ALLIED HEALTHCARE,	)		Appeal Number 01-20267
ALUMAX FOILS, INC.,	)		Appeal Number 01-20268
BACHMAN MACHINE,	)		Appeal Number 01-20269
BOXES, INC.,	)		Appeal Number 01-20270
CPI, INC.	)		Appeal Number 01-20271
DIAL CORPORATION,	)		Appeal Number 01-20272
LINCOLN INDUSTRIAL,	)		Appeal Number 01-20273
NESTLE USA, INC.,	)		Appeal Number 01-20274
NORDYNE, INC.,	)		Appeal Number 01-20275
P.D. GEORGE COMPANY,	)		Appeal Number 01-20276
PLUS COMMUNICATIONS,	)		Appeal Number 01-20278
PRECOAT METALS,	)		Appeal Number 01-20279
RASKAS DAIRY COMPANY,	)		Appeal Number 01-20280
ST. LOUIS POST-DISPATCH,	)		Appeal Number 01-20281
WARNER-JENKINSON,	)		Appeal Number 01-20283
	)
Complainants,	)
	)
v.	)
	)
GREGORY DALY,	)
LICENSE COLLECTOR,	)
ST. LOUIS CITY, MISSOURI,	)
	)
Respondent.	)

The decisions of the St. Louis City Merchants= and Manufacturers= Board of Equalization setting the assessed values of Complainants= machinery and equipment in question are hereby set aside. The Commission finds the market values and corresponding assessed values for the subject class of personal property for tax year 2001 to be:

The consolidated evidentiary hearing in these appeals was heard by Chief Hearing Officer, W. B. Tichenor and the decision is rendered by Hearing Officer Aimee L. Smashey. Complainants appeared by Counsel, Thomas L. Caradonna, St. Louis, Missouri. Respondent appeared by Counsel, Deborah Deuster, Assistant City Counselor.

The issue in these appeals is: What was the true value in money as of January 1, 2001, of Complainant=s machinery and equipment, specifically, what is the most probable price that could be commanded for the machinery and equipment in an open-market, competitive exchange with buyer and seller both acting knowledgeably and prudently?

Complainants appeal the subject machinery and equipment values set by the St. Louis City Board of Merchants= and Manufacturers= Tax Equalization (Board) for license tax collection purposes.

The evidentiary hearing was conducted on July 8 and 9, 2003, at the St. Louis City Hall, St. Louis, Missouri. Final filing of post-hearing documents was made on August 20, 2003.

Complainants offered into evidence for each of the subject properties an appraisal report (Exhibit A), cost and sales comparison demonstration (Exhibit B) and written direct testimony of Allen D. Bealmear (Exhibit C). Each of the three exhibits in each of the fifteen appeals were received into evidence.

In this decision reference to an exhibit will be by reference to the last two numbers of the appeal number and the Exhibit letter, where it is necessary to refer to specific exhibits for a specific appeal. For example, Exhibit A in Appeal 01-20267 will be referred to as Exhibit 67-A. If the reference is to the exhibit for all appeals no appeal number reference will be given, but simply referred to as Exhibit A, B, 1, or 2 as the case may require.

For Appeals No. 01-20267 (Allied); 01-20268 (Alumax); 01-20269 (Bachman); 01-20271 (Consumer); 01-20272 (Dial); 01-20273 (Lincoln); 01-20274 (Nestle); 01-20276 (P. D. George); 01-20278 (Plus); 01-20279 (Precoat); 01-20281 (Post-Dispatch); and 01-20283 (Warner-Jenkinson), Respondent pre-filed and exchanged the following exhibits:

Exhibit 1 - 2001 Manufacturers= Property Declaration with Site Inspection Form attached.

Exhibit 2 - Taxpayer=s Appeal Letter to the Board.

Exhibit 3 - Notice of Assessment Change from the Board to the Taxpayer.

Exhibit 4 - 2001 Tax Bill.

Exhibit 5 - Board=s Decision Letter.

Exhibit 6 - Written Direct Testimony of David G. F. Schmidt.

Exhibits 1, 2, 3 and part of Exhibit 6 were received into evidence.

For Appeals No. 01-20270 (Boxes); 01-20275 (Nordyne); and 01-20280 (Raskas), Respondent pre-filed and exchanged the following exhibits:

Exhibit 1 - 2001 Manufacturers= Property Declaration with Site Inspection Form attached.

Exhibit 2 - Taxpayer=s Appeal Letter to the Board.

Exhibit 3 - 2001 Tax Bill.

Exhibit 4 -Board=s Decision Letter.

Exhibit 5 -Written Direct Testimony of David G. F. Schmidt.

Exhibits 1, 2 and part of Exhibit 5 were received into evidence.

Counsel for Complainants filed Objections and Motion to Strike all of Respondent=s exhibits. By Order dated June 9, 2003, Chief Hearing Officer Tichenor issued his ruling on said objections and motion. The effect of the June 9th Order was also referenced by Chief Hearing Officer Tichenor at the evidentiary hearing. Tr. 3, line 8 - Tr. 4. Line 4. By said Order, Exhibits 4 and 5 in the Group A Appeals and Exhibits 3 and 4 in the Group B Appeals were excluded from evidence, along with the written direct testimony of Mr. Schmidt which identified the said exhibits.

