Legislature(2015 - 2016)BELTZ 105 (TSBldg)

04/08/2015 01:30 PM JUDICIARY

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
01:40:35 PM Start
01:42:01 PM Confirmation Hearing: Alaska Public Offices Commission
01:50:33 PM HB5
02:32:57 PM SB76
02:49:28 PM SJR15|| SCR4
03:00:56 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Bills Previously Heard/Scheduled:
+ Confirmation of Governor's Appointments: TELECONFERENCED
Alaska Public Offices Commission
Mark Fish
Commission on Judicial Conduct
George R. Boatright
*+ HB 5 CONSERVATOR OF PROTECTED PERSONS TELECONFERENCED
Moved SCS HB 5(JUD) Out of Committee
+ SCR 4 US COUNTERMAND CONVENTION DELEGATES TELECONFERENCED
Heard & Held
SJR 15 CALL FOR US COUNTERMAND CONVENTION
Heard & Held
+ SB 76 REAL ESTATE BROKERS; LIABILITY TELECONFERENCED
Moved SB 76 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
             SB  76-REAL ESTATE BROKERS; LIABILITY                                                                          
                                                                                                                                
2:32:57 PM                                                                                                                    
CHAIR  MCGUIRE announced  the  consideration  of SB  76."An  Act                                                               
relating  to private  actions and  remedies  against real  estate                                                               
licensees for  licensee relationships, disclosures,  and activity                                                               
before January 1, 2005; and providing for an effective date."                                                                   
                                                                                                                                
GENEVIEVE  WOJTUSIK,  Staff,  Senator McGuire  introduced  SB  76                                                               
speaking   to   the   following  sponsor   statement:   [Original                                                               
punctuation provided.]                                                                                                          
                                                                                                                                
     Under  AS  08.88.396,  a real  estate  licensee  acting                                                                    
     before January 1, 2005 was  authorized to act as both a                                                                    
     buyer's and  a seller's representative, but  only after                                                                    
     the licensee informed both the  buyer and the seller of                                                                    
     his  or her  dual agency  and obtained  written consent                                                                    
     from both. The statute,  as originally enacted, did not                                                                    
     specify remedies  if a real estate  licensee (or agent)                                                                    
     violated its provisions.                                                                                                   
                                                                                                                                
     In 2003,  the Alaska  Legislature acted to  correct the                                                                    
     remedies-omission. The  Legislature was  concerned that                                                                    
     without   specifying  its   intent   with  respect   to                                                                    
     appropriate  remedies in  the  case of  a violation,  a                                                                    
     court might  feel compelled  to impose  the potentially                                                                    
     business-ending  remedy  of forfeiture  of  real-estate                                                                    
     sales  commissions.  The Legislature  was  particularly                                                                    
     concerned  that this  could occur  in cases  even where                                                                    
     the plaintiffs had suffered no actual damages.                                                                             
                                                                                                                                
     In  order  to  address this  concern,  the  Legislature                                                                    
     enacted  House Bill  257, legislation  that fixed  this                                                                    
     ambiguity  by  retroactively  limiting the  remedy  for                                                                    
     violations of  AS 08.88.396  to actual  damages. [House                                                                    
     Bill] 257  passed the Legislature, was  signed into law                                                                    
     and  has  been  found   constitutional  by  the  Alaska                                                                    
     Supreme Court.                                                                                                             
                                                                                                                                
     Despite the  enactment of House  Bill 257,  and despite                                                                    
     the Alaska  Supreme Court's determination that  the law                                                                    
     is constitutional, questions  have arisen regarding the                                                                    
     Legislature's intent  in amending AS  08.88.396. Senate                                                                    
     Bill  76 is  intended to  make clear  the Legislature's                                                                    
     intent  when  it  amended  AS   08.88.396  in  2003  by                                                                    
     specifying  and clarifying  that  the "actual  damages"                                                                    
     limitation of the 2003 amendment  applies to all claims                                                                    
     that  are based  upon or  arise out  of allegations  of                                                                    
     violations of AS 08.88.396.                                                                                                
                                                                                                                                
     The  clarification is  necessarily retroactive  because                                                                    
     the Legislature  enacted House Bill  29 in  2004 which,                                                                    
     among other things, specified  that AS 08.88.396 ceased                                                                    
     to apply to  real estate transactions as  of January 1,                                                                    
     2005; and  the Legislature  desires to ensure  that any                                                                    
     claims  pre-dating the  2005  effective  date of  House                                                                    
     Bill 29 are appropriately subject  to the intent of its                                                                    
     2003 enactment of House Bill 257.                                                                                          
                                                                                                                                
     The  retroactivity of  the bill  is constitutional,  as                                                                    
     provided in both U.S. Supreme  Court and Alaska Supreme                                                                    
     Court  decisions.1 This  bill  preserves  the right  of                                                                    
     purchasers of  real estate to  seek redress  for actual                                                                    
     damages  under AS  08.88.396  while  ensuring that  the                                                                    
     Legislature's  intent  that   only  actual  damages  be                                                                    
     awarded is  recognized by courts hearing  cases arising                                                                    
     within the relevant time periods.                                                                                          
                                                                                                                                
2:35:00 PM                                                                                                                    
JEFFRY PICKETT, Staff Counsel to  the Senate Judiciary Committee,                                                               
Anchorage, Alaska, proved the following sectional analysis:                                                                     
                                                                                                                                
     Section 1 amends the wording  of AS 08.88.396(e) which,                                                                    
     for  real  estate  transactions  that  occurred  before                                                                    
     January  1, 2005,  limits  civil  litigation and  other                                                                    
     remedies for the  failure of a real  estate licensee to                                                                    
     comply    with    certain    requirements    concerning                                                                    
     relationships  with  and   disclosures  to  buyers  and                                                                    
     sellers.                                                                                                                   
                                                                                                                                
     Section  2 provides  that the  bill applies  to a  real                                                                    
     estate  transaction  that  occurred on  or  before  the                                                                    
     bill's effective  date, and to  a court  action related                                                                    
     to such a transaction pending  on the effective date of                                                                    
     bill.                                                                                                                      
                                                                                                                                
     Section  3 makes  sec.  1 of  the  bill retroactive  to                                                                    
     January 1, 1991.                                                                                                           
                                                                                                                                
     Section 4 makes the bill effective immediately.                                                                            
                                                                                                                                
MR. PICKETT deferred to Howard  Trickey to provide the historical                                                               
context so the committee could understand the need for the bill.                                                                
                                                                                                                                
2:36:52 PM                                                                                                                    
HOWARD TRICKEY,  Attorney, Anchorage,  Alaska, stated that  he is                                                               
representing Jack  White Vista Real  Estate and has for  a number                                                               
of years with  regard to the issues that SB  76 seeks to clarify.                                                               
He explained  that when [AS  08.88.396] passed initially,  it did                                                               
not specify a remedy if a  real estate licensee or agent violated                                                               
the  dual  agency   provisions  of  the  statute.   In  2003  the                                                               
legislature addressed  the remedies  omission in House  Bill 257,                                                               
limiting the remedy for a  technical violation to actual damages.                                                               
The policy finding and decision was  that the lack of a statutory                                                               
remedy exposed  the real estate  industry to  potentially ruinous                                                               
class  action claims.  One case  pending then,  and still  today,                                                               
sought  recovery  in excess  of  $30  million for  forfeiture  of                                                               
commissions for the  entire period of the class.  The real estate                                                               
industry supported the  bill then and SB 76 today  because of the                                                               
potential economic risk to the industry.                                                                                        
                                                                                                                                
MR.  TRICKEY said  that SB  76 would  be retroactive.  Two courts                                                               
have ruled  that forfeiture of  commissions is not a  remedy that                                                               
is  provided  by  contract  and  there  is  no  vested  right  to                                                               
forfeiture until judgment  is entered. Therefore, it  is a matter                                                               
for  the legislature  to  appropriately address  as  a matter  of                                                               
public  policy.  SB 76  seeks  to  clarify that  the  legislature                                                               
intended in  2003 that  actual damages would  be the  sole remedy                                                               
for  any  claims   arising  out  of  alleged   violation  of  the                                                               
disclosure statute.                                                                                                             
                                                                                                                                
He  added that  the disclosure  forms and  written consents  were                                                               
written by the multiple listing  service. In all transactions the                                                               
disclosures were made  as required by statute. The  problem was a                                                               
matter  of timing  but  the  disclosures were  made  in time  for                                                               
people  to withdraw  from  the transaction  if  they thought  the                                                               
disclosure affected the fairness of the transaction in any way.                                                                 
                                                                                                                                
2:42:12 PM                                                                                                                    
SENATOR MICCICHE  asked if it's  common to pass  legislation that                                                               
is retroactive 24 years.                                                                                                        
                                                                                                                                
CHAIR  MCGUIRE replied  it's  not  common but  it  has been  done                                                               
before,  typically when  it involves  cases  with liability.  She                                                               
said she  was comfortable because  the bill reaffirms  the policy                                                               
the  legislature  put  in  place initially  using  a  common  law                                                               
principle.                                                                                                                      
                                                                                                                                
SENATOR MICCICHE  asked about instances  of gross  negligence and                                                               
if the exception  allows for costs above actual  damages that may                                                               
be more ancillary.                                                                                                              
                                                                                                                                
