NENAD MILETIC,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 03-12070
	)
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 $101,900, assessed value of $19,360.

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 (1) the true value in money for the subject property on January 1, 2003; and (2) whether there was an intentional plan by the assessing officials to assess the subject property at an assessment ratio greater than the average ratio for residential property in St. Louis County.

Complainant appeals, on the ground of overvaluation and discrimination, 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 $101,900 (assessed value of $19,360, as residential property). Complainant proposed a value of $90,000 (assessed value of $17,100). A hearing was conducted on May 13, 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. He gave his opinion of value for the subject property to be $90,000, this was based on Mr. Miletic=s opinion that the average increase in value for residential property for the 2003 assessment cycle had been 7.5%. Complainant offered the following exhibits into evidence to support his opinion of value and his claim of discrimination.

Exhibit A, a prepared statement of Complainant setting out the basis for his appeal.

Exhibit B, photographs of the subject property showing various condition and deferred maintenance problems.

Exhibit C, a copy of the Change of Assessment Notice on the subject property and a copy of the Inspection Notification Door Hanger from the Assessor=s Office, dated 5/5/03.

Exhibit D, Tax History and Property Record Card on the subject property.

Exhibit E, Tax History and Property Record Card on the property at 726 Paddock Court.

Exhibit F, Tax History and Property Record Card on the property at 729 Paddock Court.

Exhibit G, Tax History and Property Record Card on the property at 720 Paddock Court.

Exhibit H, Tax History and Property Record Card on the property at 733 Paddock Court.

Exhibit I, Tax History and Property Record Card on the property at 737 Hutchins Drive.

Exhibit J, Tax History and Property Record Card on the property at 1513 Ridgewood Dr.

Exhibit K, Tax History and Property Record Card on the property at 1331 Liggett Drive.

All exhibits were received into evidence, without objection.

Respondent placed into evidence the testimony of Mr. Craig Whyman, appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Whyman was received into evidence. Mr. Whyman arrived at an opinion of value for the subject property of $115,600 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 719 Paddock Court, Crestwood, Missouri. The property is identified by locator number 25L531180. The property consists of .19 of an acre lot improved by a one-story frame single-family structure of average quality construction. The house was built in 1952 and appears to be in average condition. The residence has a total of six rooms, which includes two bedrooms, one bath, and contains 1,508 square feet of living area. There is no basement. The house does have an attached carport. The subject suffers from functional obsolescence due to poor layout and design of the rear addition. Materials used were sub-standard in relationship to the main structure. The heating and cooling system is also inadequate due to the vent system installed in relationship to the room size. The second bedroom, which is a part of this addition, is cooled by window air and is not part of the central air system. The home is not typical of the three bedroom homes that are on the subject street.

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 $90,000. Complainant=s evidence was not substantial and persuasive to establish an intentional plan by the assessing officials to assess the subject property at a ratio greater than the average assessment ratio for residential property in St. Louis County.

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 the same block as 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. 5-7.

6. The comparables were described as follows:

Comparable 1 (711 Paddock) sold in June 2001 for $124,900. This property consists of a .18 of an acre lot improved by a one-story vinyl sided single-family structure of average quality construction. The house was built in 1952 and appears to be in good condition. The residence has a total of five rooms, which includes three bedrooms, one and a half baths, and contains 1,170 square feet of living area. There is no basement. There is an attached one-car garage.

Comparable 2 (707 Paddock) sold in January 2002 for $112,500. This property consists of a .20 of an acre lot improved by a one-story frame single-family structure of average quality construction. The house was built in 1952 and appears to be in average condition. The residence has a total of six rooms, which includes three bedrooms, one bath, and contains 1,170 square feet of living area. There is no basement. There is an attached carport.

Comparable 3 (726 Paddock) sold in February 2002 for $122,000. This property consists of a .17 of an acre lot improved by a one-story frame single-family structure of average quality construction. The house was built in 1952 and appears to be in good condition. The residence has a total of five rooms, which includes three bedrooms, one bath, and contains 1,170 square feet of living area. There is no basement. There is an attached carport.

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 -$6,400 or 5.1% of the sales price. The net adjustments for Comparable 2 amounted to +$3,100 or 2.8% of the sales price. The net adjustments for Comparable 3 amounted to -$5,900 or 4.8% of the sales price.

9. The adjusted sales prices for the comparables calculated to $118,500, $115,600 and $116,100, respectively. The appraiser concluded on a $115,600 value which calculated to a value per square foot of $76.66 compared with the sales prices per square foot of living area for the comparables of $106.75, $96.15 and $104.27.