As a result of a malfunction of the recorder at the evidentiary hearing, the transcription of the proceedings did not reflect that Respondent=s Exhibits had been offered into evidence and received. On August 20, 2003, Counsel for Respondent filed with the Commission a Motion to Submit Exhibits for the Record. Chief Hearing Officer Tichenor=s hearing notes reflect that Counsel for Respondent did submit and move for the admission of Respondent=s exhibits and the Hearing Officer received same in accordance with his Order of June 9th, as previously set forth.

The tax bills were excluded on the ground that the tax bill has no relevance for proving the fair market value of the subject properties. The Board decision letters were excluded, since each of the individual decision letters are a part of the pleading in each case to establish an appeal to the Board. There is no issue as to what the Board=s decision was in each appeal, therefore, it is unnecessary to receive the decision letters into evidence.

The transcription of the tapes of the evidentiary hearing disclosed that a malfunction of the recorder prevented the recording of the cross-examination of David Schmidt and Respondent=s Counsel=s Motions to Dismiss and Complainants= Counsel=s Request for Judicial Notice made at the close of the hearing. Parties were notified of the malfunction by the Chief Hearing Officer=s memorandum issued on July 31, 2003, and after such notice, opted to resubmit in written form said motions, responses, and a joint stipulation as to the material aspects of the cross-examination of David Schmidt needed to complete the record.

The written submission of the Stipulation, Request and Motions covers those matters which were omitted from the transcript due to the malfunction of the recorder at the evidentiary hearing and closes the record of the proceedings at the evidentiary hearing.

At the close of all evidence, Respondent made two separate Motions to Dismiss on the record. Due to the previously referenced equipment failure, said motions have been submitted in writing. The first Motion to Dismiss was based on Section 137.495, RSMo. The second Motion to Dismiss was on general grounds relating to the nature of Complainants= appraisals.

Respondent=s Motion to Dismiss under Section 137.495 was not filed with reference to Complainant Boxes, Inc. (01-20269), but was asserted against the other fourteen taxpayers. Respondent=s basis for his Motion to Dismiss is that the Complainants did not file with the Respondent a listing of all tangible personal property owned or controlled by each of them as of January 1, 2001, including an estimate of the true value in money thereof.

Section 137.495 states as follows:

AEvery person, corporation, partnership or association, subject to taxation under the laws of this state and owning or controlling tangible personal property taxable by the cities shall file with the assessor or the cities a return listing all such tangible personal property so owned or controlled on January first of each year and estimating the true value thereof in money. The return shall be filed between the first day of January and the first day of April of each year, shall be signed by the taxpayer, and shall be certified by the taxpayer as being a true and complete list and statement of all the tangible personal property and the estimated value thereof.@

Respondent=s motion is not persuasive. This Hearing Officer fails to read anything in the text of Section 137.495, RSMo, which cuts off a taxpayer=s due process rights as a penalty for filing an incomplete return. No such penalty has been provided for by the legislature. Respondent=s motion is denied.

Respondent=s second Motion to Dismiss sets forth a number of grounds to support his assertion that the appraisal reports and testimony of Complainants= appraiser (Allen Bealmear) did not constitute substantial and competent evidence. In the alternative, Respondent seeks to exclude the testimony and appraisal reports of Complainants= appraiser.

While Counsel for Respondent has couched her arguments in the language of a motion to dismiss, it was then and is now nothing more than a series of objections to Complainants= Exhibits A, B and C, with a motion to strike. As such, they are untimely filed in that they were not filed (1) in accordance with the Scheduling Order entered in these appeals, and (2) they were not filed in writing at least five (5) days before the hearing. Furthermore, they were filed without a showing that despite the exercise of due diligence, a timely filing was not possible. By Order dated December 27, 2002, parties were given until May 2, 2003, to file objections to exhibits and written direct testimony. This was reiterated in the Order dated March 18, 2003, setting the evidentiary hearing in these appeals. No objections were filed by Respondent to Complainants= exhibits or the written direct testimony of their expert witness on or before May 2, 2003, as provided for by the Commission Order.

All of the information developed during the cross-examination of Mr. Bealmear was generally apparent from the appraisal report, cost and sales demonstration and the written direct testimony filed in each appeal (Exhibits A, B & C). Each of the objections could have been made irrespective of cross-examining the witness, simply based on the face of Complainant=s exhibits. There are always instances in which objections are forthcoming during the course of any evidentiary hearing. The objections made here are not of that class.

The various points set forth by Respondent=s Counsel in this motion are all grounds for objections which could have and should have been filed in accordance with the time frame established by the scheduling order. At the very least, Counsel had more than ample time to prepare these objections and file them with a motion for leave to file objections out of time more than five days before the evidentiary hearing. This was not done and no showing has been made that despite the exercise of due diligence, a timely filing was not possible. A filing which does not provide for five (5) days= notice to the parties will be denied unless there is a showing that despite the exercise of due diligence a timely filing was not possible. 12 CSR 30-3.050(2).

One of the purposes of a scheduling order is to avoid litigation games of ambushing the other side with such motions at hearing. The Commission desires that both sides to an appeal present their case in chief, through the filing and exchange of exhibits and written direct testimony, and then opposing counsel may file appropriate and timely objections in accordance with the controlling scheduling order. The titling of a series of objections as a Motion to Dismiss does not make them such. It also does not permit a party to avoid either a scheduling order or the rule for five day notice to the opposing party and the commission.

Respondent=s motion is denied as being untimely filed. Timeliness aside, the objections raised in the motion go to the weight and not the admissibility of these exhibits.

1. Jurisdiction over these appeals is proper. Complainants timely appealed to the State Tax Commission from the decisions of the St. Louis City Merchants= and Manufacturers= Tax Equalization Board.

2. The machinery and equipment which is the subject of Appeal No. 01-20267, Allied Healthcare Products, Inc., is used to produce medical equipment. Respondent=s Exhibit 1 , at 5. The machinery and equipment at this facility includes: various lathes, punch presses, milling machines, grinders, and drill presses.

The machinery and equipment which is the subject of Appeal No. 01-20268, Alumax Foils, Inc., is used to produce aluminum foil. Respondent=s Exhibit 1 , at 5. The machinery and equipment at this facility includes: dust collection systems, casting lines, ovens, incinerators, furnaces, slitters, packaging lines, cranes, rolling mills, spreaders, and roll grinders.

The machinery and equipment which is the subject of Appeal No. 01-20269, Bachman Machine Company includes: various lathes, cranes, machining centers, press lines, and milling machines.

The machinery and equipment which is the subject of Appeal No. 01-20270, Boxes, Incorporated of St. Louis, is used to produce boxes. Respondent=s Exhibit 1 , at 2. The machinery and equipment at this facility includes: box machines, printer slotter/folder gluer, and conveying and strapping systems.

The machinery and equipment which is the subject of Appeal No. 01-20271, Consumer Programs, Inc., is used to produce film processing equipment. Respondent=s Exhibit 1 , at 2. The machinery and equipment at this facility includes: studio systems, cameras, printers, print cutters, color paper processors, inspection stands, and tank systems.

The machinery and equipment which is the subject of Appeal No. 01-20272, Dial Corporation, is used to produce laundry soap. Respondent=s Exhibit 1 , at 2. The machinery and equipment at this facility includes: a sulfonation system, a chemical test station, a liquid process batch mixing system, a truck and rail loading system, tanks, batteries of tanks, filling lines, conveyor systems, spray dryers, air compressors, and palletizers.

The machinery and equipment which is the subject of Appeal No. 01-20273, Lincoln Industrial, is used to produce automated lube systems. Respondent=s Exhibit 1 , at 2. The machinery and equipment at this facility includes: drilling machines, screw machines, furnaces, machining centers, and a washing system.

The machinery and equipment which is the subject of Appeal No. 01-20274, Nestle USA, Inc. d/b/a Sunline Brands, is used to produce candy. Respondent=s Exhibit 1 , at 2. The machinery and equipment at this facility includes: conveyors, packaging machines, bag fillers, tablet machines, separators, and packaging machines.

The machinery and equipment which is the subject of Appeal No. 01-20275, Nordyne, Inc., is used to produce heating and air conditioning equipment. Respondent=s Exhibit 1 , at 3. The machinery and equipment at this facility includes: press brakes, punch presses, bridge cranes, roll forming lines, conveyors, fabricators, and assembly lines.

The machinery and equipment which is the subject of Appeal No. 01-20276, P.D. George Company, includes: scales, tanks, dispersers, dust collectors, and pumps.

The machinery and equipment which is the subject of Appeal No. 01-20278, Plus Communications, is used to produce printed materials. Respondent=s Exhibit 1 , at 4. The machinery and equipment at this facility includes: plate benders, processors, and burners, folders, printing presses, paper cutters, and a binding machine.

The machinery and equipment which is the subject of Appeal No. 01-20279, Precoat Metals, is used to coat metal coils. Respondent=s Exhibit 1 , at 3. The machinery and equipment at this facility includes: bridge cranes, forklifts, coil coating lines, air compressors, pallet lifts, boilers, and pumps.

The machinery and equipment which is the subject of Appeal No. 01-20280, Raskas Dairy Company Inc., is used to produce cream cheese. Respondent=s Exhibit 1 , at 5. The machinery and equipment at this facility includes: forklifts, pallet lifts, pallet jacks, filling and packing machines, tanks, a homogenizer, and filling lines.

The machinery and equipment which is the subject of Appeal No. 01-20281, St. Louis Post Dispatch, is used to produce newspapers. The machinery and equipment at this facility includes: imagesetter, printing presses, strapping machines, conveyors, computers, and computer printers.

The machinery and equipment which is the subject of Appeal No. 01-20283, Warner Jenkinson, is used to manufacture chemical dyes. Respondent=s Exhibit 1 , at 5. The machinery and equipment at this facility includes: forklifts, liquid chromatagraph, diode array detector, bioler, spray drying system, granulator system, tanks, ovens, scales, and mixers.

3. Complainants= appraiser valued the items of property in each appeal based on the concept of fair market value in exchange. Complainants= Exhibits C, generally at 7. This is the appropriate concept of value to be applied in the valuation of the subject property. Daly v. P.D. George Co., 77 S.W.3d 645, 649 (Mo. App. E.D., 2002).

4. Complainants= appraiser performed the subject appraisals in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP). Complainants= Exhibits C, generally at 21.

