NEBRASKA REAL ESTATE COMMISSION

April 3, 2002

Staybridge Suites                         Staybridge Room                         Lincoln, NE


Opening

Acting Chairperson Nigro convened a Meeting of the Nebraska Real Estate Commission at 9:00 a.m. on April 3, 2002, in the Staybridge Room of the Staybridge Suites, located at 2701 Fletcher Avenue in Lincoln, Nebraska. All of the members of the Real Estate Commission were present with the exception of Chairperson Gale, who was absent and excused. Also present were Director Les Tyrrell, Deputy Director for Education 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 Hearing, the Stipulation and Consent Orders, and the regulation and policy items. Peggy Isaacs, the recently-hired Applications and Licensing Secretary, was present for the Informal Special Appearances, and was introduced to the Commissioners.

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 Nigro reported that all Commissioners had been notified of the Meeting simultaneously, in writing, and that a proposed Tentative Agenda accompanied the notification.

Acting Chairperson Nigro 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 Nigro asked that guests sign the guest list.

Director Tyrrell noted that Item 17c had been added since the Tentative Agenda was mailed to the Commissioners.

After review of the Final Agenda, a motion was made by Moline and seconded by Wiebusch to adopt the Final Agenda as presented. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Minutes of January 24, 2002

The Minutes of the Commission Meeting held on February 26, 2002, were considered.

After review, a motion was made by Moline and seconded by Strand to approve the Minutes as presented. Motion carried with Johnson, Moline, Shepard, Strand, and Wiebusch voting aye, with Nigro not voting, not having been present at the Meeting, and with Gale not participating or voting, being absent and excused.

Receipts and Expenditures Reports for February and March

Director Tyrrell presented the Receipts and Expenditures Reports for February and March. A copy of said Reports are attached to and made a part of these Minutes.

Director Tyrrell noted there was nothing unusual to report.

After discussion, a motion was made by Moline and seconded by Strand to file the February and March Receipts and Expenditures Reports for audit. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Specialized Registrations

Retirement Community Registration - Villa @ Flowing Springs

Director Tyrrell presented a Retirement Community Registration for Villa @ Flowing Springs. A copy of said Report is attached to and made a part of these Minutes.

Following discussion, a motion was made by Wiebusch and seconded by Shepard to approve the Villa @ Flowing Springs registration as presented. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States Report

Deputy Director Hoffman presented for ratification the Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States Report, a copy of which is attached to and made a part of these Minutes.

After review, a motion was made by Moline and seconded by Strand to ratify issuance of the licenses as set forth in the Report. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Examination Report for February

Deputy Director Hoffman presented for ratification the Examination Report for February, a copy of which is attached to and made a part of these Minutes.

After review, a motion was made by Moline and seconded by Wiebusch to ratify the February Report for the purpose of issuing licenses. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Real Estate Education Matters

Pre-License Education Instructor Approval

Deputy Director Hoffman presented for ratification the Pre-License Education Instructor Approval Report, a copy of which is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Strand to ratify the Report. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Continuing Education Activity Approval

Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, a copy of which is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Wiebusch to ratify the Report. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Continuing Education Activity Rejection

Deputy Director Hoffman presented the Continuing Education Activity Rejection Report, a copy of which is attached to and made a part of these Minutes.

Deputy Director Hoffman noted that these activities were discussed at last month=s Commission Meeting, and the Commission decided to reject the activities.

No action was necessary on this Report.

2001 Annual Report Summary

Deputy Director Hoffman presented for ratification the 2001 Annual Report Summary, a copy of which is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Strand to ratify the Report. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

2002 Continuing Education Renewal Report

Deputy Director Hoffman presented for ratification the 2002 Continuing Education Renewal Report, a copy of which is attached to and made a part of these Minutes.

After discussion, a motion was made by Wiebusch and seconded by Johnson to ratify the Report. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

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.

No action was necessary on this Report.

The following Sworn Complaints and Investigative Matters were presented to the Commission:

Item A Complaint #2001-050 - Gene & Theresa Klein vs. Steven Robert Evers

Prior to discussion of this matter, Commissioner Johnson recused himself, thereby nullifying any potential conflict of interest. Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Moline and seconded by Wiebusch that the Complaint be dismissed without prejudice, and that the Commission file Complaints on its own motion against the Respondent and the Respondent=s designated broker on the violations alleged in the conclusion. Motion carried with Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, with Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest, and with Gale not participating or voting, being absent and excused.

Item B Complaint #2001-051 - Robert C. Schropp, Leo E. Dahlke, & RCS & Sons, Inc. vs. Kevin Ray McCart

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Moline and seconded by Strand that the Complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Item C Complaint #2001-053 - Karen Slusher vs. Pamela Johnson Norton

Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest. Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Wiebusch and seconded by Johnson that the Complaint be set for Hearing. Motion carried with Johnson, Shepard, Wiebusch, and Nigro voting aye, with Strand voting nay, with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest, and with Gale not participating or voting, being absent and excused.

Item D Complaint #2002-002 - Kip E. Johnson & Gina R. Ronk vs. Bruce Daniel Abraham

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Wiebusch and seconded by Strand that the Complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Item E Investigative Matter

Deputy Director Mayrose presented information on a situation where a broker got calls regarding trust account funds, and approached the employee who was the bookkeeper for the trust account. The employee admitted embezzling approximately $18,000. The broker went through the account himself and put in his own money to make up the embezzled amount. The broker self-reported the situation, and remedied it at the first opportunity. Examiners went through the trust account, and it had been made right.

