In re Estate of Etmund
297 Neb. 455
| Neb. | 2017Background
- 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 purchase the farm "under commercially reasonable terms and conditions as he and [the personal representative] may agree." If no agreement, Brown was authorized to sell otherwise.
- Brown obtained an appraisal valuing the property at $785,859 based on agricultural use, then entered a contract to sell the property to Talcott for $900,000.
- Devisees (petitioners) obtained a competing appraisal valuing the property at $1,457,000 based on a highest-and-best-use residential development scenario and petitioned to remove Brown under Neb. Rev. Stat. § 30-2454 and to restrain closing.
- The county court temporarily restrained closing, allowed petitioners time to investigate, received both appraisals, and ultimately denied removal after finding Brown’s appraiser and valuation more credible and concluding the sale was commercially reasonable under the will.
- Petitioners appealed the denial of removal. The Nebraska Supreme Court affirmed, holding the will’s phrase "commercially reasonable terms" was not ambiguous in context and Brown acted within her discretionary authority by relying on a qualified agricultural appraisal and selling to the tenant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Brown should be removed for selling below fair value / failing to sell under "commercially reasonable terms" | Will requires sale at commercially reasonable price equating to highest and best use (residential development); $900,000 is far below $1,457,000 appraisal so removal is warranted | "Commercially reasonable terms" must be read in context of will (give tenant first opportunity); Brown followed will, used a certified appraiser valuing agricultural use, and negotiated in good faith | Court held phrase is not ambiguous in context; Brown acted within discretion and sale was commercially reasonable; no cause for removal |
| Proper interpretation of "commercially reasonable terms and conditions" in the will | Petitioners: phrase means value based on highest and best use (development) | Brown: phrase governs the negotiation process with the tenant and is tied to continuing the tenant's agricultural opportunity; will gives broad discretion | Court concluded the phrase is not reasonably susceptible to the petitioners’ highest-and-best-use reading and must be read with the will as a whole; Brown’s reading controls |
| Qualification of Brown's appraiser and reliance on his appraisal | Appraiser admitted he was not qualified to appraise development property, so his appraisal and Brown’s reliance were improper | Appraiser was a licensed general certified appraiser with local farm experience and qualified to value the property for agricultural use; personal representative may rely on qualified advisors | Court found appraiser qualified and disinterested for agricultural valuation; Brown permissibly relied on his appraisal and counsel; no removal |
Key Cases Cited
- In re Estate of Nemetz, 273 Neb. 918 (2007) (discusses valuation and highest-and-best-use issues in probate contexts)
- In re Estate of Shell, 290 Neb. 791 (2015) (will interpretation principles in probate matters)
- In re Estate of Webb, 20 Neb. App. 12 (2012) (probate challenges to executor sales and valuation disputes)
- Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (1990) (commercial reasonableness under UCC is a factual question)
- Eicher v. Mid America Fin. Invest. Corp., 275 Neb. 462 (2008) (appellate review deference to trial court credibility findings)
- In re Estate of Ritter, 227 Neb. 641 (1988) (cardinal rule: effect must be given to testator's intent)