5. A market value appraisal inherently requires a highest and best use analysis. A highest and best use analysis is the mechanism in an appraisal that zeroes in on (1) the lawful, feasible use of the property that will produce the highest return in an exchange, and (2) whether there is sufficient demand to make such an exchange probable. This analysis shows the appraiser what to appraise it as, and therefore, how to approach the cost, sales comparison, and income approaches.

6. There was no market data presented that would indicate a demand for the machinery and equipment as assembled and in place at the subject sites.

7. The principle of substitution is that a prudent buyer will not pay more for a property than the cost of acquiring a substitute property of equivalent utility. This can be applied to either an individual asset or to an entire facility. The principle applies in either a cost, sales comparison, or income approach. Valuing Machinery and Equipment, Machinery and Technical Specialties Committee of the American Society of Appraisers, 2000, pp. 45, 115; Appraising Machinery and Equipment, Machinery and Equipment Textbook Committee of the American Society of Appraisers, John Alico, Editor, 1989, p. 81.

8. Complainants= appraiser and his appraisal staff, performed an inspection of all the personal property present at the subject locations. Complainant=s Exhibit A, generally at 7 - 8. He inquired whether there had been any equipment present on the tax date that had since been removed. Where there had been property removed since the tax date, he and his staff made inquiries to determine the type and condition of such equipment and included it in their appraisal. Complainants= Exhibit C, generally at 108.

9. The machinery, tools and equipment in each appeal consists of machinery, tools and equipment that are regularly traded in the used machinery and equipment market. Complainant=s Exhibit C, generally at 8.

10. Complainants= appraisals primarily relied upon the selling prices of matching or comparable machinery and equipment from the used machinery and equipment market. Where such data was unavailable, the Complainants= appraiser relied on the indicated value under the cost approach. The condition ratings, appraisal approaches, and data sources utilized in the appraisals were those generally accepted by the appraisal community as being reliable. Exhibit C, generally at 10, 13, and 20. Complainants= evidence provided the best indication of the worth of the subject property in the open market. Complainants= evidence is substantial and persuasive in support of the values indicated.

11. The market values of the personal properties under appeal are:

12. The Commission takes official notice that:

A. The following Complainants appealed to the State Tax Commission in the 2000 tax year:

B. The referenced Complainants presented appraisals by Allen Bealmear who inspected and inventoried the subject machinery and equipment, then proceeded to value it on the basis of what used machinery and equipment should command in the open market, and concluded a value by application of a sales comparison or cost approach to value for each item of equipment.

C. The Commission was persuaded by Complainants= evidence in each of the referenced 2000 appeals.

13. The fundamental methodology relied upon in reaching these decisions was the application of a sales comparison approach where there were sufficient sales of comparable used machinery and equipment, and in the alternative, the application of a cost approach using the depreciated replacement cost as an indicator of value.

14. Respondent, in assessing the property of the referenced Complainants which previously were successful in their 2000 appeals before the Commission, did not use the methodology or the value determined by the Commission for the 2000 assessments as the basis for the assessment by the License Collector or the Board for the subject properties in 2001. Stipulation Regarding Complainants= Cross-examination of David G.F. Schmidt, at 2 - 3.

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.

There is a presumption of validity, good faith and correctness of assessment by the St. Louis City Merchants= and Manufacturers= Tax Equalization Board. 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).

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. True value in money is defined in terms of value in exchange and not value in use. Mo. Const. Art X, Section 4(b) (1945, amended 1982); Daly v. P. D. George Co., 77 S.W.3d 645, 649 (Mo. App. E.D. 2002); 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, supra, at 897.

AFair market value@ is defined as A...[t]he estimated amount, expressed in terms of money, that may be reasonably expected for a property in an exchange between a willing buyer and a willing seller, with equity to both, neither under any compulsion to buy or sell, and both fully aware of all relevant facts, as of a specific date. Valuing Machinery and Equipment: The Fundamentals of Appraising Machinery and Technical Assets, American Society of Appraisers (2000), p. 3; Exhibit A, p. 9.

The price that the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy. It is the value in exchange and not value in use. Daly v. P. D. George Co., at 649, supra.

In order to prevail, Complainants 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, supra, 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).

The word Acounty@ includes the City of St. Louis in any law which is general in its character to the whole state. Section 1.080, RSMo. The City of St. Louis is a county of the first class. Section 48.020, RSMo.

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer=s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo.

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).

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence. Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).

Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6), RSMo.

Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898). In addition, courts may take judicial notice of records in earlier cases when justice requires - Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894, transferred 167 S.W.2d 105 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929) - or when it is necessary for a full understanding of the instant appeal. State ex rel. St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).

In counties within the first class where a taxpayer has appealed to the state tax commission A...the assessment of the taxpayer=s property, real or personal, and that appeal has been successful, then in the next following and all subsequent years the basis upon which the assessor must base future assessments of the subject property shall be the basis established by the successful appeal and any increases must be established from that basis.@ Section 137.345.5, RSMo.

The term Abasis@ is defined as: A1 the base, foundation, or chief supporting factor of anything; 2 the principal constituent of anything; 3 the fundamental principal or theory, as of a system of knowledge.@ Webster=s New World Dictionary 115 (3rd college ed., 1988).

