Appraiser's attorney tries to prove bias in complaints against client
| Wednesday, Jan 13 2010 08:05 PM
Last Updated Wednesday, Jan 13 2010 08:07 PM
An attorney for appraiser Kirksey J. "Mark" Newton Jr. on Wednesday attempted to show bias in complaints and a subsequent investigation into Newton's appraisal work.
On day three of an administrative law hearing to determine if Newton should keep his appraiser's license, attorney Ernest Price asked William Drabick, senior property appraiser and investigator at the state Office of Real Estate Appraisers, if he had done any analysis of whether complaints against Newton were tainted because they "were filed by competitors."
"(The state) looks at the facts associated with the complaint," Drabick answered.
Two of three people who filed complaints about Newton, owner of Bakersfield-based San Joaquin Appraisals, are appraisers who also work in Bakersfield. They are Gary Crabtree of Affiliated Appraisers and his son-in-law, James Henderson of J.L. Henderson & Co.
The third complainant is affiliated with a lender who is suing Newton and others for alleged mortgage fraud.
Price asked Drabick if Crabtree had triggered the involvement of Fremont Investment and Loan by telling the company there were possibly problems with Newton's work.
Drabick said he didn't know.
Price then asked if the state had looked more broadly at Newton's work beyond just the seven properties that are under scrutiny in the hearing.
"We did just the opposite," Drabick testified. There were additional complaints that were screened before the state settled on which cases to pursue based on the most egregious violations and the largest losses to lenders, Drabick said.
The defense seems to be pursuing a strategy of portraying Crabtree and Henderson as bent on ruining a competitor for professional gain. Both have previously testified they don't compete directly with Newton because they have different types of clients.
Price repeatedly asked Drabick if it was unusual for someone filing a complaint to follow up on that complaint weeks or even months later, even going as far as "volunteering" to do a second appraisal to look into the validity of the first one.
California Deputy Attorney General Gillian Friedman formally objected to characterizing review appraisals as volunteer work and Judge Samuel Reyes sustained.
Earlier this week, the men who filed the complaints testified they had been hired to do reviews by clients, and in some cases didn't know Newton was the one who had worked on or signed off on the original appraisal before accepting the assignment.
The defense also seems to be setting up an argument that it was Newton's subordinate, Jaron Parks, who created the most error-riddled appraisals. Although he didn't mention Parks by name, Price has several times referred to a "former subordinate who was fired" being responsible for the problems in the reports.
Multiple times, Price objected when Drabick said anything about Newton authoring the reports, insisting instead on language that the reports merely came from Newton's office.
Drabick was the sole witness in Wednesday's deliberations. He spent most of the day explaining the state's accusation that appraisals of seven properties Newton had authored or signed off on were deeply flawed.
Many of the property valuations were unsupported, Drabick said. Often, that valuation was derived by relying on information about sales that were not comparable to the property being examined, he said.
On several occasions, Drabick said he was unable to review all the documentation on certain properties because some of those documents had been seized by the FBI.
In 2007, the FBI and IRS raided 13 local sites associated with now defunct real estate firm Crisp, Cole & Associates, including Newton's office.
Neither Carl Cole nor his former business partner, David Crisp, have been charged criminally, but they are under federal investigation for mortgage fraud and three of their associates have accepted plea deals in exchange for cooperating with authorities.
