It pays to have friends in high places. A bill proposed by an Alaska state representative, if passed, could retroactively remove liability for real estate brokers and their agents who failed to give proper agency disclosures to clients in the past.

The bill would basically eliminate fiduciary breaches as a cause of action for civil litigation, eliminate the need to disclose whom an agent represents, and it eliminates liability for agents and brokers for previous acts of improper disclosure.

To view the proposed bill in a PDF file, click here.

One company that would surely rejoice if the bill were passed is Prudential Jack White and Prudential Vista, both owned by broker Rick Fuller. Fuller and one of his leading agents Bonnie Mehner recently lost a lawsuit filed by a consumer who claimed that Mehner failed to disclose her agency status to him. The judge awarded the plaintiff $200,000, and Mehner is facing disciplinary charges from the state.

The plaintiff's attorney Robert Wagstaff, has subsequently filed another lawsuit on behalf of Eldon and Elizabeth Tanner, who claim that it was not disclosed to them until well into their purchase of a $46,900 Mat-Su property that the same brokerage firm, Prudential Vista, was acting as dual agent to both sides of the transaction. Wagstaff has asked the judge for class-action status. Spokespersons have said that other buyers have been added to the plaintiffs' list.

A class-action suit could encourage numerous buyers who purchased a home through Prudential Vista to join the suit.

It is the timing, the language, and the peculiar retroactive amnesty provision of the bill, that has some other brokers and agents questioning the true purpose of the bill, including the legislative committee of the Alaska Association of Realtors.

Sources say that Representative Norm Rokeberg, a commercial real estate broker and sponsor of the bill, was associated with Prudential Jack White for over 20 years before starting his own firm, say sources.

Alaska, while the largest state, has one of the smallest broker and agent populations with only 2000 in the whole state. People know each other, and this has brought friends and enemies into the biggest political fray to hit the state in years. Some say disclosures harm agents' business, while others say removing them is self-serving and anti-consumer.

"The Alaska bill is very contentious among the Realtor community in Alaska," acknowledges Laurie Janik, general counsel to the NAR. "NAR typically does not become involved in state legislation.  We leave that up to our state associations. I received a copy of the bill and offered some comments to Realtors in Alaska.  Most of my comments related to how I though the disclosure requirements could benefit from some additional clarification. The language I was referencing was not language that was being amended. With respect to the language that is being amended, a new provision prevents suits against licensees for failure to comply with the disclosure provisions unless the plaintiff can show that the violation constituted fraud, misrepresentation or deceit or the person suffered a loss as a result of the violation.The one new provision that really stuck out was the retrospective application of the law.  I understand that proponents of the bill want the law to apply retrospectively to eliminate class action litigation from consumers alleging violations of the disclosure statute."

Intense lobbying is going on from both sides, say sources. Meanwhile, they say, Rokeberg has removed the bill to do some clarifications, and attorneys for Prudential Vista and the Tanner family have addressed the legislative committee with their views.

Published: May 5, 2003

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