In such cases, evidence establishing the assessor=s failure to use the fundamental methodology relied upon by the Commission in recent decisions affecting the subject property in establishing such property=s new assessed value, provides substantial proof refuting the new assessment and any Board decision which substantially relies on the deficient assessment.

The trier of fact has the duty to evaluate the evidence presented to determine its sufficiency and persuasiveness in establishing market value. Complainant offered the appraisal reports of Mr. Allen D. Bealmear, a machinery and equipment appraiser. Mr. Bealmear and his appraisal staff inventoried and inspected the machinery and equipment at the subject sites. Complainants= Exhibits A & C. He inquired whether there had been any equipment present on the tax date that had since been removed. Where there had been property removed since the tax date, he and his staff made inquiries to determine the type and condition of such equipment and included it in their appraisal. Complainants= Exhibit C, generally at 108. Complainants= appraisals were performed based upon a fair market value standard. Complainants= Exhibits A and C. Mr. Bealmear reviewed the market place for comparable sales and an evaluation of potential purchasers. Complainants= Exhibits A, generally at p. 8. He then analyzed the use that would produce the highest return in an exchange where there was sufficient demand to make an exchange probable and concluded that the subject property should be valued as individual pieces of standard machinery and equipment available in the used equipment market Complainants= Exhibits C, generally at 11. In valuing the machinery and equipment, he utilized methodologies that are deemed reliable by the appraisal community, placing primary reliance on the sales comparison approach. Complainant=s Exhibits C, generally at 13. The sources used for his appraisal data, were sources that are generally accepted in the appraisal community as reliable. Complainants= Exhibits C, generally at 19 - 20.

Respondent presented evidence and testimony in support of its original appraised values for the subject property for 2001 which were affirmed by the Merchants= and Manufacturers= Tax Equalization Board. Auditor David Schmidt testified about the review of the Complainants= 2001 and prior year declarations, site inspections on applicable appeals, failed requests for documentation on applicable appeals, and the need to include costs of installation, freight, and handling to assure the assets were properly valued. Written Direct Testimony of David G.F. Schmidt.

Upon review of the testimony and evidence submitted, this Hearing Officer is persuaded by the opinion evidence offered by Complainants= appraiser. Complainants= appraisal evidence evaluates the marketplace, market supply and demand elements, sales of like or similar equipment and calculates most equipment values based upon the most comparable market data. Complainant=s evidence provides a persuasive indication of how and at what price the subject machinery and equipment would sell. Complainants= evidence is substantial and persuasive in support of their proposed market values. Complainants= evidence was sufficient to rebut the

presumption in favor of the assessment affirmed by the Merchants= and Manufacturers= Tax Equalization Board.

The assessed valuations for the subject properties as determined by the Merchants= and Manufacturers= Tax Equalization Board for St. Louis City for the subject tax day are SET ASIDE.

The assessed value for the subject property in appeal 01-20267 (Allied Healthcare) for tax year 2001 is set at $442,490.

The assessed value for the subject property in appeal 01-20268 (Alumax Foils, Inc.) for tax year 2001 is set at $1,775,902.

The assessed value for the subject property in appeal 01-20269 (Bachman Machine) for tax year 2001 is set at $1,698,365.

The assessed value for the subject property in appeal 01-20270 (Boxes, Inc.) for tax year 2001 is set at $802,457.

The assessed value for the subject property in appeal 01-20271 (CPI, Inc.) for tax year 2001 is set at $339,247.

The assessed value for the subject property in appeal 01-20272 (Dial Corp.) for tax year 2001 is set at $2,013,377.

The assessed value for the subject property in appeal 01-20273 (Lincoln Industrial) for tax year 2001 is set at $1,207,220.

The assessed value for the subject property in appeal 01-20274 (Nestle USA, Inc.) for tax year 2001 is set at $1,458,111.

The assessed value for the subject property in appeal 01-20275 (Nordyne, Inc.) for tax year 2001 is set at $2,229,205.

The assessed value for the subject property in appeal 01-20276 (P. D. George Co.) for tax year 2001 is set at $787,587.

The assessed value for the subject property in appeal 01-20278 (Plus Communication) for tax year 2001 is set at $940,627.

The assessed value for the subject property in appeal 01-20279 (Precoat Metals) for tax year 2001 is set at $1,545,853.

The assessed value for the subject property in appeal 01-20280 (Raskas Dairy Co.) for tax year 2001 is set at $518,551.

The assessed value for the subject property in appeal 01-20281 (St. Louis Post-Dispatch) for tax year 2001 is set at $325,348.

The assessed value for the subject property in appeal 01-20283 (Warner-Jenkinson) for tax year 2001 is set at $1,850,835.

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 these appeals 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 License Collector of St. Louis City, 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 these appeals. 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: November 19, 2003.

STATE TAX COMMISSION OF MISSOURI

Aimee L. Smashey

Hearing Officer

On November 19, 2003, Hearing Officer Aimee L. Smashey, entered her Decision and Order (Decision) setting aside the assessments by the St. Louis City Merchants’ and Manufacturers’ Board of Equalization and finding true value in money and assessed values.

