DON A. & JOAN M. JOHNSON,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 02-10320
	)
PHILIP A. MUEHLHEAUSLER,	)
ACTING ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

HOLDING

Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax years 2001 and 2002 to be $362,800, assessed value of $68,930.

Complainants appeared pro se.

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

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

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2001.

SUMMARY

Complainants appeal the decision of the St. Louis County Board of Equalization which reduced the valuation of the subject property. The Assessor determined an appraised value of $409,500 (assessed value of $77,810, as residential property). The Board reduced the value to $390,000 (assessed value of $74,100). Complainant proposed a value of $339,000 (assessed value of $64,410) in their Complaint for Review of Assessment. At hearing the Complainants' proposed value was $320,000 (assessed value of $60,800). Respondent's proposed value at hearing was $364,000 (assessed value of $69,160) A evidentiary hearing was conducted on June 10, 2003, 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.

Complainants' Evidence

Complainants offered into evidence the appraisal report (Exhibit A) of William E. Ball, Jr., Missouri State Certified Real Estate Appraiser, and his testimony in support of his appraisal. Certain corrections were made to Exhibit A on the sales grid prepared by Mr. Ball, as per directions of Mr. Ball at hearing. Exhibit A was received into evidence. Mr. Ball arrived at an opinion of value of $320,000 based upon his sales comparison approach. The sales comparison approach of Mr. Ball relied upon the sales of three properties which he deemed to be comparable to the subject.

Complainants also each gave testimony on the issue of the value of the subject property.

Respondent's Evidence

Respondent placed into evidence the testimony of Mr. David L. Winkler, appraiser for St. Louis County. Mr. Winkler was a state certified real estate appraiser until June 30, 2002. Upon taking employment with St. Louis County, he elected to not continue his state certification. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Winkler was received into evidence. Mr. Winkler arrived at an opinion of value for the subject property of $364,000 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property.

Exhibit 2, the assessment history on the subject property since 1997, and Exhibit 3, an amended sales grid prepared by Mr. Winkler, were received into evidence. By the use of exhibit 3, Mr. Winkler applied his adjustments to his third comparable property for an earlier sale (November, 2002) which was the sale date utilized by Complainants' appraiser for his valuation.

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 County Board of Equalization.

2. The subject property is located at 1 Rockwood Forest View, Wildwood, Missouri. The property is further identified by locator number 28V520037. The property consists of a 4 acre site. It is improved by a one and a half story, frame single-family structure of average to good quality construction. The home was built in 1989 and appears to be in average condition. The residence has a total of 9 rooms, which includes 4 bedrooms and 3 full and 1 half baths. The home contains 3,027 square feet of living area. There is a full basement with 1,100 square feet of recreation area. There is an attached two-car garage.

The property was listed for sale in April, 1998, with an asking price of $439,000. The asking price was later reduced to $399,900. After 31 days on the market at the reduced asking price, the Complainants purchased the property on September 2, 1998, for $390,000.

3. There was no evidence of new construction and improvement from January 1, 2001, to January 1, 2002.

4. Complainant's evidence was not substantial and persuasive to establish the true value in money as of January 1, 2001, to be $320,000, as proposed.

5. Respondent's evidence was not substantial and persuasive to establish the true value in money as of January 1, 2001, to be $364,000, as proposed.

6. The properties relied upon by Complainants' and Respondent's appraisers in performing their appraisals were comparable to the subject property for the purpose of making a determination of value of the subject property, with the exception of Complainants' Comparable 2. The properties were all located within a mile of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2002. Each property was similar to the subject in site area, style, quality of construction, age, condition, room count, living area, and other amenities.

7. The Complainants' and Respondent's comparables were described as follows (Exhibits A, 1 & 3):

Comparable 1 (9 Rockwood Forest View - across the street and southeast of subject) sold in November 2000 for $321,000. This property consists of a 3.06 acres lot improved by a one-story, frame single-family home of average quality construction. The home was built in 1985 and appears to be in average condition. The residence has a total of 9 rooms which includes 4 bedrooms and 2 and a half baths and contains 2,607 square feet of living area. There is a full basement with 756 square feet of finished recreation area. The house has an attached two-car garage.

Comparable 2 (20 Rockwood Forest Valley - on a separate street, different plat, northeast of the subject approximately 2/10's of a mile) sold in June 2000 for $240,000. This property consists of a 4.13 acres lot improved by a one and a half story (appears from photograph in Exhibit A), frame single-family home of average quality construction. The home was built in 1988 and appears to be in average condition. The residence has a total of 8 rooms which includes 4 bedrooms and 2 and a half baths and contains 2,712 square feet of living area. There is a full basement with no finished recreation area. The house has an attached two-car garage. This property is given no weight or value for purposes of determining the fair market value of the subject property. See, DECISION, Bell Comparables Possessed Less Persuasiveness, infra.

