In re Estate of Craven

requirements as well as an opportunity to the parties to be
heard and present evidence. So read, the notice requirements of
§ 44-7532 are constitutionally satisfactory.
Under § 44-7532, it is the responsibility of the Department
to provide all interested parties with formal notice of the time,
place, and subject matter to be considered at the hearing, as
well as a hearing which provides an opportunity to be heard.
Contrary to Gridiron’s suggestion, it was not incumbent on
Travelers to seek out the details of an upcoming appeal which
it may have learned about informally. The prehearing confer-
ence order setting the hearing date was not served on Travelers.
The district court did not err when it determined that “Travelers
did not receive notice as required by statute.”
CONCLUSION
The Department failed to give Travelers, an interested party,
formal notice of Gridiron’s appeal as required by § 44-7532.
Accordingly, we affirm the district court’s order which vacated
the decision of the Department and remanded the matter for a
new hearing providing Travelers with notice and an opportunity
to present evidence and be heard.
A ffirmed.
in re estAte of dArleen f. C rAven, deCeAsed.
C ounty of lAnCAster , nebrAskA, AppellAnt, v.
union bAnk & trust C ompAny, trustee And
personAl representAtive of the estAte
of dArleen f. C rAven, Appellee .
794 N.W.2d 406
Filed February 11, 2011. 	No. S-10-393.
1. Decedents’ Estates: Taxation: Appeal and Error. The scope of review in an
appeal of an inheritance tax determination is review for error appearing 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.
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:46 AM CST

3. Decedents’ Estates: Taxation. Under Neb.r ev. Stat. § 77-2004 (reissue 2009),
clear market value is measured by the fair market value of the property as of the
date of the death of the grantor, less the consideration paid for the property.
4. Real Estate: Taxation: Valuation: Words and Phrases. For purposes of taxation,
the terms “fair market value” and “actual value” mean exactly the same thing.
5. ____: ____: ____: ____.r eal property sold in an arm’s-length transaction at
public auction is sold within the “ordinary course of trade” within the meaning of
Neb.r ev. Stat. § 77-112 (reissue 2009).
6. Taxation: Valuation: Words and Phrases. In determining the actual value of
property under Neb.r ev. Stat. § 77-112 (reissue 2009), a county court may
consider a professionally accepted mass appraisal method, but is not required to
adopt those appraisal values, and is free to weigh other competent evidence.
Appeal from the County Court for Lancaster County: G erAld
e. rouse, Judge. Affirmed.
Garye . Lacey, Lancaster County Attorney, and Michaele .
Thew for appellant.
Andrew M. Loudon, ofb aylor,e vnen, Curtiss, Grimit &
Witt, L.L.p., for appellee.
heAviCAn, C.J., C onnolly, G errArd, stephAn, mCC ormACk ,
and miller-lermAn, JJ.
G errArd, J.
This appeal involves the valuation of a personal residence
for inheritance tax purposes. After Darleen F. Craven’s death,
her personal representative and trustee sold Craven’s residence
at auction for $113,000 and listed that amount as the value of
the property when it petitioned for a determination of inherit-
ance tax. Lancaster County contested the valuation, and after
hearing the matter, the county court found that the actual value
of the property for inheritance tax purposes was the auction
sale price, $113,000.
The issue on appeal is whether the county court committed
reversible error when it determined that the decedent’s real
property should be valued, for inheritance tax purposes, at
the auction sale price.b ecause the county court’s judgment is
supported by competent evidence, conforms to law, and is not
arbitrary, capricious, or unreasonable, we affirm.
IN re eSTATeOFC rAveN 	123
Cite as 281 Neb. 122

bACkGrOUND
Craven died on July 17, 2008, leaving assets which included
a 	single-family 	residence 	in 	Lincoln, 	Lancaster 	County,
Nebraska. After Craven’s death, her trustee and personal rep-
resentative, Unionb ank & Trust Company (Unionb ank), sold
the residence at auction for $113,000 and listed that amount as
the value of the home when it petitioned for a determination of
inheritance tax. Lancaster County contested the $113,000 valu-
ation, and a hearing was held.
At the hearing, Unionb ank vice president and senior
trust officer Alice Skultety testified that after Craven’s death,
Unionb ank sought to sell Craven’s residence and began the
process of determining how to best market the home. Skultety
testified that she visited the residence on several occasions
and that there was an overwhelming odor of animal feces
present. Skultety said that there were feces on the carpet
and that dogs had both defecated and urinated in the house.
Skultety also noted a lack of cleanliness and a general state of
deferred maintenance. Skultety made the decision to remove
the stained carpets from the house, but upon doing so, dis-
covered that the underlying floors had absorbed animal urine
and were stained. Skultety found that the bathrooms were in
a state of disrepair, that a basement wall displayed efflores-
cence and was cracked and bowed, and that water poured into
the basement during heavy rains, soaking into the wallboards.
Skultety opined that the condition of the interior of the home
was “poor to fair.”
Skultety testified that she discussed the prospect of sell-
ing the house with the sole residual beneficiary of the estate.
Skultety stated that the beneficiary did not want to make repairs
to the property and sought to sell it in “as is” condition. After
discussing the various benefits and disadvantages of listing
or auctioning the property, the decision was made to auction
the house. Skultety explained that this decision was reached
for several reasons, including the poor condition of the home,
the large inventory of homes for sale in Lincoln, the slow real
estate market, the expense to make the home attractive enough
to list, the risk of additional home inspections that could poten-
tially uncover expensive necessary repairs, the continuing cost
124 	281N ebrASkA repOrTS

of paying taxes, and the cost of maintenance over the winter.
Skultety testified that Unionb ank hired an appraiser, who
placed a $135,000 value on the property. Skultety noted that
the $135,000 appraisal was lowered to $131,000 to reflect
other damage discovered after the appraiser’s inspection of
the property.
Unionb ank hired auctioneer Norman Ford to sell the prop-
erty. Ford testified that he had auctioned over 750 residences
in Lincoln, the majority of which were estate sales. Ford stated
that he advertised the auction in the Lincoln Journal Star news-
paper every week for 5 consecutive weeks before the auction
and advertised the auction on his company Web site. Ford
stated that he showed the property eight or nine times to pro-
spective buyers. Ford noted that the smell of urine and feces in
the house made it “difficult to stay in the house for five to ten
minutes at a time.” Ford testified to other various defects of the
property, which were all consistent with Skultety’s testimony
regarding the home’s deficiencies.
Ford stated that, in his opinion, the auction was well attended,
with several bidders actively bidding on the house. Ford noted
that the real estate market in Lincoln at the time of the auc-
tion was not strong and that he thought the $113,000 final bid
for the property was the highest possible price that could have
been obtained at the time of the sale.
The county’s witnesses included professional appraisers
Mickey Tuttle and Thomask ubert, who were asked by the
county to appraise the residence. Tuttle andk ubert testified
that because the property had been substantially improved
after the auction but before their appraisal, they were unable
to assess the condition of the property at the time of Craven’s
death, so they relied on the condition information contained in
the original $135,000 appraisal used by Unionb ank. Tuttle and
kubert stated that their appraisal was partially based on com-
parable home sales in the area and that in their opinions, the
fair market value of the property at the time of Craven’s death
was $140,000.
Tuttle further testified that auction sales of residential prop-
erties in Lincoln were not valid indicators of market value,
because sellers are not typically motivated, there is some
IN re eSTATeOFC rAveN 	125
Cite as 281 Neb. 122

