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NEBRASKA REAL ESTATE COMMISSION August 23-24, 2000Ramada Inn Airport Apollo Room Lincoln, NE Opening Acting Chairperson Hansen convened a Meeting of the Nebraska Real Estate Commission at 9:02 a.m. on August 23, 2000, in the Apollo Room of the Ramada Inn (Airport), located at 1101 West Bond Street in Lincoln, Nebraska. All of the members of the Real Estate Commission were present except for Chairperson Scott Moore and Commissioner Paul Landow, who were absent and excused. Also present were Director Les Tyrrell, Deputy Director Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Heidi Burklund. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, was present for the discussion on the proposed changes to the Seller Disclosure, Agency, and License Act Statutes, and for the Closed Session. Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, was present and represented the Commission during the White hearing and the Motion for Order Nunc Pro Tunc. Jim Titus, Special Assistant Attorney General and Counsel to the Commission, was present to assist with procedural matters during the White hearing and the Motion for Order Nunc Pro Tunc. Notice of Meeting (Adopt Agenda) Director Tyrrell presented a Public Notice and Proofs of Publication thereof relating to this Meeting, all of which are attached to and made a part of these Minutes. Acting Chairperson Hansen reported that all Commissioners had been notified of the Meeting simultaneously, in writing, and that a proposed Tentative Agenda accompanied the notification. Acting Chairperson Hansen pointed out to those in attendance that a APublic Copy@ of the materials being used during the Meeting was available to the public on the Counsel table in the Meeting Room, and that the procedures followed were in accordance with the Open Meetings Law. Acting Chairperson Hansen asked that guests sign the guest list.Director Tyrrell noted that Items 6b, 18b, 18c, and 19 had been added since the Tentative Agenda was mailed to the Commissioners. After review of the Final Agenda, a motion was made by Nigro and seconded by Wiebusch to adopt the Final Agenda as presented. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. On August 24, at 9:05 a.m., Director Tyrrell notified the Commissioners that two additional items could be addressed, if the Commission chose to amend the Final Agenda. The additional items were Stipulation and Consent Orders that would otherwise not be addressed until the October Meeting. After discussion, a motion was made by Moline and seconded by Fletcher that, due to the emergency situation, Agenda Items 18d and 18e be added to the Final Agenda. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. On August 24, at 11:45 a.m., Director Tyrrell notified the Commissioners that an additional item could be addressed, if the Commission chose to amend the Final Agenda. The additional item was a Motion being brought regarding the White Hearing held on August 23. After discussion, a motion was made by Nigro and seconded by Fletcher that, due to the emergency situation, Agenda Item 21, Adjournment, be renumbered to Agenda Item 22, and that Agenda Item 21, Motion for Order Nunc Pro Tunc on Action Taken in Hearing on Amended Complaint #1999-003 (Agenda Item 10a), be added to the Final Agenda. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Minutes of July 25, 2000 The Minutes of the Commission Meeting held on July 25, 2000, were considered. After review, a motion was made by Moline and seconded by Fletcher to approve the Minutes as presented. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Receipts and Expenditures Reports for July Director Tyrrell presented the Receipts and Expenditures Report for July 2000. A copy of said Report is attached to and made a part of these Minutes. With regard to the July Report, Director Tyrrell noted the following: There was nothing unusual to report in Receipts. In Expenditure Category 4212, Communication Expense, the cost will be rolled over to next month; Category 4222, Conference Registration Fees, included the expenses for the Investigator Workshop; in Category 4414, Education Services, the cost will be rolled over to next month; and Category 4711, Board and Lodging, was over by $600, due to the Central District Meeting in Lansing and examiner expenses. The Cash Fund Balance as of July 31, 2000, was $393,310.28, which compared to a Cash Fund Balance of $306,016.21 on July 31, 1999. After discussion, a motion was made by Fletcher and seconded by Nigro to file the July Receipts and Expenditures Report for audit. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. 2001-2003 Biennium Budget Proposal Director Tyrrell presented the 2001-2003 Biennium Budget Proposal. A copy of said Proposal is attached to and made a part of these Minutes. Director Tyrrell noted that the Budget and Planning Subcommittee, which includes Commissioner Fletcher as Chair and Commissioners Nigro and Moore, had reviewed the document, and voted to present it to the full Commission. Director Tyrrell noted that more pages would be submitted with the formal Budget Proposal, but they repeated the same information contained in the Exhibit. Director Tyrrell reviewed the document with the Commission, and noted that some items were included pending approval of electronic payments and on-line transactions. After discussion, a motion was made by Fletcher and seconded by Wiebusch to submit the 2001-2003 Biennium Budget Proposal as presented. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Specialized Registrations There were no Specialized Registrations to report. Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States This Report, a copy of which is attached to and made a part of these Minutes, was presented by Deputy Director Hoffman and reported to be in order. After review, a motion was made by Fletcher and seconded by Nigro to ratify issuance of the licenses as set forth in the Report. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. License Recognition Agreement with Idaho Deputy Director Hoffman presented a License Recognition Agreement with Idaho. A copy of said Agreement is attached to and made a part of these Minutes. Commissioner Fletcher noted that on page one, paragraph one of the Agreement, a reference was made to Missouri instead of Nebraska. Director Tyrrell said the Agreement would be corrected. After discussion, a motion was made by Moline and seconded by Nigro to enter into the License Recognition Agreement with Idaho as corrected. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. License Recognition Agreement with Illinois Deputy Director Hoffman presented a Reciprocal Memorandum of Understanding with Illinois. A copy of said Agreement is attached to and made a part of these Minutes. Director Tyrrell noted that Nebraska used to have full reciprocity with Illinois, but that Illinois passed a more restrictive law and canceled all reciprocity agreements that were in place. This agreement was to re-establish reciprocity with Illinois. Commissioner Hansen asked how Nebraska licensees could take the Illinois portion of the licensing examination. Deputy Director Hoffman said that Illinois uses the same examination company as Nebraska, so Nebraska licensees could take the Illinois portion at Nebraska examination sites. After discussion, a motion was made by Fletcher and seconded by Nigro to enter into the Reciprocal Memorandum of Understanding with Illinois. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Examination Report - July Deputy Director Hoffman presented a Report relating to the Real Estate Examinations administered during July 2000. A copy of said Report is attached to and made a part of these Minutes. Deputy Director Hoffman noted that she would be attending the Applied Measurement Professionals (AMP) Advisory Committee meeting in Kansas City next week, at AMP =s expense.After review, a motion was made by Fletcher and seconded by Nigro to ratify the July Report for the purpose of issuing licenses. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Real Estate Education Matters Pre-License Instructor Approval Deputy Director Hoffman presented for ratification the Pre-License Instructor Approval Report, which listed approvals for two pre-license instructors. A copy of said Report is attached to and made a part of these Minutes. Deputy Director Hoffman noted that one was a temporary approval, and that the instructor had experience providing training, was a licensee, and is currently working toward the GRI designation. After discussion, a motion was made by Nigro and seconded by Wiebusch to ratify the Report. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Continuing Education Activity Approval Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, which listed approvals for nineteen continuing education activities. A copy of said Report is attached to and made a part of these Minutes. Deputy Director Hoffman noted that all of the activities listed for America =s Best were ARELLO-certified computer-based training.Discussion ensued on how national courses were presented, considering how different some Nebraska laws were from the rest of the country. Deputy Director Hoffman noted that nationally-offered courses generally cover material similar to what is covered on the national portion of the examination, using generic, generally accepted terms. Courses approved for Nebraska licensees are reviewed to screen for conflicts with Nebraska law. After discussion, a motion was made by Fletcher and seconded by Wiebusch to ratify the Report. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Continuing Education Instructor Approval Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, which listed approvals for eleven continuing education instructors. A copy of said Report is attached to and made a part of these Minutes. After discussion, a motion was made by Wiebusch and seconded by Nigro to ratify the Report. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Continuing Education Activity Rejection Deputy Director Hoffman presented a Continuing Education Activity Rejection. A copy of said Report is attached to and made a part of these Minutes. Deputy Director Hoffman reported that the course primarily addressed marketing strategies, which is not approved subject matter for continuing education credit. Commissioner Moline asked if the course was approved in Iowa. Deputy Director Hoffman said she did not know. Commissioner Nigro asked what sort of courses with similar names would meet with approval. Deputy Director Hoffman said that courses which cover systems and/or computer programs that facilitate client and customer service and other tools to improve licensee accountability would meet with approval because there is a benefit to the consumer. No action was necessary on this Report. ARELLO Distance Education Certification Program Update Deputy Director Hoffman presented an article regarding the need for distance education standards. A copy of said article is attached to and made a part of these Minutes. Deputy Director Hoffman noted that Ms. Burklund found the article and forwarded it to her. The article underscored the wide recognition of the importance of distance education standards. Deputy Director Hoffman also noted that ARELLO.net, the Distance Education Certification Program website, now included 167 certified courses, and that 33 more were pending. The website provides links to the education providers. Deputy Director Hoffman reported that, starting January 1, 2001, all distance education courses will be required to have ARELLO Certification. Deputy Director Hoffman said that she did not think the University of Nebraska was going to pursue ARELLO Certification immediately, because they have other priorities at the moment. Deputy Director Hoffman said that Randall School had gotten two courses certified, and would gauge whether additional certifications would be worth the cost. Susan Geschwender had been complimentary of the certification process. Another local school is pursuing ARELLO Certification for two pre-license courses. By January, at least three pre-license and several continuing education activities are expected to be available via distance education from local providers. Currently, fourteen ARELLO-Certified continuing education activities are available through two providers located outside Nebraska. No action was necessary on this Report. Pending Sworn Complaints and Investigative Matters Director Tyrrell presented a Summary Report of the pending complaints, which included a list of licensees presently under disciplinary action or on appeal. A copy of said Report is attached to and made a part of these Minutes. Commissioner Moline asked Deputy Director for Enforcement Mayrose if follow-up examinations were being made on Mr. Rader =s trust account. Deputy Director Mayrose said the examiners had been back 2-3 times, and were on top of the situation.No action was necessary on this Report. The following Sworn Complaints and Investigative Matters were presented to the Commission:
