State of Alaska v. Wold
On Friday, the Alaska State Supreme Court issued a ruling on an appraisal standards case which is already having national — even international — implications. (I’ve already received e-mails from as far away as Australia about this!).
To synopsize, I was the testifying expert on appraisal standards for Wold’s attorneys. For a couple of decades, Wold has been a successful and highly respected appraiser, real estate expert, and investor in Ketchikan, Alaska. Back in the 1990’s, he testified on a pair of court cases, and the opposing expert in one of the cases was a member of the Alaska Appraisal Licensing Board. (You can see where this is going, right?) The Board filed a number of charges against Wold, and as is usual in such matters, the charges went before an Administrative Law Judge. The Board did not accept the Judge’s findings, and decided to adjudicate the case themselves. (You CAN see where this is going, right?). The Board found against Wold on all 8 charges and Wold naturally appealed to the District Court. That Court not only overturned 7 of the 8 charges, but ordered the Board to reimburse half of Wold’s fairly significant legal fees. Wold appealed the 8th charge to the State Supreme Court, which not only handed Wold a decisive victory (in the only USPAP case ever heard by that Court) but also remanded the case to the lower court for consideration of reimbursement of the REST of Wold’s legal fees.
As the testifying expert who advised Wold’s attorneys, I’m naturally pleased at the outcome. That having been said, I’m concerned about the bigger picture. Appraisal licensing boards around the country have a record number of complaints filed against appraisers today, and in many of these matters, sifting through the truth as opposed to the fiction is an increasing challenge. Clearly, some appraisal mistakes were made in the recent housing finance debacle, not to mention appraisal review and underwriting. The job now is understanding when and how those mistakes were made, and approaching these matters objectively, credibly, and in an unbiased fashion.
From a small northwestern observatory... 
Would you be interested in some light reading on an old case in North Dakota? Give me an email and I’ll send you my attorney’s brief. A similar set of circumstances resulted in my license being revoked and after the ALJ hearing I had no money to move forward to a higher court.
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Stefan Oly Olafson
May 22, 2012 at 10:43 am
Got to Love You for this. Richard Greco, Appraiser, Bronx, NY 10462 Glas to see someone with their head in place.
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Richard Greco
May 22, 2012 at 1:09 pm
a Very interesting and important case. It is clear that the Board had NO idea how to prosecute what they believed to have bee na bad appraisal.
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Richard M. Betts
May 22, 2012 at 4:47 pm
Sounds somewhat similar to a story in my stomping grounds.
As the agency responsible for representing Nevada Department of Transportation (NDOT) in Nevada, the Attorney General’s office would represent NDOT in eminent domain cases.
When some results went against NDOT, the immediate response is that the appraiser must have done something unethical by the losing state agency. The NV Attorney General’s office would refer the case to the Nevada Commission of Real Estate Appraisers. Of course, the NV AG’s office would also be counseling the NV Appraisal Commission in its proceedings and on any legal functions and legal advice. The “sore loser” claims, the conflict of interest, and the “snarky” analogies and name calling and legal theatrics started to reach a crescendo.
As you can expect, many cried foul. Prominent eminent domain attorneys in the state were obviously the most vocal.
What ended up ultimately happening is that you don’t need to be licensed in the State of Nevada to do eminent domain work.
http://www.leg.state.nv.us/nrs/NRS-645C.html#NRS645CSec150
For some actual meeting minutes before the State Assembly see the following with regards to AB 341:
Click to access 4075.pdf
So the end result is that you don’t have to be a licensed appraiser to do eminent domain work in Nevada.
But guess what? Most of the ones I know that do eminent domain in Nevada and testify in court are still licensed – at least somewhere if not Nevada. Otherwise they probably wouldn’t have any credibility and would not sustain voir dire and be able to testify in the first place.
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cejack
May 22, 2012 at 5:33 pm
Yes, appraisers nationwide should be grateful for this. It is very much an indictment of the improper and convoluted administrative rulings that have occurred nationwide over the issue of so-called compliance with USPAP. State boards are often too much about cronyism and too little about really understanding law or USPAP. I was surprised by the depth of understanding that the Supreme Court of Alaska had in parsing the facts from the fiction and their very clear understanding of what was opinion and what was backed by fact as well as what USPAP really says.
I also am trying to absorb that the complaint really relied upon someone who was all hat and no horse. Past board president, Appraiser 001….all the “right” resume….and to have done so little of his own due diligence?
And I presume that as an expert for the state, he is likely immune to civil tort or even review by the board itself. That, too, is very scary.
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Terrel Shields
May 22, 2012 at 6:46 pm
Terrell — The Board Member Compaintant was NOT the expert for the State. They engaged a separate, outside investigator, whose opinions apparently carried no weight at all with the Supreme Court.
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johnkilpatrick
May 23, 2012 at 8:55 am
Never a dull moment…hope to see you in San Diego. Till then.
Wayne
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Wayne Pugh
May 23, 2012 at 2:53 pm
I was pretty surprised to read that the Supreme Court understood the departure rule better than the state board did: If there were no comparables, the approach was inapplicable, and thus departure was not taken. There are lots of everyday appraisers who missed that distinction, but one should expect the regulators to understand it.
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Jim Plante
May 24, 2012 at 6:30 am
I must say I don’t see it as a great victory for either appraisers or the public, based solely on reading the Supreme Court opinion. See my comments at http://www.linkedin.com/groupItem?view=&gid=1236557&type=member&item=118339933&qid=5c1ea67a-cdf0-478d-a3a1-86e1ff048b4d&trk=group_most_popular-0-b-ttl&goback=%2Egmp_1236557
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Vince Slupski, MAI
May 25, 2012 at 10:54 am
Very interesting. I too am surprised the Supreme Court understood the departure rule better than the State Board.
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Billie Newell
June 13, 2012 at 4:51 am
Unfortunately, you cannot view Vince Slupski’s comments unless you are a member of the AI group on Linked-in. That is a result of Linked-in protecting comments in a closed group from public viewing, which allows appraisers to debate issues more openly. Could you copy and paste your comments here Vince?
“I also am trying to absorb that the complaint really relied upon someone who was all hat and no horse.” Great comment Ter. As usual, Jim Plante’s analysis is right on target.
The real question in my mind is whether this will have a long-term effect in terms of improving the quality of state appraisal boards/commissions. These people are mostly appraiser-volunteers who work long hours for little or no pay. As bad as the apparent “get-even” attitude of the Alaska board was, its overall effect is not as damaging as the simple too-much-work/too-little-time effect that all boards grapple with.
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Steve Owen
June 15, 2012 at 5:47 am