Respondent timely filed his Application for Review of the Decision. Upon information from the parties that settlement discussions had been undertaken, an Order staying further proceedings was issued on December 31, 2003. The initial Decision covered Appeal Numbers 01-20267 through 01-20276 and Appeal Number 01-20278 through 01-20281 and Appeal Number 01-20283. Subsequent to the filing of Respondent’s Application for Review, Appeal Numbers 01-20267, 01-20269, 01-20270, 01-20273, 01-20276, 01-20278, and 01-20279 have been disposed of either by dismissal or stipulation of the parties. By Order dated November 16, 2004, the stay of proceedings was lifted. Complainants timely filed their Response to the Application for Review on February 1, 2005, in accordance with Commission Order dated December 15, 2004.

Respondent sets forth three grounds for review of the Hearing Officer Decision. These grounds, as stated in the Application for Review, are:

"1. The Decision and Order/Holding is in error and made upon improper procedure, is arbitrary, capricious and not authorized by law in that the Hearing Officer who rendered the decision is not the Hearing Officer who actually conducted the hearing in this case, and there is not a complete transcript of the evidentiary hearing before the prior hearing officer due to a purported malfunction of the recording equipment. Hence, the Hearing Officer who rendered the decision in this case did not and could not have considered all of the evidence presented. Further, the evidence for which no record was maintained included the testimony of Respondent’s auditor and expert witness, David Schmidt."

"2. The instant appeals must be reheard because the absence of a complete and proper record prevents Respondent from complying with the Decision and Order/Holding and Section 138.432 R.S.Mo. which requires Respondent to set forth specific facts upon which his appeal is based. Because of the absence of such record, coupled with the change in counsel for Respondent, Respondent is unable to cite to those portions of the record which contain facts that would demonstrate why the Decision and Order/Holding is erroneous. The record as it stands includes all of Complainant’s evidence, but omits significant portions of Respondent’s evidence."

"3. The Decision and Order/Holding is in error because of its use of, (and reliance upon), materials, documents, testimony, and/or information improperly offered into evidence by Complainant (in contravention and violation of 12 CSR 30-3.060), and improperly accepted, (over written and verbal objections of Respondent), as evidence by the Hearing Officer. Specifically, said materials, documents, and information have been identified by Respondent in his previously filed Motion to Dismiss, (incorporated herein by this reference as if set out in full). The Hearing Officer’s ruling upon, (and refusal to grant), Respondent’s Motion to Dismiss is, accordingly, in error."

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 she 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).

A review of the record in these appeals provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused her 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 Commission will address the various grounds raised by Respondent individually. For purposes of this discussion, the Commission sets forth the grounds as follows:

1. The Decision is improper because it was not rendered by the Hearing Officer who conducted the hearing.

2. The Decision is improper because there is not a complete transcript of the evidentiary hearing.

3. The Decision is improper because the record omits portions of Respondent’s evidence.

4. The Decision is improper because Complainant’s evidence was received into the record.

5. The Hearing Officer erred in not granting Respondent’s Motion to Dismiss.

The evidentiary hearing in these appeals was conducted on July 8, and 9, 2003, before Hearing Officer W. B. Tichenor. The Decision and Order was rendered by Hearing Officer Aimee L. Smashey. The Commission is given specific authority to reassign or transfer cases to a different hearing officer than the one who may have conducted the evidentiary hearing. Section 138.431.4, RSMo provides in relevant part, "The commission may, prior to the decision being rendered, transfer to another hearing officer the proceedings on an appeal determination before a hearing officer." This is what was done in the present appeal.

Respondent cites to no case law to support his argument that it was error for Hearing Officer Smashey to render the Decision, instead of Hearing Officer Tichenor. Hearing Officer Smashey prepared her Decision after a complete review of the record in these appeals. Hearing Officer Tichenor reviewed the Smashey Decision and concurred therein. The reassignment was proper. Respondent’s point is not well taken. It provides no basis for a reversal or modification of the Hearing Officer Decision, nor does it require a rehearing of these appeals.

The Decision at page 5 clearly acknowledges that due to a malfunction of the recorder at the evidentiary hearing the transcript of the hearing is incomplete. Respondent asserts that since there is an incomplete transcript, the appeals must be reheard. The Commission is not so persuaded.

Respondent’s Suggestions on this particular point generally mischaracterize the facts in these appeals with regard to the matter of the incomplete transcript and record. Respondent asserts that "a major portion of the proceedings were not properly recorded or transcribed." Respondent alleges that "There is no discussion of the evidence adduced by the Respondent because the Hearing Officer who rendered the decision did not hear that testimony, and without a transcript, could not read it either." Both claims simply do not square with the facts upon this record.

In accordance with Commission Scheduling Order, the parties prefiled exhibits and written direct testimony in these appeals. For each appeal, Complainant filed an appraisal report, a cost and sales comparison demonstration, the written direct testimony of expert witness Allen D. Bealmear. All of these exhibits were received into evidence. Respondent filed in each appeal the 2001 Manufacturers’ Property Declaration, Appeal Letter to the Board, 2001 Tax Bill, Board Decision Letter and written direct testimony of David G.F. Schmidt. In six of these appeals, Respondent also filed the Notice of Assessment Change from the Board. In each appeal the Property Declarations, Appeal Letters and the Schmidt Testimony were received into evidence. The tax bills and Decision Letters were excluded. The Decision, at page 5, so states and gives the basis for the exclusion.

