ALJDEC decisions subject to certification as final

21A-028-FIN · Department of Insurance and Financial Institutions - Financial · 2021-09-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of:

Laura A. Forrey

Respondent

No. 21A-028-FIN

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 18, 2021

APPEARANCES: The Arizona Department of Insurance and Financial Institutions was represented by Assistant Attorney General Eric Schwarz. Respondent Laura A. Forrey did not appear.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Arizona Department of Insurance and Financial Institutions (Department) has been authorized and entrusted by the Arizona legislature to regulate the appraisal profession in the State of Arizona by issuing licenses, investigating complaints, and disciplining licensees.

In October 2008, Respondent Laura A. Forrey was issued a Certified Residential Real Estate Appraiser License No. 22032. That certificate expired on October 31, 2020. Respondent did not filed an application for renewal of her appraiser license with the Department.

Summit Funding, Inc. (Summit) is an Arizona licensed mortgage banker.

Prior to October 31, 2020, Respondent performed real estate appraisal activities in Arizona for Summit over the course of a number of years.

After October 31, 2020, Summit assigned Respondent ten separate appraisal assignments on properties located in Arizona, and Respondent accepted all ten of those appraisal assignments.

After October 31, 2020, Respondent engaged in real estate appraisal activities and completed ten separate appraisal reports for Summit on properties located in Arizona. Respondent signed the ten reports on dates spanning from December 10, 2020, to January 13, 2021, and submitted the appraisal reports to Summit.

Summit paid Respondent for the ten appraisals.

In all ten of the appraisal reports Respondent completed after October 31, 2020, Respondent misrepresented that the expiration date of her appraiser license was October 31, 2022, rather than the actual expiration date of October 31, 2020.

After Summit had received all ten of the appraisal reports completed after October 31, 2020, Summit learned that Respondent’s appraiser license had expired on October 31, 2020. Summit then reviewed its records and discovered that Respondent had accepted, completed, and signed all ten of the appraisal reports at issue after her appraisal license had expired.

On or about February 19, 2021, Summit’s Appraisal Department Manager Katie Mason filed a complaint against Respondent with the Department regarding these ten appraisal reports. In the complaint, Ms. Mason wrote, in pertinent part: “[Respondent] [c]ompleted 10 appraisals while unlicensed, signed certification with expiration year 2022 when license expired 2020 and was not renewed or reinstated.”

Ms. Mason submitted a copy of one of the ten appraisals at issue to the Department with the complaint and subsequently provided the Department with the nine other appraisal reports.

On or about February 26, 2021, while the Department was investigating the complaint, the Department reached out to Respondent and requested that she respond in writing to the allegations in the complaint no later than March 8, 2021.

Respondent did not respond to the request.

Upon its completion of the investigation of the complaint, the Department concluded that Respondent committed violations of the Uniform Standards of Professional Appraisal Practice (USPAP) in falsifying the expiration date of her appraiser license on ten separate appraisal reports.

The Department referred the matter to the Office of Administrative Hearings (OAH), an independent agency, for an evidentiary hearing.

On or about June 25, 2021, the Department issued a Notice of Hearing, setting the administrative hearing for 9:00 a.m. on August 18, 2021, and charging that cause existed to revoke Respondent’s real estate appraiser’s license under A.R.S. § 32-3631(A)(8).

The Complaint and Notice of Hearing was sent to Respondent via certified mail to her most recent addresses of record and emailed to her address of record.

Respondent did not appear personally or through an attorney at the duly noticed hearing, did not request to appear telephonically, and did not contact OAH to request a continuance or that the time for the hearing be delayed. Accordingly, Respondent did not present any evidence to defend her license.

The Department presented the testimony of Ms. Mason and Nancy Inserra, Regulatory Compliance Officer with the Department, and submitted 14 exhibits.

Ms. Inserra testified that Arizona adopted the USPAP Standards, which means that a violation of the USPAP is a violation of Arizona statute.

The USPAP ethics rule states that “[a]n appraiser must promote and preserve the public trust inherent in appraisal practice by observing the highest standards of professional ethics.”

CONCLUSIONS OF LAW

The Notice of Hearing that the Department mailed to Respondent at her address and email address of record was reasonable and she is deemed to have received notice of the hearing.

The Department has the authority and duty to regulate all persons engaged in the activities of real estate appraisal and with the enforcement of statutes, rules, and regulations relating to real estate appraisals. This matter lies within the Department’s jurisdiction.

The Department bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

A.R.S. § 32-3631(A) provides, in pertinent part, as follows:

The board . . . may revoke or suspend the rights of a license or certificate holder or otherwise discipline a registered trainee appraiser or a state licensed or state certified appraiser for any of the following acts or omissions:

. . . .

8. Wilfully disregarding or violating any of the provisions of this chapter or a board order or the rules of the board for the administration and enforcement of this chapter.

A.R.S. § 32-3619(D) provides as follows:

An appraiser or registered trainee appraiser shall not engage in, advertise or purport to engage in real estate appraisal activity in this state after a license or certificate has expired and before the renewal of the expired license or certificate except as provided in section 41-1092.11

A.R.S. § 32-3635(A) requires that an appraiser “shall comply with the standards of professional appraisal practice.”

The Department established that Respondent willfully misrepresented the expiration date of her license on ten appraisal reports she completed after her license expired on October 31, 2020. Therefore, the Department established grounds to discipline Respondent’s real estate appraiser’s license under A.R.S. § 32-3631(A)(8).

With respect to the penalty, Respondent’s complete failure to respond to any communication from the Department relating to this matter evidenced a total disregard for regulatory requirements. This, together with her failure to appear at the duly noticed hearing, establish that she cannot be regulated at this time.

A.R.S. § 32-3631 provides, in pertinent part, as follows:

E. If the superintendent determines that a state-licensed or state-certified appraiser is in violation of this chapter, the superintendent may take disciplinary or remedial action and may impose a civil penalty not to exceed three thousand dollars per complaint filed with the superintendent pursuant to this chapter.

In the instant matter, the Department received one complaint regarding Respondent’s conduct. While Respondent’s conduct may be considered to constitute ten violations of A.R.S. § 32-3619(D) and ten violations of A.R.S. § 32-3635(A), civil penalties are limited to $3,000.00 per complaint.

The Administrative Law Judge concludes a $3,000.00 civil penalty is appropriate in this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS ORDERED that on the effective date of the final order in this matter, Respondent Laura A. Forrey’s Certified Residential Real Estate Appraiser License No. 22032 shall be revoked.

IT IS FURTHER ORDERED that the Department require Respondent Laura A. Forrey to pay the sum of $3,000.00 as a civil penalty pursuant to A.R.S. § 32-3631.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification.

-54864001

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-137160-45720000Done this day, September 3, 2021.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Evan G. Daniels,

Department of Insurance and Financial Institutions - Financial-54864001

001

-137160-45720000