Chairperson Gale convened a meeting of the Nebraska Real Estate Commission at 9:05 a.m. on October 18, 2004, in the Goldenrod Room of the Ramada Limited South, located at 1511 Center Park Road in Lincoln, Nebraska. All of the members of the Real Estate Commission were present. Also present were Director Les Tyrrell, Deputy Director for Education and Licensing 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 Zitek hearing.

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. Chairperson Gale reported that all Commissioners had been notified of the meeting simultaneously, in writing, and that a proposed tentative agenda accompanied the notification.

Chairperson Gale pointed out to those in attendance that a public 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. Chairperson Gale asked that guests sign the guest list.

Director Tyrrell noted that agenda item 5a had been added, and 11b had been continued, since the tentative agenda was mailed to the Commissioners.

After review of the final agenda, a motion was made by Poskochil and seconded by Johnson to adopt the final agenda as presented. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

The minutes of the Commission meeting held on September 15-16, 2004, were considered.

Commissioner Moline noted a correction on page 4, paragraph 3, that the correct spelling of the name of someone he had mentioned was Connie Hain.

After review, a motion was made by Moline and seconded by Shepard to approve the minutes as corrected. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Director Tyrrell presented the Receipts and Expenditures Report for September. A copy of said report is attached to and made a part of these minutes.

Director Tyrrell noted that there was nothing unusual to report in Receipts, except that the Commission was still receiving over 100 examination fees per month, which was more than anticipated. Expenditures Category 521100, Postage Expense, was a little over the amount budgeted, due in part to the renewal mailing; Category 527100, Repair and Maintenance of Office Equipment, was to repair the main printer; and Category 571100, Board and Lodging, was over the budgeted amount for the month but even for the year, due to examiner and ARELLO meeting travel.

The cash fund balance as of September 30, 2004, was $717,641.70, which compared to a cash fund balance of $549,309.10 on September 30, 2003.

Commissioner Poskochil asked about the $3850.00 in the actual year-to-date column of Receipts Category 485910, Other Fines, Forfeitures, and Penalties. Director Tyrrell indicated that late fees had been collected shortly prior to June 30, but were not deposited until after July 1, so they showed on this fiscal year=s receipts.

Commissioner Poskochil asked if staff was anticipating a rent increase. Director Tyrrell said yes, because the Commission=s lease was up on July 1 of this year, but it was a part of DEQ=s (Department of Environmental Quality) lease, and they were still negotiating the overall lease. The Commission was on a month-to-month lease until that was settled. It appeared the anticipated 15% increase would not occur, and the Commission would most likely get a 5-10% increase. Commissioner Strand asked if the rate increase would be retroactive. Director Tyrrell said it was his understanding that it was not.

After discussion, a motion was made by Strand and seconded by Poskochil to file the September Receipts and Expenditures Report for audit. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Director Tyrrell presented a Time-Share Registration for Fairfield Palm Springs at Star Canyon. A copy of said report is attached to and made a part of these minutes.

Following discussion, a motion was made by Moline and seconded by Strand to approve the registration as presented. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Deputy Director Hoffman presented for ratification the Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other Jurisdictions 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 Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

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

Commissioner Poskochil noted that applications were averaging 100 per month, and asked if that was comparable to last year. Deputy Director Hoffman noted that the prior year September report was on page 2 of the exhibit. Commissioner Poskochil asked if examination performance was normal. Deputy Director Hoffman said yes, the salesperson passing average was approximately 50%. Fewer broker examinations were administered, so it looked like a more dramatic swing, but the examination performance was within normal parameters.

Commissioner Strand said he saw 12 months of trailing data in the report, but nothing regarding a spike in applications last year. Deputy Director Hoffman noted that applicants who pass the examination during November and December have the option to wait until January 1 to have the license issued. December license issuance would seem slow, then in January more licenses were issued. There were some trends over the course of a year. Commissioner Poskochil asked if a spike in applications from April to September was normal. Deputy Director Hoffman said the Commission had higher numbers of applicants overall this year. A spike during those months would be expected, because education providers tended to focus on continuing education toward the end of the year, during renewal season, and more on prelicense education during the spring and summer.

After review, a motion was made by Moline and seconded by Shepard to ratify the September Examination Report for the purpose of issuing licenses. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Deputy Director Hoffman noted that, at the previous meeting, she had received the only complaint about the Lincoln examination facility on the day before the meeting, that there was too much noise due to visitors in the office. When Deputy Director Hoffman returned to the office after the meeting, she had a message that AMP (Applied Measurement Professionals) had corrected the problem, and gave that applicant a retake examination free of charge to rectify the complaint. It was typical that AMP rectified problems quickly.

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.

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

Commissioner Poskochil asked about the activity related to shopping centers. Deputy Director Hoffman said it was offered by a national organization which focused on commercial real estate, particularly shopping centers. The organization rotated its meetings between several states. Since this fall=s meeting will be held in Nebraska, they sought approval for the activity. The focus was on successful renovation projects this year, and protecting the interest of investors. Commissioner Poskochil asked if Deputy Director Hoffman would receive more information on the activity. Deputy Director Hoffman said she had quite a bit of information now, and the activity was being offered in October.

After review, a motion was made by Moline and seconded by Strand to ratify the reports. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

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. Prior to discussion of Items A through G, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest.

Item A Complaint # 2004-039

Item B Complaint # 2004-041

Item C Complaint # 2004-043

Deputy Director Mayrose informed the Commission that amended answers may be filed on these three complaints.

After discussion, a motion was made by Poskochil and seconded by Grady that the Commission hold the investigative matter for item A until it was determined whether an amended answer would be filed. After further discussion, Commissioner Poskochil offered a friendly amendment to his motion, that it apply to items A, B, and C. The friendly amendment was accepted by the seconder. Motion carried with Grady, Johnson, Poskochil, Shepard, Strand, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest

Item D Complaint # 2004-038

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 Strand and seconded by Shepard that the complaint be dismissed without prejudice against both respondents. Motion carried with Grady, Johnson, Poskochil, Shepard, Strand, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest

Item E Complaint # 2004-040

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

Chairperson Gale asked Commissioner Moline to leave the room during the discussion, to avoid any appearance of influence on the Commission. Commissioner Moline was excused from the meeting until after the lunch break, and left the room.

After being advised of the results of the investigation and discussion, a motion was made by Grady and seconded by Shepard that the complaint be dismissed without prejudice against both respondents. Commissioner Poskochil offered a friendly amendment that a letter of admonition be sent to both licensees regarding the poor judgment exhibited in the situation. The friendly amendment was accepted by the mover and the seconder. The amended motion carried with Grady, Poskochil, Shepard, and Strand voting aye, with Johnson voting nay, with Gale abstaining, and with Moline not present, participating, or voting, having recused himself, thereby nullifying any potential conflict of interest.