Comparable 3 (17222 Lost Cabin Road - on a separate street, different plat, north of the subject approximately 3/10's of a mile) sold in May 2000 for $290,000. This property consists of a 3.17 acres lot improved by a one and a half story (appears from photograph in Exhibit A), frame single-family home of average quality construction. The home was built in 1988 and appears to be in average condition. The residence has a total of 6 rooms which includes 3 bedrooms and 3 full baths and contains 2,832 square feet of living area. There is a full basement with no finished recreation area. The house has an attached two-car garage. This property is given no weight or value for purposes of determining the fair market value of the subject property. See, DECISION, Bell Comparables Possessed Less Persuasiveness, infra.

Comparable 1 (5 Rockwood Forest View - across the street and southeast of subject within a tenth of a mile) sold in January 2001 for $364,900. This property consists of a 4.16 acres lot improved by a one-story, frame single-family home of average quality construction. The home was built in 1990 and appears to be in average condition. The residence has a total of 9 rooms which includes 4 bedrooms and 2 full and 2 half baths and contains 3,086 square feet of living area. There is a full basement with 900 square feet of finished recreation area. The house has an attached two-car garage.

Comparable 2 (6 Rockwood Forest View - across the street and southeast within a tenth of a mile) sold in December 2000 for $295,000. This property consists of a 3.66 acres lot improved by a one story, vinyl/brick sided frame single-family home of fair quality construction. The home was built in 1988 and appears to be in average condition. The residence has a total of 9 rooms which includes 3 bedrooms and 3 full baths and contains 2,655 square feet of living area. There is a full basement with 1,000 square feet of finished recreation area. The house has an attached two-car garage.

Comparable 3 (9 Rockwood Forest View - across the street and southeast of subject) sold in March 2001 for $334,000. This property is the same as Complainants' Comparable 1, except for the sale date.

Comparable 4 is the same as Complainants Comparable 1, relying on a sale date of November 2000, instead of March 2001.

8. Each appraiser made various adjustments to the comparable properties for differences which existed between the subject and comparables. The adjustments were within an acceptable range to account for differences and were appropriate for the appraisal assignment in this appeal.

9. The net adjustments for CP Comparable 1 amounted to +$40,600 or +12.6% of the sales price. The net adjustments for CP Comparable 2 amounted to +$15,350 or +6.4% of the sales price. The net adjustments for CP Comparable 3 amounted to +$33,550 or +11.6% of the sales price. CP - Complainants' Comparable.

The net adjustments for RP Comparable 1 amounted to -$2,600 or - .71% of the sales price. The net adjustments for RP Comparable 2 amounted to +$59,700 or +20.24% of the sales price. The net adjustments for RP Comparable 3 amounted to +$41,700 or +12.49% of the sales price. The net adjustments for RP Comparable 4 amounted to +$41,700 or +12.99% of the sales price. RP - Respondent's Comparable.

10. The adjusted sales prices for Complainants' Comparables calculated to $361,600, $255,350 and $323,550, respectively. The appraiser concluded on a $320,00- value which calculated to a value per square foot (utilizing the Bell square footage for the subject of 2,957) of $108.22 compared with the sales prices per square foot of living area for the comparables of $123.13, $88.49 and $102.40.

11. The adjusted sales prices for Respondent's Comparables calculated to $362,300, $354,700, $375,700 and $362,700, respectively. The appraiser concluded on a $364,000 value, relying on the March 2001 sale of Comparable 3, which calculated to a value per square foot of $120.25 compared with the sales prices per square foot of living area for the comparables of $118.24, $111.11 and $128.12. Relying on the November 2000 sale of Comparable 3, the adjusted sales price for that Comparable calculated to $362,700, which resulted in a per square foot value of $118.96 and an overall opinion of value, considering Comparables 1 and 2 of $360,100.

12. Evidence on the record was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2002, under the economic conditions which existed on January 1, 2001 to be $.

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).

No Presumption Assessor's Value Correct

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).

Market Value

Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated.

2. Both parties are well informed and well advised, and each acting in what they consider their own best interests.

3. A reasonable time is allowed for exposure in the open market.

4. Payment is made in cash or its equivalent.

5. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.

Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary; Exhibits A & 1.

Duty to Investigate

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.

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 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).

Opinion Testimony by Experts

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).

Complainants' Burden of Proof

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, 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).

Respondent's Burden of Proof

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Cupples-Hesse, Brooks, supra.

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).

Sale of Subject

Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time. The actual sale price is a method that may be considered for estimating true value. The actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526 (App. E.D. 1993).

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their 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.

Complainants must first establish the market value of their property in order to determine the percentage of true value at which it is being assessed. Next, they must establish the true value of the other properties generally which they claim 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 they must compare the ratio of assessed value to true value for both their property and the comparable properties to establish that their 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).

