In re Estate v. Failla

it clearly contemplates that taxable cleaning and maintenance
of tangible personal property be incidental and related to the
cleaning and maintenance of the building and fixtures, which
it was in this case. Therefore, we find that Reg. 1-098.03A did
not exceed the Department’s rulemaking authority and that the
taxpayers are not entitled to a refund. Because we have rein-
stated the decision of the Department, we do not need to reach
the taxpayers’ cross-appeal.
CONCLUSION
We find that the Department did not go beyond its authority
when it passed Reg. 1-098.03A and that it did not err when
it denied the requests for a refund. Therefore, we find that
the district court erred when it invalidated Reg. 1-098.03A,
and we remand the cause for proceedings consistent with
this opinion.
R eveRsed and Remanded.
I n Re estate of samuel Joseph faIlla , sR., deceased.
samuel J. faIlla , JR., and lIsa a. faIlla , husband
and wIfe , and teResa a. KResaK and G ene KResaK,
wIfe and husband, appellees , v. dIana l. faIlla ,
IndIvIdually and as peRsonal R epResentatIve
of the estate of samuel Joseph faIlla , sR.,
appellant, and bRadley schweeR,
tRustee , et al ., appellees.
773 N.W.2d 793
Filed October 23, 2009. 	No. S-09-170.
1. Decedents’ Estates: Appeal and Error. Appeals of matters arising under the
Nebraska Probate Code, Neb. Rev. Stat. §§ 30-2201 through 30-2902 (Reissue
2008), are reviewed for error on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors appear-
ing on the record, the inquiry is whether the decision conforms to the law,
is supported by competent evidence, and is neither arbitrary, capricious,
nor unreasonable.
Appeal from the County Court for Cass County: John f.
steInheIdeR, Judge. Reversed and remanded with directions.
770 	278 NeBRASkA RePORTS
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:50 AM CST

Steven J. Riekes and David P. Wilson, of Marks, Clare &
Richards, L.L.C., for appellant.
William R. Reinsch, of Reinsch, Slattery & Bear, P.C.,
L.L.O., for appellees Samuel J. Failla, Jr., 	Lisa A. Failla,
Teresa A. kresak, and Gene kresak.
heavIcan, 	c.J., 	wRIGht, 	connolly, 	G eRRaRd, 	stephan,
mccoRmacK, and mIlleR-leRman, JJ.
wRIGht, J.
NATURe OF CASe
Diana L. Failla, as personal representative of the estate of
her husband, Samuel Joseph Failla, Sr. (the decedent), sought
an order allowing her to sell the real property of the estate to
pay administrative costs. The decedent’s two children, Teresa
A. kresak and Samuel J. Failla, Jr., as well as their spouses
(collectively the children), sought partition of the property. The
county court ordered partition and directed that the real estate
be sold and divided among the heirs. It dismissed Diana’s peti-
tion for an order to sell the real estate. Diana appeals.
SCOPe OF ReVIeW
[1,2] Appeals of matters arising under the Nebraska Probate
Code, Neb. Rev. Stat. §§ 30-2201 through 30-2902 (Reissue
2008), are reviewed for error on the record. In re Estate of
Dueck, 274 Neb. 89, 736 N.W.2d 720 (2007). When review-
ing a judgment for errors appearing on the record, the inquiry
is whether the decision conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
unreasonable. Id.
FACTS
The decedent died intestate on November 30, 2007. His heirs
included Diana and the two children. Diana was appointed per-
sonal representative of the estate, and an order for supervised
administration was entered.
The decedent owned two tracts of land in Cass County,
Nebraska. The tract alleged to be subject to partition is
described as “Lots 1 and 2 in the NW 1⁄4 of the Se 1⁄4 of Section
13, Township 12N, Range 9 east, of the 6th P.M., Cass County,
IN Re eSTATe OF FAILLA 	771
Cite as 278 Neb. 770

Nebraska” (tract one). Tract one contained 15.15 acres and
included a house. An appraiser set the fair market value of the
property at the time of the decedent’s death as $190,000. The
house was 89 years old and included 1,442 square feet. There
were two outbuildings on the property. The first was described
as “newer” with a “dirt floor.” The second was described as
“older” and in “fair condition,” but no value was given to it. In
November 2008, a real estate agent appraised the property and
set the value as $180,000.
The children sought partition as to tract one pursuant to
§ 30-24,109. They asked that if the tract could not be equitably
divided, it be sold and the proceeds applied to payment of any
liens and encumbrances. Any balance would be divided among
the heirs according to their proportionate interests.
An amended inventory showed the total value of the estate
to be $608,776.03. The estate included tract one, valued at
$190,000; jointly owned property valued at $129,755.06; other
miscellaneous property valued at $15,386.27; and annuities
valued at $273,634.70.
Diana petitioned the county court for authority to sell tract
one and moved to dismiss the partition action. She alleged that
she had incurred administration expenses, attorney fees, and
costs in the amount of $35,096.65, and she estimated that the
total administration expenses, attorney fees, and costs by the
time the estate was closed would be not less than $42,000. She
claimed that in order to generate funds to pay the estate’s obli-
gations, it would be necessary to sell tract one. She requested
that distribution of the remaining funds be made to her (a one-
half interest as widow) and to the two children (each entitled
to a one-fourth interest). She had consulted a real estate agent
who recommended that tract one be listed for sale at a price
between $165,000 and $180,000.
Diana alleged that because she had authority as personal rep-
resentative to sell tract one, the complaint for partition should
be considered moot and should be dismissed. She sought an
order from the county court allowing her to sell tract one in a
commercially reasonable manner.
The parties stipulated that tract one could not be partitioned
in kind without prejudice to the owners and could not be
772 	278 NeBRASkA RePORTS

conveniently allotted to any one party and that therefore, tract
one should be sold.
The county court directed Diana, as personal representative,
to sell tract one and to perform the duties and responsibilities
otherwise incumbent upon a referee. The order implied that the
property should be sold at a public, judicially ordered sale. The
court divided the proceeds of the sale as follows: Diana, one-
half; Teresa, one-fourth; and Samuel, one-fourth. It sustained
the children’s motion for summary judgment, finding there was
no material issue of fact or law regarding the ownership of
tract one. It dismissed Diana’s petition for authority to sell the
property and overruled her motion for dismissal of the parti-
tion action.
ASSIGNMeNTS OF eRROR
Diana assigns that the county court erred in granting sum-
mary judgment on the complaint seeking partition of real prop-
erty and dismissing her petition for authority to sell the real
property. She also claims that her right of sale as the personal
representative is superior to the heirs’ right of partition.
ANALYSIS
The sole issue is the manner in which the real property
should be sold. The parties agree the property should be sold
and the interests divided accordingly. Diana claims a private
sale would bring the best price. The children want the property
sold at a public sale. The county court’s order implied that the
property should be sold through a public sale. We conclude the
order is not supported by competent evidence.
Diana presented testimony from Richard A. Mikuls, a real
estate agent with more than 20 years of experience. He visited
the property after reviewing an appraisal. He testified that the
best way to sell the property was through a commercial real
estate agency. Mikuls testified that he had experience with real
estate auctions. He stated it is an exception for a property to be
sold at auction for a price greater than the list price.
Mikuls said tract one should be listed for between $140,000
and $180,000. It would be reasonable to expect the property to
sell in 4 to 6 months. Mikuls stated the house would need to be
sold “as is” because it needs a new roof, the basement walls are
IN Re eSTATe OF FAILLA 	773
Cite as 278 Neb. 770

