KAREN JEAN PECORA,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 01-61000
	)
GEORGE FRINK, ASSESSOR,	)
HOWARD COUNTY, MISSOURI,	)
	)
Respondent.	)

HOLDING

Decision of the Howard County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2001 and 2002 set at $134,443, assessed value of $25,544.

Complainant appeared pro se.

Respondent appeared in person and by Counsel, Mason Gebhardt, Prosecuting Attorney for Howard County.

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, 2001.

SUMMARY

Complainant appeals the decision of the Howard County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $135,443 (assessed value of $25,544, as residential and agricultural property). Complainant proposed a value of $94,500 in her Complaint for Review of Assessment. A hearing was conducted on December 6, 2001, at the Howard county Courthouse, Fayette, 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 her own behalf. She also offered into evidence Exhibit A - a statement giving the basis for her appeal, with a worksheet, setting forth the calculations and assumptions relied upon by Complainant to establish value. Exhibit A was received into evidence. Complainant arrived at an opinion of value of $81,000 based upon reducing the value determined by a state certified appraiser ($125,000) by one-third and then making an additional deduction of approximately $2,333, apparently based upon her calculation of some depreciation percentage of three properties she deemed to be comparable to her property.

Respondent's Evidence

Respondent testified in his own behalf and offered into evidence his appraisal report (Exhibit 1), which was received into evidence. Respondent's testimony and Exhibit 1 were offered to support the original valuation of $134,443.

FINDINGS OF FACT

1.     Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Howard County Board of Equalization.

2. The subject property is located at 112 Stagecoach Road, New Franklin, Missouri. The property is identified by locator/parcel number 17929203.01, and account number 14186.

3. There was no evidence of new construction and improvement from January 1, 2001.

4.     Complainant stipulated that the fair market value of the subject property as of January 1, 2001, based upon an appraisal which had been prepared for her by a state certified appraiser, was at least $125,000.

5. Complainant's evidence was not substantial and persuasive to rebut the procedural presumption of correct assessment by the Board of Equalization and establish the true value in money as of January 1, 2001, to be $81,000, as she proposed.

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).

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of a witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of owners or experts who testify on the issue of reasonable value, but may believe all or none of the testimony and accept it in part or reject it in part. St. Louis County v. Boatmen's Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

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, 2001. 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).

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of the subject property on January 1, 2001. Koplar v. State Tax Commission, 321 S.W.2d 686, 690 (Mo. 1959); and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction. Koplar, supra, at 695.

Complainant must first establish the market value of the subject property in order to determine the percentage of true value at which it is being assessed. Next, she must establish the true value of the other properties generally which she claims are assessed at a lower percentage of true value. Evidence of value and assessments of a few properties does not prove discrimination. Substantial evidence must show that all other property in the same class, generally, is actually undervalued. State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964). Then Complainant must compare the ratio of assessed value to true value for both her property and the comparable properties to establish that the subject property is being assessed at a higher percentage of value. This difference in ratios must be shown to be grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986). No other methodology is sufficient to establish discrimination. Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696 (Mo. 1958).

Complainant Failed to Prove Value

Complainant failed to meet her burden of proof to establish the fair market value of the subject property. In this instance the owner's opinion of value is not based upon proper elements or a proper foundation as is required by law. Accordingly, no probative weight can be given to that opinion of value.

Opinion Based Upon Unproven Assumption

Ms. Pecora's opinion of value is based upon her assumption that most appraisals by the Assessor are about 1/3 of what an actual appraisal would be. The only evidence to support this assumption is that in 1990 the assessor had the subject property appraised for $54,000 and Complainant purchased the property for $71,000. There are several fundamental deficiencies in Complainant's assumption based on this limited and irrelevant evidence.

The valuation by the Assessor in 1990 of a single property does not establish that as a general rule residential property in Howard County was valued at one-third less than its fair market value. The purchase of the subject property in 1990, would provide a good indicator of value for the 1991-92 assessment cycle. Since the sale occurred in 1990 and the assessment value was established for January 1, 1990, the Assessor would have had no way to know in advance that the property was going to sell in 1990 for $71,000, when he had it appraised for $54,000 according to Complainant. The Hearing Officer notes that Complainant's application to the Board of Equalization stated a purchase price of only $68,900, not $71,000 as set out in Exhibit A. In addition, no evidence was presented to establish that in point of fact the subject property had been appraised for 1990 at $54,000. Nevertheless, facts as to appraised value on January 1, 1990, and purchase price of the property in September, 1990 are to remote in time to establish that for assessment cycle 2001-02 the Assessor has undervalued all residential property in Howard County at one-third of its fair market value.

Arbitrary One-Third Reduction of Appraised Value

Complainant's methodology of arbitrarily reducing what she recognized as the fair market value of the subject property by one-third was not shown to be an approach to value which has been recognized by the Commission or before the Courts of this state for the valuation of property for ad valorem tax purposes. Complainant's own appraiser placed a fair market value on the subject property of $125,000. Complainant agreed that this set the minimum for the subject's fair market value.

There is no recognized methodology in appeals before the Commission, whereby a value which the taxpayer or the Assessor might recognize as the fair market value (true value in money) can be either reduced by an arbitrary factor or increased by some such factor. The establishment of the fair market value of a given residential property in an appeal before the Commission sets the figure to which the assessment ratio of 19% must be applied. Relying upon Complainant's methodology would mean that the subject property would be assessed at $15,390 ($81,000 x. .19 = $15,390). This would result in an assessment ratio of only 12%, instead of the 19% mandated by law ($15,390/$125,000 = .1232). The Hearing Officer would be acting in direct contradiction to state statutes and the Missouri Constitution to arbitrarily, capriciously and unlawfully arrive at a determination of value which would result in the subject property being so assessed.

Averaging of Alleged Comparable Properties

Complainant also provided what she deemed a comparison of three other properties. The comparison was based upon the appraised values of the properties by the Assessor. These were not sales of properties. Complainant simply averaged the values which she represented to be the appraised values determined by the Assessor.

This is not a recognized methodology for establishing value in an appeal before the Commission. Complainant presented no basis to in fact establish that these properties were suitable comparables, even if there had been a recent sale of each of them. The basis that these were comparables was simply that a Realtor had recommended them as comparison properties. This hearsay is not sufficient to establish that in point of fact each of these properties were appropriate for comparables in an appraisal of the subject.

Summary

Complainant's methodology to arrive at her opinion of value is without any probative value. The opinion of value has no weight in the scales. The methodology is completely without proper elements and foundation. The appraisal which Complainant had done on the subject property establish a value of at least $125,000. Since the appraiser was not present to be cross-examined, the appraisal was not received into evidence, however, Complainant concurred that the minimum fair market value of her property as of January 1, 2001, would be $125,000. This admission by the Complainant completely invalidates, rebuts and refutes her attempt to artificially reduce the value of the subject property to $81,000.

Respondent's Evidence Supports Original Valuation

Respondent's valuation was based upon a general mass appraisal methodology. Respondent calculated the Replacement Cost New Less Depreciation for the subject home ($106,100) and added land value ($27,900) to that to arrive at the value of $134,000.

Mr. Frink also provided sales data on eleven sales of property. This data was utilized to arrive at an indicated value for the subject property. The data on the improvement value only demonstrated a range of values from $80,000 to $156,000, with the average improvement value being $107,345. The average overall value, with land included, calculated to $134,545. The per square foot of living area for the sales improvements, with land extracted, fell in a rage from $32.45 to $58.93, with the average being $36.29. The subject's per square foot value for the house is $23.63. Although Mr. Frink did not prepare a sales grid with specific adjustments for each of the sales properties, the data established that the valuation of the subject was appropriate and within the general unadjusted range demonstrated by the data.

The cost methodology, coupled with the sales data, was sufficient in this instance to support the Assessor's original valuation.

Discrimination Claim

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainant has the burden to prove:

1. The level of assessment for the subject property in 2001. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor's office.

2. The average level of assessment for residential property in Howard County in 2001. This is done by (a) independently determining the market value of a representative sample of residential properties in Howard County; (b) determining the assessed value placed on the property by the assessor's office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.

3. That the disparity between (1) and (2) is grossly excessive. The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in Howard County must demonstrate a disparity that is grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).

Complainant's discrimination claim fails because she failed to establish the market value of her property. Without establishing the market value, Complainant cannot establish her assessment ratio. Without establishing her ratio, she cannot establish that she is being assessed at a higher percentage of market value that any other property.

However, even if Complainant had established the market value of the subject property, the discrimination claim would still fail because she have not demonstrated that a statistically significant number of other residential properties within Howard County are being assessed at a lower ratio of market value than their property. Complainant's claim of discrimination is based upon her claim of comparisons of older houses in New Franklin and house on Stagecoach Road. The critical and glaring deficiency in Complainant's claim is that she tendered no evidence, nor was prepared to tender any evidence, to establish that the market value of the other homes was greater than that established by the Assessor for 2001, so that the homes were not being assessed at 19% of their true value in money as required by law. Furthermore, the few homes that Complainant reviewed and discussed, did not rise to the level of a sufficient number of properties to be statistically significant for purposes of establishing that Complainant's property should be assessed at a level less than 19% for her residential property and 12% for her agricultural property.

Because Complainant failed to establish the market value of her property and failed to establish that she is being assessed at a higher percentage of market value than a statistically significant number of other properties in Howard County, she failed to establish discrimination.

Complainant's claim that the assessment on her property is discriminatory due to her being the only female owner on Stagecoach Road and not a local business owner is totally unfounded and based upon no substantial and persuasive evidence.

ORDER

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

The assessed value for the subject property for tax years 2001 and 2002 is set at $25,544.

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 Howard 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 December 11, 2001.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer

OF HEARING OFFICER DECISION

On December 11, 2001, Chief Hearing Officer, W. B. Tichenor, entered his Decision and Order (Decision) affirming the assessment by the Howard County Board of Equalization.

Complainant's Grounds for Review

Complainant timely filed her Application for Review of the Decision (Appeal for a Hearing with the Full Commission). Complainant did not set out specific grounds of review, but provided narrative statement consisting of six pages, in which she addressed various matters relating to the Hearing Officer's Decision.

Standard Upon Review

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert's testimony and accept it in part or reject it in part. St. Louis County v. Boatmen's Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

The Commission will not lightly interfere with the Hearing Officer's Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact. Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com'n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).

DECISION

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. A reasonable mind could have conscientiously reached the result which the Hearing Officer reached. There is competent and substantial evidence to establish a sufficient foundation for the conclusions made by the Hearing Officer. The facts found and the decision rendered by the Hearing Officer are supported by substantial evidence upon the whole record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995). Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980). The Hearing Officer appropriately applied the relevant and controlling law on both the matter of valuation and discrimination (or equalization as characterized by the Complainant) to the facts in this appeal. The Hearing Officer addressed in detail (See, Decision, pp. 7-12) the various matters relating to the errors and deficiencies in Complainant's case, it will serve no useful purpose for the Commission to restate the Hearing Officer's conclusions.

The Commission will briefly address a couple of points raised by Complainant. Complainant asserts that the Hearing Officer did not permit her to present evidence of a comparison of valuation of seven older homes in New Franklin and six homes on Stagecoach Road. The transcript fails to show where the Complainant was denied the opportunity to present any such evidence. However, assuming without finding that the Hearing Officer improperly excluded the proffered spreadsheet comparisons, a comparison to what apparently would have been the valuations made by the Respondent on a total of thirteen residential properties in Howard County, would have been insufficient to have established a lack of equalization in assessment for residential property in Howard County. A comparison to only thirteen homes out of all the residential property in Howard County is not a statistically significant number of residential properties upon which a discrimination/equalization claim can be based. Furthermore, there was no showing by Complainant in her Application for Review that the evidence which she asserts she was prepared to offer consisted of an appraisal of each of the thirteen properties to establish their individual fair market values to be different than the values placed on them by the Assessor, so that their assessment ratio was actually less than the 19% required by statute.

Complainant also alleged that she did not stipulate that the state certified appraisal of $125,000 was the minimum value for the subject property as found by the Hearing Officer in Finding of Fact 4. Complainant contends she only answered a leading question. A review of the transcript relating to the stipulation on the record fails to establish that the Hearing Officer asked a leading question which resulted in the Complainant responding to something which was not correct. Tr. 4, Line 14 - Tr. 5, Line 15.

The Hearing Officer simply asked basic foundational questions which are standard inquiries, ordinarily made by the Hearing Officer under his general authority to inquiry of either party. Section 138.430.2, RSMo. The Hearing Officer inquired through four questions as to basic factual matters relating to the issue of value of the subject property. He inquired as to whether the Complainant had an appraisal performed on the property, whether it had been performed in September, 2001, whether it was by a state certified appraiser and whether his opinion of value was $125,000. The Complainant replied yes to each question. The final question was:

Q. (Hearing Officer) Are you willing to stipulate at this time, that the $125,000 determined by Mr. Bryson, is the -- is the minimum value for your property, fair market value?

A. (Complainant) Yes. I assume it is.

Q. Okay.

A. I have no other thing to go on.

This was the appropriate manner in which to determine if Complainant would stipulate to the $125,000 as the minimum fair market value. This is the value utilized by Complainant in her calculation of her opinion of value. See, Exhibit A. If she did not so wish to stipulate she should have answered no. However, given the fact that her methodology of valuation, flawed as it was, was based upon the $125,000 value, the Hearing Officer did not err in simply inquiring to establish that she would stipulate as to a minimum fair market value.

The Hearing Officer did not err in his determinations as challenged by Complainant. The Complainant's points are not well taken.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.470 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

SO ORDERED April 16, 2002.

STATE TAX COMMISSION OF MISSOURI

Sam D. Leake, Chairman

Bruce E. Davis, Commissioner

Jennifer Tidwell, Commissioner