In re Estate of Etmund
297 Neb. 455
| Neb. | 2017Background
- Decedent Cora H. Etmund died leaving a will that gave personal representative Cheryl A. Brown broad authority to sell estate realty and instructed Brown to give the current farm tenant, Norris Talcott, the "first opportunity to purchase" the property "under commercially reasonable terms and conditions as he and [the personal representative] may agree."
- Brown hired a certified appraiser who valued the land at $785,859 based on agricultural use and negotiated a sale to Talcott for $900,000; Talcott accepted.
- Devisees (petitioners) obtained a temporary restraining order under Neb. Rev. Stat. § 30-2450 after retaining their own appraiser, who valued the land at $1,457,000 based on highest-and-best-use (residential development with interim agricultural use), and filed to remove Brown as personal representative under § 30-2454.
- The county court restrained closing pending appraisal review, held a hearing, credited Brown’s appraiser over petitioners’ appraiser, found the sale commercially reasonable under the will, and denied removal and appointment of successor co-personal representatives.
- Petitioners appealed the denial of removal; the Nebraska Supreme Court reviewed whether Brown’s actions complied with the will’s "commercially reasonable" requirement and whether Brown’s appraiser was qualified.
Issues
| Issue | Petitioners' Argument | Brown's Argument | Held |
|---|---|---|---|
| Whether "commercially reasonable terms" required valuing land at its highest-and-best-use (residential development) | The phrase requires a commercially reasonable price reflecting highest-and-best-use value (development) rather than agricultural value | The phrase must be read with the will as a whole; it refers to negotiated terms between Brown and the tenant and does not mandate highest-and-best-use valuation | Court held the phrase was not ambiguous and did not require highest-and-best-use valuation; sale at agricultural-based price was commercially reasonable |
| Whether Brown should be removed for mismanagement or failing duties by selling below fair market value | Brown sold at price far below petitioners’ appraiser’s valuation, jeopardizing estate; removal is in estate's best interest | Brown acted within broad discretionary authority granted by will, relied on a qualified appraiser, and followed statutory allowances to employ advisors | No cause for removal under § 30-2454(b); county court’s factual findings were not clearly erroneous and decision affirmed |
| Whether Brown’s chosen appraiser was unqualified to value the property because he disclaimed competence to appraise development potential | Appraiser’s admission that he could not appraise development value shows he was unqualified and Brown should have sought a development appraisal | Appraiser was a licensed general certified appraiser with farm appraisal experience; property was agricultural and zoned agricultural; Brown properly relied on his report | Court held the appraiser was qualified and disinterested for agricultural valuation; Brown permissibly relied on his recommendation |
| Standard of review for contested probate valuation and credibility determinations | (implied) appellate court should overturn if valuation error | (implied) factual credibility and valuation determinations are for trial court to resolve | Appellate court reviews law de novo but will not reweigh credibility; county court’s credibility and valuation determinations stand absent clear error |
Key Cases Cited
- In re Estate of Nemetz, 273 Neb. 918 (discussing valuation by highest and best use in probate context)
- In re Estate of Shell, 290 Neb. 791 (addressing interpretation of testamentary language and executor duties)
- In re Estate of Webb, 20 Neb. App. 12 (probate sale and challenge to personal representative’s actions)
- Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (issue of commercial reasonableness is a factual question)
- Eicher v. Mid America Fin. Invest. Corp., 275 Neb. 462 (appellate review of factual findings and witness credibility)
- In re Estate of Ritter, 227 Neb. 641 (cardinal rule to effectuate testator intent)
- Reeves v. Associates Financial Services Co., Inc., 197 Neb. 107 (precedent cited on sale below appraised value in different factual context)