bowed (indicating a foundation problem), its windows need to
be replaced, and the air conditioning works only intermittently.
The property includes two outbuildings, but one had no value
due to its poor condition.
The residence was originally a two-story farmhouse but had
been converted to a ranch-style home with only one bedroom
and one bathroom. Mikuls stated that the acreage would appeal
to a buyer who wanted a residential lot in the country as a
single-family residence with a large outbuilding for storage or a
hobby. However, the existence of only one bedroom would pre-
vent many buyers from looking at the property, and the bowed
walls in the basement would scare some potential buyers.
Both parties claim that In re Estate of Kentopp, 206 Neb.
776, 295 N.W.2d 275 (1980), is supportive of their respective
positions. In In re Estate of Kentopp, the will devised certain
farmland to eight parties: three of the decedent’s children and
five grandchildren who shared their deceased father’s portion.
One of the decedent’s grandsons filed a partition action in
district court. In the county court, the personal representative
claimed the land could not be partitioned without prejudice to
the owners nor conveniently allotted to one party and asked
the county court to order him to sell the real estate. The issue
was which court had jurisdiction: the county court, which was
acting as the probate tribunal, or the district court, where the
partition action was filed.
This court held:
The partition and sale of real estate of a decedent is
clearly a matter relating to a decedent’s estate and juris-
diction to partition and sell real estate of a decedent is
[acquired] by the county court at the time jurisdiction
is acquired for all other “matters relating to decedents’
estates.” . . . [T]he county court clearly has exclusive
original jurisdiction to authorize the personal representa-
tive . . . to sell real estate for the purpose of paying . . .
costs of administration.
Id. at 786, 295 N.W.2d at 280.
Thus, under § 30-24,109, if a county court finds that the
property is subject to partition, it may direct the personal rep-
resentative to sell the property. The personal representative is
774 	278 NeBRASkA RePORTS

to perform the duties and responsibilities otherwise incumbent
upon a referee. In re Estate of Kentopp, supra.
In the case at bar, the question is what method should be
attempted in order to sell the real estate. Diana, as personal
representative, offered evidence that a private sale of tract one
would result in a greater return to the estate. The children pre-
sented no evidence on the issue. Under § 30-2476(6) and (23),
the personal representative may dispose of an asset at private
sale and sell real property unless restricted by order of the court.
The personal representative must act reasonably for the benefit
of the interested persons. Here, the county court restricted
Diana, as personal representative, from selling the property by
private sale when it dismissed Diana’s petition for authority to
sell the property. It is this restriction with which we take issue.
The order implied that Diana must sell the property at a public
sale. However, the record does not support a finding that such a
sale would be the most economically efficient method.
The evidence regarding the method of sale was that proper-
ties sold at auction are usually sold for less than the list price.
There was evidence that the best way to sell this property was
through a commercial real estate agency. Mikuls opined why it
would be better to list the property than hold a public sale.
Appeals of matters arising under the Nebraska Probate Code
are reviewed for error on the record. In re Estate of Dueck, 274
Neb. 89, 736 N.W.2d 720 (2007). When reviewing a judgment
for errors appearing on the record, the inquiry is whether the
decision conforms to the law, is supported by competent evi-
dence, and is neither arbitrary, capricious, nor unreasonable.
Id. The county court correctly determined that the property
should be sold and the interests divided accordingly. However,
its order dismissing Diana’s petition and directing a public sale
was not supported by competent evidence. The court’s order is
therefore reversed, and the cause is remanded with directions
to enter an order allowing Diana to proceed with an attempt to
sell the real estate in the manner described herein.
CONCLUSION
Under the circumstances of this case, Diana’s function, as
personal representative, is to perform the duties incumbent
IN Re eSTATe OF FAILLA 	775
Cite as 278 Neb. 770

upon a referee and to sell the property in the most commer-
cially reasonable manner possible. The personal representative
should attempt to sell the property in the manner which will
bring the best price for the property. In this instance, the evi-
dence supported Diana’s contention that the property should be
listed with a real estate agent.
We conclude that this procedure would be consistent with
our direction that the Nebraska Probate Code should be liber-
ally construed and applied in accordance with the underlying
purpose of the code to promote a speedy and efficient system
for liquidating the estate of the decedent and making distri-
bution to his successors. See In re Estate of Kentopp, 206
Neb. 776, 295 N.W.2d 275 (1980). The evidence supports the
conclusion that Diana should first attempt to sell the property
by listing it at its appraised value. The county court is given
discretion to determine how long the listing should continue. If
this method of sale does not prove satisfactory, the court should
direct that the property be sold at a public sale.
We therefore reverse the judgment of the county court,
which dismissed Diana’s request for an order to sell the real
estate, and remand the cause with directions.
R eveRsed and Remanded wIth dIRectIons.
776 	278 NeBRASkA RePORTS