Source: http://mn.gov/law-library-stat/archive/ctapun/0012/80.htm
Timestamp: 2018-07-17 17:41:24
Document Index: 446299957

Matched Legal Cases: ['§ 14', '§ 82', '§ 45', '§ 45', '§ 45', '§ 15', '§ 14', '§ 14']

In the Matter of the Real Estate Appraiser's License of Fidelis E. Agaga, License No. 20143640. C5-00-80, Court of Appeals Unpublished, December 5, 2000.
C5-00-80
In the Matter of the Real Estate Appraiser's License of Fidelis E. Agaga,
License No. 20143640.
OAH Docket No. 8-1004-12106-2
Larry E. Reed, Hassan & Reed, LLP, 2311 Wayzata Boulevard, Minneapolis, MN 55405 (for relator Fidelis E. Agaga)
Mike Hatch, Attorney General, David L. Ramp, Assistant Attorney General, 1400 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101-2131 (for respondent commissioner)
Relator is a real-estate appraiser whose license was revoked for performing and signing appraisals before he was licensed, listing a fictitious license number on those appraisals, and inflating property values in the appraisals. Relator challenges the Commissioner of Commerce's decision revoking relator's license and alleges (a) the decision was not supported by substantial evidence; (b) the record does not demonstrate relator committed a violation and, absent a violation, revocation of his license violated his due-process rights; (c) his rights were prejudiced by the admission of certain expert testimony; (d) he was denied his due-process rights when the administrative law judge (ALJ) permitted the department to raise a new issue during the hearing; (e) the sanction imposed was extreme and excessive; (f) the Department of Commerce erred by refusing to reopen the record; (g) the proceedings as a whole were unfair; (h) the department erred by not holding a hearing before disciplining him; and (i) the ALJ was biased against him. We affirm.
The Department of Commerce brought a disciplinary action against relator Fidelis E. Agaga, a licensed real-estate appraiser. The department alleged Agaga committed numerous violations of Minnesota Statutes, Minnesota Rules, and the Uniform Standards of Professional Appraisal Practice (USPAP) by (a) performing and signing four real-estate appraisals before he was licensed, (b) using a fictitious license number on those appraisals, and (c) inflating property values in the appraisals.
After a contested-case hearing before an ALJ, the ALJ found Agaga committed the charged violations and recommended the commissioner "take adverse action against [Agaga] and his license." The Commissioner of Commerce adopted and incorporated the ALJ's findings and conclusions and revoked Agaga's real-estate appraiser's license. Agaga petitioned this court for writ of certiorari.
In reviewing an agency's decision in a contested-case proceeding, the court may reverse if a petitioner's substantial rights were prejudiced because the findings, inferences, conclusions, or decision (a) violates the constitution, (b) exceeds the agency's statutory authority or jurisdiction, (c) is made on unlawful procedure, (d) is affected by other errors of law, (e) is not supported by substantial evidence in light of the entire record, or (f) is arbitrary or capricious. Minn. Stat. § 14.69 (1998).
I. Performance of the Appraisals
Agaga first asserts that his substantial rights were prejudiced because the administrative conclusions are unsupported by substantial evidence in the record. Specifically, he challenges the conclusion that he performed the appraisals at issue.
Substantial evidence is defined as
Cable Communications Bd. v. Nor-West Cable Communications Partnership, 356 N.W.2d 658, 668 (Minn. 1984) (quotation and citation omitted). If an agency engaged in reasoned decision-making, a reviewing court will affirm even if the court may have reached a different conclusion had it been the fact-finder. Id. at 669.
The department introduced samples of Agaga's signature on numerous documents, including his personal checks and mortgage application. Karen Runyon, a forensic document examiner who testified for the department, reviewed these handwriting samples and the signatures on the appraisals in question and testified that it was "probable" that Agaga signed the appraisals.[1]
Agaga testified that the signatures on the appraisals in question were not his signatures. Michael Aihe, Agaga's employer during the time these appraisals were prepared, testified that one of his other former employees had previously prepared appraisals and signed them using Aihe's name. He also testified that handwriting on files relating to the appraisals at issue belonged to two other former employees and not Agaga. He was not asked whether the signatures on the final appraisals were Agaga's.
The appraisals at issue contain a signature above Agaga's typewritten name. The department introduced handwriting samples from Agaga and the testimony of an expert who compared the samples with the signatures on the appraisals and determined that it was probable that signatures on the appraisals were Agaga's. Thus, the commissioner's conclusion that Agaga signed the appraisals is supported by substantial evidence. By signing the appraisals Agaga attested that he prepared them.
Agaga next argues that the record does not demonstrate that he committed a violation because there is no evidence that anyone ever received or relied on the alleged appraisals and no evidence that anyone suffered any detriment. Agaga further asserts that, in absence of a violation, revocation of his license violated his right to due process because he has a protectable property interest in retaining his employment.