Commissioner Moline asked if additional controls had been put in place since the embezzlement. Deputy Director Mayrose said yes, the employee was dismissed, and had made restitution for the $18,000. Commissioner Moline noted that, in the past, if the broker had remedied the situation at the first opportunity, the Commission did not discipline the broker.

A motion was made by Moline and seconded by Wiebusch that no further action be taken. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Item F Director Tyrrell reported that the employing broker who also worked at a jewelry store had quit doing any work for the jewelry store, even before Director Tyrrell had gotten back to him with the Commission=s request to do so, and was now a full-time broker. It was the consensus of the Commission to consider the matter closed.

Item G Director Tyrrell reported that the new broker for the business brokerage firm was now licensed, and had taken over the business from the former broker, who had previously received permission from the Commission to supervise while working elsewhere until the new broker was licensed.

Item H Director Tyrrell reported that the new broker for the business where the owner had died was now licensed, and had taken over the business from the owner=s son, who was a broker and an engineer who had been given an additional extension to supervise until the new broker was licensed.

Presentation of Stipulation and Consent Orders

Complaint #2002-003, Commission vs. Gary Lee Huber

Deputy Director Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2002-003, Commission vs. Gary Lee Huber. A copy of said Order is attached to and made a part of these Minutes. Mr. Huber was not present.

Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which had been signed by Mr. Huber. The Order specified a thirty-day suspension to be served on probation, plus three hours of additional continuing education on agency to be completed within six months.

After discussion, a motion was made by Moline and seconded by Shepard to enter into the Order as presented. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

A motion was made by Moline and seconded by Johnson to dismiss Complaint #2001-049, which was held in abeyance pending disposition of Complaint #2002-003. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Complaint #2001-038, William J. & Cindy C. Sarraillon vs. Vincent Muniz, Jr.

Prior to discussion of this matter, Commissioner Johnson recused himself, thereby nullifying any potential conflict of interest.

Counsel Widger presented a Stipulation and Consent Order in the matter of Complaint #2001-038, William J. & Cindy C. Sarraillon vs. Vincent Muniz, Jr. A copy of said Order is attached to and made a part of these Minutes. Mr. Muniz was not present.

Counsel Widger reviewed the circumstances involved and noted the provisions of the Order, which had been signed by Mr. Muniz. The Order specified a thirty-day suspension to be served on probation, plus six hours of additional continuing education, consisting of 3 hours in agency and 3 in license law, to be completed within six months.

After discussion, a motion was made by Wiebusch and seconded by Moline to enter into the Order as presented. Motion carried with Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, with Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest, and with Gale not participating or voting, being absent and excused.

Hearings

April 3, 9:30 a.m. - Complaint #2001-042,
David S. & Jacqueline P. Hillman vs. John E. Wiedel & Dwight A. Thimgan

A Hearing was held on April 3, at 9:30 a.m., in the matter of Complaint #2001-042. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Respondents John E. Wiedel & Dwight A. Thimgan were present. Mr. Wiedel was represented by Counsels Ward F. Hoppe and Scott Vogt of Lincoln. Greg Lemon, Deputy Secretary of State, assisted Acting Chairperson Nigro in procedural matters for the Hearing.

Counsel Widger said that she would like the Commission to dismiss Mr. Thimgan from the Complaint, and said that no evidence would be presented against him due to findings during the investigation. Mr. Hoppe had no objection. Counsel Widger said the Commission could reserve making that decision until the end of the hearing, after all evidence had been presented, if desired. A motion was made by Johnson and seconded by Wiebusch to wait until the end of the Hearing to decide whether to dismiss Mr. Thimgan from the Complaint. Mr. Lemon said no motion was needed for that, and the motion and second were withdrawn.

Mr. Hoppe offered an amended answer, and stated that Mr. Wiedel was not represented when the original answer was submitted. Mr. Hoppe said that there were distinct pleading questions which he wanted to raise, none of which applied to the misrepresentation allegations, and he wanted to preserve the right to appeal on those questions. Counsel Widger noted that Respondents usually had 20 days to file an answer to a complaint. Mr. Hoppe had titled the exhibit as an Aamended answer,@ but Counsel Widger would have no objections if it was considered a Asupplemental answer,@ which was allowed during discovery to clarify pleadings. Mr. Hoppe agreed to terming it a Asupplemental answer.@ The supplemental answer was accepted by Acting Chairperson Nigro.

After Opening Statements, Counsel Widger introduced several Exhibits and called David Hillman, Janna Pohlmann, and Jacqueline Hillman as witnesses.

Counsel Hoppe introduced several Exhibits and called John Wiedel, Dwight Thimgan, Naedo Henry, Elizabeth Lube, and Marcia Weddle as witnesses.

At 10:43 a.m. on April 3, Acting Chairperson Nigro declared a brief recess, and reconvened the Hearing at 10:54 a.m.

At 11:50 a.m. on April 3, Acting Chairperson Nigro declared a recess for lunch, and reconvened the Hearing at 12:30 p.m.

At 1:40 p.m. on April 3, Acting Chairperson Nigro declared a brief recess, and reconvened the Hearing at 1:50 p.m.

At 2:22 p.m. on April 3, Acting Chairperson Nigro declared a recess to continue with other agenda items, and reconvened the Hearing at 4:19 p.m.

After closing arguments had been presented, Acting Chairperson Nigro declared the Hearing concluded.