10. Respondent meet the standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, to sustain the original valuation of $101,900 presumed to have been made by a computer, computer-assisted method or a computer program.

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).

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 $101,900, 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.

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of the subject property on January 1, 2003. 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. 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). The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986). No other methodology is sufficient to establish discrimination. Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696 (Mo. 1958).

Complainant=s opinion of value was not supported by an substantial and persuasive evidence. The opinion of fair market value of $90,000 was simply based upon what Mr. Miletic asserted was the average amount of increase for property in St. Louis County for the 2003 assessment cycle. This is not a proper method for arriving at fair market value. It is not a technique for appraising property that has been accepted or recognized by the courts of this state or by the Commission. Therefore, the owner=s opinion of value was not based upon proper elements and a proper foundation, therefore it can be given no probative value in the appeal.

Complainant offered into evidence a number of exhibits. However, the exhibits were insufficient to establish the fair market value of the subject property. A brief review of the exhibits will address the shortcomings of the documents as to their lacking in substantial and persuasive effect.

The prepared statement reviewed the various deferred maintenance and condition problems with the subject house. This is helpful to gain an understanding of the condition of the property. However, there is no way in which the Hearing Officer can determine the dollar impact on the market value of the property based simply upon a listing of condition problems. The information relating to the percentage changes in values for 2003 in a neighboring subdivision does not establish fair market value. Furthermore, as is discussed below such information is insufficient to establish a claim of discrimination.

Photographs of the property under appeal are helpful to gain a better understanding of the exact nature of items of deferred maintenance and other condition problems. The various condition problems shown by the photographs are not inconsistent with a house that is over fifty years old. However, photographs do not establish value. There is no logical basis upon which the Hearing Officer can make a determination of value simply by reviewing photographs of condition problems.

This exhibit only establishes that the subject property was increased in value from $16,260, assessed value, in 2001 to $19,360 in 2003. An approximate increase of 19%. However, this does not establish the fair market value proposed by Complainant is correct. There is no presumption that the value established by the Assessor for the 2001 assessment cycle is correct. The fact that a property increases by a certain percentage in a given assessment cycle does not prove fair market value.

This exhibit does not establish the fair market value proposed by Complainant. It only provides information that shows the valuation of the subject property for 2003 to be $101,900.

This group of exhibits was offered by Mr. Miletic to support his claim of discrimination. However as is discussed below these exhibits are not substantial and persuasive evidence to establish discrimination. Neither are they sufficient to establish fair market value for the subject property. Since there is no presumption that the Assessor=s value is correct, these exhibits possess no probative value on either the issue of fair market value for the subject or the issue of discrimination.

Complainant Fails To Prove Discrimination

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainant has the burden to prove the level of assessment for the subject property in 2003. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor=s office.

Complainant must then prove the average level of assessment for residential property in St. Louis County for 2003. This is done by (a) independently determining the market value of a representative sample of residential properties in St. Louis County; (b) determining the assessed value placed on the property by the assessor=s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.

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

Complainant=s discrimination claim fails because he failed to establish the market value of the subject property. Without establishing market value for the property under appeal, the assessment ratio cannot be established. Without establishing the assessment ratio, the taxpayer cannot establish that the subject property is being assessed at a higher percentage of market value that any other property.

However, even if Complainant had established the market value for his property, the discrimination claim would still fail because he has not demonstrated that a statistically significant number of other residential properties within St. Louis County are being assessed at a lower ratio of market value than the subject property. Complainant=s claim of discrimination is based upon the Assessor=s record on seven properties in the subject neighborhood. This is neither a representative sample for St. Louis County, nor is it sufficient as a statistically significant sample for purposes of establishing a claim of discrimination.

Because Complainant failed to establish the market value of the subject property and failed to establish the subject property is being assessed at a higher percentage of market value than a statistically significant number of other properties in St. Louis County, he failed to establish discrimination.

Respondent presented clear and convincing evidence to establish a fair market value as of January 1, 2003, to be $101,900 for the subject. Respondent=s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single family residences.

The adjustments made the Mr. Whyman were consistent with generally accepted guidelines for the appraisal of property of the subject=s type. The adjustments properly accounted for the various differences between the subject and each comparable. The net adjustments to the sale properties fell within a very narrow range from 2.8% to 5.1%. An appropriate adjustment was made to account for the condition problems of the subject as compared to the two comparable properties which were deemed to be of superior condition to the subject. The fact that all three sales relied upon by Mr. Whyman were located on the subject street within a block of Mr. Miletic=s property provides an extremely sound basis for the opinion of value concluded by the appraisal.

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 $19,360.

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 27, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer