c e i l i n g s , t h e ... p r o p e r t y h a d two bedrooms w i t h s e v e n - f o o t i n t e r i o r c e i l i n g s . The f a i r quality criteria set forth therein l i s t s 'flat roof or low-pitch roof.' The ... p r o p e r t y h a d a low-pitched roof. The ' f a i r ' c r i t e r i a referenced ' l o w - q u a l i t y f i x t u r e s ' as a f i x t u r e c o u n t o f t e n o r b e l o w . The ... p r o p e r t y h a d o n l y s i x f i x t u r e s . The ' f a i r ' q u a l i t y c r i t e r i a i n c l u d e d an o w n e r - b u i l t ( n o t professional) reference, and [ D a v i s ] d e t e r m i n e d , upon i n v e s t i g a t i o n , t h a t some o f t h e c o n s t r u c t i o n d i d i n d e e d a p p e a r t o be owner b u i l t . [ D a v i s ] f o u n d b e l o w - q u a l i t y workmanship, which i s another c r i t e r i a 3 The r e p o r t l i s t s t h r e e "comparable s a l e " p r o p e r t i e s and compares them t o t h e p r o p e r t y i n s e v e r a l c a t e g o r i e s . 2 Davis testified that "Marshall evaluation-cost evaluation service that r e p r o d u c t i o n c o s t when t h e y ' r e e s t i m a t i n g [ u s i n g ] t h e c o s t a p p r o a c h [ a n a l y s i s ] on 3 8 and S w i f t " " i s an a p p r a i s e r s u s e t o do reproduction cost i n appraisals." 2110718 under ' f a i r ' q u a l i t y c o n s t r u c t i o n . I n d i c a t i o n s o f below-quality workmanship i n t h e ... property i n c l u d e a w a l l - m o u n t e d h e a t pump w i t h a l a r g e gap b e t w e e n t h e t o p o f t h e h e a t pump a n d t h e w a l l ; a c o u n t e r t o p t h a t does n o t f i t p r o p e r l y , t h e l a c k o f h a n d r a i l s on t h e s t a i r s a n d v e r y n a r r o w s t a i r s , a k i t c h e n o u t l e t with a hole i n the sheetrock l a r g e r t h a n t h e o u t l e t c o v e r , no d o o r s on t h e d o w n s t a i r s c l o s e t s , and o u t s i d e d r a i n p i p e s emptying i n t o t h e yard. These c o n d i t i o n s a r e n o t t h e t y p e t h a t w o u l d l i k e l y develop from poor maintenance o r d e s t r u c t i v e [ f o r c e s ] . [The Board] f i n d s that these conditions e x i s t e d i n 2006. "[Smith] argued that there a r e c e r t a i n f e a t u r e s of t h e ... p r o p e r t y that a c t u a l l y exceed the c r i t e r i a f o r average q u a l i t y . He a l s o p o i n t s o u t t h a t t h e ... p r o p e r t y meets o r e x c e e d s most o f t h e average q u a l i t y c r i t e r i a i n t h e M a r s h a l l and S w i f t e s t i m a t o r . I n t h i s r e g a r d , [ D a v i s ] , who i s h i m s e l f a w e l l - q u a l i f i e d Real Property Appraiser, and [Smith] disagree. The s c a l e s t i p i n f a v o r o f t h e B o a r d ' s p o s i t i o n on t h i s p o i n t b y v i r t u e o f t h e following explanation. " [ D a v i s ] e x a m i n e d P r o p e r t y R e c o r d C a r d s on t h e ... p r o p e r t y a n d t h e t h r e e c o m p a r a b l e [ p r o p e r t i e s ] . The 2006 P r o p e r t y R e c o r d C a r d f o r t h e ... p r o p e r t y l i s t s t h e q u a l i t y c l a s s as [']E m i n u s . [ ' ] The Code d e f i n i t i o n s i n t h e Alabama Department o f Revenue's A l a b a m a A p p r a i s a l M a n u [ a ] l ... s t a t e t h a t E minus means ' f a i r ' q u a l i t y c o n s t r u c t i o n . The D e p a r t m e n t o f Revenue h a s a c l a s s i f i c a t i o n code s y s t e m f o r v a r i o u s l e v e l s o f q u a l i t y a n d u s e s p l u s a n d minus s i g n s t o i n d i c a t e s t r u c t u r e s t h a t f a l l between t h e c l a s s i f i c a t i o n s . ... C l a s s E d e s c r i b e s a r e s i d e n c e t h a t m i g h t be c o n s i d e r e d s l i g h t l y b e l o w a v e r a g e o r fair. C l a s s F i s a l o w - c o s t o r poor type o f structure. An E minus i n d i c a t e s a l e s s t h a n b e l o w average property. The E minus means t h a t t h e ... property