Item F Complaint # 2004-042

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 Grady and seconded by Strand that the complaint be dismissed without prejudice. Motion carried with Grady, Johnson, Poskochil, Shepard, Strand, and Gale voting aye, and with Moline not present, participating, or voting, having recused himself, thereby nullifying any potential conflict of interest.

Item G Complaint # 2004-044

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 Grady and seconded by Johnson that the complaint be dismissed without prejudice. Motion carried with Grady, Johnson, Shepard, Strand, and Gale voting aye, with Poskochil voting nay, and with Moline not present, participating, or voting, having recused himself, thereby nullifying any potential conflict of interest.

Item H Complaint # 2004-047 - David & Pamela Gross vs. Joann W. Fike

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 Poskochil and seconded by Strand that the complaint be dismissed without prejudice. Motion carried with Grady, Moline, Poskochil, Shepard, Strand, and Gale voting aye, and with Johnson not present, participating, or voting, having recused himself, thereby nullifying any potential conflict of interest.

Item I Complaint # 2004-050 - Trenton L. Reed vs Kenneth Winston Coats

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 Strand and seconded by Poskochil that the complaint be set for hearing on alleged violations of Title 299 Chapter 5-003.23 and Neb. Rev. Stat. ' 81-885.24(29), as stated in the investigative report. Motion carried with Grady, Poskochil, Shepard, and Strand voting aye, with Johnson and Moline voting nay, and with Gale abstaining, having been temporarily absent and excused during the discussion.

Item J Investigative Matter - Stuart Mills

Deputy Director Mayrose presented the 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 Shepard that the Commission file a complaint on its own motion and set it for hearing on alleged violations of Neb. Rev. Stat. 81-885.12(2) and (29), as stated in the investigative report. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Deputy Director for Enforcement Mayrose presented a stipulation and consent order in the matter of Complaint #2004-032, Commission vs. Bonnie Lou Nemecek. A copy of said order is attached to and made a part of these minutes. Ms. Nemecek was not present.

Deputy Director for Enforcement Mayrose reviewed the circumstances involved and noted the provisions of the order, which had been signed by Ms. Nemecek. The order specified a censure plus six hours of additional continuing education, consisting of 3 hours in ethics and 3 in disclosure, to be completed within six months.

After discussion, a motion was made by Moline and seconded by Grady to enter into the order as presented. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

A hearing was held on October 18, at 10:38 a.m., in the matter of Complaint 2004-022, Robert Moline, Managing Broker, HomeServices of Nebraska Inc. vs. Larry F. Zitek. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Respondent Larry F. Zitek was present and represented by attorney Brad Roth of Lincoln. Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest.

Counsel Roth presented a motion to recuse two additional members of the Commission, Commissioner Strand and Commissioner Poskochil. Chairperson Gale asked those Commissioners to respond to the motion.

Commissioner Strand said he thoroughly reviewed the material that Counsel Widger had sent him regarding conflict of interest and recusal. One sentence had weighed heavily with him, Ato avoid the appearance of conflict.@ Commissioner Strand noted that his wife, Mary Bills-Strand, was affiliated with Woods Bros. Realty. Commissioner Strand noted that the Commission was a body of individuals appointed to regulate an industry, that everyone else on the Commission was representative of the industry, and that he represented the public in that regard. He brought a different perspective to the issues. Commissioner Strand did not see how he would have to recuse and everyone else would not have to, since all the other Commissioners were in the real estate industry. His wife did not have a financial interest in the entity involved, and Commissioner Strand did not see any direct financial benefit to himself regarding the outcome of the hearing. Chairperson Gale asked if Commissioner Strand believed he could be fair, objective, and impartial, could weigh the evidence according to the record presented, was not prejudiced as to the outcome, and would receive no benefit or gain from the outcome. Commissioner Strand said yes.

Commissioner Poskochil stated that he would weigh the evidence as he would any other item brought before the Commission. He would not approach it differently than any other case. There was no financial gain to him regarding the outcome. Commissioner Poskochil noted that anyone who came before the Commission could be considered a conflict of interest, because they would be in the real estate industry. Chairperson Gale asked if Commissioner Poskochil believed he could be fair, objective, and impartial, could weigh the evidence according to the record presented, was not prejudiced as to the outcome, and would receive no benefit or gain from the outcome. Commissioner Poskochil said yes.

After opening statements, Counsel Widger offered a joint stipulation of facts which included 19 exhibits, all of which were received by Chairperson Gale. Counsel Widger called Robert Moline, Larry Zitek, and Karl Sannicks as witnesses.

At 11:20 a.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 11:28 a.m.

At 12:18 p.m., Chairperson Gale recessed the hearing until 2 p.m.

Counsel Roth presented no additional exhibits, and called Katherine Henry, Daniel Allison, and Director Tyrrell as witnesses.

At 3:35 p.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 3:50 p.m.

At 4:45 p.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 4:52 p.m.

At 5:27 p.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 5:29 p.m.

After closing arguments had been presented, Chairperson Gale declared the hearing concluded.

Commissioner Strand asked for the other Commissioners= reaction to the definition of Acan,@ and noted that approximately 1/4 of the transactions were in line with the advertising. It seemed like a pretty fair percentage to not be considered misleading advertising, and it was designed to get a segment of the market which was willing to receive less service for a lower fee. Commissioner Strand was compelled by the fact that the Commission would have received complaints if the practice had not been to disclose the limited service and the potential fees.

Commissioner Johnson said he felt that number was just too low. If 77-80% of the people paid more than the $2500 advertised, that did not hold up.

Chairperson Gale said the percentage did not bother him so much, and it seemed to be climbing. There had been no consumer complaints, and it appeared consumers were shown different computations, so maybe that was why they had avoided complaints. The language itself said Acan,@ not Awill,@ except for one letter which had been pulled and was not a part of the ongoing advertising. It bothered Chairperson Gale that the realtors were employees of the bank. Whenever there was a buyer=s agent who worked for the bank, an additional $2500 fee was charged. The ad said that Security First Bank can sell a home for a flat fee of $2500. If another employee had a buyer, it became a $5000 fee. That bothered him more than the language as stated. Commissioner Johnson noted the fee could be more than that, or could be less.

Chairperson Gale said that the customer was not controlling that number, because of the added commission if Security First Bank had the loan closing as well. There was the $2500 fee, plus another $2500 or 2.8% for an in-house buyer=s agent, plus a closing fee, all through the same employer.

Commissioner Johnson said he agreed with the first part of Chairperson Gale=s statement, but did not think the loan fee had anything to do with the complaint. Commissioner Poskochil agreed with Commissioner Johnson, and said there would be a fee anywhere the customer took the loan. That issue was not part of this scenario.

Commissioner Grady said he likened the language to saying he Acan@ win the lottery, but the chances were not even remotely in his favor to do that. He felt the advertising was a bait-and-switch tactic, to make the initial contact. Commissioner Grady said the program was not in keeping with proper ethics to acquire a customer=s attention. A billboard had multiple exposures to the people on that route, and the newspaper ad clearly claimed that all those agents participated in a $2500 transaction. Commissioner Grady said it was false advertising.

Commissioner Shepard agreed with Commissioner Grady. Security First Bank was using the advertising as a hook. Commissioner Shepard said he did not doubt that Security First Bank employees told customers what the actual fees were once they got there, but the ad was used to get the initial phone call, to get the people in the door. The Commission would not necessarily get a complaint, because people would just say no and go on once they found out about the additional fees. It seemed like a bait-and-switch tactic to try to get that first phone call. There were at least three places in the exhibits where the advertising stated they charged a flat fee of $2500, without using the word Acan.@ Whether Security First Bank was still using that advertising now was not an issue, because it was a fact they had used it. In Exhibit 2 alone, there were ten newspaper ads where they had stated they provided the listed services for a flat fee of $2500. Obviously, there was no use of Acan@ in those situations, they just said they were going to do it. Using the word Acan@ was a hedge at the very least, and Commissioner Shepard did not like being that close to the edge. Commissioner Shepard was in favor of the complainant.

Commissioner Strand questioned whether the Commission could justify taking those savings away from consumers. He agreed that they were edgy, minefield-type practices, but some people would want to pay a lower fee for less than full-service brokerage. You get what you pay for. Commissioner Strand was not comfortable legislating business practices between competitors. Advertising itself did not sell, it just got a person the opportunity to sell the product, whatever it may be.

Commissioner Shepard said he did not want to dictate specific language, but the company could say something like they could sell a home for as low as $2500, which meant a lot different than Acan.@

Commissioner Poskochil said he agreed somewhat. Real estate companies were competitors. The program was directed more for sellers to save money, but buyers were getting no representation. Commissioner Poskochil was not an advocate for no buyer representation in a transaction. The company could advertise whatever they wanted, but should have a disclaimer of some kind, like that there were restrictions to the program. Consumers should not think it would cost them only $2500 automatically. Once a consumer was in the door, the company had a much better opportunity to consummate a transaction. The program may be great for a seller consumer, but a buyer consumer was getting very limited representation, if any. The company was implying that they saved money for buyers, too. The advertising needed to get cleaned up somehow through proper disclosure. Commissioner Poskochil saw problems with buyers not being represented.

Commissioner Strand said he understood why the Commissioners would have more comfort with more disclosure and disclaimers. Commissioner Johnson said the disclosure may be small, but it needed to be on the page. Commissioner Strand said it would be lost on a billboard, but a billboard led to people reading an ad in the newspaper, where they should be informed more fully. Commissioner Strand questioned whether it was the Commission=s purview to suggest that practice. Commissioner Strand did not want to regulate practices unless consumers were being harmed, and the Commission had received no complaints from consumers.

Chairperson Gale said the advertising may be blue sky, rather than an irreparable harm to customers. He thought it was pretty unusual that the Commission had received no consumer complaints. The one rebuttal witness had said he had a problem with one customer, when she misunderstood the fee structure, even though it had been explained to her. Chairperson Gale said the ads may constitute puffery, and may possibly be misleading, but Chairperson Gale felt there may have been some consumer harm because all sides of the transactions were done by bank employees. Perhaps there were no customer complaints because they were still getting a better deal than a 7% commission, but Chairperson Gale questioned whether they were getting the deal they thought they were from Security First Bank. Chairperson Gale said Security First Bank could not control buyers with outside representation. It seemed like an internal misrepresentation, because the realtors were not independent agents, but all employees of Security First Bank. The one person who complained was upset because of an additional $2500 fee for a buyer=s agent within the bank. Perhaps that was not enough to constitute consumer harm.

Commissioner Grady said the advertising set up two perceptions. The owner of a $100,000 house would hope to get the same price, but only pay $2500 instead of $7000 to a real estate company. The buyer would think the seller would sell for less money, and the amount saved on the commission would go into their pocket, not the seller=s. It was not clear that money would only be saved by getting through all the hoops, via a circuitous route, or else the seller would be paying twice as much or more than the initial advertising indicated.

Commissioner Poskochil said his focus was on the fees and the potential harm to consumers. There could be harm from not properly disclosing what the seller was getting for the fee, and from cutting out buyer=s representation by sending leads directly to the listing agent. The consumer buyer was not represented if the program worked as intended. Commissioner Poskochil was not in favor of nonrepresentation, because that was where the consumer got harmed. Commissioner Poskochil was not concerned with the percentages or numbers. The advertising was probably not a true representation of the fees charged. He was concerned with whether the advertising was truthful, if anyone would be harmed by reading it, and if there was possible consumer harm from not being represented. His main problem was nondisclosure. Commissioner Poskochil wanted to see all the consumers in the transaction protected equally, not just one.

Commissioner Shepard said that, if the Commission voted to dismiss the charges, it would be condoning the advertising on the billboard and saying it was OK to do that. It would also appear that the Commission was saying it was OK to say online and in other advertising that they charged one low flat fee for selling a home, as they had advertised in the past and could do again.

Commissioner Strand questioned that the ads sold anything, and said they just gave the company the opportunity to sell the program. Commissioner Strand asked if the Commissioners could imagine a consumer buying from a billboard. Commissioner Shepard said he thought it was misleading. The statute specified advertising that was misleading, and in his opinion the advertising was misleading. If the Commission found for the complainant, Commissioner Shepard said he would like to see any disciplinary action discussed separately. Chairperson Gale said that was the customary procedure. Chairperson Gale clarified the allegations in the complaint, as stated in exhibit 11a, pages 3 and 4.

A motion was made by Shepard and seconded by Grady to find the respondent guilty of violating Neb. Rev. Stat. Section 81-885.24(2), (22), and (29).

Chairperson Gale said there seemed to be a big difference between subsections (2) and (22). Commissioner Strand agreed. Commissioner Poskochil said that (22) specified substantial misrepresentation. Commissioner Strand noted that Commissioner Poskochil could offer to amend the motion, to delete the violation of (22). Commissioner Strand did not see a point to his amending a motion he intended to vote against.

A motion was made by Poskochil and seconded by Johnson to amend the motion by deleting the violation of subsection (22).

Chairperson Gale said he agreed that the advertising did not reach the level of substantial misrepresentation.

The amendment to the motion carried with Grady, Johnson, Poskochil, Shepard, Strand, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest. Chairperson Gale noted that the motion, as amended, was to find the respondent guilty of violating Neb. Rev. Stat. Section 81-885.24(2) and (29).

Commissioner Strand said that, in a free market, companies competed without regulation unless there was a consumer protection issue, such as misleading advertising. For him, consumer complaints were the acid test, and the Commission had not heard a peep about this since he had been on the Commission. Interference ran contrary to what happened in a competitive marketplace.

Commissioner Shepard said he did not have a problem with Security First Bank selling a home for $2500. He did not know the market in Lincoln, and it had no bearing. Commissioner Shepard was looking at truthfulness, because Security First Bank was not selling most homes for a flat fee of $2500. Commissioner Strand questioned how much could be said on a billboard. Commissioner Shepard said the company should not to use a billboard if the company could not say it right. If the company wanted to sell a home for a fee of $0 or $100, that was fine with him. It just had to be fair. Commissioner Shepard did not think the advertising was fair, regarding the $2500 flat fee. Commissioner Strand asked if it would have been OK if the letter had said they Acan@ sell a house for $2500. Commissioner Shepard said he did not want to answer that, and that he was focused on the questions currently in front of the Commission. Commissioner Strand said that was before the Commission, too.

Chairperson Gale noted that subsection (29), regarding the negligence, incompetence, and unworthiness, was against Mr. Zitek personally. He wanted to see if the other Commissioners felt (29) should be included in the motion.

Commissioner Johnson said he considered that, but he was mostly concerned with removing (22). Commissioner Johnson felt that (2) and (29) went together. He was more concerned with the advertising than anything else.

Chairperson Gale said that advertising was dictated by the marketplace, psychology, sociology, and human behavior. The allegation of negligence, incompetence, and unworthiness was more precise, so the person could know the specific accusation. The Commission had eliminated (22), as far as blatant misrepresentation. Chairperson Gale was not sure the situation rose to the level of incompetence.

Commissioner Poskochil noted that there were other issues brought up during the hearing, but those were not to be addressed today. The Commission was dealing with the advertising, which had gone on for a while, maybe until they were told differently. Commissioner Poskochil could not address negligence except for Mr. Zitek=s supervision of his employees, such as making sure the advertising department got the ads right, checking the numbers used, verifying that the information used was factual, and training his sales staff on disclosures. The broker was responsible for supervision as to where advertising and training duties were delegated. Commissioner Poskochil asked if the Commissioners felt there was enough unsupervised activity to rise to the level of (29).

Commissioner Strand said the disclosures must have been pretty damn good, otherwise the Commission would have a boatload of complaints. Commissioner Strand asked if the question being raised was that, if the advertising was considered inappropriate, would the Commission be setting precedent for future similar violations to include (29). Chairperson Gale said that was the question. Chairperson Gale questioned whether the Commission approving the motion, and stating that this advertising was misleading and showed negligence, would show the marketplace that they could not do indefinite advertising. As the motion currently stood, the two went together.

Commissioner Strand said that, if the two went together, it almost seemed like (29) was retroactive in this case. Mr. Zitek had approved the advertising, and did not think it violated Commission rules, regulations, or law. It would not seem retroactive in any other circumstance but this one, since compliance was ultimately the broker=s responsibility.

Chairperson Gale said he was seeking direction from the other Commissioners. To him, it seemed easier to regulate the advertising issues if the two charges were separated. This seemed like the Commission was saying you should have known this was misrepresentation that violated our rules, and that seemed somewhat retroactive. Chairperson Gale was comfortable either way the Commission wanted to proceed. If there was no motion to further amend the motion, then the vote would be on the amended motion, which included (2) and (29).

Seeing no additional motion to amend, Chairperson Gale called the question on the amended motion. The amended motion failed with Grady, Johnson, and Shepard voting aye, with Poskochil, Strand, and Gale voting nay, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

A motion was made by Poskochil to find Mr. Zitek guilty of violating only Neb. Rev. Stat. Section 81-885.24(2). Director Tyrrell requested that the Commission wait for a moment, while staff consulted a ruling from the Commission=s former Special Assistant Attorney General with regard to the motion.

Counsel Widger noted that former Special Assistant Attorney General Dick Nelson had sent a letter to the Commission dated February 28, 1995, regarding the wording of motions and votes of the Commission. The Commission had requested his opinion in writing on the subject, so he wrote a letter which was included in the Commissioner manuals. It was Counsel Nelson=s opinion that if a motion to find guilt did not get at least four votes, the Chairperson should rule to dismiss the complaint. If a motion to dismiss failed, then the Commission could make and vote on another motion. Commissioner Poskochil asked what would happen if a vote to dismiss failed. Counsel Widger said then the complaint was still sitting there before the Commission. Commissioner Strand asked what would happen if a motion to dismiss failed 3-3. Counsel Widger said the complaint would still be sitting there. In this case, a motion to find guilt had failed 3-3.

Chairperson Gale said a motion to reconsider the vote could be made by one of the Commissioners who voted nay, under Robert=s Rules of Order. Commissioner Poskochil asked Counsel Widger if he could make a motion to reconsider. Counsel Widger said she did not know. Counsel Roth asked if that was addressed in the Commissioner manual. Director Tyrrell said no. Chairperson Gale said it may not be in the manual, but the Commission operated under Robert=s Rules of Order, under the Administrative Procedures Act.

The previous motion died for lack of a second.

A motion was made by Poskochil and seconded by Gale to reconsider the vote. Chairperson Gale said he seconded the motion for discussion, because the Commission had not understood the full consequences of the vote. Motion carried with Grady, Poskochil, Shepard, and Gale voting aye, with Johnson and Strand voting nay, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Chairperson Gale said that brought the Commission back to the original motion, which was to find Mr. Zitek guilty of violating Neb. Rev. Stat. Section 81-885.24(2) and (29), as amended. Chairperson Gale said the motion could be discussed and amended.

A motion was made by Poskochil and seconded by Gale to amend the motion, to remove the violation of (29). Motion carried with Grady, Johnson, Poskochil, Shepard, and Gale voting aye, with Strand voting nay, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Chairperson Gale noted that the motion, as amended, was to find Mr. Zitek guilty of violating Neb. Rev. Stat. Section 81-885.24(2). Motion carried with Grady, Johnson, Poskochil, Shepard, and Gale voting aye, with Strand voting nay, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Chairperson Gale then opened the disciplinary envelope. One prior disciplinary action was on file, from a previous hearing at which Mr. Zitek received a censure for violating Neb. Rev. Stat. Section 81-885.24(18) by compensating an unlicensed person for licensed activity, and Neb. Rev. Stat. Section 81-885.24(29) by allowing an unlicensed person to participate in licensed activity.

Commissioner Grady asked what penalties had been applied in similar situations in the past. Director Tyrrell and Counsel Widger reviewed the Disciplinary Action Summary, and noted that there were a total of three past Commission penalties for violating only Neb. Rev. Stat. Section 81-885.24(2). The penalties had been a censure, a 30-day suspension all served on probation, and a revocation.

A motion was made by Johnson and seconded by Shepard to suspend Mr. Zitek=s broker license for 2 years, all served on probation, and to require that six hours of additional continuing education, consisting of 3 hours in agency and 3 in license law, be completed within 180 days.

