Constance K. Klingelhoefer created a revocable trust and a limited liability company, transferred Nebraska farmland to the LLC, and then gifted a minority interest in the LLC to each of her eleven children. She transferred her personal property, including her 51.5 percent interest in the LLC, to her trust. The LLC records listed Constance as trustee as the owner of her 51.5 percent interest in the LLC. Three of Constance’s sons were actively engaged in farming and they rented the farmland owned by the LLC. Constance’s trust provided that upon her death, the trustee of the trust was to offer to sell, or vote to sell, to the three sons involved in farming all or any portion of the real estate held by the LLC. The purchase price of the property was to be fair market value as determined by an appraiser selected by a majority of Constance’s children.

Upon Constance’s death, at least eight of her children selected Bob Arnold Appraisal and Consulting, Inc. to appraise the real estate owned by the LLC. One of Constance’s sons, David Klingelhoefer, served as the successor trustee of her trust and as manager of the LLC. David brought an action seeking a declaratory judgment to permit the sale of the property owned by the LLC in accordance with the terms of Constance’s trust and the appraisal. Certain of Constance’s children argued that the LLC agreement (which would have liquidated the LLC), and not the trust, should govern the sale or the disposition of the real estate. Constance’s children also alleged that the trustee had breached his fiduciary duties to them by engaging in self-dealing with respect to the real estate owned by the LLC that was leased to the three sons.

The parties moved for summary judgment on the issue of whether Constance’s trust or the LLC agreement should govern the disposition of the farmland. The trial court held that Constance intended to hold her interest in the LLC in her trust, and that the only construction of the LLC and trust document that would permit Constance to accomplish her estate plan would be for the terms of the trust to control the disposition of the real estate and not the terms of the LLC agreement. On appeal, the Nebraska Court of Appeals affirmed the decision of the trial court, finding that the appraiser was properly selected. The court concluded that the real estate should be sold to the three sons at the appraised price. The trial court entered an order finding that there was no breach of fiduciary duty by the trustee, which was also affirmed on appeal.