In re Estate of Etmund, 297 Neb. 455

Background

Decedent Cora H. Etmund’s will appointed Cheryl A. Brown as personal representative and directed Brown to give her current farm tenant, Norris Talcott, the first opportunity to buy the farm “under commercially reasonable terms and conditions as he and [the personal representative] may agree.” If Talcott declined or they could not agree, the property was to be sold otherwise.
At death the property was agriculturally used and zoned; Brown hired a certified appraiser who valued it for agricultural use at $785,859 and negotiated a sale to Talcott for $900,000, which Talcott accepted.
Devisees (petitioners) hired their own appraiser who valued the property at $1,457,000 based on a highest-and-best-use residential development scenario and challenged the sale as not commercially reasonable.
Petitioners obtained a temporary restraining order pending investigation; they then filed for removal of Brown as personal representative and for appointment of successors, alleging mismanagement and failure to adhere to the will’s commercially reasonable requirement.
The county court heard competing appraisals, found Brown’s appraiser more credible, denied removal and other relief, and this appeal followed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Brown failed to sell the property on “commercially reasonable terms” and thus should be removed	The will requires sale at commercially reasonable terms meaning valuation at highest-and-best-use (residential development); selling to tenant for $900,000 (below petitioners’ $1,457,000 appraisal) is not commercially reasonable	“Commercially reasonable terms” must be read in context of the will: it governs negotiations with the existing farm tenant and allows Brown broad discretion; sale based on an agricultural appraisal can be commercially reasonable	Court held “commercially reasonable” is not ambiguous here and, given the will’s context and the county court’s credibility findings, the $900,000 sale was commercially reasonable; no cause for removal
Whether Brown’s appraiser was qualified and whether reliance on his appraisal was a breach warranting removal	Appraiser admitted not being qualified to value development property; that made his appraisal unreliable and Brown’s reliance unreasonable	Appraiser was a licensed general certified appraiser with local farm appraisal experience; property was agricultural and zoned as such; Brown may rely on qualified, disinterested advisors under the probate code	Court held the appraiser was qualified to value the property as agricultural; Brown permissibly relied on his appraisal and advice; no mismanagement shown
Proper interpretive standard for “commercially reasonable” in the will	Plaintiffs: interpret phrase to require highest-and-best-use valuation where feasible	Defendant: interpret phrase in light of surrounding provisions (first offer to tenant, broad PR discretion)	Court applied will-construction rules and held the phrase, in context, does not compel highest-and-best-use valuation
Standard of review for factual/appraisal disputes in probate	Plaintiffs: county court erred in accepting Brown’s appraisal over petitioners’ appraisal	Defendant: county court’s credibility and factual findings control on appeal	Court reaffirmed appellate deference: factual findings of the probate court will not be set aside unless clearly erroneous; affirmed county court’s credibility choice and ruling

Key Cases Cited

In re Estate of Nemetz, 273 Neb. 918 (court referenced highest-and-best-use discussion)
In re Estate of Shell, 290 Neb. 791 (probate will interpretation principles)
In re Estate of Webb, 20 Neb. App. 12 (probate removal context cited by petitioners)
Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (question of commercial reasonableness is factual)
In re Estate of Ritter, 227 Neb. 641 (cardinal rule of giving effect to testator intent)