Hearing Officer Finds True Value in Money

The evidence presented by Mr. Winkler in Exhibit 1, had it been standing alone, would have established the value advocated - $364,000. The evidence presented by Mr. Bell in Exhibit A, had it been standing alone, would have fallen short of establishing the value advocated - $320,000, however, would have established a value less than that determined by the Board.

However, it is necessary to take into consideration all of the evidence placed on the record. When that is done, then the evidence clearly rebutted the presumption of correct assessment by the Board of Equalization, however, the evidence presented by Mr. Bell was confronted by the evidence of value advanced by Mr. Winkler and vice versa.

Winkler Comparables Given More Weight

In viewing the totality of the evidence, the Hearing Officer is persuaded that the Winkler comparables present the stronger case to establish value. Each of the sales were of properties located on the subject street, in the subject plat. The fact that each Winkler comparable was just down the street from the subject erased any possible speculation as to the need for any locational adjustment. Accordingly, greater weight has been given to the value derived from the Respondent's comparables than those presented by Mr. Bell on behalf of Complainants.

Bell Comparables Possessed Less Persuasiveness

Two of the Bell comparables fell outside of the subject plat and therefore off of the subject street. What effect this difference in location may or may not have had on these properties is not clear from the evidence. However, it is notable that these two properties (CP Comparables 2 & 3) sold for significantly less (28.2% and 16.9%, respectively, on the per square foot sales price) than the comparable located on the subject street. This provides a reasonable indication that properties on Rockwood Forest Valley and Lost Cabin Road may be considered to be in a less desirable location than properties on Rockwood Forest View and might command a significant locational adjustment to be utilized for comparison to properties on the subject street.

CP Comparable 2 immediately raises a question as to the strength of its comparability and the weight that could be given to it. This property clearly falls significantly below the subject property's 1998 purchase price, as well as, the recent sales prices of all of the other sale properties. Comparable 2 possesses various similarities to the subject which establish a general ground for comparability. However, the sale price demonstrates some factor or factors which make this sale cross the line of being an outlier. As such its probative benefit in this case is significantly limited to the extend that no weight could be given it.

CP Comparable 3 likewise suffers from a question as to an adjustment for location. It is also noted that the May 2000 sale price was a full $100,000 below the sale price which the subject commanded in September 1998. Notwithstanding, Complainants' assertion as to overpaying for the subject, the 1998 purchase price has every indication of a fair market transaction. There is no evidence to support and substantiate Complainants' claim. Mr. Bell's opinion of concurrence, without supporting data and analysis, is not persuasive. Comparable 3, in light of the other evidence on this record, fails to establish itself as an appropriate comparable. Accordingly, it is given no weight in the determination of value.

Conclusion

The value of the subject property can be determined relying upon the evidentiary record as to the four sales of properties on the subject street. This evidence is far superior to the evidence of the two sales which comprised two-thirds of Mr. Bell's sales analysis. This is substantiated by the fact that the adjusted values for the property at 9 Rockwood Forest View determined by Mr. Bell and Mr. Winkler within $1,100 of each other (March 2001: Bell - $374,600; Winkler - $375,700; November 2000: Bell - $374,600; Winkler - $375,700). The additional sales provided by Mr. Winkler provide support to establish a value of $362,800, giving weight to the indicated value determined by Exhibit 1, and the adjusted values determined by Mr. Bell in Exhibit A and Mr. Winkler in Exhibit 3 for the 9 Rockwood Forest View sale in November 2000.

The true value in money for the subject property as of January 1, 2002, under the economic conditions existing as of January 1, 2001, is $362,800.

Unequal Tax Claim

Complainant, Mr. Johnson, in his testimony addressed the matter of what he felt were unequal taxes on his property when compared to some of his neighbors. To the extent that this was an assertion as to some assertion of discrimination, if falls far below what is required by case law to establish discrimination. The evidence on this record is totally lacking to establish that residential property on the average in St. Louis County is not being assessed at 19% of its fair market value.

Individual instances which may be shown from time to time are insufficient to demonstrate that a statistically significant number of properties are undervalued and thereby under assessed. It is always possible to show that certain individual properties are valued below their last sale price. Such is the case with the subject which for the 1999-2000 assessment cycle was assessed at $130,530 below its 1998 sale price. This valuation at 33.5% below what the property brought in an arm's-length, open market transaction provides prima facie evidence that the subject was most likely assessed at only 12.7% of its sales price (market value). However, this fails to establish that on average this was the case throughout St. Louis County.

In other words, for 2 years Complainants' tax bills represented a payment of real property taxes based upon a significant under-assessment. The fact that for the 2001-02 assessment cycle this was corrected to bring the subject property into line as to market value and therefore resulted in a increase in taxes of approximately $2,000 is not justification, or authorization to continue to value the subject property at an assessment ratio that is less than 19% of market value.

ORDER

The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax year 2002 is set at $68,930.

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 June 19, 2003.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer