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 property “under commercially reasonable terms and conditions as he and [my] personal representative may agree.”
The property was agricultural and zoned agricultural at 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) contested the sale, producing their own appraisal valuing the property at $1,457,000 based on highest-and-best-use as residential development with interim agricultural use, and sought to restrain closing and to remove Brown as personal representative under Neb. Rev. Stat. § 30-2454.
The county court temporarily restrained closing, allowed petitioners time to investigate, heard competing appraisal testimony, found Brown’s appraiser more credible, and denied removal and the petition to appoint successor co-personal representatives.
On appeal, the Nebraska Supreme Court reviewed whether the will’s phrase “commercially reasonable terms and conditions” required valuing the land at its highest-and-best-use for development and whether Brown’s hiring of her appraiser and sale decision warranted removal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether “commercially reasonable terms” in the will requires selling at highest-and-best-use (development) value	The phrase requires valuing land at its highest and best use (residential development) and sale to tenant at $900,000 is below commercially reasonable value	The will’s language and context show the phrase governs negotiation with the tenant farmer; Brown had discretion to sell based on agricultural valuation	Court held the phrase is not ambiguous; it does not mandate highest-and-best-use development value and Brown’s sale was commercially reasonable
Whether Brown should be removed for mismanagement by hiring an appraiser not qualified to value development potential	Brown’s appraiser admitted he was not qualified to appraise development property, so Brown’s reliance produced an inadequate valuation and mismanagement	Brown properly exercised broad discretion in will, hired a qualified, disinterested general certified appraiser, and was permitted to act on that appraiser’s recommendation	Court held Brown acted within her discretion, employed a qualified appraiser, and there was no cause for removal
Whether the county court clearly erred in crediting Brown’s appraisal over petitioners’ appraisal	Petitioners argued their evidence showed a much higher value and that the court should have found Brown’s appraisal unreliable	Brown argued the court properly credited her appraiser’s qualifications and testimony and evaluated credibility	Court affirmed county court’s factual credibility determinations as not clearly erroneous
Whether statutory duties required a different process (e.g., independent investigation or sale method)	Petitioners argued statutory duties to obtain fair market value and protect estate required different action	Brown relied on will-given discretion and statutes allowing employment of advisors and reliance on their recommendations	Court held statutes permit a representative to employ and rely upon qualified appraisers and advisors; Brown complied

Key Cases Cited

In re Estate of Nemetz, 273 Neb. 918 (2007) (discusses valuation principles in probate highest-and-best-use contexts)
In re Estate of Shell, 290 Neb. 791 (2015) (interpretation of testamentary language and executor duties)
In re Estate of Webb, 20 Neb. App. 12 (2012) (executor removal and sale-price challenges in probate context)
Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (1990) (commercial reasonableness is a factual question for the factfinder)
In re Estate of Ritter, 227 Neb. 641 (1988) (cardinal rule: give effect to testator’s intent)