2:45:39 PM                                                                                                                    
MR. TRICKEY  explained that  this legislation  does not  affect a                                                               
claim someone  might bring for  gross negligence and  the damages                                                               
that might be  recovered from that cause of action.  SB 76 simply                                                               
limits the remedies for the statutory violations.                                                                               
                                                                                                                                
SENATOR COGHILL questioned why the  statutory provision has to be                                                               
clarified because of the common law principle.                                                                                  
                                                                                                                                
MR.  TRICKEY  explained  that  the   court  recognized  that  the                                                               
legislature  intended  damages  for statutory  violations  to  be                                                               
limited   to  actual   damages,   and   later  circumvented   the                                                               
legislative  intent saying  that  statutory  violations could  be                                                               
presented  as evidence  of a  breach of  the common  law duty  of                                                               
loyalty and  disclosure. The legal  case involves a  windfall for                                                               
the  plaintiffs and  their lawyers  because  nobody suffered  any                                                               
damages or actual harm.                                                                                                         
                                                                                                                                
CHAIR MCGUIRE closed public testimony and solicited a motion.                                                                   
                                                                                                                                
2:48:48 PM                                                                                                                    
SENATOR COGHILL motioned to report SB 76 from committee with                                                                    
individual recommendations and attached zero fiscal note.                                                                       
                                                                                                                                
CHAIR MCGUIRE announced that without objection, SB 76 is                                                                        
reported from the Senate Judiciary Standing Committee.                                                                          
                                                                                                                                

Document Name Date/Time Subjects
Resume Mark Fish.pdf SJUD 4/8/2015 1:30:00 PM
CS Senate Judiciary for HB5.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
1 HB5 Sponsor Statement.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
2 HB5 Version W.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
3 HB5 Letter of Support ACOA.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
4 HB5 Letter of Support AARP.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
5 HB5 FN #1.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
5.1 HB5 FN #2.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
5.2 HB5 FN #3.pdf SJUD 4/8/2015 1:30:00 PM
HB 5
SJR15 SCR4 Sponsor Statement.pdf SJUD 4/8/2015 1:30:00 PM
SJR 4
Summary of Changes SCR 4.pdf SJUD 4/8/2015 1:30:00 PM
SJR 4
SJR15 ver A.pdf SJUD 4/8/2015 1:30:00 PM
SJR 15
CS Senate Judiciary SJR 15 Version H.pdf SJUD 4/8/2015 1:30:00 PM
SJR 15
Summary of Changes SJR 15.pdf SJUD 4/8/2015 1:30:00 PM
SJR 15
SJR15 Fiscal Note #1.pdf SJUD 4/8/2015 1:30:00 PM
SJR 15
SJR15 Support Document - Charles Kacprowicz Commentary.pdf SJUD 4/8/2015 1:30:00 PM
SJR 15
SJR15 Support Document - Fax Stuart Thompson 3-25-15.pdf SJUD 4/8/2015 1:30:00 PM
SJR15 Support Document - Letter Louisiana Senator A G Crowe.pdf SJUD 4/8/2015 1:30:00 PM
SJR15 Support Document - Letter North Dakota Rep Alan Fehr.pdf SJUD 4/8/2015 1:30:00 PM
SJR15 Support Document - Letters from Non-Alaskans 3-18-15.pdf SJUD 4/8/2015 1:30:00 PM
SJR15 Support Document - New Hampshire Resolution.pdf SJUD 4/8/2015 1:30:00 PM
SJR15 Support Document - New Mexico Resolution.pdf SJUD 4/8/2015 1:30:00 PM
SJR15 Support Documents - Emails 3-16-15.pdf SJUD 4/8/2015 1:30:00 PM
SJR15 Fiscal Note #1.pdf SJUD 4/8/2015 1:30:00 PM
SB76 Version A.PDF SJUD 4/8/2015 1:30:00 PM
SB 76
SB76 Sponsor Statement.pdf SJUD 4/8/2015 1:30:00 PM
SB 76
SB76 Fiscal Note #1.pdf SJUD 4/8/2015 1:30:00 PM
SB 76
SB76.Realtors Support.PDF SJUD 4/8/2015 1:30:00 PM
SB 76
CS Senate Judiciary SCR4 Version W.pdf SJUD 4/8/2015 1:30:00 PM
SCR 4
SCR4 Fiscal Note #1.pdf SJUD 4/8/2015 1:30:00 PM
SCR 4
SCR4 Sectional Summary.pdf SJUD 4/8/2015 1:30:00 PM
SCR 4
SCR4 Support Document - Email Mike Coons 3-25-15 (2).pdf SJUD 4/8/2015 1:30:00 PM
SCR 4
SCR4 Support Document - Letter Citizens Initiatives (Charles Kacprowicz) (2).pdf SJUD 4/8/2015 1:30:00 PM
SCR 4
Summary of Changes SCR 4.pdf SJUD 4/8/2015 1:30:00 PM
SCR 4