The idea for this article came about as a result of a legal case I am currently working on. My client initially hired me as a consulting wine expert witness. My specific duties are working as a wine appraiser, wine consultant, and investigator. I had assumed that I was being retained to find fault with another alleged wine expert’s work. Ultimately, this proved to be true when I had performed an “Appraisal Review” as it is known as in the wine appraisal profession.
An appraisal review is in essence a professional review of another appraiser’s alleged
appraisal report. The purpose of the appraisal review is to confirm where the appraiser’s appraisal report either conforms to recognized appraisal theory and methodology, and or where it fails to conform to recognized appraisal methodology. Federal appraisal report standards were enacted into law by the US Congress in 1986, and these appraisal standards are known as USPAP (the Uniform Standards of Professional Appraisal Practice).
Unfortunately, my client was enjoined into this lawsuit by the shady wine consulting company after this company was sued by the insurance company. The disreputable wine consulting company previously hired my client to provide outside services to them. The alleged wine consulting company currently advertises “wine appraisal services” on their web site, and the fact of the matter is that no one in the employ of this company is a qualified wine appraiser. The alleged wine consulting company is certainly not providing professionally prepared appraisal reports. They also do not meet the requirements for “qualified appraisers” and or “qualified appraisals” as found in the U.S. Pension Protection Act or PPA (P.L. #109-280 Stat. 708 ) and or the Internal Revenue Service Notice 2006-96.
Spirits and wine appraisers are “personal property appraisers” by definition. Unlike real property appraisers (i.e. those who appraise buildings and land), personal property appraisers are NOT required to be licensed in the states where they conduct their business. However, personal property appraisers are required to follow USPAP. Recently the both the federal and state governments have been cracking down on disreputable personal property appraisers. Those sentenced appraisers have been fined, and some have even served jail time.
Based upon my professional analysis and subsequent appraisal review of the other alleged expert’s wine appraisal report, I found that both the alleged appraiser and his alleged wine appraisal report were absolutely unqualified on all counts given the applicable USPAP definitions. The basic problems found in my appraisal review were as follows: (1) the alleged appraiser never completed any appraiser training at any time in his life. (2) USPAP requires the appraiser to be able to show demonstrable expertise in their field of appraisal. The alleged appraiser in question possessed no professional training in wine whatsoever. (3) The insurance company hired the wine consulting company (i.e. the alleged wine appraiser) to provide the wine appraisal report which itself a violation of USPAP. This is not an arm’s length transaction between either the insurance company or the alleged appraiser which assures the hiring party objectivity and impartiality. (4) The alleged wine appraiser’s appraisal report failed to meet the USPAP mandated legal requirements on all counts.
As I am sure you can imagine, the alleged professional wine consulting company screwed their client. This caused the resulting alleged wine loss and also the subsequent insurance claim which the insurance company had paid out. The insurance company’s lawsuit soon followed and then my client was later enjoined.
Through my appraisal review, I had discovered not only the ineptitude of the alleged wine appraiser, but I also discovered the numerous, negligent, flaws found in his subsequent appraisal report. I also discovered that the insurance company negligently overpaid the claimant by as much as 560% above and beyond the value of the actual wine loss.
The moral of this anecdote is that an appraisal review can and does pay for itself. The appraisal review a very useful weapon for individuals, law firms, and insurance companies alike to hold unprofessional appraisers accountable for their actions. Should you ever have need to question a poorly prepared appraisal report, then an appraisal review is your best option and well worth the cost.