should be rated as 'fair' quality construction. F o r a l l o f the reasons s e t f o r t h 9 2110718 herein, the q u a l i t y of construction of the p r o p e r t y , u s i n g t h e c o s t a p p r o a c h , s h o u l d have b e e n i d e n t i f i e d as ' f a i r , ' n o t a v e r a g e . "The report f a i l s to [accurately] state the differences between t h e ... p r o p e r t y and t h e comparable [properties]. There clearly are d i f f e r e n c e s between t h e p r o p e r t y and t h e comparable [ p r o p e r t i e s ] , b u t [Smith] r e p o r t e d t h a t t h e r e were no d i f f e r e n c e s i n c e r t a i n m a t e r i a l a s p e c t s . For e x a m p l e , on Page 2 o f 6 o f t h e r e p o r t ... u n d e r [ t h e category e n t i t l e d ] Sales Comparison Approach, i n the h e a t i n g / c o o l i n g b l o c k [Smith] s t a t e s t h a t a l l f o u r p r o p e r t i e s have c e n t r a l h e a t i n g a n d c o o l i n g . This is simply not true. A d d i t i o n a l l y , under [the] F u n c t i o n a l U t i l i t y [ b l o c k ] , [Smith] r e p o r t s t h a t a l l of the p r o p e r t i e s are average. This i s c l e a r l y i n c o r r e c t as w i l l be f u r t h e r s e t f o r t h h e r e i n . I n t h e ... R e p o r t , Page 2 o f 6 ... u n d e r [ t h e c a t e g o r y entitled] Sales Comparison Approach, the block e n t i t l e d 'Condition' describes a l l of theproperties as average. Again, this i s not correct. A d d i t i o n a l l y , t h e r e i s no a d j u s t m e n t f o r d i f f e r e n c e s i n t h e ages o f t h e p r o p e r t i e s . Some comment s h o u l d have b e e n made w i t h r e s p e c t t o t h e s e d i f f e r e n c e s . [Smith] reported the ... property virtually throughout [the report] a t a higher c l a s s i f i c a t i o n t h a n w a r r a n t e d when c o m p a r i n g t h e [ p r o p e r t y ] t o t h e comparable[ p r o p e r t i e s ] . "As s e t f o r t h i n [ t h e ] p a r a g r a p h [directly] a b o v e , t h e f u n c t i o n a l u t i l i t y o f t h e ... p r o p e r t y i s l i s t e d a s a v e r a g e . T h i s e v a l u a t i o n does n o t c o m p o r t with the actual status o f the property. The l a y o u t o f t h e ... p r o p e r t y i s i n f e r i o r t o t h e l a y o u t o f t h e comparable [ p r o p e r t i e s ] . Two u p s t a i r s bedrooms i n t h e ... p r o p e r t y w i t h o u t c l o s e t s a n d t h e l a c k o f an upstairs bathroom causes t h e bedrooms t o be functionally obsolete. In fact, i t i s quite a r g u a b l e t h a t t h e two u p s t a i r s bedrooms s h o u l d n o t have b e e n l i s t e d as bedrooms a t a l l . Further, the f l o o r plan i s functionally obsolete. A l l of the 10 2110718 c o m p a r a b l e [ p r o p e r t i e s ] h a d two b a t h r o o m s a n d t h e ... p r o p e r t y h a d o n l y one. The f l o o r p l a n o f t h e ... p r o p e r t y r e q u i r e d t h a t a p e r s o n i n an u p s t a i r s bedroom t r a v e r s e a n a r r o w s e t o f s t a i r s w i t h no h a n d rail t h r o u g h e i t h e r t h e k i t c h e n o r one o f t h e d o w n s t a i r s bedrooms t o g e t t o t h e o n l y b a t h r o o m i n the house. [Davis] testified t h a t none o f t h e comparable [ p r o p e r t i e s ] s u f f e r e d from f u n c t i o n a l o b s o l e s c e n c e . Two o f t h e c o m p a r a b l e [properties] were r a n c h - s t y l e h o u s e s w i t h a l l rooms on one f l o o r . " " F u r t h e r , [Smith] d i d n o t address f u n c t i o n a l obsolescence i n h i s cost[-]approach [assessment]. [ S m i t h ] s h o u l d have u s e d a method c a l c u l a t e d t o account f o r f u n c t i o n a l obsolescence. For example, [ S m i t h ] c o u l d have u s e d a c o s t - t o - c u r e f a c t o r i n h i s a n a l y s i s , [ i . e . , a n a l y z i n g how much i t w o u l d c o s t t o c u r e t h e f u n c t i o n a l o b s o l e s c e n c e , ] b u t d i d n o t