A motion was made by Moline and seconded by Shepard to dismiss the Complaint against Mr. Wiedel.

Commissioner Moline said that, to him, the only misrepresentation was during the signing of the buyer=s agency agreement. The other items raised watered down that fact. Commissioner Moline said that the Hillmans knew they might look at or buy a home when they drove to Lincoln, and he did not think that put them in a position to not understand the agreement. Mr. Hillman asked pointed questions, and got the answer that the agreement could be canceled if both parties agreed. Commissioner Moline could not definitively point to an instance where the licensee tried to deceive the Hillmans, and noted that they were sophisticated buyers.

Commissioner Shepard said he totally agreed on exactly the same points. Commissioner Shepard said he could not see where there was a tremendous amount of pressure to sign the agreement, and the Hillmans had opportunity to say no or talk about it further.

Acting Chairperson Nigro said she would vote against the motion. She said the Hillmans came expecting to see houses, and were told that if they did not sign the agreement, they could not look at houses. They thought they could get out of the agreement if it was appropriate. Acting Chairperson Nigro thought they were coerced into signing the agreement.

Commissioner Johnson said he disagreed a little bit. The Hillmans were obviously not in a comfortable position to say no, but they could have gone to another company and asked if they had to sign an exclusively buyer agency agreement, and would have gotten the answer Aprobably not.@ They chose to work with Re/Max. There were inconsistencies on both sides. Commissioner Johnson said he was not a real proponent of exclusive buyer agency, but it seemed the emphasis was to get out of the contract.

Commissioner Wiebusch said she was struggling with the term Asubstantial misrepresentation.@ She said the Hillmans were not coerced, but had to make a difficult decision, and decided to sign the agreement. Commissioner Wiebusch said she would probably vote in favor of the motion.

A roll call vote was taken on the pending motion. Motion carried with Johnson, Moline, Shepard, Strand, and Wiebusch voting aye, with Nigro voting nay, and with Gale not participating or voting, being absent and excused.

A motion was made by Moline and seconded by Shepard that Mr. Thimgan be dismissed from the Complaint. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

With the consent of the Respondent, Acting Chairperson Nigro directed Counsel Widger to prepare the Order.

Acting Chairperson Nigro announced that all Exhibits related to this Hearing would be retained in the Commission Office.

The Hearing was adjourned at 6:16 p.m.

Informal Special Appearances

April 3, 2:00 p.m. - Judy Shepard, Potential Salesperson Applicant

Director Tyrrell presented an Exhibit which included correspondence regarding Ms. Shepard=s Special Appearance, documents regarding her criminal history, and letters of recommendation. A copy of said Exhibit is attached to and made a part of these Minutes. Ms. Shepard was present.

Ms. Shepard said she was convicted of a felony in 1985, and was told she had to appear regarding that felony, which was for manufacturing/distribution of a controlled substance. She served two days in prison, was let off probation early for doing well, and her civil rights had been restored as part of the order releasing her from probation. Ms. Shepard planned to stay with her current employer after licensing.

After discussion, a motion was made by Moline and seconded by Johnson to allow Ms. Shepard to sit for the salesperson examination after making proper application, and to have a license issued upon passing. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

April 3, 2:30 p.m. - Michael Krenisky, Activation of License Issue

Deputy Director Hoffman presented an Exhibit which included correspondence regarding Mr. Krenisky=s Special Appearance and documents regarding license renewal. A copy of said Exhibit is attached to and made a part of these Minutes. Mr. Krenisky was present.

Deputy Director Hoffman reviewed the Exhibit. Director Tyrrell noted that Neb. Rev. Stat. 81-885.14 was the proper citation in Deputy Director Hoffman=s cover memo.

Mr. Krenisky said that Deputy Director Hoffman had given a good discussion on what had happened. He said that, as he attempted to renew the license, he filled out and submitted the application according to the instructions. The renewal was stamped as received, and the checks were cashed for the renewal and for Errors and Omissions insurance. He then received the letter that said he was renewed on inactive. He tried to discuss it with Director Tyrrell and Deputy Director Hoffman, to reconcile his status. His dilemma was that nowhere was he told he needed to submit additional forms or fees. In the last week of the year, he found out he had not been renewed on active, and that his status had been changed to inactive. On his renewal form, he had indicated he was renewing on active status and had made application for Errors and Omissions insurance, and had not checked the blank for renewal on inactive status. At the bottom of the renewal, it stated that ARenewal application and fees will be returned if all requested information is not supplied and/or this application is not signed by the applicant.@ If he had not supplied the requested information, staff should have returned his renewal form. Mr. Krenisky said he indicated his intent, and questioned how someone else could change his intent. He did not mind if it was done up front and he was given ample time to respond. He did not find out until the December letter that he was renewed on inactive status. If he had been notified earlier, he would have had time to address the problem.

Commissioner Moline noted that Mr. Krenisky was renewed inactive, and asked what was missing. Deputy Director Hoffman said much more was needed to transfer. The renewal form was only for renewal. Commissioner Moline asked if Mr. Krenisky needed a transfer form. Deputy Director Hoffman said that, or a letter, or a note, or a phone call. In 1996, staff did get a clue from his renewal form that he wanted to transfer to active status, and contacted him to get the proper transfer information, which included a completed Consent to Examine Trust Account form, a letter regarding how Mr. Krenisky intended to do business, and the transfer fee. A transfer was a separate process from a renewal, and staff tried to notify licensees up front. In the renewal instructions, in larger bold print, it stated APlease do not include other fees such as transfer fees, examination fees, etc. as part of the renewal fee payment - these are separate processes and are better sent under separate cover.@ That was also noted every year in the Commission Comment newsletter.