degree of urgency associated with auction sales, and auctioned
properties are not adequately exposed on the open market.
kubert estimated that less than 5 percent of the residential real
property sold in Lincoln is sold at auction.k ubert stated that
because of this, it was his opinion that homes sold at auction
are not sold in the ordinary course of business.
The county also offered the testimony of appraiser Sally
Webster, who stated that she did not consider auction sales to
be valid indicators of fair market value, because auctions gen-
erally require higher earnest money deposits, lack warranties
other than those regarding title, have shorter closing periods,
and do not contain provisions for contingencies. Webster stated
that these differences effectively eliminate a substantial portion
of the pool of potential buyers.
The court made the determination, after weighing all of
the evidence, that the actual value of the Craven residence for
inheritance tax purposes was $113,000, equivalent to the price
for which the property sold at auction. The county appeals.
ASSIGNMeNTS OFerr Or
The county assigns, renumbered and restated, that (1) the
county court erred in determining that the $113,000 public
auction sales price was the property’s value for inheritance
tax purposes, and (2) the county court erred when it relied on
Neb.r ev. Stat. § 77-2018.05 (reissue 2009) to determine the
value of the real property in decedent’s estate for inheritance
tax purposes.
STANDArDOFr evIeW
[1,2] The scope of review in an appeal of an inheritance
tax determination is review for error appearing on the record.1
When reviewing a judgment for errors appearing on the record,
the inquiry is whether the decision conforms to the law, is sup-
ported by competent evidence, and is neither arbitrary, capri-
cious, nor unreasonable.2
1 In re Estate of Baer, 273 Neb. 969, 735 N.W.2d 394 (2007).
2 Id.
126 	281N ebrASkA repOrTS

ANALySIS
C leAr mArket vAlue
[3] The rate of tax assessed on the inheritance of property
by an immediate relative (in this case, Craven’s brother) is
governed by Neb.r ev. Stat. § 77-2004 (reissue 2009), which
states, in relevant part, that “the rate of tax shall be one percent
of the clear market value of the property in excess of forty
thousand dollars received.” (emphasis supplied.) Clear market
value is not defined by statute, though our law is established
that clear market value is measured by the fair market value of
the property as of the date of the death of the grantor, less the
consideration paid for the property.3 There is no evidence in
the record that Craven’s beneficiary paid consideration for the
estate which he inherited. Clear market value is thus equivalent
to fair market value in this instance.
[4] Our law is also established that, for purposes of taxation,
the terms “fair market value” and “actual value” mean exactly
the same thing.4 Actual value is defined by Neb.r ev. Stat.
§ 77-112 (reissue 2009):
Actual value of real property for purposes of taxation
means the market value of real property in the ordi-
nary course of trade. Actual value may be determined
using professionally accepted mass appraisal methods,
including, but not limited to, the (1) sales comparison
approach using the guidelines in section 77-1371, (2)
income approach, and (3) cost approach. Actual value is
the most probable price expressed in terms of money that
a property will bring if exposed for sale in the open mar-
ket, or in an arm’s length transaction, between a willing
buyer and willing seller, both of whom are knowledge-
able concerning all the uses to which the real property
is adapted and for which the real property is capable of
being used.
[5] The county argues that real property sold at auction is
not sold in the “ordinary course of trade” within the meaning
3 See County of Keith v. Triska, 168 Neb. 1, 95 N.W.2d 350 (1959).
4 See Xerox Corp. v. Karnes, 217 Neb. 728, 350 N.W.2d 566 (1984).
IN re eSTATeOFC rAveN 	127
Cite as 281 Neb. 122

of § 77-112, so the county court erred when it determined that
the auction sale price was the property’s value for inheritance
tax purposes. We disagree.r eal property, particularly in estate
proceedings, is routinely sold at auction. Though real estate
appraisers may choose to disregard auction sales for valuation
purposes, we have long recognized that the price for which real
estate sells at public auction is admissible as evidence of the
value of that property.5 And though sale price is not necessar-
ily synonymous with market value, the purchase price of real
property may be taken into consideration in determining the
actual value of the property for taxation purposes.6
Therefore, the auction sale price was competent evidence of
the actual value of the property. Though the county presented
expert opinion testimony that the value of the property was
higher than the auction sale price, the county court weighed
the evidence and found the auction sale price evidence more
compelling as an indicator of this particular property’s actual
value. We addressed a similar issue in Lincoln Joint Stock Land
Bank v. Fuller, noting:
While opinion evidence is almost always necessary in
fixing the market value of land, it is not always control-
ling. The trial court apparently gave it little weight in the
case at bar when the results of three public auctions of
the land were presented to it. In this we believe the trial
court was justified. Opinion evidence must give way to
facts, and, after three sales, none of which brought over
$12,000, it would seem that the trial court was amply
justified in finding that the market value did not exceed
that amount.7
[6] Here, too, the court found that the auction sale price was
the better measure of the actual value of the property than was
the appraisal evidence. The county argues that the appraisals
5 See Travelers Indemnity Co. v. Heim, 218 Neb. 326, 352 N.W.2d 921
(1984), citing Lincoln Joint Stock Land Bank v. Fuller, 132 Neb. 677, 273
N.W. 14 (1937).
6 See Collier v. County of Logan, 169 Neb. 1, 97 N.W.2d 879 (1959).
7 Fuller, supra note 5, 132 Neb. at 682, 273 N.W. at 17.
128 	281N ebrASkA repOrTS

