Svoboda v. Larson (In re Larson)

308 Neb. 240

953 N.W.2d 535

IN RE ESTATE OF Blain LARSON, deceased.

Cindy Svoboda, Personal Representative of the Estate of Blain Larson, deceased, appellee,

v.Matthew Larson, appellant.

No. S-20-340.

Supreme Court of Nebraska.

Filed January 22, 2021

Jared J. Krejci, of Smith, Johnson, Allen, Connick & Hansen, Grand Island, for appellant.

Jeffery T. Peetz, of Endacott, Peetz & Timmer, P.C., L.L.O., for appellee.

Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Papik, J. Cindy Svoboda (Cindy), in her capacity as personal representative of the estate of Blain Larson, filed a formal petition for complete settlement of the estate. In her petition, she asked the county court to enter an order approving her final accounting and directing that she distribute assets of the estate in accordance with a proposed schedule of distribution. Blain's son, Matthew Larson, objected to the proposed schedule of distribution, and now he appeals the county court's dismissal of his objection. Because the county court has not ruled on Cindy's petition, however, the phase of the probate proceedings she initiated has not concluded, and Matthew has not appealed from a final order. Consequently, we lack jurisdiction to address Matthew's assigned errors, and we dismiss his appeal.

BACKGROUND

Blain's Will and Will Contest Proceedings.

Blain died on February 19, 2017. Cindy and Matthew were the beneficiaries under Blain's will, which nominated Cindy to serve as his personal representative. In March 2017, Cindy began informal probate proceedings in the county court and was appointed Blain's personal representative. Matthew and his sister attempted to prevent informal probate and to obtain an order that Blain died intestate. They alleged that Blain did not have sufficient mental capacity to sign the will at the time of its execution and that the will was invalid on the grounds of undue influence, fraud, and duress. The matter went to trial in the district court, and Blain's will was determined to be valid.

Cindy's Petition to Settle Estate and Matthew's Objection to Proposal for Distribution.

On February 7, 2020, Cindy filed in the county court a "Formal Petition for Complete Settlement After Informal Testate Proceeding." Cindy requested approval of previous distributions, fees and expenses she incurred as personal representative, and her final accounting. She also asked for an order directing distribution of the estate in accordance with the final accounting and a proposed schedule of distribution. Soon afterward, Cindy filed a final accounting.

On March 6, 2020, Matthew filed an objection to the proposal for distribution, citing Neb. Rev. Stat. § 30-24,104(b) (Reissue 2016) of the Nebraska Probate Code. The objection alleged that the schedule of distribution failed to properly apportion inheritance taxes. It further alleged that many of the expenses incurred by Cindy as personal representative were unnecessary and unreasonable and that estate funds should not be used to pay the attorney fees Cindy incurred in defending the will contest.

The county court conducted a hearing on Matthew's objection. At the outset of the hearing, the parties and the county court agreed that dollar amounts pertinent to the final accounting and proposed schedule of distribution were uncertain. The parties suggested that if the county court ruled on the legal issues raised in Matthew's objection, the parties could thereafter reach an agreement as to the appropriate distribution of assets. The parties then submitted evidence and argument concerning Matthew's objection.

County Court's Order Dismissing Matthew's Objection.

On April 7, 2020, the county court entered an order rejecting the arguments made in Matthew's objection. The county court determined that the attorney fees Cindy incurred as personal representative could be paid from the estate. The county court also determined that Cindy properly paid certain challenged expenses from the estate. As to inheritance taxes, the county court found that

the inheritance taxes should be paid from the estate and to the extent the residuary estate is unavailable for payment of these expenses, the specific devisees in proportion to the share owned by Cindy ... and Matthew ... should be reduced for [valid administration expenses] and inheritance tax.

Cindy's Supplemental Final Accounting.

On April 17, 2020, Cindy filed a supplemental final accounting. The document stated that Cindy "accepts opposing counsel's apportionment of administration expenses, funeral expenses, debts, taxes and claims 0.494 to Cindy ... and 0.506 to Matthew." It set forth a final distribution, with amounts to be paid to both Cindy and Matthew. Our record does not contain any order of the county court approving a final accounting or otherwise ruling on Cindy's petition for complete settlement.

Matthew filed a notice of appeal in which he stated his intention to appeal the county court's April 7, 2020, order dismissing his objection to the proposed schedule of distribution.

ASSIGNMENTS OF ERROR

Matthew assigns that the county court erred in various respects when it dismissed his objection to Cindy's proposed schedule of distribution in its April 7, 2020, order.

STANDARD OF REVIEW

A jurisdictional question which does not involve a factual dispute is determined by an appellate court as a matter of law. In re Estate of Adelung , 306 Neb. 646, 947 N.W.2d 269 (2020).

ANALYSIS

In his objection to Cindy's proposed schedule of distribution, Matthew argued that Cindy could not use estate funds to pay certain expenses. On appeal, he contends the county court's order rejecting those arguments was erroneous. But before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the appeal. In re Estate of Abbott-Ochsner , 299 Neb. 596, 910 N.W.2d 504 (2018). Here, we conclude that we do not.

Under Neb. Rev. Stat. § 25-1911 (Reissue 2016), for an appellate court to acquire jurisdiction of an appeal, there must be a final judgment or final order entered by the tribunal from which the appeal is taken. In re Interest of A.A. et al. , 307 Neb. 817, 951 N.W.2d 144 (2020). See, also, Neb. Rev. Stat. § 30-1601 (Cum. Supp. 2018). Our record shows, and the parties agree, that the county court has not entered a final judgment in this case. Thus, our jurisdiction depends on whether Matthew has appealed from a final order.

In probate proceedings, we apply the rubric of Neb. Rev. Stat. § 25-1902 (Supp. 2019) to determine whether an order is final. See In re Estate of Gsantner , 288 Neb. 222, 846 N.W.2d 646 (2014). As applied to this case, the relevant question raised by § 25-1902 is whether the order dismissing Matthew's objection was "made during a special proceeding" and "affect[ed] a substantial right." We have repeatedly said that a proceeding under the Nebraska Probate Code is a special proceeding. See, e.g., In re Estate of Gsantner, supra ; In re Estate of McKillip , 284 Neb. 367, 820 N.W.2d 868 (2012) ; In re Estate of Potthoff , 273 Neb. 828, 733 N.W.2d 860 (2007). If Matthew has appealed from an order that affects a substantial right, then, it is a final order and we have jurisdiction to review it.

A substantial right under § 25-1902 is an essential legal right.

Western Ethanol Co. v. Midwest Renewable Energy , 305 Neb. 1, 938 N.W.2d 329 (2020). A substantial right is affected if an order affects the subject matter of the litigation, such as diminishing a claim or defense that was available to an appellant before the order from which an appeal is taken. Id. Substantial rights under § 25-1902 include those legal rights that a party is entitled to enforce or defend. Western Ethanol Co., supra. A substantial right is not affected when that right can be effectively vindicated in an appeal from the final judgment. In re Estate of Potthoff, supra . As one commentator has observed, in the context of multifaceted special proceedings that are designed to administer the affairs of a person, an order that ends a discrete phase of the proceedings affects a substantial right because it finally resolves the issues raised in that phase. See John P. Lenich, What's So Special About Special Proceedings? Making Sense of Nebraska's Final Order Statute , 80 Neb. L. Rev. 239 (2001).

Probate matters are an example of such a multifaceted special proceeding. Id. Therefore, in deciding whether an order in a probate matter affects a substantial right, we have considered whether the order ended a discrete phase of the proceedings. In In re Estate of McKillip, supra , we addressed the finality of an order determining that physical partition of real estate was not possible without great prejudice to the owners and ordering the referee to sell the land at public sale. We concluded that the order was final because the distribution of real estate was a discrete phase of the probate proceedings and would finally resolve the issues in that phase of the probate estate. We observed that postponing review would not serve judicial economy because it would significantly delay distribution of the real estate, thereby delaying completion of the probate of the estate. Id. See, also, In re Estate of Potthoff, supra (order in proceedings for computation of probate estate final because it completely resolved separate issue of whether deceased's interest in property was part of probate estate and matter could not be effectively considered in appeal from final judgment).

In In re Estate of Rose , 273 Neb. 490, 730 N.W.2d 391 (2007), on the other hand, a party sought to appeal an order that did not end a discrete phase of the probate proceedings. In In re Estate of Rose , the surviving spouse of the decedent filed a petition in county court electing to take her elective share of 50 percent of the augmented estate and requesting a family allowance. After a hearing, the county court ordered the personal...