Commissioner Strand asked why Mr. Krenisky would have gotten Errors and Omissions insurance if he intended to remain inactive. Deputy Director Hoffman noted that the answer was found on Exhibit 12b2, page B, in Mr. Krenisky=s 2000 inactive renewal confirmation letter, which discussed continuing Errors and Omissions insurance coverage while inactive. Mr. Krenisky could have claims made against him while on inactive status. Director Tyrrell noted that Dick Williams, from Williams Underwriting Group, had included a situation in his contract renewal presentation where a Colorado licensee on inactive status, without Errors and Omissions coverage, got an $80,000 suit filed against her. That caused him to add that paragraph to the inactive renewal confirmation letter.

Mr. Krenisky said he had only bought and sold his own property, and had not used his license to conduct transactions for others. He only used the education in his own dealings. He had never subjected himself to liability, and only got the insurance to be on active status. Mr. Krenisky said the statement in the instructions was not very explanatory.

Commissioner Wiebusch asked what was Mr. Krenisky=s intent. Mr. Krenisky said it was to be on active status, and self-employed. Commissioner Wiebusch said the Commission needed to know how he was doing business. Mr. Krenisky said that was the only form he had, and was all he knew to submit. Commissioner Wiebusch asked if Mr. Krenisky had a copy of the license law manual. Mr. Krenisky said yes, but he could not find a reference to transferring to active status, because he only read the part on the renewal process.

Director Tyrrell noted that Mr. Krenisky had not lost his license, or his entitlement to it. The only issue was that Mr. Krenisky had to take the examination in order to activate his license. No prelicense education was required. The only issue was that Mr. Krenisky did not want to take the examination, which was required by law because he was inactive over 3 years.

Commissioner Strand noted the Commission=s letter dated 12-21-01, and asked if there would have been a remedy within 10 days. Deputy Director Hoffman said yes, and that it was done often during that time. There was an accelerated rate of transfer at the end of December, because of those reminder letters. Deputy Director Hoffman said that was the usual timing, due to the renewal period. Mr. Krenisky said he was out of town until 12-29.

Commissioner Moline asked if this had happened in the past. Deputy Director Hoffman said that staff put notices in the instructions, Commission Comment, etc., to prevent problems. Staff also notified people every year of their inactive status and their activation deadline, but people often missed their three-year deadline. Director Tyrrell noted that the Commission had no way to waive the statute. Commissioner Moline asked for clarification that it was in statute. Director Tyrrell said yes.

Commissioner Wiebusch asked Mr. Krenisky what he did upon returning home and finding the letter. Mr. Krenisky said he assumed it was a misprint, and contacted Deputy Director Hoffman on January 2. His check had been cashed, so he thought he was OK. Mr. Krenisky asked why transfer instructions were not included, and why the process was secretive. Director Tyrrell noted that these were renewal instructions, and lots of unrelated instructions were not included, such as those for setting up a branch office or a corporation, and those for original applicants. These instructions were just specifically for license renewal. Mr. Krenisky could have gone active at any time prior to 1-1-02. Mr. Krenisky said he disagreed, because this was a renewal process, and he was renewing on active status. Director Tyrrell said no, that transferring a license to active status was a separate process.

Commissioner Shepard noted that Mr. Krenisky went through this exact situation in 1996, and must have known the process from that experience. Mr. Krenisky said that was at the start of his licensure, and was the first time. He thought the Commission had the information on file, and did not need it supplied again. Commissioner Shepard noted he had gone from inactive to active at that time, and had to go through the process, then went inactive again. Mr. Krenisky reiterated that he thought the Commission had it on file, and he did not think he had to go through those hoops again.

Commissioner Wiebusch noted the annual letters sent at renewal, which stated that he had to activate by 1-1-02 in order to avoid taking the examination, and questioned why Mr. Krenisky would assume it was a mistake and not call until 1-2-02. Mr. Krenisky said the Commission had 42 days of sitting on this, and was holding him to the fire for being one day late. He said he did not want to debate it, but it was an issue of fairness. Because he had not been notified between November 10 and December 21, he did not have time to respond, especially by mail. Commissioner Johnson said he could have responded by phone on the last day, instead of waiting until the deadline was past.

A motion was made by Moline and seconded by Wiebusch to deny Mr. Krenisky=s request to activate his license without taking the examination. Commissioner Moline said the Commission did not have the power to disregard the statute. Maybe instructions could have been more clear, and it was a case of unfortunate timing, but the Commission did not have the power to change what the Legislature and Governor determined.

Motion carried with Johnson, Moline, Shepard, Strand, and Wiebusch voting aye, with Nigro abstaining, and with Gale not participating or voting, being absent and excused.

April 3, 3:00 p.m. - Tena Ferrell, Potential Salesperson Applicant

Director Tyrrell presented an Exhibit which included correspondence regarding Ms. Ferrell=s Special Appearance, and documents regarding her criminal history. A copy of said Exhibit is attached to and made a part of these Minutes. Ms. Ferrell was present.

