Recent Cases Affecting Licensed Real Estate Appraisers and ...

1 Recent Cases Affecting Licensed real Estate Appraisers and Lessons learned therefrom ITKOWITZ PLLC Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers Recent Cases Affecting Licensed Appraisers and Lessons learned therefrom ; January 2015; copyright 2014-2015; ; Page 1 of 30 Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers - Recent Cases Affecting Licensed real Estate Appraisers and Lessons learned therefrom - January 2015 By Michelle Maratto Itkowitz Itkowitz PLLC 26 Broadway 21st Floor New York, New York 10004 (646) 822-1805 twitter = @m_maratto ** Copyright 2015 by Michelle Maratto Itkowitz No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the author and publisher.

2 Requests for permission or inquires about the author should be directed to While every precaution has been taken in the preparation of this book, the author and publisher assume no responsibility for damages resulting from the use of the information herein. Receipt of this book by any person or entity does not create an attorney and client relationship between the recipient and the author or her firm. ** And, yes, this is legal advertising. (And we hope it works!) Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers Recent Cases Affecting Licensed Appraisers and Lessons learned therefrom ; January 2015; copyright 2014-2015; ; Page 2 of 30 Contents I. Introduction (10 Minutes).

3 3 II. Kosterich v. Ciotta, 63298/2012, NYLJ 1202675952250 at 1 (Supreme Court, Westchester County, August 8, 2014) (13 Minutes) .. 6 III. Sutton v. Hafner Valuation Group Inc., 2004 Slip. Op. 01492 (App. Div. 3rd Dept. 2014) (13 Minutes) .. 7 IV. Knobel v. Perales, 2014 Slip. Op. 50202(U) (Supreme Court, NY County 2014) (13 minutes) .. 9 V. People of the State of New York v. First American Corp., 18 173 (Court of Appeals, 2011) (13 minutes) .. 9 VI. FDIC v. Hoyle, 2012 WL 4049808 (United States District Court for the Eastern District of New York, 2012) (13 Minutes) .. 13 VII. Jones v. Bank of Am. Nat. Ass n, 97 639 (2nd Dept. 2012) (13 Minutes) .. 16 VIII. Rodin Properties-Shore Mall, v. Ullman, 264 367, (1st dept. 1999) (13 Minutes) .. 18 IX. Flandera v.

4 AFA Am., Inc., 78 1639, 913 (4th Dept. 2010) (13 Minutes) .. 19 X. Allstate v. Credit Suisse, 42 1220(A), (Supreme Court, NY Cty, 2014) (13 Minutes) .. 20 XI. Clement v. United Homes LLC, 914 F. Supp. 2d 362 (United States District Court for the Eastern District of New York 2012) (13 Minutes) .. 22 XII. Estrada v. Metropolitan Prop. Group, Inc., 110 AD3d 497 (Appellate Division, 1st Dept. 2013) (13 Minutes) .. 24 XIII. Ramapo v. 1236 Rogers Avenue LLC, 46 1201(A) (Supreme Court, Kings Cty.) (13 Minutes) 24 XIV. Board of Managers of French Oaks v. Town of Amhearst, 989 NY2d 642 (Court of Appeals, 2014) (13 Minutes) .. 27 XV. Bonus Material The Accidental Defendant By Peter Christiansen (12 Minutes) .. 29 XVI. Conclusion (5 Minutes) .. 29 Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers Recent Cases Affecting Licensed Appraisers and Lessons learned therefrom ; January 2015; copyright 2014-2015; ; Page 3 of 30 Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers - Recent Cases Affecting Licensed real Estate Appraisers and Lessons learned therefrom - January 2015 (10 Minutes) is a survey of Recent Cases Affecting real Estate Appraisers .

5 During this evening s presentation, I could stand up in front of the room and recite rules and laws to you. That would be boring for me, and more boring for you. Instead, I am going to discuss with you various legal Cases having to do with Appraisers and appraisals. I am going to tell you the story of each case the facts, the players. I am going to describe the dispute that arose. I will tell you each side s legal argument, what the court s decision was, and why. Finally, we will discuss what the take away is for real Estate Appraisers in New York today. In some Cases I include a little extra information that I think you might like to have. In this way, you can see the law in action, and how it applies to what you do every day.

6 Tonight s class needs to be interactive and collaborative. I am NOT an appraiser . I work with Appraisers and appraisals in my capacity as a real Estate litigator. I know many Appraisers . I read Cases and laws on Appraisers and appraisals. BUT YOU ARE ON THE FRONT LINES. You in the audience should raise your hands and make whatever comments you have. The Columbia Society of real Estate Appraisers is at the forefront of appraiser education, and it recognizes that one of its best resources is its membership. Therefore, your comments about real life appraisal situations is of tremendous value to the group. If you ask me a question and I am not able to answer it, I will take note of it, research it after the class, consult with Mr.

7 Neglia, and email you the answer and/or post it somewhere on the Columbia site. Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers Recent Cases Affecting Licensed Appraisers and Lessons learned therefrom ; January 2015; copyright 2014-2015; ; Page 4 of 30 Tonight s presentation is being video recorded so that it can, hopefully, become a resource for use at some other time. If you make a comment or ask a question the camera is not going to turn on to you. brief word on the New York State Court System. The lowest court in New York State is the Supreme Court, the court of original jurisdiction, the place where a case would first be brought. There is one in each county.

8 The name of the court sometimes confuses people because on the Federal level the Supreme Court is the highest court, not the lowest. If a party in a Supreme Court case does not like the outcome of that case , it would appeal to the Appellate Division of the Supreme Court. There are four of those. The First Department covers Manhattan. The Second Department covers Brooklyn and Long Island. The Third and Fourth Departments are upstate. You are not allowed to appeal every decision from the Appellate Division. But if you have the right to appeal, you appeal to the highest court in the State the Court of Appeals in Albany. Here is a chart: Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers Recent Cases Affecting Licensed Appraisers and Lessons learned therefrom ; January 2015; copyright 2014-2015; ; Page 5 of 30 Tonight, I will be pointing out which court a case comes from.

9 In general, the higher the court, the more persuasive its rulings are. Cases from the Court of Appeals are the most important Cases . All the other courts have to follow what the Court of Appeals decides, unless the legislature makes a law that says otherwise. Brief word on USPAP, because it comes up a lot. Uniform Standards of Professional Appraisal Practice ( USPAP ) is a set of quality control standards applicable for real property, personal property, intangibles, and business valuation appraisal analysis and reports. USPAP was first developed in the 1980s by a joint committee representing the major and Canadian appraisal organizations after the big savings and loan crisis. The Appraisal Foundation (TAF), a non-profit organization established in 1987, administers the USPAP.

10 Since 2006, USPAP has been updated in two year cycles, which begins on January 1 of even numbered years. The current version of USPAP is available at Itkowitz PLLC Continuing Education Course Prepared for the Columbia Society of real Estate Appraisers Recent Cases Affecting Licensed Appraisers and Lessons learned therefrom ; January 2015; copyright 2014-2015; ; Page 6 of 30 and has an effective date of January 1, 2014. New York has also incorporated USPAP rules into state law (see 19 NYCRR ). v. Ciotta, 63298/2012, NYLJ 1202675952250 at 1 (Supreme Court, Westchester County, August 8, 2014) (13 Minutes) Facts: Appraisal performed by homeowners who were trying to refinance their home. Before the bank would make the loan, the bank required the homeowner to get an appraisal from Defendant- Appraisers .