KENNETH P. ASTON,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 03-10181
	)
PHILIP MUEHLHEAUSLER, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2003 and 2004 set at $388,400, assessed value of $73,800.

Complainant 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.

Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $388,400 (assessed value of $73,800, as residential property). Complainant proposed a value of $284,059 (assessed value of $53,971). 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.

Complainant testified in his own behalf. Mr. Aston offered his opinion of value for the property under appeal to be $284,059 as given on the Complaint for Review of Assessment. Mr. Aston arrived at this opinion of value by averaging the per square foot appraised values for 2003 from the Assessor=s records on eight different properties and applying this per square foot average to his property. He then averaged the Assessor=s appraised values on the same eight properties for 2003. Finally, the Complainant averaged the two indicated values which he had determined from his two methods to arrive at an average value of $284,059.

Complainant offered into evidence Exhibit A, a spreadsheet setting forth his technique for valuation. Counsel for Respondent objected to the exhibit on the grounds of relevancy and lack of foundation to establish that the method used for valuation was a recognized and accepted methodology for the appraisal of real property. The objection was sustained as to Exhibit A. It was excluded from evidence. Exhibit B which had been marked for identification purposes consisted of photographs of another property that was no longer under appeal and it was withdrawn at hearing.

Respondent placed into evidence the testimony of Mr. Arthur R. Froeckmann, 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. Froeckmann was received into evidence, over the objection of Complainant. Complainant objected to the appraiser=s adjustment for Comparables 2 and 3 being on public water and also that comparables 2 and # were in a different subdivision. The objection was overruled on the basis that the objection goes to the weight that should be given the appraisal and not its admissibility.

Mr. Froeckmann arrived at an opinion of value for the subject property of $405,000 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 17058 Rooster Ridge Road, Chesterfield, Missouri. The property is identified by locator number 19U540193. The property consists of 5.34 acres (2 acres of which is in a flood hazard area - improvements are not affected by potential flooding) improved by a one-story frame single-family structure of average quality construction. The house was built in 1977 and appears to be in average condition. The residence has a total of six rooms, which includes four bedrooms, three full baths, and contains 2,375 square feet of living area. There is a full basement, with approximately 2,000 square feet of living area. The subject property is further improved by a three-car attached garage, an open front porch, concrete patio below a rear deck, an enclosed frame porch, in-ground swimming pool, detached frame shed, paved walkway, detached frame garage with attic area, a blacktop driveway leading to the garages and a front semi-circular blacktop driveway. No apparent deferred maintenance items are noted. The property is served by a septic tank and a private well that are common to the market area and does not adversely affect marketability. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2003.

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 $284,059.

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, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. Exhibit 1, pp. 6-9.

6. The comparables were described as follows:

Comparable 1 (17070 Rooster Ridge Road - .1 of a mile Northwest of the subject) sold in July 2002 for $425,000. This property consists of a 3.99 acres improved by a one-story frame single-family structure of good quality construction. The house was built in 1985 and appears to be in good condition. No significant deferred maintenance was reported. The residence has a total of eight rooms, which includes four bedrooms, three full and one half baths, and contains 2,648 square feet of living area. There is a full basement, which has 260 square feet of finished area. The property is further improved by an enclosed frame porch, deck, patio, paved walkways, paved circular driveway and an attached two-car garage.

Comparable 2 (16490 Saddle Creek Road - .6 of a mile South of the subject) sold in November 2002 for $400,000. This property consists of a 2.16 acres improved by a one-story frame single-family structure of average quality construction. The house was built in 1976 and appears to be in average condition. No significant deferred maintenance was reported. The residence has a total of seven rooms, which includes three bedrooms, three full and one half baths, and contains 2,502 square feet of living area. There is a full basement, which has 1,100 square feet of finished area. The property is further improved by an open frame porch, deck, in-ground pool, paved walkways, paved driveways and an attached two-car garage. The property has public water and a septic system.

Comparable 3 (7 Horseshoe Ridge Road - .9 of a mile Southeast of the subject) sold in April 2002 for $402,000. This property consists of 3.02 acres improved by a one-story frame single-family structure of average quality construction. The house was built in 1976 and appears to be in good condition. No significant deferred maintenance was reported. The residence has a total of seven rooms, which includes three bedrooms, two full and one half baths, and contains 2,028 square feet of living area. There is a full basement, which has 2,000 square feet of finished area. The property is further improved by an open frame porch, deck, patio, in-ground pool, wading pool, paved walkways, paved circle driveway and an attached two-car garage. The property has public water and a septic system.

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 -$20,000 or 4.7% of the sales price. The net adjustments for Comparable 2 amounted to +$7,400 or 1.9% of the sales price. The net adjustments for Comparable 3 amounted to -$700 or 0.2% of the sales price.

9. The adjusted sales prices for the comparables calculated to $405,000, $407,400 and $401,300, respectively. The appraiser concluded on a $405,000 value which calculated to a value per square foot of $170.53 compared with the sales prices per square foot of living area for the comparables of $160.50, $159.87 and $198.22.

10. Respondent=s evidence met the standard of clear and convincing to sustain the original assessment made by the Assessor, as of January 1, 2003, to be a fair market value of $388,400.

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, even if simply to sustain the value made by the Assessor (which is not presumed to be correct), 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, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program. There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $388,400, 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, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 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.

Complainant=s opinion of value was based simply upon an averaging for eight 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 values 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 or appraised values 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 is not an appropriate method for valuing of real property. In the present case basic information was presented on eight properties. However, only two of the properties had sold within a year of the tax date of January 2003. Two of the properties did not even have a sale date given. Furthermore, the values being averaged were not actual sale prices, but were simply the appraised values placed on the properties by the Assessor for the 2003 assessment cycle. Essentially, Complainant was admitting or at least arguing that the Assessor had properly arrived at the fair market value for these eight properties using the County=s mass appraisal system, however, that same system had overvalued the subject property. This is illogical. If it is assumed that the Assessor=s appraised values on the eight properties are correct, why wouldn=t the appraised value placed on the subject property using the same computer methodology also be correct? Of course, any technique of valuation that is based upon using the appraised values determined by the Assessor begins with a fatally defected flaw. Since there is no presumption that the Assessor=s valuation is correct, no weight can be given to an averaging of the Assessor=s valuation as to a determination of fair market value.

The averaging of the appraised values set by the Assessor is not substantial and persuasive evidence to establish fair market value for the property under appeal. An average is an average, but it doesn=t establish fair market value. In seeking to arrive at the fair market value for a given property the average of any number of appraised prices is not sufficient to establish value for the property under appeal. It is not even relevant to establishing fair market value when the very data upon which the average is based and from which the average is derived carries absolutely no presumption that the data is representative of a correct fair market valuation.

The technique used by Complainant 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. All the Complainant=s theory proves is that the average of $268,968 and $299,150 equals $284,059. However, the issue before the Commission was not what is the average of two figures. The issue was fair market value of the subject property. Complainant failed to meet his burden of proof and thereby failed to establish the value presented to be the fair market value.

Respondent=s evidence constituted clear and convincing evidence to establish a fair market value of $388,400 for the property under appeal. The appraisal report performed by Mr. Froeckmann established value by utilization of one of the three recognized and accepted methodologies for the valuation of real property in an appeal before the Commission. The sales comparison or market approach to value generally is the strongest of the three approved approaches to value.

This is especially true when the sale properties used for comparison are from the same general location of the subject and have sufficient factors of comparability. Such was the case for this appraisal problem. An adjustment to Comparable 1 accounted for its superior quality of construction. The other adjustments for differences in bedroom and bathroom count and living area were all within generally accepted guidelines for an appraisal problem of this nature.

The remaining adjustments for the various differences in amenities all appear to be appropriate to account for the contributory value from the market for these factors. The gross percentage of adjustments fell in a very acceptable range of 11.7% to 20.7%. The net adjustments as a percentage of sale price was in an extremely tight range from 0.2% to 4.7%. Appropriate adjustments to address the two comparables that were on public water system were made, as was the fact that the specific neighborhood for comparables 2 and 3 was superior to the subject=s more immediate neighborhood.

All of the various differences in factors between a subject property and the comparables utilized in an appraisal problem must be accounted for in the appraisal process. This is accomplished by make the various adjustments as did Mr. Froeckmann in his appraisal. The resulting indicated values of each comparable provide clear and convincing support to the final opinion of value of $405,000, which establishes the Assessor=s original valuation of $388,400, since by Commission rule the value established by the Assessor or the Board, whichever is higher, can not be exceeded in this decision.

Respondent met the burden of proof to present clear and convincing evidence. In the absence of Complainant meeting his burden of proof the original assessment must be affirmed.

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

The assessed value for the subject property for tax years 2003 and 2004 is set at $73,800.

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