Absent a real-estate appraiser's license, it is unlawful "to act as a real estate appraiser" in Minnesota. Minn. Stat. § 82B.03, subd. 1(a) (1998). Only licensed appraisers may advertise or represent themselves as such, and only a licensed appraiser may used that title. Id., at subd. 1(b), (c) (1998).
We reject Agaga's assertion that the department was required to show harm to someone in order to find a statutory violation. The statute does not require a showing of detriment to another. We agree, however, that "to act as a real estate appraiser" is not well defined by statute. We understand appellant's argument. The statute leaves the door open for a determination that, absent proof of actual use of an appraisal, a charge under this statute may not be supported. Contrary to Agaga's assertions on appeal, however, there is evidence that the appraisals in question were actually prepared after someone saw the homes and then forwarded them to a mortgage company for its use. Thus, there is sufficient evidence that Agaga violated the statute.
Each of these appraisals states on its first page that Agaga prepared it for Lake City Mortgage. Additionally, Agaga himself testified that he went to Lake City Mortgage and was shown the subject appraisals at Lake City Mortgage's office. Thus, he cannot now argue that these appraisals were never submitted to a mortgage company. Agaga continues to assert on appeal that statements from owners of two of the properties in question should have been admitted after the ALJ's decision. The unsworn statements from the two owners that Agaga wants into the record state, in relevant part, that the appraiser who came to their homes was white, and because Agaga is black, he argues simply that it could not have been him. Although we address the refusal to accept these statements in a subsequent section of this opinion, we note these statements undeniably support the fact that appraisals, by someone, were actually completed on the subject properties.
III. Handwriting Expert's Testimony
Agaga next alleges the ALJ prejudiced his rights by accepting Runyon's testimony. He asserts that foundation was lacking because Runyon relied on photocopies rather than originals in making her determinations.
In contested-case hearings, the ALJ may admit all evidence that carries probative value. Minn. R. 1400.7300, subp. 1 (1999). Evidence shall be excluded if it is "incompetent, irrelevant, immaterial, or unduly repetitious." Id.
During the hearing, Agaga objected to admission of the photocopied documents and asserted that these documents were not the best evidence. The ALJ overruled the objection, concluding that the photocopies were the best available evidence.[2] The ALJ noted, however, that use of photocopies would impact his fact-finding.
Agaga also objected on foundation grounds when Runyan was asked for her conclusions. The department then offered to question Runyon regarding whether she had sufficient material with which to formulate an opinion. When asked this question, Runyon responded that she could give a conclusion "with a limitation" because of the use of photocopies. She then explained the procedure she used in evaluating the samples and opined that it was "probable" that Agaga signed the questioned documents. She noted that her conclusion could have been more decisive if she had used original documents.
Runyon qualified her answers based on her reliance on photocopies rather than originals. The ALJ and the commissioner were therefore aware of the limitations of her testimony. Thus, the ALJ did not prejudice Agaga's rights by admitting this testimony.
IV. Introduction of New Evidence
Agaga next contends that his right to a fair hearing was violated when the ALJ permitted the department to raise a new issue through a witness whose opinions had not been disclosed. It appears Agaga is referring to testimony about an appraisal he completed on an Andover property. Agaga completed this appraisal in December 1998, after he was licensed. The department did not make reference to this appraisal in its order to show cause presented to Agaga.
The ALJ stated in his memorandum that evidence of Agaga's appraisal of the Andover property was not introduced as an additional ground for action against Agaga but was used only to demonstrate that errors in his other appraisals were not isolated mistakes. The ALJ further noted that this appraisal should only be used by the commissioner in determining appropriate adverse action against Agaga. The ALJ made no reference to this appraisal in his conclusions. The commissioner adopted the ALJ's findings, conclusions, and reasoning in total. The commissioner made no explicit reference to the Andover property appraisal and referenced it only by stating that Agaga's continued refusal to prepare lawful appraisals supported the sanction imposed.
There is nothing in the record to indicate that the commissioner's determination that Agaga committed the alleged offenses was based on the Andover property appraisal. Agaga's improper actions, if any, on the Andover property are the subject for another hearing and another case. We base no part of our decision on this case on the Andover property appraisal. Thus, there is no support for Agaga's assertion that introduction of this testimony violated his right to a fair hearing.
V. Severity of the Sanction
Agaga also asserts that even assuming he committed the alleged acts, the sanction was too severe.
The commissioner has the authority to revoke a real-estate appraiser's license if the commissioner finds that such an order is in the public interest and "the person has violated any law, rule or order related to the duties and responsibilities entrusted to the commissioner." Minn. Stat. § 45.027, subd. 7(1), (2) (1998). "Duties and responsibilities entrusted to the commissioner" include, among other things, the administration of Minn. Stat. chs. 45-83 and rules adopted under those chapters. Minn. Stat. § 45.011, subds. 1, 4 (1998).