Hearings 9:30 a.m. August 23 - Amended Complaint 1999-003, State of Nebraska ex. rel. Gareld Jules Jouvenat vs. William J. White A Hearing was held on August 23, at 9:38 a.m., in the matter of Amended Complaint 1999-003, State of Nebraska ex. rel. Gareld Jules Jouvenat vs. William J. White. Jim Titus, Special Assistant Attorney General and Counsel to the Commission, assisted Acting Chairperson Hansen with procedural matters during the Hearing. Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Respondent William J. White appeared with Counsels Sean Brennan and Brian Bennett. In his opening, Counsel Kinsey noted it had been almost one year since Commissioners originally heard the Complaint, so he reviewed the allegations, original exhibits, and findings. Counsel Kinsey said the case was remanded because the stipulations exceeded the items in the original complaint, so Counsel Kinsey had filed an Amended Complaint to include the stipulated facts and related charges. In responding to the Amended Complaint, Mr. White had denied all allegations in the Complaint, and had invoked formal rules of evidence during this Hearing. As a result, several witnesses, additional exhibits, and depositions would be presented. During the Hearing, Counsel Kinsey presented three stipulations, which released three witnesses from their subpoenas. Counsel Kinsey presented 20 Exhibits, eighteen of which were offered and received by Acting Chairperson Hansen, one of which was rejected, and one of which was received in part. Counsel Kinsey called four witnesses, one of which failed to appear. Counsel Kinsey also had deposition testimony from two additional witnesses read into the record. In his opening, Counsel Brennan presented procedural objections, and noted that they were proceeding without waiving any of those procedural objections, which were preserved for purposes of appeal. Counsel Brennan felt that the Amended Complaint, with additional charges, should not have been allowed, and that this Hearing was a violation of due process. Counsel Brennan said that this Hearing should be limited to only the original allegations, and to only those items actually covered by license law and related to practice as a real estate broker. Counsel Brennan also objected to proceeding without the entire Commission being in attendance. Counsel Brennan said he would call character witnesses to testify on Mr. White =s behalf. During the Hearing, Counsel Brennan presented two Exhibits, which were offered and received by Acting Chairperson Hansen. Counsel Brennan called 15 witnesses for direct testimony and one witness for rebuttal testimony only.Acting Chairperson Hansen requested an opinion from Counsel Titus on whether Counsel Brennan =s objections should prevent the Commission from proceeding with the Hearing. Counsel Titus affirmed that the Commission was within its authority to file the Amended Complaint and hold the Hearing. Acting Chairperson Hansen then polled the Commission on whether to proceed with the Amended Complaint. All Commissioners present voted to proceed.Acting Chairperson Hansen noted that a quorum of the Commission was in attendance, and that four votes would be needed to take action. Acting Chairperson Hansen also noted that this was a common occurrence, and that the longstanding practice of the Commission was that any action required at least four votes. Counsels proceeded with their cases-in-chief, and entered objections to various Exhibits and witnesses. Counsel Titus assisted Acting Chairperson Hansen with ruling on the objections. At 10:50 a.m., Acting Chairperson Hansen declared a brief recess, and reconvened the Hearing at 11:02 a.m. At 12:30 p.m., Acting Chairperson Hansen declared a recess for lunch. At 1:39 p.m., Acting Chairperson Hansen reconvened the Hearing. At 2:52 p.m., Acting Chairperson Hansen declared a brief recess, and reconvened the Hearing at 3:04 p.m. After closing arguments had been presented, Acting Chairperson Hansen declared the Hearing concluded. Commissioner Moline asked for and was given clarification on the options available to the Commission and on the procedural requirements. Commissioner Wiebusch noted that her firm =s attorney always said that the warranty deed is the most important document in a transaction. She would never think of signing someone else=s name to a warranty deed. She disagreed with Counsel Brennan=s assertion that it was OK because there was no damage or loss, and stated that there was no circumstance which would make signing another person=s name to a warranty deed OK.Commissioner Nigro said that she would never sign for a buyer or a seller on any document. In her opinion, the phone call from Canada on February 28 should have put a stop to the closing on March 4. Commissioner Fletcher concurred with Commissioner Nigro. He noted that the deeds were falsified on February 4, and that Mr. White sent two letters after that date requesting that Mr. Jouvenat sign the deeds. Commissioner Fletcher thought that Mr. White was probably hoping that the signed deeds would come in. Commissioner Fletcher also agreed that the phone call on February 28 should have stopped all further proceedings. Acting Chairperson Hansen said he was trying to look at the big picture in this case. He said Mr. White had a very severe case of doing what he should not do, and that even though Mr. White was trying to help, it was a very serious situation. Acting Chairperson Hansen also took note of the numerous character witnesses, and the fact that Mr. White eventually admitted the violations. Commissioner Moline agreed with Commissioner Nigro that the phone call on February 28 was very important. A motion was made by Moline and seconded by Fletcher that Mr. White be found guilty of violating the statutes noted in the Amended Complaint. Acting Chairperson Hansen asked for clarification regarding the allegations, and after discussion, Commissioner Moline withdrew the motion. A motion was made by Fletcher and seconded by Moline that Mr. White =s actions constituted violations of 81.885.24(22) and (29), by making substantial misrepresentations which exhibited unworthiness, as noted in paragraphs A, B, C, D (in respect to the warranty deeds only), and E of the Complaint; and that Mr. White be found guilty. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused.Acting Chairperson Hansen then opened the disciplinary envelope. No prior disciplinary actions were on file. Commissioner Fletcher said that, after listening to the character witnesses and all the evidence presented, he was not in favor of revocation. Commissioner Moline said that he did not vote for revocation during the first Hearing, and that he felt an actual suspension was needed, in keeping with the very serious violations. He asked that the Commission consider starting any suspension from the date the case was remanded to the Commission, which was February 15, 2000. Commissioner Nigro said that she felt revocation was necessary, because forgery was too serious to merit anything less. Commissioner Wiebusch noted that forging the signatures was a very unfortunate decision for Mr. White to have made, and said she also felt revocation was necessary. Acting Chairperson Hansen noted that four votes were needed to take action, and that it looked like there were not four votes for suspension. Commissioner Wiebusch asked the Commissioners in favor of suspension to elaborate on their reasoning. Acting Chairperson Hansen said that he felt a suspension was more in keeping with similar cases. He also noted the large number of character witnesses and supporters. Acting Chairperson Hansen said he thought that Mr. White had learned his lesson. He was not sure how long the suspension should be. Commissioner Fletcher said that Mr. White knows how serious his violations were, and that he has learned from them. Commissioner Fletcher would be in favor of a fairly substantial term, possibly with part of it served on probation. Commissioner Moline said he felt a lifetime revocation was too harsh a punishment. He felt Mr. White had served the public well for years, and exhibited very poor judgment in this situation. Commissioner Moline thought a suspension of approximately three to five years, with two years served as actual suspension, might be an appropriate penalty. Commissioner Moline said he did not want to discount the seriousness of the forgery, but that Mr. White had represented the industry well for decades, and needed a chance in the future. Commissioner Moline said the violations were very, very serious. Commissioner Nigro reiterated her disagreement with Counsel Brennan =s assertion that no one had suffered a loss, because the entire real estate industry had suffered a loss. All licensees had been damaged, and Mr. White=s actions reflected poorly on all of them. These violations, to her, represented the ultimate in seriousness.A motion was made by Moline and seconded by Fletcher that Mr. White =s license be suspended for five years, starting from February 15, 2000; that the first two years be served on actual suspension; and that the last three years be served on probation.Commissioner Moline said that a lifetime revocation was too much, and that two years was a long time in the real estate business. He felt it was a substantial penalty for forgery. Commissioner Fletcher agreed that a lifetime revocation was too harsh a penalty, and that five years suspension with three served on probation was sufficient. Acting Chairperson Hansen said he concurred with Commissioners Moline and Fletcher. Commissioner Nigro said the penalty was not severe enough. She felt a minimum of five years actual suspension was needed. Commissioner Wiebusch concurred with Commissioner Nigro. Commissioner Nigro said that it was the Commission >s job to police the profession.A vote was taken on the motion. The motion failed with Fletcher, Moline, and Hansen voting aye, with Nigro and Wiebusch voting nay, and with Landow and Moore not participating or voting, being absent and excused. A motion was made by Wiebusch and seconded by Nigro that Mr. White =s license be suspended for five years, with none of the suspension served on probation. Commissioner Moline asked if the suspension would start from February 15, 2000. His suggestion was accepted as a friendly amendment. The motion failed with Moline, Nigro, and Wiebusch voting aye, with Fletcher and Hansen voting nay, and with Landow and Moore not participating or voting, being absent and excused.A motion was made by Fletcher and seconded by Moline that Mr. White =s license be suspended for five years, with the first three years served on actual suspension and the last two years served on probation, beginning on February 15, 2000. The motion failed with Fletcher, Moline, and Hansen voting aye, with Nigro and Wiebusch voting nay, and with Landow and Moore not participating or voting, being absent and excused.Discussion ensued on possible terms of suspension. A motion was made by Wiebusch and seconded by Nigro that Mr. White =s license be suspended for 52 years, with the first 32 years served on actual suspension and the last two years served on probation, beginning on February 15, 2000. The motion passed with Fletcher, Moline, Nigro, Wiebusch and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused.Acting Chairperson Hansen notified the Respondent that the costs incurred for the court reporter and any witness fees would be billed to the Respondent, as provided for in 305 NAC Chapter 4, and that the Respondent would have thirty days from the date of the Order to reimburse the Commission for said costs. With the consent of the Respondent, Acting Chairperson Hansen directed Counsel Kinsey to prepare the Order. Counsel Brennan requested an itemized bill of the Hearing costs. Acting Chairperson Hansen