The transcript of the evidentiary hearing was completed on July 25, 2003, and delivered to the Commission on that date, at which time Hearing Officer Tichenor was first informed that the transcript was incomplete. The Hearing Officer advised the parties by Memorandum dated July 31, 2003, and faxed to Counsel on that date of the malfunction in recording and that the examination of David Schmidt, Counsel for Respondent’s Motions to Dismiss and Counsel for Complainant’s Request to take Judicial Notice had not been recorded. The Hearing Officer then advised as follows:

"Therefore, in order to complete this record I will reconvene the evidentiary hearing for the sole purpose of permitting Mr. Schmidt to be cross-examined and respective Counsel to make their Motions and Request as in the hearing concluded on July 9." The Hearing Officer then requested the Counsels to confer and advise him as to a date for the reconvening of the hearing.

The Hearing Officer further provided the parties with an alternative to reconvening the evidentiary hearing. The Memorandum states: "If Mr. Caradonna wishes to waive cross-examination of Mr. Schmidt, and if Ms. Deuster is willing to simply file in writing each of the two Motions to Dismiss as presented at the conclusion of the evidentiary hearing and if Mr. Caradonna is willing to simply file in writing his Request for Judicial Notice, then I will receive into evidence the exhibits of Respondent in each appeal not previously ruled on, subject to Mr. Caradonna’s continuing objections and proceed to render my Decision and Order, with the consent of Counsels." Respondent’s Counsel had previously filed with the Commission (July 29, 2003) Respondent’s Suggestions in Opposition to Complainants’ Oral Motion at Hearing Pursuant to Section 137.345, RSMo. Complainant’s Response to Respondent’s Suggestions was filed with the Commission on August 4, 2003. Said oral motion being a motion to take judicial notice of the cited statute and prior decisions of the Commission with regard to certain of the Complainants’ property valuations. Counsel for Complainant filed on August 18, 2003, a Request for Judicial Notice for inclusion in the record due to the recorder malfunction which had not preserved Counsel’s oral motion on this point.

On August 18, 2003, the Commission received the parties Stipulation Regarding Complainants’ Cross-Examination of David G. F. Schmidt. Said stipulation was signed by Thomas L. Caradonna, Counsel for Complainants. The signature of Deborah Deuster (by TLC, w/consent) was also affixed, and a copy of the facsimile transmission of the Stipulation, with the same signed by Ms. Deuster, was attached to the original of the Stipulation. Accordingly, the cross-examination testimony of Mr. Schmidt became a part of the record thus completing the transcript on this matter.

On August 20, 2003, the Commission received from Counsel for Respondent the following motions:

1. Motion to Submit Exhibits for the Record of the Proceedings.

2. Motion to Dismiss Complainants’ Appeals Pursuant to Section 137.495, RSMo.

3. Motion to Dismiss Complainants’ Appeals.

These three motions constitute and comprise the motions made by Respondent’s Counsel Deuster at the close of the evidentiary hearing which were not recorded and included in the transcript. Each of the Motions specifically recites that the motions were "...made at the conclusion of the presentation of evidence in the above proceedings set forth hereinbelow in writing for the purpose of inclusion in the record of proceedings due to a malfunction in the recorder of the Chief Hearing Officer, as set forth in the Memorandum Order dated July 31, 2003, ..."

Respondent’s claim that a major portion of the proceedings were not properly recorded misstates the situation. The only evidence that was not recorded was the cross-examination of Mr. Schmidt. This cross-examination can hardly be considered to be "a major portion of the proceedings." The stipulated cross-examination, which is a part of this record and was reviewed by Hearing Officer Smashey prior to rendering her decision, consists of only nine questions and answers.

As to the oral motions which were not recorded and thus transcribed, all were subsequently made a part of this record by being filed in written form. Thus, there is nothing that constitutes a major portion of either the proceedings or the evidence in these appeals which are not present in the record. Hearing Officer Smashey had a complete record upon which she could render her decision.

Likewise, the assertion that Hearing Officer Smashey "...did not hear the testimony (cross-examination of Schmidt) and without a transcript, could not read it either" is a misstatement of the facts. The Hearing Officer had the cross-examination of Mr. Schmidt which was stipulated to by Respondent’s Counsel. Furthermore, the Hearing Officer had the prefiled written direct testimony of Mr. Schmidt. Mr. Schmidt’s testimony is referenced and summarized at page 21 of the Decision.

Respondent’s point as to the incomplete transcript is not well taken. Any procedural defects as to the problem of the incomplete transcript were addressed by Hearing Officer Tichenor’s offer to reconvene the evidentiary hearing for the cross-examination and making of motions which had been omitted from the transcript. Respondent effectively waived his objections to this offer by stipulating to having the Mr. Schmidt’s cross-examination submitted in writing and also having Respondent’s Motions submitted in writing. Respondent was in no way harmed or denied due process in this regard. Hearing Officer Tichenor’s actions relative to this proceeding were neither arbitrary nor capricious. Hearing Officer Smashey’s actions in rendering her decision after the stipulation and written motions had become a part of the record were likewise neither arbitrary nor capricious. The Decision rendered herein was based upon a complete and full record as so stipulated to by the parties. Respondent’s claim provides no basis for a reversal or modification of the Hearing Officer Decision or for a rehearing of these appeals.

