JEROME F. & DIANE M. MARTIN,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-12087
	)
PHILIP MUEHLHEAUSLER, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

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 2003 and 2004 to be $354,950, assessed value of $67,440.

Complainant, Jerome F. Martin, appeared pro se.

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

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

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2003.

Complainants appeal, on the ground of overvaluation, 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 $354,950 (assessed value of $67,440, as residential property). The Board reduced the value to $340,000 (assessed value of $64,610). Complainants proposed a value of $275,000 (assessed value of $52,250), in the Complaint for Review of Assessment. A hearing was conducted on May 6, 2004, 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.

Mr. Martin testified in his own behalf. He gave his opinion of value for the subject proper to be $275,000. This was based upon the average sales prices of ten properties located in Warson Woods. Complainant offered into evidence Exhibit A. Exhibit A was a listing by street address and sale price of the ten sale properties upon which Mr. Martin had made his calculation as to an average value. Counsel for Respondent objected to Exhibit A on the grounds of lack of foundation to establish that the method of valuation is a proper appraisal method, relevancy and hearsay. The objection was sustained and the exhibit was excluded. Complainant also testified that taxes had increased over a four year period by 50% while the Consumer Price Index had only gone up 12% in that same four year period. He felt that the increase in taxes was excessive.

Respondent placed into evidence the testimony of Mr. John D. Rebsamen, Missouri State Certified Residential Real Estate Appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Rebsamen was received into evidence. Mr. Rebsamen arrived at an opinion of value for the subject property of $361,000 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.

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 527 Gray Barn Lane, Warson Woods, Missouri. The property is identified by locator number 22M520164. The property consists of .29 of an acre lot improved by a one-story masonry and frame single-family structure of average quality construction. The house was built in 1982 and appears to be in average condition. The residence has a total of eight rooms, which includes four bedrooms, two full and one half baths, and contains 2,516 square feet of living area. There is a full basement with approximately 500 square feet of living area and an attached two-car garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2003. Exhibit 1, p. 5.

3. There was no evidence of new construction and improvement from January 1, 2003, to January 1, 2004.

4. Complainant=s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2003, to be $275,000.

5. The properties relied upon by Respondent=s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within less than a mile of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2003. The sale properties were similar to the subject in style, quality of construction, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.

6. The comparables were described as follows:

Comparable 1 (824 Edlin Drive - .42 of a mile Northeast of the subject) sold in October 2002 for $345,000. This property consists of a .29 of an acre lot improved by a one-story masonry single-family structure of average quality construction. The house was built in 1957 and appears to be in fair to average condition. The residence has a total of nine rooms, which includes four bedrooms, two full baths, and contains 2,198 square feet of living area. There is a full basement, which has 1,500 square feet of living area. There is an attached two-car garage.

Comparable 2 (11 Ridge Line Drive - .87 of a mile Northeast of the subject) sold in September 2001 for $383,500. This property consists of a .20 of an acre lot improved by a split level masonry single-family structure of average quality construction. The house was built in 1941 and appears to be in average condition. The residence has a total of ten rooms, which includes three bedrooms, three full and two half baths, and contains 2,500 square feet of living area. There is a full basement, which has 400 square feet of living area. There is a two-car built in garage.

Comparable 3 (816 Bricken Place - .41 of a mile Northeast of the subject) sold in October 2002 for $365,000. This property consists of a .30 of an acre lot improved by a one-story masonry single-family structure of average quality construction. The house was built in 1955 and appears to be in average to good condition. The residence has a total of eight rooms, which includes four bedrooms, two full and one half baths, and contains 2,196 square feet of living area. There is a full basement, which has 750 square feet of living area. There is an attached two-car garage.

7. The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.

8. The net adjustments for Comparable 1 amounted to +$12,800 or 3.71% of the sales price. The net adjustments for Comparable 2 amounted to -$12,900 or 3.36% of the sales price. The net adjustments for Comparable 3 amounted to -$4,400 or 1.21% of the sales price.

9. The adjusted sales prices for the comparables calculated to $357,800, $370,000 and $360,000, respectively. The appraiser concluded on a $361,000 value which calculated to a value per square foot of $143.48 compared with the sales prices per square foot of living area for the comparables of $156.96, $153.40 and $166.21.

10. Respondent=s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and clear and convincing to establish the value of the subject, as of January 1, 2003, to be $354,950, as originally set by the Assessor.

11. Respondent=s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.

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.

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).

The presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any substantial proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board is accepted as true only until and so long as there is no substantial evidence to the contrary.

There is no presumption that the assessor=s valuation is correct. Section 138.431.3, RSMo.

Section 137.115, RSMo, 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 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; Exhibit 1, p. 3.

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).

The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program. There is a presumption in this appeal that the original valuation was made by a computer, computer-assisted method or a computer program. There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $354,950, appraised value, Respondent=s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.

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

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

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

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

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

 

Section 137.115.1(1) & (2).

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

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, 2003. 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). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).

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).

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).

In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor=s or board=s valuation, and not for increasing the valuation of the property under appeal. Section 138.060, RSMo; 12 CSR 30-3.075.

Complainants= opinion of value was based simply upon an averaging of the sales prices of ten properties. When a taxpayer desires to utilize some innovative and creative method for the valuation of real property, the taxpayer has the burden to establish that the method which they have devised has been recognized and accepted for the appraisal of real property. No such showing was made on this record for Complainant=s averaging technique. The averaging of sales prices is a faulty procedure and is not recognized or accepted for appraisal of property before the Commission. Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers (1982), p.159.

Averaging of sales prices is often times very appealing to taxpayers. It is an easy and simple calculation. However, even if some general markers of comparability are presented such as date of sale, site size, location, style of home, quality of construction, age, condition, room count, living area and other amenities of comparability, averaging of sales prices is not an appropriate method for valuing of real property. In the present case nothing was presented except addresses of ten properties and the asserted sales prices.

The most basic foundation to even establish the actual sale price, certificates of value, was not provided. None of the other information to establish prima facie comparability was provided. The fact that such information may be available in the Assessor=s Records is not sufficient. It is not the responsibility of the Hearing Officer to perform an appraisal for the taxpayer or to present evidence for the taxpayer. It would be totally inappropriate for the Hearing Officer to take a list of sales provided by either party and then proceed to research each property in the Assessor=s records.

However, even assuming that the taxpayer had presented the data from the Assessor=s records for each of the ten properties, the averaging of the sales prices is still not substantial and persuasive evidence to establish fair market value for the subject property. An average is an average. In seeking to arrive at the fair market value for a given property the average of any number of sale prices is not sufficient to establish value for the property under appeal.

The technique used by Complainants for the opinion of value offered was not based upon proper appraisal elements or a proper appraisal foundation. Therefore, the opinion of the owner has no probative value. In like manner testimony by Mr. Martin relative to a comparison between the percentage of increase in taxes and the Consumer Price Index over a four year period is irrelevant. The percentages of increase of taxes versus the Consumer Price Index have no bearing on the fair market value of the Complainant=s home.

The evidence presented by Respondent was clear and convincing to sustain the original value made by the Assessor of $354,950 for the subject property. The three sale properties selected by Mr. Rebsamen were appropriate and possessed the necessary elements of comparability for the present appraisal problem. The comparables were somewhat older than the subject house, however, the appraiser made a very conservative adjustment of $100 per year for this difference.

The adjustment to Comparables 1 and 3 accounted for their generally inferior and superior condition, respectively to the subject. All comparables were within 500 square feet in living area to the subject. This is an important factor of comparability. The narrow range of both net adjustments (+3.71 to -3.36) and gross adjustments (6.28 to 9.51) help provide validity to the selection of these properties as comparables for the appraisal assignment.

The appraisal met the statutory criteria of clear and convincing evidence to sustain the Assessor=s original valuation of the subject property.

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 years 2003 and 2004 is set at $67,440.

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 May 14, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor, Hearing Officer