Ms. Ferrell said she had been a resident of Lincoln for 4 years now. She was interested in real estate because it could be done at almost any age, even if a person was in a wheelchair or on crutches. With her background, it was difficult to find employment, due to the felony question on almost every application. When she answered Ayes,@ she was never given the opportunity to explain the conviction, because she never got an interview. Ms. Ferrell had been convicted of felony murder one in Seattle, and was in prison for 13 years, 7 months, and 6 days. She moved to Lincoln upon her release because Lincoln was quiet and laid back, and she did not want to be around her old associates because she wanted to start her life over. She only knew one person in Lincoln at the time.

Acting Chairperson Nigro asked what she had been doing since moving to Lincoln. Ms. Ferrell said her first job was at Kinko=s, then she was a temporary, and then a day laborer until she had problems with her back. She has become a skin and beauty consultant for Mary Kay, and was working on her GED in order to get her real estate license.

Commissioner Moline asked if her civil rights had been restored. Ms. Ferrell said she thought that all her rights were restored upon her release from prison. Director Tyrrell said it was probably everything except firearms. Ms. Ferrell said that was correct.

Commissioner Johnson asked if Ms. Ferrell had talked to brokers regarding employment. Ms. Ferrell said not yet, but she intended to do so. The assistance program with which she was working, which would pay for real estate school, had suggested that she find out first if she could get a license, and then talk to agencies to find out whether she could work in a real estate office to get a feel for it.

Acting Chairperson Nigro said that, in her 16 years of experience in real estate, licensees got to know their clients pretty well, and vice versa. Common questions included things like AWhere are you from?@ and AHow did you decide to get into real estate?@ Acting Chairperson Nigro asked how Ms. Ferrell would answer those questions without being dishonest. Ms. Ferrell said she would try to evade the question and do anything to avoid answering without lying, but would not lie. Ms. Ferrell said she hoped it would not come up.

Acting Chairperson Nigro asked if Ms. Ferrell had family in the area. Ms. Ferrell said she had a sister in Chicago, and nieces in Las Vegas and California who wanted her to move there. She would not go, because she liked it here.

Commissioner Moline noted that the guidelines the Commission adopted last January stated that a license would be denied for a person convicted of a violent crime unless extraordinary circumstances were present, and asked what extraordinary circumstances were present in Ms. Ferrell=s situation which would allow the Commission to make an exception. Ms. Ferrell said that her age and just giving her the opportunity to give something back to community were the only reasons she knew.

Commissioner Johnson asked if Ms. Ferrell had considered applying to real estate companies for a staff position, to get a feel for the industry before taking the examination. Ms. Ferrell said that had been suggested to her. She had thought about doing real estate for a lot of years, and thought that now would be the time to do it. She wanted to know if she could apply for a license before working at an agency. She had liked real estate before she went to prison, and got along fairly well with people, and she thought she would be good at it. She had never wanted to be a police officer, judge, or doctor, because that was not in her, but this would be something she could do.

Acting Chairperson Nigro asked for clarification that Ms. Ferrell was getting a GED. Ms. Ferrell said that was correct. Acting Chairperson Nigro asked if she had the chance to get her GED while in prison. Ms. Ferrell said she had to work while in prison, because only meals were provided, and inmates had to work to buy any extras themselves. She took a couple of college classes while in prison, like street law, but worked at minimum wage for the majority of the time.

Commissioner Wiebusch said she kept going back to the guidelines. She did not think the Commission had heard extraordinary circumstances, and she would have trouble allowing Ms. Ferrell to sit for the examination. Ms. Ferrell reiterated that it was very, very difficult to get employment because most applications asked about felony convictions, and she was never given an interview where she could explain. It was difficult to get employment with a felony hanging over her head.

Commissioner Strand said he had the same question, and wondered what would be considered extraordinary circumstances. He did not know what the Commission thought would be extraordinary when the guidelines were adopted, because he was not on the Commission at the time. Commissioner Strand said he thought there were things Ms. Ferrell would do well, and thought it would be good if someone would bear witness to her abilities. Commissioner Strand said he tried to see what would make it OK for Ms. Ferrell to take the examination in a year. Ms. Ferrell said her counselor thought it would be better to find out first if a license was possible.

Acting Chairperson Nigro said she would be more comfortable if Ms. Ferrell already had her GED, and had employment in the real estate field. Commissioner Strand said the Commission tried to treat people fairly, and he just had trouble defining extraordinary circumstances. Ms. Ferrell said she did not consider herself handicapped, it was just difficult to get employment.

Acting Chairperson Nigro asked how long it would take to get a GED. Ms. Ferrell said it would be approximately 6 months. Commissioner Strand asked how long real estate school would take. Ms. Ferrell said she understood it would take longer at a college than at a real estate school, but either way it would not take a long time.

Commissioner Johnson said that Ms. Ferrell may make a fine agent, but she should come back after she got her GED and got an idea of the real estate business. Commissioner Johnson said that the Commissioners knew a lot of people came into the real estate business and only a few succeeded. Maybe Ms. Ferrell could, but she needed to be able to fit into the extraordinary circumstances exception. Ms. Ferrell said she needed to find a job now.

A motion was made by Strand and seconded by Moline to not allow Ms. Ferrell to sit for the examination.