announced that all Exhibits related to this Hearing would be retained in the Commission Office. The Hearing was adjourned at 4:55 p.m. Informal Special Appearances No Informal Special Appearances were scheduled for this Meeting. Discussion - Amendments to Seller Property Condition Disclosure, Agency Relationships, and Real Estate License Acts Director Tyrrell presented Exhibits which included suggested changes to the Seller Property, Agency, and License Law statutes. A copy of said Exhibits are attached to and made a part of these Minutes, denoted as 12a, 12b, and 12c respectively. Director Tyrrell noted that the changes were suggested by the Nebraska Realtors Association Task Force, and explained how the Exhibits had been prepared and denoted. Director Tyrrell also noted that the Association had brought a new cover page for 12c, which was denoted as 12c New Cover. Jerry Alvers, Mike Elgert, and Fred Hoppe of the Nebraska Realtors Association reviewed the suggestions in detail, providing the rationale behind the individual suggestions. Exhibits 12a, 12b, and 12c were discussed with Commissioners and staff. Tom Dover, Susan Geschwender, and Rick Meginnis of the Nebraska Realtors Association periodically joined the discussion. Tom Fitchett of Lincoln, representing the Midlands MLS and Lincoln Board of Realtors, distributed an Exhibit which included proposed suggestions for wording in Neb. Rev. Stat. 76-2422 (4) and Title 299, Chapter 5-003.09. A copy of said Exhibit is attached to and made a part of these Minutes, denoted as 12d. Mr. Fitchett reviewed the suggested changes and the rationale behind them. It was the consensus of the Commission to refer the suggestions to staff for possible integration into the proposed changes. Acting Chairperson Fletcher thanked the participants for their suggestions, and Mr. Elgert thanked the Commission for the opportunity to provide input. Renewal of Errors and Omissions Contract for Calendar Year 2001 Director Tyrrell presented an Exhibit which specified that the terms of the Errors and Omissions insurance contract would remain unchanged for the renewal period. A copy of said Exhibit is attached to and made a part of these Minutes. Jim Ludwigsen of Williams Underwriting Group, Inc. was present to answer questions regarding the contract renewal. Mr. Ludwigsen noted that Hartford/Trumbull was leaving the real estate errors and omission insurance market. They found another insurer, Ace Ltd., for the same contract terms. Commissioner Fletcher noted that the proposal contained Ace Ltd. =s rating, but not their class. Director Tyrrell said that their class was IX.After discussion, a motion was made by Fletcher and seconded by Wiebusch to renew the Errors and Omissions Contract for Calendar Year 2001 as presented. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Approval of On-Line Transactions Director Tyrrell presented an Exhibit which specified fees for on-line transactions through Nebraska On-Line. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted that this item was presented at the previous Meeting, and that some of the terms were still being negotiated. The State Records Board may absorb the development costs, and possibly the transaction fee as well. No action was necessary on this Report. It was the consensus of the Commission to proceed with developing website forms and capabilities for electronic fee payments, in anticipation that acceptable terms would be negotiated. 1999-2000 Objectives - Final Report Director Tyrrell presented a Final Report on the Commission =s 1999-2000 Objectives. A copy of said Report is attached to and made a part of these Minutes.No action was necessary on this Report. Information Matters ARELLO Annual Meeting - October 13-18, Salt Lake City Director Tyrrell presented an Exhibit regarding the ARELLO Annual Meeting. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell asked that Commissioners who planned to attend send their registration materials to the Commission office as soon as possible. No action was necessary on this Report. Update on Risk Management Seminar - September 25-29, 2000 Director Tyrrell presented an Exhibit regarding the Risk Management Seminar. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted that the Risk Management Seminar will be on the front cover of the September issue of the Commission Comment, and that some registration forms had been received as a result of the June article. Deputy Director Hoffman also noted that the seminars are included on the community college calendars. Commissioner Wiebusch recommended placing the information on the calendar of local MLS sites. Perre Neilan, representing the Nebraska Realtors Association, said he would take care of that. No action was necessary on this Report. Errors and Omissions Insurance Loss Report through June 30, 2000 Director Tyrrell presented an Exhibit regarding the Errors and Omissions Insurance Loss Report through June 30, 2000. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted that there was nothing unusual in the report, and that all claims from the first four years had been closed. No action was necessary on this Report. Trust Account Examination Evaluation Report - Second Quarter 2000 Director Tyrrell presented an Exhibit regarding the Trust Account Examination Evaluation Report for Second Quarter 2000. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted that comments were overwhelmingly positive. He had contacted the brokers he could identify to clarify questions raised, and had apologized to the broker whose management account was examined on the first of the month. Director Tyrrell also noted that brokers were still asking for advance notice of examinations. No action was necessary on this Report. Website Statistics for July Director Tyrrell presented an Exhibit regarding website usage during July. A copy of said Exhibit is attached to and made a part of these Minutes. No action was necessary on this Report. Proposal from Department of Banking - Central Disciplinary Data Base Director Tyrrell presented a Memorandum from the Department of Banking and Finance which proposed implementing a central disciplinary data base. A copy of said Memorandum is attached to and made a part of these Minutes. Director Tyrrell said that the three agencies listed in the proposal are related, and that there may be others which should also be included. Director Tyrrell noted that new applications and renewal applications would need to be checked, if the Commission wanted to start down this road. Director Tyrrell also raised the question of how unrelated types of licenses would affect real estate applicants, and used the example of a doctor or CPA. Acting Chairperson Hansen asked if mortgage brokers were licensed. Commissioner Moline said they register with the Banking Department, but there was no test or other special requirement to register. Acting Chairperson Hansen asked how a real estate licensee would be affected if another of their licenses was revoked. Director Tyrrell said the Commission would have discretion, because revoking real estate licenses is not automatic under the law. Director Tyrrell cited Neb. Rev. Stat. 81-885.12(2), which stated that AWhen an applicant has been convicted of forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any other similar offense or offenses, or has been convicted of a felony or a crime involving moral turpitude in any court of competent jurisdiction..., such untrustworthiness of the applicant and the conviction may in itself be sufficient ground for refusal of a license.@After discussion, it was the consensus of the Commission to explore the possibility of establishing a central disciplinary data base. Presentation of Stipulation and Consent Orders Complaint #2000-034, Commission vs. Michael Gene Sonnenfelt Deputy Director for Enforcement Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2000-034, Commission vs. Michael Gene Sonnenfelt. A copy of said Order is attached to and made a part of these Minutes. Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which had been signed by Mr. Sonnenfelt. After discussion, a motion was made by Moline and seconded by Nigro to enter into the Order as presented. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Complaint #2000-016, Doug and Sharon Klug vs. Lyle Richard Todd Deputy Director for Enforcement Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2000-016, Doug and Sharon Klug vs. Lyle Richard Todd. A copy of said Order is attached to and made a part of these Minutes. Mr. Todd was present for the discussion. Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which had been signed by Mr. Todd. Deputy Director Mayrose noted that Mr. Todd was in attendance. Director Tyrrell noted that, if the Commission chose to reject the Order, Mr. Todd =s comments today could not be used against him at the subsequent Hearing,After discussion, a motion was made by Moline and seconded by Fletcher to enter into the Order as presented. Motion carried with Fletcher, Moline, Wiebusch, and Hansen voting aye, with Nigro voting nay, and with Landow and Moore not participating or voting, being absent and excused. Complaint #2000-019, Kathleen A. Barnes vs. Scott Roger Cundall Deputy Director for Enforcement Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2000-019, Kathleen A. Barnes vs. Scott Roger Cundall. A copy of said Order is attached to and made a part of these Minutes. Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which Mr. Cundall had signed. After discussion, a motion was made by Moline and seconded by Fletcher to enter into the Order as presented. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Complaint #2000-023, Commission vs. Steven W. Stueck Deputy Director for Enforcement Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2000-023, Commission vs. Steven W. Stueck. A copy of said Order is attached to and made a part of these Minutes. Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which Mr. Stueck had signed. After discussion, a motion was made by Fletcher and seconded by Wiebusch to enter into the Order as presented. Motion carried with Fletcher, Nigro, Wiebusch, and Hansen voting aye, with Moline voting nay, and with Landow and Moore not participating or voting, being absent and excused. Complaint #2000-024, Commission vs. Louis P. Beau Deputy Director for Enforcement Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2000-023, Commission vs. Louis P. Beau. A copy of said Order is attached to and made a part of these Minutes. Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which Mr. Beau had signed. Deputy Director Mayrose also noted that this Order involved the same situation as the previous Order with Mr. Stueck. Director Tyrrell advised the Commissioners that a public Complaint was being held in abeyance, pending the outcome of the Commission =s Complaint. Discussion ensued on whether enough additional continuing education was required, and whether the Consent Order should be accepted. Director Tyrrell said the Commission may want to reconsider the action taken in Mr. Stueck=s Order, if they did not take action on Mr. Beau=s Order or decided to set Mr. Beau=s Complaint for Hearing. In either of those situations, a joint Hearing would need to be held on both Complaints.After discussion, a motion was made by Moline and seconded by Fletcher to reject the Order as presented. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Commissioner Moline said that he voted against the Stueck Order because he thought Mr. Stueck needed at least 6 hours of continuing education on basic subjects. Commissioner Moline thought Mr. Beau needed 3-6 more hours of continuing education on dual agency. Deputy Director Hoffman noted that courses were available on agency, but not specifically limited to dual agency. After discussion, a motion was made by Moline and seconded by Fletcher to propose an Order which stipulated a censure plus 12 hours of additional continuing education, specific courses to be approved by the Director, to be completed within six months of the Order. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. After discussion, a motion was made by Fletcher and seconded by Nigro to reconsider Agenda Item 18d, the Stueck Stipulation and Consent Order. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. After discussion, a motion was made by Moline and seconded by Wiebusch to offer a Stipulation and Consent Order which stipulated a censure plus 6 hours of additional continuing education, specific courses to be approved by the Director, to be completed within six months of the Order. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Discussion ensued on how to get licensees to properly distribute brokerage relationships disclosure documents. Commissioners expressed frustration at the continued problems. Deputy Director Mayrose noted that most violations or deficiencies uncovered during trust account examinations were related to agency brochures. Commissioner Moline said that deficiency reports beat on brokers, not agents. Director Tyrrell clarified that examiners give the employing broker a list of the specific licensees who violate agency law. Commissioner Moline asked that the licensees with the most egregious violation records be brought before the Commission, as examples that the Commission takes these violations seriously. Director Tyrrell was also asked to put another article in the Commission Comment regarding the problems, to explain the proper procedure and put licensees on notice that the regulation will be enforced. Closed Session - Legal Strategy At 1:31 p.m. on August 24, a motion was made by Fletcher and seconded by Wiebusch to go into closed session to discuss legal strategy. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. At 1:47 p.m. on August 24, a motion was made by Moline and seconded by Wiebusch to go back into open session. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. No action was taken as a result of the closed session. Future Meeting Dates The following dates are scheduled: October 2-3, 2000 - TBA The following dates are tentatively scheduled: November 15-16, 2000 - TBA December 12-13, 2000 - TBA January 23-24, 2000 - TBA Motion for Order Nunc Pro Tunc on Action Taken in Hearing on Amended Complaint #1999-003 (Agenda Item 10a) Brian Bennett, counsel for William J. White, presented a Motion for Order Nunc Pro Tunc on the action taken in the Hearing on Amended Complaint #1999-003, State of Nebraska ex. rel. Gareld Jules Jouvenat vs. William J. White (Agenda Item 10a). Jim Titus, Special Assistant Attorney General and Counsel to the Commission, assisted Acting Chairperson Hansen with procedural matters regarding the Motion. Rob Kinsey, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Counsel Bennett explained that the Latin phrase Anunc pro tunc@ meant to correct an error in the record. He was bringing the Motion on behalf of Mr. White to correct the record regarding the first vote taken on disciplinary action, which was noted in the Motion as a five-year suspension, with three years of actual suspension and two years served on probation, effective February 15, 2000. Counsel Bennett=s position was that the motion actually passed with a vote of 3-2, because that was a majority of the Commissioners present. He felt the language of the statute was open to interpretation, because the statute specified seven members of the Commission, and stated that four of the members would constitute a quorum, and a majority of the members were required for an affirmative vote. Counsel Bennett cited a 1997 Attorney General=s opinion regarding another agency, in which the Attorney General found that the number for quorum and the number required to take action were not specified, so the common law rule was applied that all members equaled a quorum, and a majority of those were required for action. Counsel Bennett contended that the most logical and rational interpretation of the statute was that a majority of the members present were required for an affirmative vote, because it specified that four were required for a quorum, but did not specify the number needed for an affirmative vote. Counsel Bennett also said that, on the boards on which he had served, the common practice was that a simple majority of those present would constitute an affirmative vote. In the Hearing, Counsel Bennett felt that two Commissioners held hostage the will of the Commission, by insisting on a greater penalty in exchange for voting yes. This was the equivalent of requiring a 2/3 vote, or 80%, and Counsel Bennett did not believe the Legislature would have intended to require 80% agreement to take action.Counsel Kinsey noted that this issue popped up this morning, and that he had not received a copy of the Motion. Counsel Bennett handed Counsel Kinsey a copy. Counsel Kinsey said he understood the argument, but noted that the Legislature either uses the term Amajority@ or Amajority present@ in addressing quorum standards. The Attorney General opinion cited did not apply, because the Commission statute was not ambiguous. The statute specified that the Secretary of State and six appointed members constituted the Commission, and that not less than 4 members were required for a quorum, and that any action required the majority of the members of the Commission. Counsel Kinsey said the Legislature may have left out the actual number so that, if the number of members changed, it would still require a majority of the members to take action. The Legislature would have specified Amembers present@ if that was their intent. The Commission knows prior to debate how many votes are required, and that, depending on attendance, that may be 80-100% agreement. The Attorney General opinion was in reference to a statute that did not specify any numbers at all; addressed a situation where three of the seven members had acted on behalf of the commission involved; and actually established that four of the seven members were required to take action.Counsel Bennett responded that when a law affects someone =s rights, the law is generally interpreted in favor of the person losing rights. Counsel Bennett said the same argument could be used either way, for Amembers present@ or Afour members.