do so. "... Had [ S m i t h ] n o t a l l o w e d t h e d i s c r e p a n c i e s r e f e r e n c e d h e r e i n , and had [Smith] n o t f a i l e d t o c o m p l y w i t h t h e [USPAP], t h e r e w o u l d have b e e n a d i f f e r e n t outcome i n t h i s a p p r a i s a l . "... [ S m i t h ] d e n i e d any w r o n g d o i n g . He s t a t e d t h a t he d i d n o t o b s e r v e t h e ... p r o p e r t y . However, his f a i l u r e to inspect i s i r r e l e v a n t to the issues herein regarding the p r o p r i e t y of the report f o r w h i c h he was r e s p o n s i b l e . "[Smith] gave h i s o p i n i o n s with regard to v a r i o u s a s p e c t s o f t h e c r i t i c i s m s o f f e r e d by [Davis] t o t h e e f f e c t t h a t he i s r i g h t a b o u t a l l a n a l y s i s p e r f o r m e d a n d d a t a r e f l e c t e d i n t h e r e p o r t . Many o f t h e s e o p i n i o n s have b e e n p r e v i o u s l y a d d r e s s e d i n t h i s O r d e r . C l e a r l y , however, [Smith]'s o p i n i o n s i n t h e s e r e g a r d s do n o t w a r r a n t much w e i g h t . 11 2110718 "... [ S m i t h ] a r g u e s t h a t a p u b l i c r e p r i m a n d o r a s u s p e n s i o n w o u l d harm h i m f i n a n c i a l l y . T h i s i s c e r t a i n l y a c o n s i d e r a t i o n ; h o w e v e r , i t c a n n o t be determinative of the issues and t h e u l t i m a t e [ d e c i s i o n by t h e B o a r d ] . " Based violated on t h e s e f i n d i n g s , s i x rules Appraisal the Board found t h a t Smith had of the Uniform Standards Practice ("USPAP"): of Professional (1) USPAP R u l e 1-1(a), which r e q u i r e s an a p p r a i s e r t o c o r r e c t l y e m p l o y r e c o g n i z e d methods and techniques that are necessary t o produce a credible a p p r a i s a l ; (2) USPAP R u l e 1 - 1 ( b ) , w h i c h p r o h i b i t s an a p p r a i s e r from committing a s u b s t a n t i a l e r r o r , o m i s s i o n , o r that significantly 4(a), which affects requires an an a p p r a i s a l ; (3) USPAP R u l e appraiser analyze comparable-sales data t o i n d i c a t e sales-comparison approach 4(b)(ii), which comparable-cost requires data 4 (5) USPAP 1- available a v a l u e c o n c l u s i o n when a (4) USPAP an a p p r a i s e r t o a n a l y z e "to estimate Rule to i s necessary; i m p r o v e m e n t s " when a c o s t a p p r o a c h results; commission the cost new Rule 1- available of the i s necessary f o r credible 1-4(b)(iii), which requires an I t i s u n c l e a r what t h e B o a r d ' s d e c i s i o n means when r e f e r e n c i n g " i m p r o v e m e n t s " i n t h e c o n t e x t o f t h e USPAP r u l e s . When r e f e r e n c i n g t h i s p a r t i c u l a r USPAP r u l e , the Board e x p l a i n s t h a t "[Smith] p r i c e d o u t t h e house w i t h c e n t r a l h e a t i n g a n d a i r c o n d i t i o n i n g when t h e house a c t u a l l y h a d w a l l 4 12 2110718 appraiser to analyze available t h e d i f f e r e n c e between the improvements" credible prohibiting results an in a cost results; appraiser a from a an (6) USPAP's or fraudulent or Board provisions that employee or explicitly the Board may manner" or report or person to other report." punished revoke Rule assignment Smith under o f § 3 4 - 2 7 A - 2 0 ( a ) ( 6 ) - ( 9 ) , A l a . Code 1975. statute, license, also Ethics fraudulent communicate a m i s l e a d i n g or f r a u d u l e n t The i s necessary for "communicat[ing] misleading permit[ting] data "to estimate and t h e p r e s e n t w o r t h o f approach and misleading "communicat[ing] knowingly t h e c o s t new when assignment comparable a license, four Under suspend a or l e v y a f i n e f o r : "(6) V i o l a t i o n o f any o f t h e s t a n d a r d s f o r t h e development or communication of real estate a p p r a i s a l s as p r o v i d e d i n t h i s s e c t i o n . "(7) F a i l u r e o r r e f u s a l w i t h o u t good c a u s e t o exercise reasonable diligence i n d e v e l o p i n g an a p p r a i s a l , p r e p a r i n g an a p p r a i s a l , i n p r e p a r i n g an a p p r a i s a l r e p o r t , o r i n c o m m u n i c a t i n g an a p p r a i s a l . "(8) N e g l i g e n c e o r i n c o m p e t e n c e i n d e v e l o p i n g an a p p r a i s a l , i n p r e p a r i n g an a p p r a i s a l r e p o r t , o r i n h e a t pumps." P r e s u m a b l y , t h e w a l l h e a t pumps were c o n s i d e r e d t h e a c t u a l " i m p r o v e m e n t s " on t h e house t h a t were n o t p r o p e r l y considered. 