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 farm “under commercially reasonable terms and conditions as he and [the personal representative] may agree.”
Brown hired a certified appraiser who valued the property for agricultural use at $785,859 and negotiated a sale to Talcott for $900,000; Talcott accepted.
Devisees (petitioners) hired their own appraiser who valued the land at $1,457,000 based on a highest-and-best-use analysis (residential development with interim agricultural use) and sought to restrain Brown from closing and to remove her as personal representative.
The county court temporarily restrained the sale, held hearings on the competing appraisals, found Brown’s appraiser more credible, denied removal and related petitions, and the devisees appealed.
The Nebraska Supreme Court reviewed whether “commercially reasonable” as used in the will required valuing the land at its highest-and-best use and whether Brown should be removed for hiring an appraiser who did not value the property for development.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether “commercially reasonable terms” in the will requires valuing land at highest-and-best-use (development)	Will requires sale at a commercially reasonable price, which equals highest-and-best-use (residential/development)	Phrase refers to negotiation terms between tenant and PR; intent supports agricultural/tenant continuity, not necessarily development value	Court: Phrase not ambiguous; in context it does not mandate highest-and-best-use valuation; no error in county court finding sale commercially reasonable
Whether Brown should be removed for hiring an appraiser who did not value development potential	Brown’s appraiser admitted not qualified to appraise development land; that taints appraisal and justifies removal for mismanagement	Brown had broad discretionary authority in will, reasonably relied on a qualified, disinterested appraiser and counsel; statutes permit acting on advisers’ recommendations	Court: Brown acted within discretion, employed a qualified/disinterested appraiser, and was entitled to rely on recommendations; no cause for removal
Whether the $900,000 sale unreasonably jeopardized estate compared to petitioners’ appraisal	Petitioners’ appraisal shows price far below market (over $550k less), so sale jeopardizes beneficiaries’ interests	County court weighed competing appraisals and credibility; Brown’s appraisal supported sale as commercially reasonable	Court: County court’s factual findings (credibility, value) not clearly erroneous; affirmed
Standard for determining commercial reasonableness and evidentiary weight	Petitioners: court should adopt highest-and-best-use as measure and credit their appraisal	Brown: commercial reasonableness is fact question; trial court decides credibility and weight of appraisals	Court: Issue is one of law (interpretation) and fact (commercial reasonableness); court of appeals defers to county court’s factual findings and affirms

Key Cases Cited

In re Estate of Nemetz, 273 Neb. 918 (applying highest-and-best-use in certain probate valuation contexts)
In re Estate of Shell, 290 Neb. 791 (discussing interpretation of testamentary language and personal representative duties)
In re Estate of Webb, 20 Neb. App. 12 (addressing removal of personal representative over underpriced sale)
Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (holding commercial reasonableness under UCC is a fact question)
Eicher v. Mid America Fin. Invest. Corp., 275 Neb. 462 (bench-trial credibility and appellate review principles)
In re Estate of Ritter, 227 Neb. 641 (cardinal rule to effect testator intent in will construction)
Reeves v. Associates Financial Services Co., Inc., 197 Neb. 107 (precedent on pricing disputes cited by parties)