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 buy the farm “under commercially reasonable terms and conditions as he and [personal representative] may agree.”
- At death the land was used and zoned for agriculture; Brown obtained an appraisal valuing it at $785,859 (agricultural use) and negotiated a sale to Talcott for $900,000.
- Devisees (petitioners: Holubar, Paul Etmund, Dale Etmund, Sr., and Geistlinger) procured a competing appraisal valuing the property at $1,457,000 based on highest-and-best-use (residential development with interim agricultural use) and sought to restrain closing and to remove Brown under Neb. Rev. Stat. § 30-2454.
- The county court temporarily restrained closing to allow investigation, then denied removal after weighing the competing appraisals and crediting Brown’s appraiser; it found Brown acted within her discretion and sold on commercially reasonable terms.
- Petitioners appealed, arguing the will required valuation at highest and best use and that Brown’s appraiser was unqualified for development valuation; the Nebraska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether “commercially reasonable terms” in the will requires valuation at highest-and-best-use (development) | The will requires a commercially reasonable price, which for land means valuing it at its highest and best use (residential development) | The will’s language (first offer to tenant; broad discretion to PR) shows commercially reasonable refers to marketplace negotiations with the tenant, not mandating highest-and-best-use valuation | Court held phrase unambiguous in context; did not require highest-and-best-use valuation and affirmed sale as commercially reasonable |
| Whether Brown should be removed for mismanagement or failing duties by relying on her appraiser | Brown’s appraisal produced a price far below petitioners’ development-based appraisal, so her conduct jeopardized estate value and warrants removal | Brown reasonably relied on a qualified, disinterested general certified appraiser and an attorney; statutes allow reliance on advisors and discretion in administration | Court held no cause for removal—Brown acted within statutory discretion and relied on a qualified appraiser; county court credibility finding not clearly erroneous |
| Whether Brown’s appraiser was unqualified because he disclaimed competence to value development potential | Appellant argued the disclaimer meant the appraisal was limited/inadequate for determining commercially reasonable sale price | Appellee argued the property was agricultural/zoned agricultural, and the appraiser was properly qualified to value it for agricultural use; PR may rely on such an appraiser | Court held appraiser was qualified and disinterested for agricultural valuation; PR entitled to act on his recommendation |
| Standard of review and whether county court erred in weighing evidence/credibility | Petitioners urged reversal based on alleged valuation error and misapplication of will terms | Brown argued deference to county court’s factual findings and credibility determinations | Court applied de novo review to legal interpretation and clear-error review to facts, finding no clear error and that decision conformed to law |
Key Cases Cited
- In re Estate of Nemetz, 273 Neb. 918 (2007) (discusses valuation at highest and best use in probate contexts)
- In re Estate of Shell, 290 Neb. 791 (2015) (probate-law principles on fiduciary duties and will interpretation)
- In re Estate of Webb, 20 Neb. App. 12 (2012) (removal of personal representative where sale below appraised value considered)
- Chadron Energy Corp. v. First Nat. Bank, 236 Neb. 173 (1990) (commercial reasonableness under UCC is a question of fact)
- In re Estate of Ritter, 227 Neb. 641 (1988) (cardinal rule: give effect to testator’s intent when construing a will)
- Eicher v. Mid America Fin. Invest. Corp., 275 Neb. 462 (2008) (appellate review respects trial court credibility determinations)