13 2110718 c o m m u n i c a t i n g an appraisal. "(9) W i l l f u l l y d i s r e g a r d i n g o r v i o l a t i n g t h i s c h a p t e r or the r e g u l a t i o n s of the b o a r d f o r the a d m i n i s t r a t i o n and e n f o r c e m e n t o f t h i s c h a p t e r . " In reviewing as a d e c i s i o n o f an a d m i n i s t r a t i v e a g e n c y , s u c h the Board, t h i s that Legal of the Envtl. circuit court's court. Assistance ( A l a . C i v . App. 2007). governs our review Board's decision s t a n d a r d of r e v i e w i s the in Found., the this Inc., 973 So. 2d 369, 4 1 - 2 2 - 2 0 ( k ) , A l a . Code circuit case. court's In review pertinent of part, provides: " ( k ) E x c e p t where j u d i c i a l r e v i e w i s by t r i a l de novo, t h e a g e n c y o r d e r s h a l l be t a k e n as p r i m a f a c i e just and reasonable and the court shall not s u b s t i t u t e i t s j u d g m e n t f o r t h a t o f t h e a g e n c y as t o t h e w e i g h t o f t h e e v i d e n c e on q u e s t i o n s o f f a c t , e x c e p t where o t h e r w i s e a u t h o r i z e d by s t a t u t e . ... The c o u r t may r e v e r s e or modify the d e c i s i o n or grant other appropriate relief from the agency a c t i o n ... i f t h e c o u r t f i n d s t h a t t h e a g e n c y a c t i o n i s due t o be s e t a s i d e o r m o d i f i e d u n d e r s t a n d a r d s s e t f o r t h i n appeal or r e v i e w s t a t u t e s a p p l i c a b l e to that agency or i f substantial rights of the p e t i t i o n e r have b e e n p r e j u d i c e d b e c a u s e t h e a g e n c y a c t i o n i s any one o r more o f t h e f o l l o w i n g : "(1) In statutory as A l a b a m a Dep't o f E n v t l . Mgmt. v. Section and same v i o l a t i o n of provisions; constitutional "(2) In excess of the s t a t u t o r y of the agency; 14 or authority 375 1975, the i t 2110718 "(3) rule; I n v i o l a t i o n o f any p e r t i n e n t agency "(4) Made upon u n l a w f u l p r o c e d u r e ; "(5) A f f e c t e d by other e r r o r of law; "(6) C l e a r l y erroneous i n view of the reliable, probative, and substantial e v i d e n c e o f t h e whole r e c o r d ; o r "(7) Unreasonable, arbitrary, or c a p r i c i o u s , o r c h a r a c t e r i z e d b y an abuse o f discretion or a clearly unwarranted exercise of d i s c r e t i o n . " Our review application of the Board's conclusions of the law t o the f a c t s of law i s de novo. and i t s Ex p a r t e W i l b a n k s H e a l t h C a r e S e r v s . , I n c . , 986 So. 2d 422, 425 (Ala. 2007). The c i r c u i t c o u r t o f f e r e d no e x p l a n a t i o n f o r i t s d e c i s i o n to modify reducing the determined discussing severe, the Board's that punishment, Smith had the Board's first Smith's c u l p a b i l i t y . decision, the t h e punishment whether we w i l l punishment examine of Smith. By effectively circuit court was severe. too evidently Before punishment o f S m i t h was t o o the Board's determination of As p r e s e n t e d t h o r o u g h l y i n t h e B o a r d ' s the Board heard Davis's testimony i n d i c a t i n g violated s i x USPAP 15 rules and four that statutory 2110718 provisions regarding presumption of administrative specific, the conduct correctness attaches a g e n c y due The Board's to the Hall So. 2d v. 1047, decision of expertise Alabama 1048 "A Smith in a disputed specific, some of a Alcoholic (Ala. Civ. s p e c i a l i z e d area." Davis's an in Board's f i n d i n g s i n t h i s case c l e a r l y i n v o l v e "expertise Although 631 appraisers. i t s recognized s p e c i a l i z e d area." B e v e r a g e C o n t r o l Bd., 1993). to of opinions, w i t h i n the Board's a u t h o r i t y to weigh the d i s p u t e d i t App. the Id. was evidence. A r e v i e w i n g c o u r t " s h a l l not s u b s t i t u t e i t s judgment f o r t h a t o f t h e a g e n c y as t o t h e w e i g h t o f t h e e v i d e n c e on q u e s t i o n s f a c t , e x c e p t where o t h e r w i s e 20(k). a u t h o r i z e d by s t a t u t e . " § 4 1 - 2 2 - T h e r e i s no i n d i c a t i o n t h a t t h e B o a r d ' s regarding Smith's a p p r a i s a l f a l l found in § court to testimony t h a t the various into any 41-22-20(k)(1)-(7) t h a t would modify the Board's and t h e d e f e r e n c e decision. determinations of the categories allow the circuit Based on Davis's g i v e n t o t h e B o a r d , we Board erred i n determining r u l e s and of cannot say t h a t Smith v i o l a t e d the statutory provisions cited i n the Board's decision. Further, t h e B o a r d ' s p u n i s h m e n t o f S m i t h does n o t 16 fall 2110718 i n t o any o f t h e c a t e g o r i e s would a l l o w the c i r c u i t in punishing punishment Smith. of court We Smith found i n § 41-22-20(k)(1)-(7) t h a t t o modify the Board's specifically i s authorized note by that decision the statute. Board's The Board s u s p e n d e d S m i t h ' s l i c e n s e f o r one month and l e v i e d a g a i n s t an administrative permits the Board [appraiser's] subsection the to, license" $5,000. among and other "levy Section things, fines 34-27A-20(a) "suspend the provided in as in § 34-27A-20(a). ( c ) o f § 34-27A-20 p r o v i d e s : " I n a d d i t i o n disciplinary b o a r d may of ( c ) " f o r v i o l a t i o n s enumerated In t u r n , s u b s e c t i o n to fine him powers granted i n subsection (a), the l e v y a d m i n i s t r a t i v e f i n e s f o r s e r i o u s v i o l a t i o n s of t h i s c h a p t e r o r t h e r u l e s and r e g u l a t i o n s o f t h e b o a r d o f n o t more t h a n $500 f o r e a c h v i o l a t i o n . " regulations provides with of the board," § Regarding "the r u l e s 34-27A-23, Ala. Code 1975, that "[a] licensed real estate appraiser s h a l l comply the c u r r e n t [USPAP] approved by the b o a r d . " The has p r o m u l g a t e d R u l e 780-X-13-.01, A l a . A d m i n . Code Real Estate Appraisers under § Board (Alabama Board), which adopted the p a r t s of the USPAP a p p l i c a b l e i n t h i s Thus, and c a s e as r u l e s g o v e r n i n g 34-27A-20(a), the 17 Board was appraisers. authorized to 2110718 s u s p e n d S m i t h ' s l i c e n s e f o r one month. and ( c ) , t h e B o a r d was each serious rules. a l s o a u t h o r i z e d t o f i n e S m i t h $500 f o r violation The Board Under § 34-27A-20(a) under § 34-27A-20(a) determined that Smith and had the violated s t a t u t o r y p r o v i s i o n s u n d e r § 3 4 - 2 7 A - 2 0 ( a ) and 6 USPAP for a total the Board o f 10 v i o l a t i o n s . was violations. authorized to Accordingly, T h u s , a t $500 p e r fine the Board a u t h o r i t y t o l e v y t h e $5,000 f i n e In sum, punishing the had in this violation, f o r the the 10 statutory case. S m i t h , and t h e c i r c u i t c o u r t e r r e d i n m o d i f y i n g the circuit court's Based on judgment, within rules, in decision. acted $5,000 4 i t s discretion Board's Board Smith USPAP the and we foregoing, remand we the reverse case to the the c i r c u i t c o u r t f o r the e n t r y of a judgment c o n s i s t e n t w i t h t h i s opinion. REVERSED AND Pittman, REMANDED. Thomas, and M o o r e , J J . , c o n c u r . Thompson, P . J . , c o n c u r s i n t h e r e s u l t , w i t h o u t 18 writing.

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