Georgia Real Estate Appraisers v. Krouse
| Decision Date | 14 July 2009 |
| Docket Number | No. A09A0385.,A09A0385. |
| Citation | 299 Ga. App. 73,681 S.E.2d 737 |
| Parties | GEORGIA REAL ESTATE APPRAISERS BOARD v. KROUSE. |
| Court | Georgia Court of Appeals |
Thurbert E. Baker, Atty. Gen., Ekonomou, Atkinson & Lambros, Kirby G. Atkinson, Paul E. Nystrom III, Atlanta, for appellant.
Thompson & Smith, Larry I. Smith, Augusta, Huff, Powell & Bailey, Daniel J. Huff, Atlanta, for appellee.
This appeal involves a disciplinary proceeding against a licensed appraiser, Ashby Roy Krouse III. The Georgia Real Estate Appraisers Board initiated the disciplinary action to revoke Krouse's state certified general real property appraiser classification, alleging that Krouse had violated numerous professional standards in his appraisal of certain real property. Following an evidentiary hearing, the administrative law judge ("ALJ") issued an initial decision concluding that the evidence authorized the revocation of Krouse's appraiser classification. The ALJ's decision was affirmed and adopted in the final order of the reviewing Board. Krouse then filed a petition for judicial review in the superior court. The superior court reversed the Board's decision, concluding that it was not supported by any evidence since the Board failed to present testimony from an expert witness to establish the violations.
We granted the Board's application for discretionary appeal to review the superior court's ruling. We conclude that expert testimony was not required to establish the charged violations and that the record evidence was otherwise sufficient to support the Board's findings. We therefore reverse the superior court's ruling and reinstate the Board's revocation order.
Under the Administrative Procedure Act, an administrative agency's findings and conclusions may be reversed by the superior court if they are "clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record." OCGA § 50-13-19(h)(5). This language has been interpreted to preclude review if "any evidence" on the record substantiates the administrative agency's findings of fact and conclusions of law. The presence of conflicting evidence is sufficient to satisfy the any evidence standard. Upon further discretionary appeal to this Court, our duty is not to review whether the record supports the superior court's decision but whether the record supports the final decision of the administrative agency.
(Citation omitted.) Professional Standards Comm. v. Peterson, 284 Ga.App. 424, 427(1), 643 S.E.2d 899 (2007).
So viewed, the record evidence shows that Krouse was a state certified general real estate appraiser. In August 2002, Krouse was contacted by William Hatcher, the owner of 98.24 acres of land located in Richmond and Burke counties ("the property"). Hatcher sought Krouse's assistance in a tax appeal challenging the tax assessor's re-valuation of the property from $15,900 to $117,888.
During a discussion about the tax appeal and property valuation, Hatcher told Krouse that he would be willing to donate the property to a charitable organization if it was appraised at a value near the $117,000 tax assessment value. Hatcher had previously rejected an adjoining landowner's offer to buy the property for $35,000. He had also rejected a request that he donate the property to the Boy Scouts after the property was appraised at $38,000. Because Hatcher intended to claim a tax deduction based upon the charitable donation, he desired a higher appraised value in order to maximize his tax deduction and savings.
Krouse was a supporter of a charitable organization known as the Hale Foundation, Inc. and was socially acquainted with several board members of that foundation. On September 2, 2002, Krouse attended a social gathering with the co-founder of the Hale Foundation and overheard him discussing the charity's financial status with two other board members. Krouse mentioned that he had a client who was considering donating property to a charity for tax purposes. The co-founder responded that the Hale Foundation would greatly appreciate the donation, on the condition that they could resell the property quickly to yield funds for the charity's operations. Krouse advised the co-founder that the property could be resold for approximately $20,000 on the open market.