Respondent’s next challenge is on the ground that the record in these appeals omits portions of Respondent’s evidence. Respondent fails to provide any description as to the "...significant portions of Respondent’s evidence," which allegedly were omitted. There were essentially only two items of Respondent’s prefiled evidence for each appeal that were excluded upon objection by Complainants. The excluded items were the 2001 tax bills and the Board Decision Letters. The tax bills were deemed to be irrelevant. Decision, p. 5. The Board Decision Letters are a part of the pleading in each case and thus are only repetitive and need not be received into evidence. Decision, p. 5. The exclusion of these proffered exhibits had nothing to do with the malfunction of the recorder at the hearing. These documents were excluded in response to proper objections posed and ruled on by the Hearing Officer.

Respondent makes no assertion as to how the exclusion of either of these documents would have resulted in a different finding of true value in money of any of the Complainants’ properties. Hearing Officer Tichenor ruled on these matters in his Order dated June 9, 2003. In his ruling, Hearing Officer Tichenor referenced earlier Commission Decisions for tax year 2000 for these appeals in which Hearing officer Smashey had also excluded the same type of exhibits. With this exception, each of the other exhibits prefiled by Respondent were received into evidence. The cross-examination of Respondent’s witness is also part of this record. There is no significant portion of Respondent’s evidence that was omitted from this record. Respondent’s point is not well taken. It provides no basis for a reversal or modification of the Hearing Officer Decision or for rehearing of these appeals.

Respondent next argues that the Decision is in error because it relies upon the evidence presented by Complainant in contravention and violation of 12 CSR 30-3.060 and was accepted over objection of Respondent. Respondent provides no further explanation or clarification as to exactly in what manner the appraisal report, cost and sales demonstration and testimony of Complainants’ expert appraiser are in violation of the Commission Rule.

Commission Rule 12 CSR 30-3.060 is the rule on the exchange of exhibits and prefiled testimony in appeals before the Commission. The rule provides that a scheduling order may be issued in appeals setting deadlines for the filing and exchange of the exhibits and written direct testimony that are going to be relied upon by each party for their case in chief. This was done in these appeals. Complainants timely complied with the Commission Scheduling Order and filed their appraisal reports, a cost and sales demonstration and the written direct testimony of their expert witness. The Commission can find no violation of the rule in these appeals.

Complainants’ evidence to establish their case in chief was properly filed with the Commission and exchanged with Respondent. Respondent did not file any objections prior to the evidentiary hearing setting forth grounds for exclusion of the exhibits. The Commission notes that the exhibits and testimony presented by Complainants in these appeals is for all intents and purposes the same type, form and format of evidence which has previously been presented before the Commission in numerous other appeals. Furthermore, it is the same type, form and format of evidence which was deemed to constitute substantial and persuasive evidence in the case of P. D. George v. Daly, STC 97-20316 (3/21/00), and was so recognized by the Missouri Court of Appeals. Daly v. P.D. George, 77 S.W.3d 645 (Mo. App. E.D. 2002).

Respondent’s point is not well taken. Complainants’ evidence was properly received into evidence in these appeals and it constituted substantial and persuasive evidence upon which the Hearing Officer could base her decision as to true value in money. Neither Hearing Officer Tichenor erred in ruling on his admission into evidence of Complainants’ exhibits, nor did Hearing Officer Smashey err in relying on said evidence in rendering her decision. Respondent’s claim provides no basis for a reversal or modification of the Hearing Officer Decision or for a rehearing of these appeals.

The final ground asserted for reversal or modification of the Hearing Officer Decision is that the ruling on Respondent’s Motions to Dismiss by Hearing Officer Smashey was in error. Respondent offers no new line of argument in support of this point. Hearing Officer Smashey addressed in detail both the Motion to Dismiss under Section 137.495, RSMo and the general Motion to Dismiss. Decision, pp. 6-8. The Commission has reviewed both of Respondent’s Motions and the Ruling by Hearing Officer Smashey. The Commission finds nothing in the ruling which is in error. Respondent has alleged no specific error as to how the Hearing Officer is alleged to have misapplied the law in regard to the two motions. Respondent simply incorporated his original motion in the Application for Review and makes a general, but unsupported assertion that the ruling "is, ..., in error." The Commission disagrees.

Respondent’s point is not well taken. There is no basis shown upon which either of Respondent’s Motions to Dismiss should have been granted. The Hearing Officer properly applied the law in response to the said Motions.

There was a complete record established in these appeals, the malfunction of the recorder notwithstanding. The proceedings were "suitably recorded and preserved" in accordance with Section 536.070(4), RSMo. Respondent agreed to the procedure to make the record complete. No prejudice resulted to either party. Respondent’s various claims on this point are completely without merit.

All of Complainants’ exhibits and testimony were properly and timely filed. There was no improper action by either Hearing Officer relative to receiving of Complainants’ evidence into the record. Respondent’s Motions to Dismiss were without merit and were properly denied.

The Commission upon review of the record and Decision in these appeals, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified, or that the appeals should be reheard, in whole or in part. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

SO ORDERED April 14, 2005.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Sam D. Leake, Commissioner

Jennifer Tidwell, Commissioner