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 purchase the farm “under commercially reasonable terms and conditions as he and [the personal representative] may agree.”
At death the subject property was used and zoned for agriculture; Brown obtained an agricultural appraisal valuing the property at $785,859 and negotiated a sale to Talcott for $900,000.
Devisees (petitioners: Holubar, P. Etmund, D. Etmund, Sr., and Geistlinger) commissioned a different appraisal valuing the property at $1,457,000 based on “highest and best use” as residential development with interim agricultural use, and petitioned to remove Brown for failing to sell on commercially reasonable terms.
The county court temporarily restrained closing, allowed petitioners to investigate, heard competing appraisal testimony, found Brown’s appraiser more credible, and denied removal and the petition to appoint successor personal representatives.
The Nebraska Supreme Court reviewed whether Brown’s sale to Talcott was “commercially reasonable” under the will and whether Brown’s choice of appraiser (and appraisal) justified removal.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether “commercially reasonable terms” in the will required valuing land at its highest-and-best-use for residential development	Petitioners: phrase requires highest-and-best-use valuation (residential development) so $900,000 is unreasonably low	Brown: phrase governs negotiations with tenant and allows sale consistent with agricultural use appraisal and personal rep’s discretion	Court: phrase not ambiguous; read in context it contemplates negotiation with tenant and does not mandate highest-and-best-use; sale was commercially reasonable
Whether Brown should be removed for mismanaging the estate by relying on her appraiser and approving the $900,000 sale	Petitioners: Brown’s appraiser was unqualified to value development potential and sale harmed estate	Brown: appraiser was a qualified, disinterested general certified appraiser who reasonably concluded agricultural use; personal rep may rely on experts	Court: Brown acted within broad discretion, properly relied on a qualified appraiser, and removal was not warranted
Whether the county court clearly erred in preferring Brown’s appraisal over petitioners’ appraisal	Petitioners: their appraisal better reflects market and growth projections	Brown: county court as factfinder may weigh credibility and accept her appraiser	Court: appellate review defers to county court’s credibility findings; no clear error in finding for Brown
Whether statutory duties required a different procedure (e.g., independent investigation) before sale	Petitioners: personal rep should have sought development appraisal or further inquiry	Brown: will granted broad discretionary power; statute permits relying on advisors and qualified appraisers	Court: statutes permit acting on advisor recommendations; Brown’s actions were reasonable under the will and statute

Key Cases Cited

In re Estate of Nemetz, 273 Neb. 918 (discussing valuation and testator intent)
In re Estate of Shell, 290 Neb. 791 (interpretation of testamentary language)
In re Estate of Webb, 20 Neb. App. 12 (removal for undervalued sale — distinguished by court)
Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (commercial reasonableness under UCC is a fact question)
In re Estate of Ritter, 227 Neb. 641 (cardinal rule: give effect to testator’s intent)
Eicher v. Mid America Fin. Invest. Corp., 275 Neb. 462 (deference to trial court credibility determinations)
Reeves v. Associates Financial Servs. Co., Inc., 197 Neb. 107 (case on sale at price below appraiser value — distinguished by court)