@ It may have been the past interpretation that four votes were required, but the 1997 opinion said that a quorum was a majority of the members, and that a majority of those present were required to take action. Counsel Bennett said that was general law. Counsel Bennett felt that Counsel Kinsey was stretching to say that 80-100% was required, and said that was a strained interpretation of the statute. Counsel Bennett said it was very rare for 100% agreement to be required in order to take action.Commissioner Moline questioned the terms of the first proposed disciplinary action, as specified in the Motion. Counsel Bennett said he was not sure what the original terms were, and that he had specified what he thought they were in the Motion, but that the actual terms could be obtained from the verbatim transcript. Commissioner Moline suggested that Ms. Burklund =s notes be consulted for discussion purposes, since the verbatim transcript was not yet available. Director Tyrrell began reviewing the notes.Acting Chairperson Hansen observed that four votes were required for the Omaha School Board to take action. Director Tyrrell noted that the Lincoln City Council had the same requirement. Acting Chairperson Hansen speculated that they were internal requirements, and noted that the Commission >s practice was that 4 votes were required for an affirmative vote, and that had been made clear at the outset of the Hearing. . Director Tyrrell said that the question was raised years ago, and that it had always been the practice of the Commission that four were needed for quorum, and four were needed for action. In 1994 or 1995, Special Assistant Attorney General Nelson had clarified the matter for the Commission. The interpretation was that, in disciplinary matters, four votes were needed to establish guilt. The quorum and voting requirements are set forth in the Commissioner Manual, that four votes are needed for an affirmative vote in any matter.Director Tyrrell then reported that Ms. Burklund =s notes showed that the original disciplinary action motion was for a five-year suspension, with two years of actual suspension and three years served on probation, effective February 15, 2000. Commissioner Moline said that was what he thought he had originally proposed.Counsel Titus said that he concurred with Counsel Kinsey that the statute was not ambiguous, and that it clearly required a majority of the Commissioners for an affirmative vote. Counsel Titus speculated that the number may not have been specified because, if a vacancy was not filled, there may only be six members of the Commission. He also noted that, even if there was a vacancy, a majority of six members was still four. Since the Commission currently consists of all seven members, four are still needed for a majority vote. Counsel Bennett said that he did not doubt the past practice or Counsel Nelson =s interpretation, but that past practice was not binding on his client, just the rules and regulations. Counsel Bennett asked that the Commissioners find that a vote of 3-2 was a valid vote, and that the first motion made, according to the verbatim transcript, be considered the action taken by the Commission.Commissioner Moline asked for clarification of the options available to the Commission. Director Tyrrell said the options would be to accept, reject, or table the Motion. Acting Chairperson Hansen said that he was reluctant to change the long-standing policy. Commissioner Wiebusch noted that it had stood for 25 years. Acting Chairperson Hansen said that there had been lots of cases when the Commission had to work hard to get four votes. Director Tyrrell noted that, in those cases, a vote of 3-2 did not find a person guilty. A motion was made by Nigro and seconded by Fletcher to reject the Motion Nunc Pro Tunc. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. Recesses and Adjournment At 9:25 a.m. on August 23, Acting Chairperson Hansen declared a brief recess, and reconvened the Meeting at 9:38 a.m. At 10:50 a.m. on August 23, Acting Chairperson Hansen declared a brief recess, and reconvened the Meeting at 11:02 a.m. At 12:30 p.m. on August 23, Acting Chairperson Hansen declared a recess for lunch. At 1:39 p.m. on August 23, Acting Chairperson Hansen reconvened the Meeting. At 2:52 p.m. on August 23, Acting Chairperson Hansen declared a brief recess, and reconvened the Meeting at 3:04 p.m. At 4:55 p.m. on August 23, a motion was made by Moline and seconded by Wiebusch that the Meeting recess until 9:00 a.m. on August 24. Motion carried with Fletcher, Moline, Nigro, Wiebusch, and Hansen voting aye, with Landow and Moore not participating or voting, being absent and excused. At 9:05 a.m. on August 24, Acting Chairperson Hansen reconvened the Meeting. At 10:04 a.m. on August 24, Acting Chairperson Hansen declared a brief recess, and reconvened the Meeting at 10:20 a.m. At 11:14 a.m. on August 24, Acting Chairperson Hansen declared a brief recess, and reconvened the Meeting at 11:33 a.m. At 12:35 p.m. on August 24, Acting Chairperson Hansen declared a recess for lunch. At 1:31 p.m. on August 24, Acting Chairperson Hansen reconvened the Meeting. At 1:31 p.m. on August 24, the Commission voted to go into closed session. At 1:47 p.m. on August 24, the Commission voted to go into open session. At 3:20 p.m. on August 24, Acting Chairperson Hansen declared a brief recess, and was excused from the remainder of the Meeting. Acting Chairperson Fletcher reconvened the Meeting at 3:30 p.m. At 4:15 p.m. on August 24, there being no further business to come before the Commission, a motion was made by Nigro and seconded by Moline that the Meeting adjourn. Motion carried with Moline, Nigro, Wiebusch, and Fletcher voting aye, with Hansen, Landow, and Moore not participating or voting, being absent and excused. I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the August 23-24, 2000, Meeting of the Nebraska Real Estate Commission were available for inspection on September 7, 2000, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska. Respectfully submitted, Guests Signing the Guest List Marlin Kym, Milford Kent Littlejohn, Omaha Beth Lube, Re/Max Real Estate Group, Omaha Jim Ludwigsen, Williams Underwriting, Clarksville IN Dorothy Matzke, Bennet Stan Matzke Jr., Bennet Elmer Miller, Murdock Perre Neilan, Nebraska Realtors Association, Lincoln Ed Perry, Lincoln H.L. APete@ Petersen, Milford Belva Petersen, Milford Sherry Schweitzer, Milford Neal Sell, Seward Larry Sims, Lincoln Joyce Sock, Boone County, Albion Sharon White, Milford Don Williams, Milford Lois Williams, Milford Bob Wolfe, York Robert Zoucha, Boone County, Albion August 24 |