Commissioner Strand said it seemed the Commission ruled on something precedent-setting today. Given the tone of the discussion when the Commission decided to remove the broker incompetency charge from the finding of guilt, Commissioner Strand felt it would be more appropriate to do a censure. Commissioner Strand said he would vote against the motion, and did not want to amend it because it came from people with longer tenure on the Commission than himself. Chairperson Gale agreed that the hearing was precedent-setting and defined parameters for advertising, and the suspension seemed a little strong to him as well. Commissioner Grady asked if the fact that Mr. Zitek was no longer the designated broker was a mitigating factor. Chairperson Gale said it seemed somewhat mitigating to him.

Commissioner Johnson said that the reason he made the motion as stated was that, with a suspension, there was usually a period of time when the licensee could not operate at all. His motion made the suspension all served on probation, which would not affect one thing regarding Mr. Zitek=s ability to practice, but would give the Commission a longer period to monitor his activity and bring a more severe penalty if needed. Commissioner Johnson was open to an amendment to make it a shorter time frame, if that was what the Commissioners wanted.

Seeing no motion to amend, Chairperson Gale called the question. Motion carried with Grady, Johnson, Poskochil, and Shepard voting aye, with Strand and Gale voting nay, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Chairperson Gale 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.

Counsel Roth respectfully requested that the Attorney General=s opinion be made a part of the record. Counsel Widger clarified that it was not an Attorney General=s opinion, but the opinion of the Commission=s counsel at the time. Counsel Roth requested that the Nelson opinion be added to the record. Chairperson Gale said it would be unusual to add to the record at this point, and asked Counsel Widger if the Commission=s decision were appealed, could a certified copy of the opinion be provided, as was done for regulations. Counsel Widger said no. Appeals of Real Estate Commission decisions went to District Court, and the trial was conducted de novo, on the record of the administrative body=s proceeding. If rules and regulations were referenced, they had to be made exhibits at the hearing. Chairperson Gale asked for clarification that the opinion was an informal advisory opinion by Counsel Nelson, and not an Attorney General=s opinion. Counsel Widger said that was correct. Director Tyrrell explained that Counsel Nelson had made that ruling during a similar situation, and the Commission requested that he put it in writing. He researched the foundation for the ruling and sent his written opinion to the Commission. Chairperson Gale said that, since there was argument and discussion of the advisory opinion, he was not sure how to attach it to the record. Counsel Widger said that Counsel Roth should ask that the evidence be reopened, to add the exhibit discussed during deliberation, then closed again. Counsel Roth requested that the evidence be reopened, to add the exhibit discussed during deliberation, then closed again, and that it be marked as exhibit 23. Counsel Widger noted that her copy of the advisory opinion was difficult to read, and asked permission to substitute a cleaner copy. Chairperson Gale said the court reporter should mark Counsel Widger=s copy as exhibit 23, and gave Counsel Widger permission to substitute a clean copy at a later time. Counsel Roth offered exhibit 23 for the record, there was no objection from Counsel Widger, and the exhibit was received and made a part of the record by Chairperson Gale. Chairperson Gale noted for the record that Counsel Widger had permission to substitute a clean copy at a later time.

For the record, Counsel Roth objected to the procedure used by the Commission in determining guilt.

With the consent of the Respondent, Chairperson Gale directed Counsel Widger to prepare the order.

Chairperson Gale announced that all exhibits related to this hearing would be retained in the Commission office.

The hearing was adjourned at 6:40 p.m.

The hearing regarding Complaint 2004-033, Guy Huddleston vs. Vicki K. Huddleston, was continued.

Director Tyrrell presented an exhibit which included correspondence regarding Mr. Burkle=s special appearance, Mr. Burkle=s salesperson application, and information regarding Mr. Burkle=s criminal history. A copy of said exhibit is attached to and made a part of these minutes. Mr. Burkle was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Mr. Burkle said he was here because the Commission required criminal history background checks, which he thought was great. The first issue on his criminal history was a bad check charge. He had hired a troubled kid to keep books for him, and the kid=s name was on the account. The kid had a substance abuse problem and took money out of the business account without Mr. Burkle=s knowledge. Mr. Burkle had hosted an event with catering, wrote a check to the caterer, and the check did not clear because of the missing money. The caterer was livid, and turned it over to the county attorney. Mr. Burkle tried to explain the situation and make it right with him. Mr. Burkle was supposed to get a cashier=s check or cash to resolve it that day, but he was busy selling insurance to make ends meet and did not get it done that day. The next thing he knew, he had a warrant out against him. The county attorney said he could get out of trouble by filing charges against the kid, but the kid had a criminal history with several felony charges, and Mr. Burkle did not want him to go to jail. Mr. Burkle let the kid go for a month, then rehired him because he knew the kid=s mother and was trying to help him get his life together. Today the kid has a very good job, and was on his feet. Mr. Burkle said he had never done anything wrong.

Regarding the abuse of a vulnerable adult charge, Mr. Burkle said he met this lady, Delores Summers, when he was selling annuities. She had a good annuity and a medicare supplement, and it looked like everything was OK, so he did not sell her anything at the time, but kept in touch. She had no kids of her own, and she used to come down to the office to use the phone, balance her checkbook, and visit. She also used to drive up to Norfolk to see family there, which he thought were cousins. Mr. Burkle said he was like the son she never had. Mr. Burkle had cheap rent at his office, but had to either fix it up or move. Mrs. Summers offered to loan him the money at a good rate of interest. He had it all but paid back when his wife took off and left him with two kids in high school. Mr. Burkle got behind on paying the loan back. Mrs. Summers told him not to worry about it, and to put the money he had back into the business and pay her whenever, because she would get a better rate of return if the business did well.

The cousins Mrs. Summers had in Norfolk were not blood cousins, and they stood her up for Thanksgiving dinner when Mrs. Summers had driven all the way up there to spend it with them. Mrs. Summers got mad and told them they were out of her will, and she was going to leave everything to him. Then she had a furnace problem, and he helped her with it, because he always helped his clients. He often helped clients run errands. Other agents told him that he was too nice, and it would come back to bite him, but he thought it was good to help people. Mr. Burkle told the Norfolk cousins that he did not want to inherit anything from Mrs. Summers.

A granddaughter of one of the cousins came to visit Mrs. Summers, and she and the housekeeper=s daughter stayed for a week. The girls were both 18. They ran up $7800 in charges on Mrs. Summers= credit cards, and Mrs. Summers asked Mr. Burkle to look into it. Mr. Burkle had Mrs. Summers fill out a police report, and he took it to the police station for her. The girls were arrested and were both in jail for a pretty strict bond. The cousin and the housekeeper got mad, and Mrs. Summers told Mr. Burkle that she had to get the money to get them out of jail. It would have cost her $10,000 to get them out, and Mr. Burkle told Mrs. Summers not to do it. Then Mrs. Summers signed a paper saying they did not steal the credit cards, and then Mr. Burkle was in trouble for filing a false report.

Mr. Burkle said the police told him that Mrs. Summers was looney. Mr. Burkle said wait a minute, she=s fine. Her doctor that she had gone to for years did a complete mental evaluation on her, and wrote a nice letter saying she was of sound mind and body. Then the cousins= psychiatrist got involved, and suddenly Mr. Burkle was not supposed to have contact with Mrs. Summers. She kept calling him to ask for his help in getting rid of their interference, and that caused trouble for him. The housekeeper told the police that she had not borrowed money from Mrs. Summers, but that Mr. Burkle had borrowed the money that he said she had, even though Mr. Burkle had gotten a signed promissory note from her. Mr. Burkle said that anyone could accuse you of anything, and you had to defend yourself. The attorney from his church told him there was a recent case where an insurance agent had bilked bachelor brothers out of lots of money. The county officials were livid about that, so they want to get someone. They wanted him to pay $10,000 for something he did not do, and it had already cost him $2500-3000. Mr. Burkle then got a better attorney out of Lincoln who kept getting charges dropped, then said it would go away. Then the attorney told him to plead no contest to a misdemeanor, or else it would go to court, and even though Mr. Burkle would probably win, the publicity would be guilt by accusation. The attorney said Mr. Burkle would probably just get a year=s probation. Mr. Burkle did not want the publicity, he just wanted it to go away, so he pled no contest. The judge had a different attitude on it than the attorney thought, and Mr. Burkle was sentenced to some house arrest.

Chairperson Gale said Mr. Burkle needed to focus on the charges on his own criminal history. Chairperson Gale noted that Mr. Burkle had pled no contest to one misdemeanor charge. Chairperson Gale asked if Mr. Burkle had been charged with felonies. Mr. Burkle said that, at first, they thought he had taken the $10,000 that the housekeeper had borrowed, but she had signed papers. Chairperson Gale asked about bad checks. Mr. Burkle said he had one bad check in 1994, which he had paid off, and that charge was dismissed. Chairperson Gale asked about the January 1997 charge of abuse of a vulnerable adult. Mr. Burkle said that was dropped to a misdemeanor, and he pled no contest. He had promissory notes for his loans from Mrs. Summers, and had paid them off. Chairperson Gale asked if Mr. Burkle had any other convictions. Mr. Burkle said no, and that the other charge would not be on his record if he had pressed charges against his employee.

Chairperson Gale asked if Mr. Burkle still had an insurance license. Mr. Burkle said he had one until 1998, but did not currently have one. Chairperson Gale asked if Mr. Burkle had voluntarily surrendered it for a noncompete agreement. Mr. Burkle said that was correct. Mr. Burkle bought an ice cream business after that, ran it for about five years, and sold it in December of last year.

Chairperson Gale asked why Mr. Burkle was interested in a real estate license. Mr. Burkle said he had sold robotics equipment, then he could no longer travel because of family commitments. He had been an insurance agent since 1991, and he had gone into insurance because he could start right away. Lots of people had offered him jobs, and he had disclosed his criminal history to all of them, so he would not be hired under false pretenses. He gave them copies of the letter he had submitted to the Commission.

Commissioner Strand asked if his attorney had told Mr. Burkle to plead no contest. Mr. Burkle said yes, but he was not a criminal attorney. Commissioner Strand asked about the six-month jail sentence on Mr. Burkle=s criminal history background report. Mr. Burkle said that was not right. Judge White just decided he was going to jail. A couple of days later, that was dropped, and he was let out by a different judge. Mr. Burkle was sentenced to house arrest. He had continued selling insurance, primarily health insurance through the Nebraska Restaurant Association. He was getting commission checks every week, things looking good, and he wrote up 700 Godfather=s employees= insurance. His business had grown too big too fast, and they were very busy. His daughter had wanted out of the business, and that was his main reason to sell out. Mr. Burkle had sold automation equipment, and was interested in real estate because he was traveled out. He was in his 50s, and wanted to get into real estate to supplement his income. He was looking for jobs at 53 years of age, and since he had got married at 19, he did not complete college. Mr. Burkle was not going to back to school, and did not want to sell cars. Mr. Burkle said he liked the Commission=s rules, and that real estate was a clean industry.

Commissioner Johnson asked if Mr. Burkle was currently unemployed. Mr. Burkle said he had recently sold his ice cream catering business, and had 3 farms in Iowa. Commissioner Johnson asked if Mr. Burkle had talked to real estate people in Omaha. Mr. Burkle said he had talked to lots of brokers, had interviewed with them all, and had not had anybody turn him down.

Commissioner Poskochil asked if the evidence of the signed promissory notes had been presented in court. Mr. Burkle said his promissory notes were. Mr. Burkle did not have copies of the housekeeper=s notes, but his attorney had the proof. Mr. Burkle said he sold out most everything he had, and had kept his records for 5 years. Mr. Burkle thought he had sent a copy of his promissory note to the Commission. Mr. Burkle said he did not know what records were available now. In his prosecution, it got to the point where they said that he should have stopped Mrs. Summers from loaning money to the housekeeper and the cousins. Commissioner Poskochil asked if Mr. Burkle had paid back the loans, and on time. Mr. Burkle said there was not a time frame, but the money was paid back as Mrs. Summers wanted it. All his bills were paid. He had hired accountants.

Director Tyrrell noted that Mr. Burkle said he had been interviewing with various real estate companies, and always brought his record up so they knew about it up front. Director Tyrrell asked why Mr. Burkle had answered no to the question on the application regarding criminal convictions, and why staff only found out about it from the criminal history background check. Mr. Burkle said that, when he signed up for real estate school, they told him there would be a background check. Mr. Burkle had been told that his convictions would not be on his record. His attorney ran a background check on him while Mr. Burkle was in his office, and there was nothing on it.

Commissioner Grady asked about Mr. Burkle being threatened by a police officer that he would be charged for filing a false report. Mr. Burkle said they were trying to force him to admit that Mrs. Summers was not competent. The credit card charges were made by 18-year-old kids, for things like clothes and a concert in Detroit. Mrs. Summers had signed the original report, then retracted it, and he was charged for filing a false report even though he just delivered it for Mrs. Summers.

Chairperson Gale asked if it would be acceptable to Mr. Burkle if the Commission required him to notify his employing broker of his criminal history, made the broker confirm the notification in writing prior to placing the license, and required him to notify Commission staff immediately of any new criminal charge if jail time was possible. Mr. Burkle said absolutely, and that he would expect the Commission to require that. Mr. Burkle said he planned to work in the Davenport office of an Omaha real estate company.

Chairperson Gale asked if Mr. Burkle had paid all his bills regarding his court appearances. Mr. Burkle said yes. Chairperson Gale asked if Mr. Burkle was current on his alimony and child support. Mr. Burkle said he received child support, his alimony was all done, and his taxes were all paid.

Commissioner Strand said he was struggling with his decision, and was trying to weigh the court decision. Commissioner Strand said Mr. Burkle=s special appearance was not another trial before the Commission, but he had been found guilty in court. Appearances could be deceiving, and in a close relationship with a client, it could look bad to borrow money, in spite of the documentation. Commissioner Strand said the Commission handled complaints that were filed for the appearance of impropriety in negotiations. Real estate required really straightforward communications. Commissioner Strand was having trouble with Mr. Burkle=s 7-page letter and 40 minutes of explanation. It seemed like too much of an explanation for what went on, and did not summate into something with which he was comfortable.

Mr. Burkle said he had to struggle with bringing up all these bad memories. The judge was irritated at the time, and made an example of him. Mr. Burkle wanted to treat the Commission with respect, and explain his record completely. He never cheated anyone in his life. He realized now that he should not have borrowed money from his client, but it made Mrs. Summers feel good that she was going to be his silent partner, and it gave her some value to her life.

Commissioner Grady asked if Mr. Burkle thought his record had been expunged. Mr. Burkle said his attorney had done a criminal history background check for Mr. Burkle on his computer, which took about 30 seconds. Then the attorney went to the courthouse to find this out. Mr. Burkle said he had a copy of the record his attorney ran. The bounced check was on that record, but not the other charges.

Chairperson Gale declared the dialogue portion of the special appearance closed.

After discussion, a motion was made by Shepard and seconded by Johnson to allow Mr. Burkle to sit for the examination and have a license issued after making proper application, with the conditions that Mr. Burkle must notify his initial employing broker of his criminal convictions and the circumstances of the convictions; the employing broker must confirm said notification in writing to the Commission prior to issuance of the license; and Mr. Burkle must immediately notify Commission staff of any criminal charge which could result in jail time during his first five years of licensure.

Commissioner Strand asked Commissioner Shepard if he knew Mr. Burkle=s ice cream business partner. Commissioner Shepard said the business partner was a friend of his, and he did not think his friend would have had a long-term relationship with Mr. Burkle if there was any problem with Mr. Burkle.

A vote was taken on the pending motion. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, and Gale voting aye, and with Strand voting nay.

Director Tyrrell presented an exhibit which included correspondence regarding Mr. Purdie=s special appearance, Mr. Purdie=s salesperson application, and information regarding Mr. Purdie=s criminal history and auctioneering education. A copy of said exhibit is attached to and made a part of these minutes. Mr. Purdie was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Mr. Purdie said he was raised in Plainview, graduated from Pierce High School, attended Northeast Community College in Norfolk, and spent12 years in the military. He was injured during the first Gulf War, and returned to Nebraska. He and his father opened a small engine warranty repair shop, and he repaired lawnmowers under warranty part-time. He also drove a semi truck, hauling grain or rock for Johnson Sand & Gravel in Columbus.

At the time this happened, he was gone, and his sister-in-law answered the phone and agreed to take in a lawnmower because the customer insisted on dropping off the mower outside the shop. His family had plans for the weekend, and Mr. Purdie did not get back to the shop until Monday evening. A police investigator came by and asked him what lawnmowers were in the shop and who owned them, so Mr. Purdie showed him. It was evident to the investigator that the stolen lawnmower had been dumped, probably because the thief got nervous. The police could not catch up to the guy, in spite of the fact his sister-in-law had gotten his name. Mr. Purdie was charged with having a stolen lawnmower in his possession. Mr. Purdie explained to the judge how it had happened, and how he would avoid it in the future. The judge saw fit to give Mr. Purdie 2 years of probation, to monitor his activities, to make sure the community knew he was on the up and up, and to ensure he was not putting the word out that he was willing to buy stolen lawnmowers.

After all this happened, Mr. Purdie sold the repair business, moved to Leigh, and primarily drove truck. Mr. Purdie had some disabilities from his military service that sometimes did not allow him to work full time at physical manual labor. The Veterans Administration offered to help him finish his business degree, which he accepted. He also took real estate classes, and got his auctioneer and personal property appraiser licenses. Mr. Purdie was currently renovating a building in Leigh as an auction house.

Commissioner Moline asked if Mr. Purdie was honorably discharged. Mr. Purdie said yes. Commissioner Moline asked his rank at discharge. Mr. Purdie said he was a staff sergeant.

Chairperson Gale said that, considering the circumstances Mr. Purdie had described, he was surprised that Mr. Purdie was charged. That would make anyone subject to arrest if someone dumped a stolen item in their yard. Chairperson Gale asked if Mr. Purdie was represented by an attorney. Mr. Purdie said yes. Chairperson Gale asked if there was a plea bargain. Mr. Purdie said he pled no contest, because the expense to prove his total innocence was $10,000, and he did not have that kind of money. Chairperson Gale asked if the county attorney would have reduced the charge. Mr. Purdie said no. Chairperson Gale asked if Mr. Purdie had paid all restitution and court costs. Mr. Purdie said yes. Chairperson Gale asked if Mr. Purdie had any further criminal charges against him. Mr. Purdie said no.

Commissioner Johnson asked how long Mr. Purdie had lived in Columbus at the time. Mr. Purdie said six years. Commissioner Johnson asked if everybody knew him, but the county attorney still would not work with him on the charges. Mr. Purdie said he would not. Commissioner Johnson said that was amazing. Mr. Purdie said his family thought it was amazing too.

Commissioner Johnson asked if Mr. Purdie completed auctioneer training. Mr. Purdie said yes. Commissioner Johnson asked if Mr. Purdie would associate with a broker for the real estate part of auctions. Mr. Purdie said yes, he had a broker in Columbus lined up. Commissioner Johnson asked if the broker knew Mr. Purdie=s situation. Mr. Purdie said yes, and the broker had encouraged him to go to auctioneer school.

Chairperson Gale asked if Mr. Purdie would have any problem with the Commission placing conditions on him that he notify his broker of his criminal history, that his broker attest in writing that disclosure had been made prior to placing the license, and that Mr. Purdie be required to notify staff immediately of any contact with the law that may result in jail time. Mr. Purdie said he had no problem with the conditions.

Commissioner Poskochil asked about the assertion in the exhibit that Mr. Purdie was questioned for a while, then sent home with a wire. Mr. Purdie said he was sent to get on tape a conversation with the customer to prove that Mr. Purdie was not lying. The lawnmower had been left outside the fenced area of his business, and he did not know why. Commissioner Poskochil asked if the wire was used to prove he was innocent, or that he was collaborating with the thief. Mr. Purdie said he did not know. They asked him to do it, and he did it. Mr. Purdie acted in good faith, and cooperated with the police to prove he was not soliciting stolen property. Commissioner Poskochil asked if it was a phone tap. Mr. Purdie said the thief lived one block away, so he walked over to talk to him, but he was not home. Commissioner Poskochil asked if the police questioned him. Mr. Purdie said he did not know. Mr. Purdie saw the thief return home that evening, and told the police. The thief packed up van his van and left town immediately. Mr. Purdie did not know if police talked to him. Chairperson Gale noted that he did not stop by for the lawnmower. Mr. Purdie said no, he did not claim the mower. Commissioner Grady asked if the thief worked elsewhere. Mr. Purdie said he worked for a roofing company that moved around quite a bit, and they said they did not know where he went.

Mr. Purdie distributed an exhibit which consisted of a letter of recommendation from the Chairman of the Board of Trustees for the Village of Leigh. A copy of said exhibit is attached to and made a part of these minutes, denoted as exhibit 12b1.

After discussion, a motion was made by Moline and seconded by Johnson to allow Mr. Purdie to sit for the examination and have a license issued after making proper application, with the conditions that Mr. Purdie must notify his initial employing broker of his criminal conviction and the circumstances of the conviction; the employing broker must confirm said notification in writing to the Commission prior to issuance of the license; and that Mr. Purdie must immediately notify Commission staff of any criminal charge which could result in jail time during his first two years of licensure. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Director Tyrrell presented an exhibit regarding renewal of the examination contract with Applied Measurement Professionals (AMP). A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell noted that this was the final renewal of a multi-year contract. AMP had told staff they anticipated a 6% increase, so that amount was budgeted. Since then, AMP reviewed the contract, and offered to renew it for next two years for $69.00 per examination, which was a 3% increase, approximately. Director Tyrrell noted they would be providing the same services as in the past, and requested that the Commission give him the authority to enter into the addendum for 7-1-05 through 6-30-07.

After discussion, a motion was made by Grady and seconded by Moline that the Commission give Director Tyrrell the authority to enter into the addendum, to renew the examination contract with AMP for 7-1-05 through 6-30-07, as noted in the exhibit.

Commissioner Grady said that he had gone on the AMP website, and the simulation examination looked interesting. Director Tyrrell said staff will continue to keep the Commission up-to-date on that, and that the Commission would look at all options during the next RFP (request for proposals) process. Commissioner Johnson asked if the RFP would be issued in 2007. Director Tyrrell said staff would probably issue the RFP in the fall of 2006. If the Commission chose to change providers, that would give them a 5-6 month time frame to work with the new provider, get the new question bank reviewed and in place, etc.

A vote was taken on the pending motion. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

Commissioner Grady noted that this was his first ARELLO meeting, and it was very informative and interesting. ARELLO was an organization that brought a lot to the profession, and the international perspective was valuable. There was a lot of information to digest. The sessions were excellent, and Commissioner Grady got a lot out of it. Commissioner Grady had initially questioned holding the meeting in Pittsburgh, but he had a little time to explore, and enjoyed the city as well.

Commissioner Shepard said the meeting was good, especially the roundtable discussions. Commissioner Shepard was trying to get a transcript of the first session, and said the information would be valuable for the other Commissioners as well.

Commissioner Johnson noted that almost every other state fined its licensees for disciplinary actions. That was not the procedure in Nebraska, but Commissioner Johnson would like to take a look at that possibility. The folks who could fine licensees said that the two most important things that got licensees= attention were fines and public notice, through publication in their newsletters. Commissioner Johnson asked that the Commission discuss the option of fines in the future.

Commissioner Poskochil concurred, and said he would also like to discuss fines. Some jurisdictions could fine unlicensed entities $10,000 for practicing without a license. A couple of jurisdictions had substantial penalties, and he did not know what Nebraska had. Director Tyrrell said that conducting licensed activity without a license was a Class II or III misdemeanor. He did not know what the fine would be, and speculated it may be $100 for a first-time offense. That went through the court system. Chairperson Gale said misdemeanor fines were typically $1000 or less. Commissioner Johnson noted that those jurisdictions= statutes allowed the Commission to fine unlicensed entities.

Commissioner Poskochil said that most states and organizations were realizing that home inspector licensing was the way to go. Chairperson Gale said his office was working on it for this legislative session as well. Commissioner Poskochil said he had picked up a lot of information on the topic, and would share it with Chairperson Gale. Commissioner Poskochil said that licensure allowed regulation. Right now, there was no teeth to the regulations. Chairperson Gale said he would share the information with his general counsel.

Commissioner Poskochil noted there was also discussion regarding virtual office websites.

Commissioner Shepard reported that educational requirements to gain a license varied widely. Texas required something like 900 hours to gain a broker license. There may be a time the Commission wants to look at that issue. To really be a profession, more education may be needed. Commissioner Shepard would like to know what other states required, and where Nebraska ranked.

Chairperson Gale noted that subcommittees could be formed to further investigate the issues raised in the discussion. The Commission could not do a retreat, due to the Open Meetings Law, but subcommittees could investigate issues and meet with staff, then bring their findings back to the full board.

Director Tyrrell noted that some educational requirements were deceptive, such as the Texas education requirements. When comparing their prelicense requirements to ours, their 900 hours sometimes did not qualify as 180 hours of ours. Some did not even have 30 hours in real estate education. Texas gave credit for various degrees and college coursework.

No action was necessary on this report.

Future Meeting Dates

November 18-19, 2004 - Days Hotel Carlisle, Omaha

January 12-13, 2005 - Staybridge Suites, Lincoln

February 15-16, 2005 - Staybridge Suites, Lincoln

At 10:12 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 10:20 a.m.

At 11:20 a.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 11:28 a.m.

At 12:18 p.m., Chairperson Gale recessed the hearing until 2 p.m.

At 1:25 p.m., Chairperson Gale declared a recess for lunch, and reconvened the meeting at 2:00 p.m.

At 3:35 p.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 3:50 p.m.

At 4:45 p.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 4:52 p.m.

At 5:27 p.m., Chairperson Gale declared a brief recess, and reconvened the hearing at 5:29 p.m.

Chairperson Gale adjourned the hearing at 6:40 p.m.

At 6:40 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 6:45 p.m.

At 7:02 p.m., Chairperson Gale passed the gavel to Acting Chairperson Moline and was briefly excused from the meeting. Chairperson Gale rejoined the meeting at 7:06 p.m.

At 7:13 p.m. on October 18, there being no further business to come before the Commission, a motion was made by Moline and seconded by Shepard that the meeting adjourn. Motion carried with Grady, Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the October 18, 2004, meeting of the Nebraska Real Estate Commission were available for inspection on October 29, 2004, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director

Perre Neilan, Nebraska REALTORS7 Association, Lincoln

Mark Leaders, CBSHOME, Omaha

Jim Adams, Woods Bros., Lincoln

Brian Eichelberger, Home Real Estate, Lincoln

Chadd Bliss, Home Real Estate, Lincoln

Paige Christen, HomeServices of Nebraska, Lincoln

Mark Nabity, MidAmerican Mortgage, HomeServices of Nebraska, Lincoln

Karl Sannicks, Home Real Estate, Lincoln

Larry Melichar, Home Real Estate, Lincoln

Tami Lambie, BancWise Real Estate Solutions, Lincoln

Katie Henry, BancWise Real Estate Solutions, Lincoln

Larry Zitek, BancWise Real Estate Solutions, Lincoln

Dan Allison, BancWise Real Estate Solutions, Lincoln