Commissioner Moline said that he thought extraordinary circumstances would be that, within a year, Ms. Ferrell would obtain her GED and have an employer come and testify that she can really get the job done. Commissioner Moline encouraged her to work hard to get that done. Commissioner Nigro said she would like to see her back in a year, having obtained her GED and a job in real estate. Commissioner Wiebusch said it would mean a lot to have an employer in the real estate field testifying for Ms. Ferrell. That would be a huge step, but Commissioner Wiebusch encouraged Ms. Ferrell to not give up. Commissioner Moline clarified that it would not be a sure thing a year from now, and that it all fell on Ms. Ferrell=s shoulders.

A vote was taken on the pending motion. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Consider Requiring Criminal Background Checks on Applicants

Director Tyrrell presented an Exhibit which included the results of an ARELLO survey, proposed language for the regulatory change, and comments received from licensees regarding requiring criminal background checks on applicants. A copy of said Exhibit is attached to and made a part of these Minutes.

Lieutenant Dishong from the Nebraska State Patrol was asked to come forward and testify regarding background checks. Lieutenant Dishong noted that Nebraska was an open records state, and criminal history information regarding Nebraska convictions only was available to anyone who wanted to buy it. As the proposed rule was drafted, i.e. requiring criminal history background checks from each state of residence in the last 5 years, no statutory change was needed. However, if the Commission wanted to introduce legislation which would require nationwide, fingerprint-based criminal history background searches, the State Patrol could access FBI files for all 50 states, instead of making applicants contact several different states for separate checks. If the Commission just wanted Nebraska information, the State Patrol could check that with the applicant=s name, date of birth, and Social Security number. The State Patrol could also do fingerprint-based searches, which would eliminate problems due to common names and identity theft. State checks cost $10, and federal checks cost $33.

Director Tyrrell noted that applicants could request checks from the State Patrol and pay the fee, then have the results sent directly to the Commission.

Commissioner Moline clarified that the current proposed rule was OK if the Commission did not require an FBI check. If the Commission wanted a one-stop check, it would need to have a state statute requiring it. Lieutenant Dishong said that was correct. Commissioner Moline noted that applicants would have to contact Kansas and Nebraska separately if they had lived in both states during the previous five years. Director Tyrrell said yes, that if they had lived in Kansas, they could come to the Nebraska State Patrol and get the Nebraska check, then contact Kansas for the Kansas check.

Commissioner Moline asked if applicants could order the checks by mail, or if it had to be done in person. Lieutenant Dishong said that, if the Commission wanted to set up a draw-down account, applicants could do it by fax. If applicants were responsible for payment, they needed to pay at the time the check was ordered. Commissioner Moline asked if applicants would need to drive to the nearest Nebraska State Patrol office. Lieutenant Dishong said they could either do it through the mail or drive to Lincoln, because that was the only location where checks were done.

Commissioner Moline asked how long it took via mail. Lieutenant Dishong said it was usually a 72-hour turnaround. Due to a peculiarity in the law, the Nebraska State Patrol could not release charge information without disposition if the charge was over a year old. The Nebraska State Patrol might have to find out the resolution on old charges, which could take a couple of weeks. Lieutenant Dishong estimated that on 90% of checks there were no criminal records at all, that most others would be completed within 72 hours, and a few would take a couple of weeks. Commissioner Moline asked if it would be on the report if an applicant was arrested today. Lieutenant Dishong said that, if the charge was less than a year old, it would be included on the report. Commissioner Wiebusch asked if there would be any information provided about other arrests. Lieutenant Dishong reiterated that, if the Nebraska State Patrol could not substantiate the disposition of old arrest information, they had to delete it before distributing the information for civil use, so old unresolved arrest information would get redacted from the report.

Commissioner Moline asked for clarification that the best bet for obtaining correct information was to use a fingerprint check. Lieutenant Dishong said that was correct. Commissioner Moline asked if applicants could to fingerprinting by themselves, or if it had to be done by a professional. Lieutenant Dishong said it would have to be done by a professional. Director Tyrrell said it could be done by local law enforcement. Lieutenant Dishong said it was done for free at State Patrol offices, and for a charge at some local police or sheriff offices. Lieutenant Dishong said it might be a problem if the applicant was not asked for identification when fingerprinted. Commissioner Moline thought that local law enforcement personnel would ask for ID. Lieutenant Dishong said he would hope so.

Lieutenant Dishong noted that, for Nebraska-only checks, those could be done by using the applicant=s name and date of birth. Very few common names would be a problem within Nebraska. The Nebraska State Patrol=s posture was that fingerprints are the best way, but Lieutenant Dishong did not know how necessary that would be for real estate license applicants. Lieutenant Dishong noted that liquor license and private investigator applicants were required to submit fingerprint checks. The Nebraska State Patrol was happy to do the noncriminal checks, and Lieutenant Dishong noted that more checks were done for noncriminal licensing and employment checks than for criminal investigation purposes.

Commissioner Moline noted that applicants would have to get more than one set of fingerprints done, if checks were needed from more than one state. Lieutenant Dishong said that was correct.

Commissioner Wiebusch asked if the Commission would need to provide a contact list for other states. Director Tyrrell said staff would probably refer them to their local state police or state patrol. Lieutenant Dishong said they could contact the Nebraska State Patrol, and they would tell them the other addresses. Lieutenant Dishong noted that almost all state law enforcement agencies have web sites.

Commissioner Nigro asked if the cost was the same in other states. Lieutenant Dishong said he did not know the cost per state.