On the following day, September 3, 2002, Krouse met with Hatcher to discuss the property. At the meeting, Krouse provided Hatcher with his written appraisal report, designated as a "Valuation Analysis." The appraisal specified that the "purpose of this appraisal is to develop an opinion as to the current market value of the fee simple interest of the subject property" by issuing "a letter form report in lieu of a standard detailed appraisal report." The appraisal stated that the intended use was "to estimate the probable selling price" and that the intended user was Hatcher. In the "Site Description," the appraisal stated that there were "[n]o apparent nuisances, adverse conditions, hazards, or influences exist[ing] in the subject area which would detrimentally affect the value" of the subject property. In the appraisal, Krouse concluded that "the subject property [had] a Market Value as of September 3, 2002, [of] ... $113,000.00." Krouse certified that "[t]he reported analysis, opinions, and conclusions [were] limited only by the reported assumptions and limiting conditions, and [were Krouse's] personal, unbiased professional analyses, opinions, and conclusions." Krouse further certified that he had "no financial interest, either present or contemplated, in the opinion of value put on this property."
Both Hatcher and Krouse knew that the property was swampland and inaccessible by virtue of it being landlocked. The written appraisal report, however, did not state those facts nor state, as testified by Krouse, that the property had been valued as if it had access. Hatcher and Krouse talked about the possibility of gaining access to the property through an easement by necessity, but Hatcher stated that he was not willing to engage in the necessary legal action. Instead, Hatcher decided to donate the property to a charitable organization in exchange for the corresponding tax benefit.
Krouse asked Hatcher to donate the property to the Hale Foundation. Hatcher agreed to do so and immediately thereafter, Krouse asked Hatcher whether he would mind if the property was purchased by Krouse's wife following the donation. Hatcher responded that he did not care what happened to the property after the donation. Krouse then called his wife and arranged for her to purchase the property from the Hale Foundation for $25,000.
The next day, September 4, 2002, Krouse filed documentation for the tax appeal indicating that the property's value was $25,000, the amount for which it was being sold. The tax assessor resolved the tax appeal by reducing the tax assessment value of the property accordingly.
On September 5, 2002, the real estate closings for both conveyance transactions took place. The parties first closed on the conveyance of the property from Hatcher to the Hale Foundation by deed of gift. Immediately thereafter, the transaction conveying the property from the Hale Foundation to Krouse's wife occurred.
Following Hatcher's donation of the property, he filed his 2002 federal tax return claiming a charitable donation based upon the $113,000 property valuation set forth in Krouse's written appraisal report. The charitable donation yielded Hatcher a tax saving of approximately $37,000.
On the day following the real estate closings, Krouse took a representative of the Georgia Department of Transportation to see the property that his wife had just purchased to ascertain whether the state would be willing to acquire it as part of its ongoing wetlands mitigation project. Approximately two years later, the Department of Transportation purchased the property from Mrs. Krouse, paying her $265,850.
Thereafter, several newspaper articles were published that questioned the legitimacy of the transaction and its handling. The matter was brought to the attention of the Georgia Real Estate Appraisers Board and an investigation was launched. Krouse was also a licensed real estate broker. In 1999, the Georgia Real Estate Commission had imposed a sanction against Krouse's real estate broker's license as a result of his failure to disclose his interest in a real estate transaction and also as a result of his acting as a broker during a period of time when his license had lapsed. Based upon this prior sanction and Krouse's conduct in the appraisal of the Hatcher property, the Board filed a disciplinary proceeding seeking to revoke Krouse's state certified general real property appraisal classification. At the conclusion of an evidentiary hearing before an ALJ and a review by the Board, Krouse's appraisal classification was revoked. Upon judicial review before the superior court, however, the Board's decision was reversed.
1. The Board contends that the superior court erred in concluding that testimony from an expert witness was required to establish Krouse's violations of the Georgia Real Estate Appraiser Classification and Regulation Act, OCGA § 43-39A-1 et seq., and the rules and regulations promulgated by the Board.1 We agree.
In support of its decision, the trial court relied upon Thebaut v. Ga. Bd. of Dentistry, 235 Ga.App. 194, 202-203(3), 509 S.E.2d 125 (1998), where we held that "where the issues of competence and negligence are of a complicated nature, expert testimony is required to establish the proper competency standards and whether or not they are met." (Punctuation and footnote omitted; emphasis supplied.) But, as the emphasized language shows, the requirement for expert testimony is not absolute and depends upon the circumstances of the case.
The requirement that expert testimony be adduced in cases involving the alleged breach of professional standards is premised upon the existence of questions ...
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