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 real estate “under commercially reasonable terms and conditions as he and [my personal representative] may agree.”
- Brown obtained an appraisal valuing the land for agricultural use at $785,859 and negotiated a sale to Talcott for $900,000; Talcott had farmed the property since before Etmund owned it.
- Devisees (petitioners) hired a second appraiser who valued the property at $1,457,000 based on highest-and-best-use (residential development with interim agricultural use) and sought removal of Brown under Neb. Rev. Stat. § 30-2454, arguing the sale price was well below market.
- The county court temporarily restrained closing, permitted investigation, then held a bench trial where it credited Brown’s appraiser over petitioners’ appraiser and denied removal and petitioners’ request to appoint successor co-personal representatives.
- The Nebraska Supreme Court reviewed the probate record, focusing on (1) the meaning of “commercially reasonable terms,” (2) whether Brown’s appraisal was qualified and reasonable, and (3) whether removal was in the estate’s best interests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether “commercially reasonable terms” required valuation at highest-and-best-use (residential development) | Petitioners: phrase requires sale at highest-and-best-use value (residential development) | Brown: phrase meant commercially reasonable negotiations between PR and tenant, consistent with testator’s intent to favor tenant farmer | Court: term not ambiguous in context; meant negotiation with tenant and sale could be based on agricultural valuation; no error |
| Whether $900,000 sale was commercially reasonable | Petitioners: sale price significantly below fair market value per their appraiser; removal warranted | Brown: price based on certified appraiser valuing agricultural use; PR acted within discretion | Court: factual finding that sale was commercially reasonable was supported and not clearly erroneous |
| Whether Brown’s appraiser was qualified / PR mismanaged by hiring him | Petitioners: appraiser admitted not qualified for development appraisals, raising doubt about appraisal adequacy | Brown: appraiser was a general certified appraiser experienced in farms, qualified to value agricultural use; PR may rely on advisor recommendations | Court: appraiser was qualified and disinterested; PR entitled to rely on his appraisal; no cause for removal |
| Whether removal of personal representative was in estate's best interests under §30-2454 | Petitioners: argued mismanagement and failure to perform duties merits removal | Brown: acted reasonably, followed appraisal and advice, exercised broad will-granted discretion | Court: no cause to remove; denial of removal affirmed |
Key Cases Cited
- In re Estate of Nemetz, 273 Neb. 918 (discusses highest-and-best-use in probate valuation)
- In re Estate of Shell, 290 Neb. 791 (interpretation of testamentary language)
- In re Estate of Webb, 20 Neb. App. 12 (removal of PR where sale below appraised value)
- 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 to effectuate testator’s intent)
- Reeves v. Associates Financial Services Co., Inc., 197 Neb. 107 (precedent on valuation disputes)