CRAIG E. NIEHAUS,	)
	)
Complainant,	)
	)
v.	)		Appeal Number  00-10066
	)
MAURICE M. GOGARTY, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

HOLDING

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax year 2000 $292,950, assessed value of $55,660.

Complainant appeared pro se.

Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.

Case heard and decided by Chief Hearing Officer, W. B. Tichenor.

ISSUES

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2000.

SUMMARY

Complainant appeals the decision of the St. Louis County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $292,950 (assessed value of $55,660, as residential property). Complainant proposed a value of $239,000 (assessed value of $45,410). A hearing was conducted on March 6, 2001, at the St. Louis County Government Center, Clayton, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant's Evidence

Complainant testified in his own behalf and presented a series of calculations which formed the basis for his opinion of value. Complainant's calculations were presented on poster board, however, a copy of his notes from which his poster board displays were drafted were filed with the Hearing Officer at the close of Complainant's testimony. Said notes are identified for the record as Exhibit A.

Complainant's case is based on the following rationale and calculations.

The subject property had been valued for tax year 1999 by the Assessor at $212,000, $145,315 for the subject dwelling, $66,684 for the land. Complainant calculated the value of the house to be $63.76 per square foot of area (2,279 square feet). During 1999, Complainant (1) converted the garage into a 340 square foot family room; (2) replaced the 20 x 17 foot garage with a 22 x 212 foot garage (detached); (3) added a furnace & air conditioner for family room to heat kitchen area; (4) split the existing bedroom into a bedroom and a bath; (5) added closets; (6) replaced 5 windows in kitchen and bedroom; (7) extended the driveway 10 feet and (8) added to the patio. The total added living area amounted to 340 square feet.

The total square footage of the house after the improvements was 2,619. The Assessor valued the subject property for 2000 at $292,947 ($226,263 for improvements - house, garage, patio, etc., and $66,684 for land). Complainant argued that the 55.7% increase in the value of the improvements was excessive. He further argued that his house was the only one on the subject street that had the improvement value raised either on existing or new square footage. He asserted that the average increase on homes in the Webster Groves school district was 3.3% in value.

Complainant's opinion of value was based on his position that the valuation which the assessor had made for tax year 1999 of $212,000 should only be increased by the per square foot value for the improvement taken times the new square footage, plus $5,000 for the new garage.

The remodeled garage added 340 square feet of living area. Complainant proposed that the added value of this would be $21,678 (340 x $63.76 = $21,678). Therefore, adding $21,678 for the remodeling and $5,000 for the new garage to the 1999 assessor's value would produce a value of $238,678, which Complainant rounded to $239,000.

Respondent's  Evidence

Respondent placed into evidence the testimony of Ms. Kathy A. Pusateri, Missouri State Certified Residential Real Estate Appraiser for St. Louis County. The appraiser testified as to her appraisal of the subject property. The Appraisal Report, Exhibit 1, of Ms. Pusateri was received into evidence. Ms. Pusateri arrived at an opinion of value for the subject property of $308,000 based upon a sales comparison approach to value. In performing her sales comparison analysis, the appraiser relied upon the sales of properties which she deemed to be comparable to the subject property. The appraisal and opinion of value were not offered by Respondent to advocate an increase in value above that determined by the Assessor ($292,950), but were offered only as evidence to support the valuation determined by the Assessor and sustained by the Board of Equalization.

FINDINGS OF FACT

1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis City Merchants' and Manufacturers' Tax Equalization Board.

2. The subject property is located at 82 Frederick Lane, Glendale, Missouri. The property is identified by locator number 22L420937. The property consists of a .32 of an acre site. It is improved by a one-story, brick, single-family structure of average quality construction. The house was built in 1940. The residence has a total of nine rooms, which includes four bedrooms, three full baths, and contains 2,577 square feet of living area. There is a partial basement and a detached two-car garage. Exhibit 1, p. 5.

3. There was new construction and improvement from January 1, 1999, to January 1, 2000. See, Complainant's Evidence, supra.

4. An appraisal, by a financial institution, had been done on the subject property prior to the remodeling which was done in 1999. The appraisal came in at approximately $300,000. Testimony of Complainant.

5. Complainant's methodology for valuation was not a recognized approach to determining value for ad valorem tax purposes, nor was it based on recognized market data to establish the fair market value of the subject property. Complainant's evidence was not persuasive to establish the true value in money as of January 1, 2000, to be $239,000, as proposed.

6. The sale properties utilized by Respondent's appraiser were comparable for purposes of conducting a sales comparison approach to arrive at value. The properties were located within one-eighth of a mile of the subject on the same street as the subject. The comparables were described as follows:

Comparable 1 (76 Frederick Lane) sold in October, 1997, for $300,000. This property consists of a .34 of an acre lot improved by a one-story, brick residence, with a partially finished attic, built in 1947, having 2,484 square feet of living area over a full basement, with 315 square feet of recreation area. The house is of average quality construction. The residence contains a total of six rooms with three bedrooms and two and a half baths. There is an attached two-car garage. Exhibit 1, p. 6.

Comparable 2 (79 Frederick Lane) sold in June, 1998, for $237,500. This property consists of a .31 of an acre lot improved by a one-story brick residence, built in 1950, having 1,970 square feet of living area. The house is of average quality construction. The residence contains a total of seven rooms with three bedrooms and two full baths. There is no basement. There is an attached two-car garage. Exhibit 1, p. 6.

Comparable 3 (91 Frederick Lane) sold in October, 1997, for $230,000. This property consists of a .36 of an acre lot improved by a one-story brick residence, built in 1953, having 1,879 square feet of living area over a partial basement. The residence contains a total of six rooms with three bedrooms and two and a half baths. There is an attached two-car garage. Exhibit 1, p. 6.

Comparable 4 (97 Frederick Lane) sold in July, 1999, for $292,000. This property consists of a .40 of an acre lot improved by a one-story brick and frame residence, built in 1940, having 2,161 square feet of living area over a partial basement. The residence contains a total of eight rooms with four bedrooms, two and a half baths. There is an attached two-car garage. Exhibit 1, p. 6.

The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. The net adjustments for Comparable 1 amounted to +$700 or less than 1% of the sales price. The net adjustments for Comparable 2 amounted to +$44,700 or 18.8% of the sales price. The net adjustments for Comparable 3 amounted to +$30,100 or 13% of the sales price. The net adjustments for Comparable 4 amounted to +$16,500 or 5.6% of the sales price.

The adjusted sales prices for the comparables calculated to $300,700, $282,200, $260,100 and $308,500, respectively. The appraiser concluded on a $308,000 value which calculated to a value per square foot of $119.52 compared with the sales prices per square foot of living area for the comparables of $120.77, $120.56, $122.41 and $135.12.

7. Respondent's evidence met the standard of clear, convincing and cogent to sustain the original assessment by the Assessor. Adjustments made by Respondent's appraiser were appropriate and accounted for the relevant differences between the comparables and the subject.

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.

Board of Equalization Presumption

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958). There is no presumption that the assessor's valuation is correct. Section 138.431.3, RSMo.

Standard for Valuation

Section 137.115, RSMo 1994, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children's Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). It is the fair market value of the subject property on the valuation date. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).

Valuation in Even Numbered Year

The assessor shall annually assess all real property in the following manner: new assessed values shall be determined as of January first of each odd-numbered year and shall be entered in the assessor's books; those same assessed values shall apply in the following even-numbered year, except for new construction and property improvements which shall be valued as though they had been completed as of January first of the preceding odd-numbered year. Section 137.115.1, RSMo.

Respondent's Burden of Proof

The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program. There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program. There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $292,950, appraised value, Respondent's evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.

The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:

(1) The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and

(2) The purchase prices from sales of at least three comparable properties and the address or location thereof. As used in this paragraph, the word comparable means that:

(a) Such sale was closed at a date relevant to the property valuation; and

(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used. Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.

Section 137.115.1(1) & (2).

Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved. It does not mean that there may not be contrary evidence. Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974). The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt. 30 AmJur2d. 345-346, Evidence section 1167. "For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder's mind is left with an abiding conviction that the evidence is true." Matter of O'Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).

Complainant's Burden of Proof

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 1999. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

Owner's Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner's opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).

Methods of Valuation

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987) and State ex rel. State Highway Comm'n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Respondent's Evidence Persuasive

Respondent presented clear and convincing evidence to support the original valuation of the Assessor, the value which the Board of Equalization had determined was the fair market value of the subject property. Respondent's evidence was particularly persuasive and convincing in light of the fact that all four sales had occurred within a range of 7 to 13 months of the valuation date of January 1, 1999. Furthermore, each of the sales were in the closest proximity to the subject that an appraiser could hope for. The location of the four sales, effectively surrounded in the subject with sales on either side of the subject.

Respondent is charged under the provisions of Section 137.115.1, RSMo, of valuing the subject property for tax year 2000 as if the improvements which were made during 1999 had been completed in 1999 and were in place on January 1, 1999. The market data in this appeal establishes that homes on the subject street were selling in a per square foot living area value range from $120 to $135, with an average of approximately $125. The appraiser's valuation came in just under the bottom of this range, after adjustments for differences to the comparables.

The value determined by the Assessor of $292,950 for the value of the subject property for January 1, 2000, is well supported.

Complainant's Valuation Not Persuasive

Complainant's proposed value of $239,000 would calculate to approximately $93 per square foot of living area value. This cannot be supported by the market data in this appeal. It is specifically rebutted by Respondent's evidence. In point of fact, Complainant presented no evidence from the market to establish value. Complainant did admit that an appraisal from an independent source had been performed before the property was remodeled and improved. This appraisal resulted in an indication of value of approximately $300,000. This further rebuts and contradicts Complainants approach to valuing the subject.

Complainant's methodology was to simply take the improvement per square foot value times the new addition and add a value for the garage, apparently based on what it cost to construct the garage. This is not a recognized methodology for valuing property. Complainant's calculations have no basis in fact in any market data. The concluded value by Complainant runs contrary to the independent appraisal performed by the lending institution prior to the remodeling.

Complainant is essentially making an argument for a comparative assessment value. That is, Complainant asserts that since other properties on his street did not receive an increase in value for 2000 that his property should not be increased, except to account for a room conversion and garage addition. However, a comparable assessment approach to value is not recognized under Missouri statute, case law or appraisal practice. The evidence in this appeal clearly demonstrates that such an approach would not result in market value (true value in money) for the subject property. Since the owner's opinion of value is based on an erroneous and non-recognized methodology (improper elements and foundation) it has no probative value for purposes of determining the value of the property.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax year 2000 is set at $55,660.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 1994.

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED April 4, 2001.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer