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 the 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.”
The property was zoned and used as agricultural land at the time of death; Brown hired a certified appraiser who valued it at $785,859 (agricultural use) and negotiated a sale to Talcott for $900,000.
Devisees (petitioners: Holubar, P. Etmund, D. Etmund, Sr., and Geistlinger) retained an appraiser who valued the land at $1,457,000 based on a “highest and best use” analysis (residential development with interim agricultural use) and sought to enjoin the sale and remove Brown under Neb. Rev. Stat. § 30-2454.
The county court temporarily restrained the sale to allow petitioners’ investigation; after hearings the court denied removal, credited Brown’s appraiser, and allowed the sale to proceed.
On appeal, the Nebraska Supreme Court reviewed whether Brown failed to sell under “commercially reasonable” terms and whether she was disqualified for hiring an appraiser who did not opine on development value.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether “commercially reasonable terms” required valuing the land at its highest-and-best-use (residential development)	The will’s directive to sell under commercially reasonable terms mandates using highest-and-best-use valuation (development value)	The will’s text and context show the clause governs negotiations with the tenant; commercially reasonable refers to terms agreed with Talcott and allows agricultural valuation	The phrase is not ambiguous; it does not require highest-and-best-use valuation and the county court did not err in finding the $900,000 sale commercially reasonable
Whether Brown should be removed for hiring an appraiser who did not appraise development value	Brown’s appraiser admitted he was not qualified to appraise development property, so Brown mismanaged the estate and should be removed	Brown had broad discretion under the will, reasonably relied on a qualified, disinterested appraiser and counsel, and statute permits acting on advisors’ recommendations	Brown’s selection and reliance on her appraiser were reasonable; no cause for removal under § 30-2454(b)
Whether conflicting appraisals required the court to find the sale unreasonable	The large disparity shows the sale unreasonably jeopardized devisees’ interests	The factfinder must weigh credibility; county court found Brown’s appraiser more credible	Appraisal conflict is a factual matter; county court’s credibility determinations and valuation were not clearly erroneous
Standard and scope of appellate review of probate valuation issues	Petitioners argued the legal interpretation of “commercially reasonable” should be resolved in their favor	Respondent argued deference to county court on factual determinations and independent review only on pure questions of law	Court applied independent review to the legal question of will interpretation and deferential review to factual appraisal credibility; affirmed county court

Key Cases Cited

In re Estate of Nemetz, 273 Neb. 918 (applies highest-and-best-use discussion to probate valuation)
In re Estate of Shell, 290 Neb. 791 (interpretation of will clauses and fiduciary duties)
In re Estate of Webb, 20 Neb. App. 12 (removal of personal representative where sale below appraised value in different factual context)
Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (commercial reasonableness under the UCC is a factual question)
Reeves v. Associates Financial Services Co., Inc., 197 Neb. 107 (authority on fiduciary and valuation disputes in Nebraska)
In re Estate of Ritter, 227 Neb. 641 (cardinal rule to effectuate testator’s intent in will construction)
Eicher v. Mid America Fin. Invest. Corp., 275 Neb. 462 (trial court credibility findings and appellate review standard)