Grievance Committee

Grievance Committee... initial review of and screens complaints and requests grand jury

Grievance Committee does not conduct hearings determine violation or award mediate or arbitrate business disputes

Grievance Committee appointed by president confirmed by board of directors balanced representation of membership mature, experienced, knowledgeable person

Arbitration requests acceptable form necessary parties named Important questions acceptable form necessary parties named timely filed parties have standing litigation pending impartial panel

Arbitration requests basis for an award mandatory or voluntary Important questions basis for an award mandatory or voluntary amount too large or too small matter too legally complex knowledgeable arbitrators available

Arbitration requests forward for a hearing dismiss request Options for action forward for a hearing dismiss request

Arbitration requests may be appealed by either party Dismissal by grievance committee may be appealed by either party parties not attend

Ethics complaints complaint acceptable form necessary parties named Important questions complaint acceptable form necessary parties named timely filed respondent a member or MLS participant of board

Ethics complaints litigation pending impartial hearing panel Important questions litigation pending impartial hearing panel amend complaint if complaint were true, could it violate Code

Ethics complaints amend complaint and forward for hearing Options for action amend complaint and forward for hearing forward complaint as submitted by complainant for a hearing dismiss complaint

Ethics complaints dismissal appealable parties do not attend appeal Amendments/dismissals dismissal appealable parties do not attend appeal

Grievance Committee Ethics Hearing Procedures Arbitration Hearing Procedures Rehearings & Ethics Appeals Procedural Review Arbitration Procuring Cause

Ethics Hearing Procedures

Hearing panel three, preferably five odd number

Hearing panel if REALTOR-ASSOCIATE® or REALTOR® other than principal is a party, at least one panel member should also be a nonprincipal panel chair named by chair of professional standards committee

Rights of parties counsel present evidence witnesses cross-examine witnesses make closing statement

Amending a complaint prior to hearing: complainant may file. Hearing panel may disallow during hearing: complainant or hearing panel

Witnesses... present only during testimony the REALTOR® principal may remain throughout hearing

Hearing panel’s decision in writing findings of fact discipline

Discipline letter of warning letter of reprimand education fine not to exceed $5,000 probation for one year or less

Discipline suspension from board membership for not less than 30 days nor more than one year, or a fine of $5,000 in lieu of suspension expulsion from board membership for one to three years suspension or termination of MLS privileges

Grievance Committee Ethics Hearing Procedures Arbitration Hearing Procedures Rehearings & Ethics Appeals Procedural Review Arbitration Procuring Cause

Arbitration Hearing Procedures

Arbitration Hearing Procedures policy matters submission to arbitration arbitration hearing arbitrators’ decision -- executive session

Policy Matters timing fees consistency with state law prior litigation

Policy matters within 180 days after closing Timing within 180 days after closing within 180 days after facts could have been known with reasonable diligence whichever is later

Policy Matters Fees not to exceed $500

Policy matters Consistency with state law state law prevails Uniform Arbitration Act consult with board counsel

Policy matters Variations from state to state include: Consistency with state law Variations from state to state include: advance agreements to arbitrate future disputes agreements to binding arbitration after dispute occurs/arises law does not recognize agreements to arbitrate before or after

Policy matters matter previously litigated cannot be arbitrated Prior Litigation matter previously litigated cannot be arbitrated neither party to litigation may charge the other with failure or refusal to arbitrate

Submission to arbitration One of three options: signed agreements and deposits before hearing held if no agreement/deposit, proceed if respondent participates in hearing if no agreement/deposit/attendance, proceed if state law allows

Arbitration hearing the panel witnesses rights of parties during hearing

Arbitration hearing The panel three, preferably five, members odd number

Arbitration hearing majority of REALTORS® The panel majority of REALTORS® if REALTOR-ASSOCIATE® or REALTOR® nonprincipal is involved, at least one panel member should be a nonprincipal chair of panel named by chair of professional standards committee

Arbitration hearing challenges for good and sufficient cause The panel challenges for good and sufficient cause additional state law requirements for arbitrators may apply

Arbitration hearing present only during testimony Witnesses present only during testimony a REALTOR-ASSOCIATE® or REALTOR® nonprincipal on whose behalf action was brought is not considered a party; such nonprincipal may be a witness and is allowed to remain throughout hearing if affiliated with party

Arbitration hearing counsel (attorney at law) evidence witnesses Rights of parties during hearing counsel (attorney at law) evidence witnesses

Arbitration hearing cross-examine witnesses make closing statement Rights of parties during hearing cross-examine witnesses make closing statement Note: state law - subpoena power

Arbitrators’ decision executive session the award

Arbitrators’ decision Executive session parties dismissed; panel makes award board counsel may be present to provide procedural guidance and answer legal questions no predetermined rules

Arbitrators’ decision The award Standard of proof preponderance of the evidence (the 51 percent rule) ethics - clear, strong, and convincing

Arbitrators’ decision The award Form of award only amount no findings of fact or rationale not greater than amount requested signed by arbitrators (or majority)

Arbitrators’ decision The award Form of award no dissenting opinion no discussions with parties in ethics can dissent

Grievance Committee Ethics Hearing Procedures Arbitration Hearing Procedures Rehearings & Ethics Appeals Procedural Review Arbitration Procuring Cause

Rehearings & Ethics Appeals

Rehearings & Ethics Appeals appeal hearings directors’ decision about appeal directors’ action if no appeal filed

Rehearings complainant and respondent have right to rehearing newly discovered evidence

Rehearings same hearing panel petitioner given opportunity to present new evidence scope of rehearing limited to new evidence

Appeal hearings deposit maximum $250 in writing Formalities deposit maximum $250 in writing clearly state bases for challenge

