Appeal by Petitioner from order and decision on judicial
review entered 3 April 2006 by Judge Susan C. Taylor in Superior
Court, Davie County. Heard in the Court of Appeals 8 February
2007.
Randolph and Fischer, by J. Clark Fischer; and Melvin and
Powell, by Edward L. Powell, for Petitioner-Appellant.
Attorney General Roy Cooper, by Assistant Attorney General
Roberta Ouellette, for Respondents-Appellees.
McGEE, Judge.
The North Carolina Appraisal Board (the Board) found probable
cause that Gilbert L. Boger (Petitioner) violated the Standards of
Practice applicable to residential real estate appraisers and sent
Petitioner a complaint status report and probable cause summary on
22 July 2003. The Board issued a notice of hearing dated 24
November 2004 to Petitioner. The notice of hearing stated:
In accordance with G.S. Chapter 150B, the
Administrative Procedures Act, you are hereby
notified that the . . . Board has received
information which, if true, may warrantdisciplinary action against you including the
revocation or suspension of your certification
as a residential real estate appraiser
pursuant to G.S. 93E-1-12(a)(8), (9) and (11);
NCAC 57A.0501(a); and the following Rules and
Standards of the Uniform Standards of
Professional Appraisal Practice: The Ethics
Rule, Competency Rule, and Standard 1 and
Standard 2.
The notice of hearing also included two pages of factual
allegations against Petitioner. The Board alleged the following:
1. In Case Number 2001-0055, [Petitioner]
appraised a 39.95 acre tract of land located
in Woodleaf, North Carolina in May 2000,
estimating a final value of $295,125[.00], or
$7,500[.00] an acre.
2. The purpose of the appraisal was to
appraise the fee simple market value of the
property.
3. [Petitioner] used only the Sales
Comparison Approach to value the subject
property, as he stated the Cost Approach and
Income Approach were not considered
appropriate to appraise vacant land.
4. [Petitioner] used four sales in his Sales
Comparison Approach.
5. . . . [Petitioner] stated the sales price
per acre of the four sales was $6,076[.00],
$5,423[.00], $6,434[.00] and $6,314[.00]. The
appraisal report contained MLS sheets showing
the sales data, but it did not contain any
analysis of those sales that would indicate
how he arrived at the per acre value for the
subject property, which was higher than any of
his sales.
6. One such MLS sheet, regarding a sale in
December 1999 of a property located on Green
Road in Salisbury, NC stated that the property
was listed for $123,000[.00], sold for
$167,000[.00] and contained 30.79 acres, for a
sales price of $5,423[.00] per acre. Public
records indicate that when this property was
sold it contained an additional tract of 38.68
acres, thus the sales price per acre was$2,404[.00].
7. Another such MLS sheet, regarding a sale
in August 1998 of a property located on
Mooresville Road, stated that the property
sold for $450,000[.00] and contained 71.27
acres. Public records indicate that there
were approximately $194,000[.00] in
improvements included with the sale.
Adjusting for the improvements on this sale
would have lowered the sale price per acre to
approximately $3,589[.00] per acre.
8.
[Petitioner] stated in the appraisal
report that five acres of the subject are a
floodplain when there are actually ten or more
acres in the floodplain.
9.
[Petitioner]
does not state in the
appraisal report whether any of his comparable
sales contained similar floodplain.
10.
[Petitioner]
appears to give value to the
timber on the subject property in his final
estimate of value, but he does not state the
actual value of the timber.
11.
In the appraisal report, [Petitioner]
did
not disclose to the client and any intended
users of the appraisal the scope of work used
to develop the appraisal.
12.
In the appraisal report, [Petitioner]
did
not state the highest and best use of the
subject property. The workfile he sent in to
the Board did not include any discussion of
the highest and best use of the property.
13.
In Case Number 2003-0076, [Petitioner]
appraised a property located in High Point,
North Carolina in June 2002, finding a value
of $l49,000[.00].
14.
The purpose of the appraisal was to
appraise the fee simple market value of the
house, land and improvements.
15.
[Petitioner]
used Cost and Sales
Comparison Approaches to value the subject
property.
16.
[Petitioner]
used three comparable salesin his appraisal report.
17.
These sales were located two to three
miles north of the subject and in an area that
was superior to the subject, yet [Petitioner]
made no adjustments for the difference in
location.
18.
The subject property was partially
located in a flood zone. None of the
comparable sales were located in a flood zone,
yet [Petitioner]
made no adjustments to his
comparable sales for this difference.
19.
There were other sales located in the
subject area that were much more comparable to
the subject property and that would have
indicated a value for the subject property of
around $81,000[.00].
The notice of hearing further stated that "[a]n evidentiary hearing
before the . . . Board on the foregoing allegations has been
scheduled for Tuesday, December 14, 2004 at 9:00 am, or as soon
thereafter as the matter may be heard, at the Board's offices, 3900
Barrett Drive, Raleigh, North Carolina."
Following the hearing, the Board entered an order dated 23
February 2005. The Board made findings of fact and conclusions of
law and revoked Petitioner's real estate appraiser certification.
Petitioner does not challenge the findings of fact on appeal.
The Board concluded that Petitioner was guilty of violating the
following rules of the Uniform Standards of Professional Appraisal
Practice (USPAP): (1) the Competency Rule, (2) Standard Rule 1, (3)
Standard Rule 1-1(a), (4) Standard Rule 1-4(g), (5) Standard Rule
2, and (6) Standard Rule 2-2. The Board further concluded that by
violating the various provisions of USPAP, Petitioner violated
Section 57A.0501 of the North Carolina Appraisal Board Rules andN.C. Gen. Stat. § 93E-1-12(a)(9).
Petitioner filed a petition for judicial review of the Board's
order. The trial court entered an order and decision on judicial
review on 3 April 2006, upholding the Board's order. The trial
court ruled, inter alia, that (1) Petitioner received adequate
notice of the allegations against him, (2) the Board did not abuse
its discretion when it found that Petitioner violated the
Appraiser's Act and revoked Petitioner's certification, and (3) the
Board did not act arbitrarily or capriciously in revoking
Petitioner's certification. Petitioner appeals.
I.
Petitioner argues the trial court erred by affirming the
Board's order because the order was based upon findings of
violations of which Petitioner had no prior notice. Specifically,
Petitioner argues "the Board violated both [Petitioner's] basic due
process rights and the [applicable] statutory provisions . . . by
making findings and imposing sanction based on matters beyond it[s]
notice of proposed action." Petitioner argues he did not receive
adequate notice of the following findings of fact:
19. [Petitioner] was not experienced in the
subject market, nor did he understand the
nuances of the subject market.
. . .
27. [Petitioner] did not correctly complete
the research and analysis necessary to produce
a credible appraisal.
28. [Petitioner] did not correctly employ
recognized methods and techniques necessary to
produce a credible appraisal. In addition, he
failed to demonstrate effective use of the
sales comparison approach to value.
29. [Petitioner's] appraisal in this case is
not credible.
. . .
33. There was no mention in the appraisal
report of the appraisal procedures followed or
of the reasoning that supported
. . . [Petitioner's] analysis, opinions or
conclusions.
. . .
47. [Petitioner] was not experienced in the
subject market, nor did he understand the
nuances of the subject market.
48. [Petitioner] did not correctly employ
recognized methods and techniques necessary to
produce a credible appraisal in this case. In
addition, he failed to demonstrate effective
use of the sales comparison approach to value.
49. [Petitioner's] appraisal in this case is
not credible.
"Judicial review of the final decision of an administrative
agency in a contested case is governed by section 150B-51(b) of the
APA."
Watkins v. N.C. State Bd. of Dental Exam'rs, 358 N.C. 190,
199, 593 S.E.2d 764, 769 (2004). "Appellate review of a judgment
of the superior court entered upon review of an administrative
agency decision requires that the appellate court determine whether
the trial court utilized the appropriate scope of review and, if so,
whether the trial court did so correctly."
Dillingham v. N.C. Dep't
of Human Res., 132 N.C. App. 704, 708, 513 S.E.2d 823, 826 (1999).
The nature of the error asserted by the party
seeking review dictates the appropriate manner
of review: if the appellant contends the
agency's decision was affected by a legal
error, G.S. § 150B-51(b)(1)(2)(3) & (4),
de
novo review is required; if the appellant
contends the agency decision was not supported
by the evidence, G.S. § 150B-51(b)(5), or was
arbitrary or capricious, G.S. § 150B-51(b)(6),
the whole record test is utilized.
Id. In the present case, Petitioner asserts the Board and the trial
court committed legal error, and we therefore apply
de novo review.
See id.
Due process of law requires notice and an opportunity to be
heard.
McDonald's Corp. v. Dwyer, 338 N.C. 445, 448, 450 S.E.2d
888, 891 (1994). N.C. Gen. Stat. § 150B-38(b) (2005) provides:
Prior to any agency action in a contested case,
the agency shall give the parties in the case
an opportunity for a hearing without undue
delay and notice not less than 15 days before
the hearing. Notice to the parties shall
include:
(1) A statement of the date, hour, place,
and nature of the hearing;
(2) A reference to the particular sections
of the statutes and rules involved; and
(3) A short and plain statement of the
facts alleged.
In the present case, Petitioner received a notice of hearing,
which stated:
In accordance with G.S. Chapter 150B, the
Administrative Procedures Act, you are hereby
notified that the . . . Board has received
information which, if true, may warrant
disciplinary action against you including the
revocation or suspension of your certification
as a residential real estate appraiser pursuant
to G.S. 93E-1-12(a)(8), (9) and (11); NCAC
57A.0501(a); and the following Rules and
Standards of the Uniform Standards of
Professional Appraisal Practice: The Ethics
Rule, Competency Rule, and Standard 1 and
Standard 2.
The notice of hearing also included a statement of the factual
allegations against Petitioner. The notice of hearing further
stated that "[a]n evidentiary hearing before the . . . Board on theforegoing allegations has been scheduled for Tuesday, December 14,
2004 at 9:00 am, or as soon thereafter as the matter may be heard,
at the Board's offices, 3900 Barrett Drive, Raleigh, North
Carolina."
Petitioner argues that several of the Board's findings of fact
in its order revoking his certification were not included in the
notice of hearing. However, the Board was not required to give
Petitioner notice of every fact it would ultimately prove. The
statute only requires a "short and plain statement of the facts
alleged." N.C.G.S. § 150B-38(b)(3). The Board clearly complied
with this requirement. Moreover, the Board gave Petitioner notice
of every statute or rule under which Petitioner was ultimately
disciplined.
Petitioner also argues that pursuant to N.C. Gen. Stat. § 150B-
42(a), the Board erred by basing its findings of fact on matters
that were not "officially noticed." N.C. Gen. Stat. § 150B-42(a)
(2005) provides:
After compliance with the provisions of G.S.
150B-40(e), if applicable, and review of the
official record, as defined in subsection (b)
of this section, an agency shall make a written
final decision or order in a contested case.
The decision or order shall include findings of
fact and conclusions of law. Findings of fact
shall be based exclusively on the evidence and
on matters officially noticed.
However, despite Petitioner's argument to the contrary, the term
"officially noticed" does not refer to those facts that are alleged
in a notice of hearing. Rather, N.C. Gen. Stat. § 150B-41(d) (2005)
provides: "Official notice may be taken of all facts of whichjudicial notice may be taken and of other facts within the
specialized knowledge of the agency." N.C.G.S. § 150B-41(d) makes
clear that official notice is similar to judicial notice and does
not require an agency to limit its findings of fact to facts that
were alleged in a notice of hearing. We conclude the Board
adequately complied with N.C.G.S. § 150B-38(b) and provided notice
sufficient to satisfy due process of law. Therefore, the trial
court did not err by holding that Petitioner received adequate
notice of the allegations against him. We overrule these
assignments of error.