Commissioner Moline noted that if an applicant had lived in eight different states in the last 5 years, that was reason enough to require the checks. Commissioner Moline also noted that most brokers thought it was already being done, and that the Commission had received supportive letters. Director Tyrrell noted that the Nebraska Realtors7 Association also gave its support, in a letter distributed at the meeting. A copy of said letter is attached to and made a part of these Minutes. Commissioner Wiebusch said she had talked to several brokers about it, and they were all in favor of the requirement.

Commissioner Moline asked about the current proposed rule. Director Tyrrell said the Commission could hold the rule hearing, and begin requiring state checks once the rule was adopted and had completed the rule approval process. The Commission could then decide whether to start requiring FBI checks and draft legislation to that effect, and expand to that when the legislation passed. If the Commission decided in advance that it wanted to eventually require FBI checks, the rule change could include language that it was effective until FBI checks are required by statute.

Commissioner Wiebusch asked if the FBI checks cost $33. Lieutenant Dishong said yes. Commissioner Moline clarified that, if the proposed rule passed, applicants would have to get each state to send reports. If the legislation passed, applicants would only submit one report from the Nebraska State Patrol for a national background check.

Commissioner Moline asked if the Commission should start requiring fingerprints for the state checks. Counsel Widger said that, if the Commission wanted, they could specifically put it in the regulation that the check would be performed using fingerprints. Commissioner Moline said he thought brokers would be in favor of that requirement. Counsel Widger said the Commission would have obsolescence language in the rule also. Counsel Widger noted that the Commission=s regulations referred to Aother real estate jurisdictions,@ and asked what was done for immigrants from countries where no records were available due to bombings or civil unrest. Lieutenant Dishong said there was no way to do criminal history background checks on foreign nationals. Director Tyrrell clarified that the Commission=s definition of jurisdiction indicated it applied to jurisdictions which had enacted real estate laws, and therefore would not apply to Poland or Mexico, for instance, where no real estate laws had been enacted. Lieutenant Dishong said the Nebraska State Patrol frequently sent letters requesting any records available to Canadian authorities, which was an informal workaround for the problem.

A motion was made by Strand and seconded by Wiebusch to modify the proposed rule language per the Commission=s discussion; to require state checks now and a federal check later, both based on fingerprints; to set the proposed rule for public hearing; and to have staff draft the proposed legislation. As part of the motion, background checks would be required for all original applications for brokers and salespersons. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Consider Link to Williams Underwriting Group, Inc. Website for On-Line Renewal and Issuance under Contracted Policy

Director Tyrrell presented an Exhibit which included online enrollment information from Williams Underwriting Group, Inc. (WUG). A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell noted that the link would be available after renewals were mailed, but in time for the major portion of the renewal season. The initial on-line enrollment would be for the basic policies offered to licensees, for renewal enrollment only. After the first of the year, new licensees and inactive licensees would be able to do mid-year enrollment also. For additional insurance, licensees could download the forms and mail them to WUG. All deadlines would be the same, regardless of on-line or mailed enrollment. Enrollment by mail would be processed the same way as now, and if licensees were in a hurry, a certified check or money order would still provide the quickest enrollment by mail. On-line enrollment would be similar to the Commission=s on-line renewal, with payment accepted by credit card only. On-line enrollment would give licensees renewing late a better chance of meeting deadlines, because there would be no mail lag time.

A motion was made by Moline and seconded by Shepard to put a link on the Commission website to the Williams Underwriting Group, Inc. website, to facilitate licensee enrollment in the state Errors and Omissions insurance program. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Consider Revisions to ABrokerage Relationships in Real Estate Transactions@ Brochures and Related Documents

Director Tyrrell presented an Exhibit which included proposed revisions to the ABrokerage Relationships in Real Estate Transactions@ brochures, and instructions given to licensees regarding developing an agency policy and completing the brochures. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell reviewed the proposed changes, which were the same for both documents. The changes primarily addressed substituting dual agency Aconsents@ for Aagreements.@ The date on the front panel might cause confusion, so Director Tyrrell wanted to adjust the language as needed. Commissioner Moline suggested that it read, ARequired after January 1, 2003.@ Director Tyrrell noted that, if LB 863 passed, the phrase Aintends to perform@ would be changed to Amay@ throughout both brochures.

Director Tyrrell reviewed the proposed changes to the instructions to brokers on how to complete and personalize the brochures, denoted as Exhibit 15c. The current proposed changes were to reference the documents as Abrochures@ instead of Apamphlet,@ since that was the common name for the documents; to make grammatical and consistency changes; and to combine the last two items to eliminate redundancy. If LB 863 passed, the phrase Aintends to perform@ would be changed to Amay@ throughout the document.

Director Tyrrell reviewed Exhibit 15d. The changes addressed substituting dual agency Aconsents@ for Aagreements.@

Director Tyrrell asked for the Commission=s guidance on questions he had received. Brokers had asked if they could personalize the brochures with check blanks, so licensees could mark those tasks which were actually going to be completed. Director Tyrrell asked if it should be added to the instructions that brokers could put check blanks in the Atasks@ sections. Commissioner Wiebusch wanted it made clear that it was not required. Commissioner Wiebusch said that, when the brochure was first required, their attorney said they would have to perform any services added in the personalized section. Commissioner Moline said it would be up to each broker if they want to affirmatively state what services they would perform. It was the consensus of the Commission to not add to the current instructions, but to tell brokers that they could add check blanks if they asked.

A motion was made by Wiebusch and seconded by Moline to make the changes indicated, and to make the additional changes as discussed if LB 863 passed. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale not participating or voting, being absent and excused.