Appeal hearings misapplication of Articles of Code Respondent’s bases for appeal limited to: misapplication of Articles of Code misinterpretation of Articles of Code procedural deficiency lack of procedural due process nature/extent of discipline imposed

Appeal hearings alleged procedural deficiency Complainant’s bases limited to: alleged procedural deficiency other lack of due process which may have deprived complainant of opportunity for fair hearing

Appeal hearings president or delegate reviews appeal Initial administrative review president or delegate reviews appeal determine if any legitimate basis if not, problem explained to appellant and additional detail requested

Appeal hearings board of directors, or panel of board of directors, or Review by: board of directors, or panel of board of directors, or executive committee

Appeal hearings The hearing petitioner limited to bases set forth in written appeal request hearing panel chair summarizes case

Appeal hearings each party may offer corrections to summary The hearing each party may offer corrections to summary each party may present arguments

Appeal hearings The hearing no new evidence allowed, except as it bears upon claim of deprivation of due process arguments limited to issues raised in written appeal

Directors’ decision - appeal directors may adopt hearing panel’s decision and recommendation for discipline directors may modify hearing panel’s decision and/or recommendation for discipline

Directors’ decision - appeal directors may dismiss matter if findings of fact not supported if procedural deficiency, directors may refer case back for new hearing before different panel

Directors’ decision - appeal Modification of discipline directors may reduce discipline directors cannot increase discipline. Directors can refer back to original hearing panel with their written statement of concerns

Directors’ action - no appeal if procedural deficiency, directors may refer back for new hearing before a different hearing panel directors may reduce discipline

Directors’ action - no appeal directors cannot increase discipline if concerned with discipline, directors can refer back to original hearing panel with written concerns

Directors’ action - no appeal in the absence of an appeal or one of the other actions stated previously, the directors must adopt the hearing panel’s decision

Grievance Committee Ethics Hearing Procedures Arbitration Hearing Procedures Rehearings & Ethics Appeals Procedural Review Arbitration Procuring Cause

Procedural Review - Arbitration

Procedural Review - Arbitration appeal versus review in arbitration hearing request for procedural review

Arbitration hearing no right to appeal award Appeal versus review no right to appeal award right to limited procedural review based solely on assuring that due process rights were observed process provides “safety valve” so no litigation

Request for procedural review Limited right of review based solely on: failure of due process board failed to follow established arbitration procedures Note: If not filed in 20 days from receipt of award, award final

Request for procedural review Request for review board of directors, or a panel of the board of directors, or executive committee

Request for procedural review Request should clearly set forth all bases for challenge use form A-13 in CEAM cannot say, “I appeal”

Request for procedural review Initial administrative review president or delegate reviews request purpose - to determine if request states legitimate basis if not, problem should be explained to party and additional information requested

Request for procedural review Directors’ executive session decision is final and binding only issue is whether proper procedures followed for due process if directors find hearing defective, award is invalidated. Case sent back for new hearing by different panel

Request for procedural review Directors’ executive session Parties can be released from obligation to arbitrate

Request for procedural review Review hearing arguments limited chair clarifies that award itself is not reviewed no new evidence except as it bears upon claim of deprivation of due process

Request for procedural review Review hearing standard rights to challenge hearing panel chair can respond to appellant’s allegation other parties to arbitration can support original decision

Grievance Committee Ethics Hearing Procedures Arbitration Hearing Procedures Rehearings & Ethics Appeals Procedural Review Arbitration Procuring Cause

Procuring Cause

Procuring cause - an overview basis for award facts to be considered

Basis for award No predetermined rule to determine entitlement no “contract” rule no “threshold” rule Determination based on all facts and circumstances related to particular transaction

Basis for award Black’s Law Dictionary, Fifth Edition, defines procuring cause as: A broker will be regarded as the “procuring cause” of a sale . . . if his efforts are the foundation on which the negotiations resulting in a sale are begun

Basis for award Black’s Law Dictionary, Fifth Edition, further defines procuring cause as: A cause originating a series of events which, without a break in their continuity, result in accomplishment of prime objective of the employment of the broker who is producing a purchaser ready, willing, and able to buy real estate on the owner’s terms

Factors to be considered Factor 1: No predetermined rule of entitlement “rules of thumb,” and prior decisions disregarded agency relationships not determinative of entitlement to compensation

Factors to be considered Factor 2: Arbitrability and appropriate parties questions of arbitrability and appropriate parties named can be considered by panel

Factors to be considered Factor 3: Relevance and admissibility generally, state law controls any relevant evidence is admissible

Factors to be considered Factor 3: Relevance and admissibility generally, state law controls any relevant evidence is admissible

Factors to be considered Factor 3: Relevance and admissibility Possible ethics violations in arbitration hearings can be considered part of evidence cannot be used to withhold an otherwise substantiated award should be considered only as one of the many potentially relevant factors in decision

Factors to be considered Factor 3: Relevance and admissibility Note: hearing panel shall not make referrals of ethical concerns that arise during a hearing

Factors to be considered Factor 4: Communication and contact -abandonment and estrangement Abandonment: whether the broker’s inactivity, or perceived activity, may have caused the purchaser to reasonably conclude that the broker had lost interest in or disengaged from the transaction. (CEAM, Appendix II to Part Ten)

Factors to be considered Factor 4: Communication and contact -abandonment and estrangement Estrangement: whether the broker engaged in conduct or failed to act which caused the purchaser to terminate the relationship. This can be caused, among other things, by words or actions. (CEAM, Appendix II to Part Ten)

Factors to be considered Factor 5: conformity with state law Factor 6: consideration of the entire course of events -- the list