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Reynolds v. Arkansas Appraiser Licensing and Certification Board

Court of Appeals of Arkansas, Division IV

December 11, 2019

Teddy REYNOLDS, Appellant

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[Copyrighted Material Omitted]

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         Crane & Phillips, P.A., by: Ryan Phillips, Magnolia, for appellant.

         Leslie Rutledge, Att’y Gen., by: Juliane Chavis, Ass’t Att’y Gen., for appellee.


         BART F. VIRDEN, Judge

          This is an administrative appeal arising out of the Arkansas Appraiser Licensing and Certification Board’s (the Board’s) order sanctioning Teddy Reynolds on the basis of his alleged failure to comply with the Uniform Standards of Professional Appraisal Practices (USPAP). Reynolds appealed the Board’s decision to the Columbia County Circuit Court, which affirmed. Reynolds now seeks our court’s review of the Board’s decision, arguing generally that the Board’s decision is not supported by substantial evidence, is arbitrary and capricious, and lacks sufficient findings of fact. Having fully considered the arguments on appeal, we affirm the Board’s decision.

          I. Background and Procedural History

          Teddy Reynolds is a licensed general appraiser in the state of Arkansas, and his conduct as an appraiser is governed by the USPAP. In 2009, Louisiana Land Bank engaged Reynolds to prepare an appraisal

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on land owned by Michael Worley because it was contemplating extending credit to Worley. The land, known as Delta Duck Farms, consists of 702 acres in Monroe County, which Worley purchased in two tracts in 2009. Worley intended to build a luxury hunting lodge and specialty barn on the land. He also planned to use a portion of the land for agronomy and recreation.

          Reynolds prepared a summary appraisal report for Louisiana Land Bank in January 2010. The appraisal included a workfile, which contained several pages of Excel documents. The appraisal was also sent to Worley who, in turn, shopped the appraisal to several other banks in an attempt to get the best loan terms. Ultimately, Louisiana Land Bank declined to offer a loan to Worley.

          In May 2011, an anonymous complaint against Reynolds was filed with the Board based on his appraisal for Louisiana Land Bank. The Board, through chief investigator Diana Piechocki, investigated the complaint. In the course of Piechocki’s investigation, she reviewed the appraisal and a portion of Reynolds’s workfile, although she did not review the Excel documents Reynolds created and included as part of his appraisal. Piechocki found several critical deficiencies in Reynolds’s appraisal, and formal charges were lodged against him. The general basis of the complaint and subsequent charges against Reynolds was that his appraisal lacked the required specificity, especially as it related to his failure to analyze his findings in narrative form.

          The Board held a hearing on those charges in March 2013. At the beginning of the hearing, the Board considered whether a continuance should be granted. It was determined that in investigating the charges, Piechocki had not reviewed Reynolds’s Excel documents. Reynolds’s counsel requested a continuance for Piechocki to inspect them, thinking that her opinion on his appraisal would be changed by the examination. Counsel for the Board suggested that the hearing continue as scheduled, allotting time for Piechocki to examine the documents during the hearing. In suggesting this, the Board’s counsel mentioned that Reynolds could present the documents to the Board and that this was sufficient to overcome any prejudice because ultimately the Board would decide whether any violations had been committed. The Board voted to go forward with the hearing.

          Piechocki and Reynolds testified. Often, the hearing focused on how much narrative must be included in an appraisal. Piechocki testified regarding the deficiencies she found initially in Reynolds’s appraisal. She then reviewed the Excel documents and testified that they did not change her opinion. Reynolds also testified in his defense. However, during his testimony, he admitted that his appraisal was lacking in narrative and should have been more developed. He further conceded that he would do things differently if given the opportunity. At the conclusion of the hearing, the Board voted to sanction Reynolds.

          In April 2013, the Board entered findings of fact, conclusions of law, and an order. The Board’s findings of fact and whether they are supported by substantial evidence are the crux of this appeal. The Board found:

F3. That [Reynolds] did not analyze the prior transfers of the subject property within the past 36 months.
F4. That [Reynolds] has failed to include support or explanation in the report or workfile as to the basis for adjustments he has made in the approaches to value. [Reynolds] has not included an allowance or explanation in ...

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