The commissioner determined that Agaga violated Minn. Stat. § 45.027, subd. 7(4) (1998), and committed numerous violations of Minn. Stat. ch. 82B (1998). The commissioner also concluded that Agaga committed multiple violations of Minn. R. 2808.6000 (1999) and the USPAP. The commissioner further observed that the number and extent of these violations were so great that they demonstrated that Agaga is unfit to prepare appraisals.
Based on these conclusions, the commissioner's decision to revoke Agaga's license was not extreme.
VI. Reopening the Record
Agaga argues that the commissioner should have reopened the hearing when Agaga submitted new evidence. He asserts that he gathered this evidence after the hearing because he was surprised by the department's expert's testimony.
Agaga does not contend that the department failed to notify him that Runyon would be testifying. Instead, he alleges that during a meeting among the ALJ and both counsel the day before the hearing, the department indicated that Runyon could not determine whether Agaga signed the appraisals. Agaga asserts that he relied on this information and, thus, did not obtain any witness statements before the hearing.
There is no record of the meeting before the hearing, but during the hearing Agaga's counsel stated on the record that he understood from the previous day's meeting that Runyon would testify that it was "questionable" whether the signatures were Agaga's. The ALJ responded that they had decided that Runyon could testify but her testimony would be limited. During her testimony, Runyon explained that because she viewed photocopies, she could only say that it was "probable" that Agaga signed the appraisals. Thus, there is no support for Agaga's assertion that he was surprised that Runyon testified and/or surprised by the content of her testimony.
The evidence Agaga wanted to introduce after the ALJ's decision included unnotarized statements from property owners at two of the locations at which the appraisals at issue were performed. According to these statements, the appraiser was recognized to the property owners as being of a different race than Agaga. Even assuming these statements had been admitted and accepted as true, they indicate only that Agaga did not go to the properties in question. They do not address whether Agaga actually worked up the appraisals and signed them. That issue is covered earlier in this opinion in favor of respondent.
VII. Unfairness
Agaga next argues that the commissioner's decision must be reversed and vacated because the proceedings were unfair. He contends that all the decisions were decided in the department's favor, deference was given to all of the department's witnesses, and testimony in his favor was ignored.
This court gives deference to administrative fact-finding. Info Tel Communications, LLC v. Minnesota Pub. Utils. Comm'n, 592 N.W.2d 880, 884 (Minn. App. 1999), review denied (Minn. July 28, 1999). Further, absent manifest injustice, inferences an agency has drawn from the evidence must be accepted by a reviewing court even if it appears the record better supports contrary inferences or if "the reviewing court would be inclined to reach a different result were it the trier of fact." Ellis v. Minneapolis Comm'n on Civil Rights, 295 N.W.2d 523, 525 (Minn. 1980) (citation omitted). Thus, this court will not reweigh the evidence.
VIII. Hearing before Discipline
Agaga additionally contends that the commissioner erred by not giving him a hearing. Because Agaga received a contested-case hearing, it appears he is referring to the denial of his request for rehearing.
After the ALJ issued his findings, conclusions, and recommendation, the commissioner informed Agaga of his right to submit exceptions and argument. By letter to a deputy commissioner, Agaga asked for consideration of submitted new evidence and asked for "an opportunity to be heard on this matter."[3]
Agaga alleges that the department informed him that he had a right to a hearing. Contrary to Agaga's argument, the only mention of a hearing in the commissioner's letter informing Agaga of his right to file exceptions and arguments was notification that the parties would have an opportunity to request a hearing "on any financial penalty." The commissioner did not impose a financial penalty here.
Agaga also asserts Minn. Stat. § 15.0421 guaranteed his right to a hearing. This statute was renumbered § 14.61 in 1982 and currently states that a final agency decision shall not be made until the ALJ's report is made available to the parties for at least ten days and adversely affected parties are given the opportunity to file exceptions and present argument. Minn. Stat. § 14.61 (1998). Although "argument" has been construed to mean parties are entitled to oral argument if they so request, the statute makes no mention of the right to a new hearing, and caselaw has not interpreted the statute as requiring such a hearing. Cf. In re Determining High Water Level of Lake Pulaski, 384 N.W.2d 510, 515 (Minn. App. 1986) (stating if relator had requested oral argument, request should have been granted).
IX. Bias
Finally, Agaga asserts that the ALJ was biased in favor of the department. In support of this argument Agaga primarily restates his preceding arguments, which we have rejected.
[1] Runyon relied on a scale of conclusions that ranged from "positive elimination" to "positive identification." "Inconclusive" fell halfway in between the two extremes, and "probable" fell halfway in between "positive identification" and "inconclusive."
[2] It is undisputed that the attorney general's office had possession of the original documents at one time but could not locate them at the time of the hearing.
[3] Agaga states that he also sought a hearing in his request for reconsideration. The record contains only an unsigned and undated copy of this document attached to unrelated submissions from Agaga. There is no evidence that Agaga ever actually sought reconsideration of the commissioner's decision.