were better indicators of the actual value of the property
and notes that those appraisals utilized the methods expressly
approved by § 77-112. However, though the county court may
consider a professionally accepted mass appraisal method in
determining the actual value of property under § 77-112, it is
not required to adopt those values.8 The court is free to weigh
other competent evidence, such as the auction sale price, and
determine the actual value of the property.
The appraisals cited by the county as evidence of actual
value were estimates of the fair market value of the property,
based upon sales of comparable properties and other factors.
However, evidence in the record reflects that there were no
truly comparable properties in the area because of the unique
deficiencies of the home. Testimony indicated that those defi-
ciencies made the property difficult to market and reduced its
value. Testimony also indicated that auctioning the property
was a reasonable alternative to listing with a real estate agent
and that estate auctions were common practice in the industry.
The record further reveals that the auction was conducted at
arm’s length, was well advertised, and was open to the pub-
lic, and there was testimony that the auction sale price was
the highest possible price that could have been obtained for
the property.
There are no yardsticks by which actual value can be deter-
mined with complete accuracy.9 Here, there is ample evidence
in the record to support the county court’s determination that
the actual value of the property was equivalent to the auction
sale price in this instance. That will not always be the case;
these determinations are necessarily fact specific.b ut because
competent evidence supports the county court’s determination
that the actual value of the property was $113,000, and because
no error appears in the record, we will not disturb the court’s
factual determination on appeal.
8 See JCB Enters. v. Nebraska Liq. Cont. Comm., 275 Neb. 797, 749 N.W.2d
873 (2008) (when “may” is used in statute, permissive or discretionary
action is presumed).
9 S.S. Kresge Co. v. Jensen, 164 Neb. 833, 83 N.W.2d 569 (1957).
IN re eSTATeOFC rAveN 	129
Cite as 281 Neb. 122

C ounty C ourt’s reliAnCe on
“neb. rev. stAt. § 77-2018.5”
The county court cited a statute which does not exist, “Neb.
rev. Stat. § 77-2018.5,” in support of its factual determination
that the value of Craven’s residence for inheritance taxation
purposes was the auction sale price of the home. The county
interprets the court’s reference to “§ 77-2018.5” as one to
§ 77-2018.05 and argues that such reliance was misplaced.
However, the record does not establish which statute the court
meant when it cited § 77-2018.5, so we do not speculate as to
whether the court intended to cite § 77-2018.05.r egardless,
the county court’s erroneous citation to a nonexistent statute
was harmless error. The county court has jurisdiction, pursuant
to chapter 77, article 20, to make estate valuation determina-
tions for purposes of inheritance taxation. And as previously
discussed, the court did not err when it determined that the
value of this particular property, for inheritance taxation pur-
poses, was $113,000.
CONCLUSION
For the foregoing reasons, we affirm the judgment of the
county court.
A ffirmed.
WriGht, J., not participating.
stAte of nebrAskA, Appellee , v.
roCky J. shArp, AppellAnt.
795 N.W.2d 638
Filed February 11, 2011. 	No. S-10-622.
1. Motions to Suppress: Investigative Stops: Warrantless Searches: Probable
Cause: Appeal and Error. In reviewing a trial court’s ruling on a motion to sup-
press based on the Fourth Amendment, an appellate court will uphold its findings
of fact unless they are clearly erroneous.b ut an appellate court reviews de novo
the trial court’s ultimate determinations of reasonable suspicion to conduct an
investigatory stop and probable cause to perform a warrantless search.
Appeal from the District Court for Douglas County: pAtriCiA
A. lAmberty, Judge. Affirmed.
130 	281N ebrASkA repOrTS