Legislative Matters

Director Tyrrell reported that LB 863 was on Enrollment and Review Initial status, and explained the remaining steps prior to implementation. Commissioner Moline asked about the vote. Director Tyrrell said he believed it was 26-0. Commissioner Moline asked if there had been any negative debate. Director Tyrrell said there was some debate, and Senator Chambers said that if the Nebraska Realtors7 Association supported another bill, he would not hold up LB 863 on Select. Senator Chambers said he never had a problem with the bill as written, last year or this year. Director Tyrrell did not know of anyone with anything against the bill. Director Tyrrell said it may be on Select toward the end of the week, then on Final sometime next week. After that, passage depended on whether the senators could get to it on the agenda. April 19th is the last day of the session.

No action was necessary on this Report.

Information Matters

Update on Filing Amendments to 299 NAC Chapters 1, 2, 3, 5, & 7

Director Tyrrell reported that, approximately 2 weeks after Commission adopted the amendments to Title 299, and even though a preliminary copy was sent to the Policy Research Office before the Public Hearing, the Commission=s policy research analyst had requested that Director Tyrrell change the rule. Director Tyrrell told him he did not have the power to do so, and that the Commission had formally adopted the amendments. Then the analyst asked that Director Tyrrell hold the Title 299 amendments until Policy Research could further review the impact on trust accounts. They felt the Commission was lessening the restrictions on transactions where the earnest money was transferred to title companies. Director Tyrrell indicated language had been added to Chapter 5, Section 006, to make it consistent with the statutory exemption of placing and maintaining monies in a trust account. The proposed new subsection was to give guidance to brokers, beyond what was currently in rule, on what to do and what papers to deliver to parties involved in the transaction. Director Tyrrell thought it would just be a couple of weeks= hold, but when he inquired, he found out Policy Research sent the rule to the Department of Insurance for review. Director Tyrrell was currently waiting to hear from Policy Research. The problem appeared to be that the title insurance industry thought the Commission was imposing requirements on title companies. Director Tyrrell said he assumed title insurance companies already gave evidence of receipt, and noted that it would be a normal business practice to issue a receipt for funds received. The filing is ready to go at the first opportunity.

No action was necessary on this Report.

Audit of Fiscal Year 2001 began March 19, 2002

Director Tyrrell reported that State Auditor=s staff began an audit on March 19 for Fiscal Year 2000-2001. The auditors had requested that the Commission meet for the exit interview. Director Tyrrell told them it would have to be a public meeting. Director Tyrrell told them he would ask if the Commission=s Budget and Planning Committee wanted to attend the exit interview, which was scheduled for Tuesday, April 16, at 9 a.m., in the Commission office. It was the consensus of the Commission that Director Tyrrell should handle the exit interview, and report to the entire Commission at a future meeting.

No action was necessary on this Report.

Service Satisfaction Survey - March Results

Director Tyrrell presented an Exhibit entitled AService Satisfaction Survey, March 2002 Results.@ A copy of said Exhibit is attached to and made a part of these Minutes.

The survey appeared in the Spring Commission Comment, which was mailed during March 2002. The response rate was low, but all comments received were positive.

No action was necessary on this Report.

Future Meeting Dates

May 21-22, 2002 - Staybridge Suites, Lincoln
June 12-13, 2002 - Staybridge Suites, Lincoln
August 21-22, 2002 - Staybridge Suites, Lincoln
September 25-26, 2002 - Staybridge Suites, Lincoln

Recesses and Adjournment

At 9:25 a.m. on April 3, Acting Chairperson Nigro declared a brief recess, and reconvened the Meeting at 9:35 a.m. for the Hearing.

At 10:43 a.m. on April 3, Acting Chairperson Nigro declared a brief recess, and reconvened the Hearing at 10:54 a.m.

At 11:50 a.m. on April 3, Acting Chairperson Nigro declared a recess for lunch, and reconvened the Hearing at 12:30 p.m.

At 1:40 p.m. on April 3, Acting Chairperson Nigro declared a brief recess, and reconvened the Hearing at 1:50 p.m.

At 2:22 p.m. on April 3, Acting Chairperson Nigro recessed the Hearing until 4:15 p.m., declared a brief recess, and reconvened the Meeting at 2:25 p.m.

At 2:54 p.m. on April 3, Acting Chairperson Nigro declared a brief recess, and reconvened the Meeting at 3:00 p.m.

At 4:16 p.m., Acting Chairperson Nigro reconvened the Hearing.

At 6:16 p.m., Acting Chairperson Nigro declared the Hearing concluded and declared a brief recess, and reconvened the Meeting at 6:24 p.m.

At 6:38 p.m. on April 3, there being no further business to come before the Commission, a motion was made by Moline and seconded by Wiebusch that the Meeting adjourn. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Nigro voting aye, and with Gale 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 April 3, 2002, Meeting of the Nebraska Real Estate Commission were available for inspection on April 17, 2002, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director

Guests Signing the Guest List

Perre Neilan, Nebraska Realtors7 Association, Lincoln
Harding Collis, NP Dodge, Omaha
Susan Geschwender, Randall School, Omaha
Beth Lube, Re/Max Real Estate, Omaha
John E. Wiedel, Re/Max Real Estate, Lincoln
W. F. Hoppe, Hoppe & Harner, Lincoln
Scott M. Vogt, Hoppe & Harner, Lincoln
Marcia L. Weddle, Century 21 Home & Farm, Lincoln