II.
Petitioner argues the trial court erred by upholding the
Board's order because the revocation of Petitioner's certification
was arbitrary, capricious, an abuse of discretion, and was not
supported by substantial evidence. We first note that Petitioner
did not challenge any of the Board's findings of fact. Therefore,
the Board's findings of fact are conclusive on appeal.
See Cox v.
Real Estate Licensing Board, 47 N.C. App. 135, 139, 266 S.E.2d 851,
853,
disc. review denied, 301 N.C. 87, 273 S.E.2d 296 (1980).
Moreover, Petitioner did not appeal the trial court's determination
that the Board's findings of fact were sufficient to support the
Board's decision to revoke petitioner's certification. Accordingly,
we only determine whether the Board's order was arbitrary,
capricious, or an abuse of discretion, and we apply the whole record
test.
See Dillingham, 132 N.C. App. at 708, 513 S.E.2d at 826.
"A court applying the whole record test may not substitute itsjudgment for the agency's as between two conflicting views, even
though it could reasonably have reached a different result had it
reviewed the matter
de novo."
Watkins, 358 N.C. at 199, 593 S.E.2d
at 769. "Rather, a court must examine all the record evidence_that
which detracts from the agency's findings and conclusions as well
as that which tends to support them_to determine whether there is
substantial evidence to justify the agency's decision."
Id.
Petitioner argues the Board's action was grossly
disproportionate to the violations charged. Petitioner argues that
"[w]hile the [t]rial [c]ourt correctly note[d] that nothing in
Chapter 93E expressly states that the Board will employ a system of
progressive discipline, both basic common sense and the Board's
public pronouncements require such a conclusion." Petitioner relies
on the comments of the Board's counsel at the hearing before the
Board. The Board's counsel argued that she should be able to ask
whether there had been other complaints against Petitioner, and
stated: "The only reason for bringing this to your attention is that
it is a matter of when you are considering any sanction against
[Petitioner], it is something that you've taken into account in the
past, your progressive discipline system, whether or not there has
been prior discipline." The comments of the Board's counsel were
not evidence and are not the law.
Pursuant to N.C. Gen. Stat. § 93E-1-12(a), the Board is
authorized to suspend or revoke a certification if it finds the
certificate holder guilty of one of the eleven enumerated offenses.
N.C. Gen. Stat. § 93E-1-12(a) (2005). Under
Edwards v. Latham, 60N.C. App. 759, 763, 299 S.E.2d 819, 822 (1983), one violation of a
licensing statute is sufficient to support the revocation of the
license. In the present case, the Board determined that Petitioner
violated N.C.G.S. § 93E-1-12(a)(9). Pursuant to the statute, and
in accordance with
Edwards, this one violation was sufficient to
support the revocation of Petitioner's certification.
Petitioner also argues the Board's decision to revoke his
certification was arbitrary and capricious because it amounted to
retaliation for Petitioner's refusal to settle the case through a
consent order. In a letter dated 2 February 2004, the Board's
counsel offered to settle the case. However, the letter also
stated: "If we are unable to resolve this matter through settlement,
[the Board's counsel] will return the case to a prosecution
footing." As was made clear in the notice of hearing, Petitioner
was subject to the revocation of his certification by virtue of the
allegations made against him. When Petitioner chose not to accept
the settlement, Petitioner chose to have a hearing before the Board,
which he knew could result in the revocation of his certification.
For the reasons stated above, the Board's revocation of Petitioner's
certification was not arbitrary, capricious, or an abuse of
discretion. We overrule the assignments of error grouped under this
argument.
Affirmed.
Judges CALABRIA and STEPHENS concur.
Report per Rule 30(e).
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