PHILIP & MARGARET MANNE,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-10170
	)
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 $192,800, assessed value of $36,630.

Complainant, Philip Manne, 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 sought to raise a claim of discrimination, unequal treatment as to the valuation of land at the evidentiary hearing.

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 $199,100 (assessed value of $37,830, as residential property). The Board reduced the value to $185,000 (assessed value of $35,150). Complainants proposed a value of $154,000 (assessed value of $29,260). A hearing was conducted on April 22, 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, Philip D. Manne, appeared and testified on behalf of Complainants. Mr. Manne offered an opinion of value for the subject property of $154,000. Essentially, Mr. Manne disputed the land value, but not the value for the improvements, which the Assessor had applied to the subject property. It was Mr. Manne=s contention that approximately 1.7 acres of the subject lot could not be developed. Mr. Manne offered into evidence the following exhibits.

Exhibit A (1) Photographs of the subject house, a barn and the subject road; (2) Change of Assessment Notice, dated May 19, 2003; (3) Comparable Sales Analysis Report for Tax Year 2003 on the subject property performed under the Assessor=s computerized mass appraisal system; (4) copy of BOE Decision letter for 2003; (5) copy of BOE Decision, dated July 11, 2003.

Exhibit B An appraisal report prepared by Mr. Manne.

Exhibit C Property Record Card on Subject.

Exhibit D Property Record Cards on the 3 comparables used in Exhibit B.

Exhibit E Copies of pages from Marshall Swift Cost Manual used in Exhibit B.

Exhibit F Listing of repairs needed to subject and estimates of cost for such repairs.

Exhibit G Copy of the inspection notification door hanger left by the Assessor=s office.

Exhibit H A land sale listing from the Internet and Property Record Cards on various parcels in the subject area.

Counsel for Respondent did not object to exhibit A and C. These exhibits were received into evidence. Counsel for Respondent did object to exhibits B, D, E, F, G and H on grounds of relevancy, and lack of foundation. Objection was overruled as to Exhibit F, and sustained as to Exhibits B, D, E, G and H. See, DECISION, infra.

Mr. Manne attempted to raise a claim of discrimination, unequal treatment in the valuation of land, at the evidentiary hearing. The only ground for appeal given on the Complaint for Review of Assessment was overvaluation. See, DECISION, infra.

Respondent placed into evidence the testimony of Mr. Arthur R. Froeckmann, 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. Mr. Froeckmann arrived at an opinion of value for the subject property of $192,800 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. Complainants 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 3370 Bouquet Road, Wildwood, Missouri. The property is identified by locator number 25Z640040. The property consists of 4.78 acres improved by a one-story vinyl-sided single-family structure of average quality construction. The house was built in 1963 and assumed to be in average physical condition. The residence has a total of seven rooms, which includes three bedrooms, two full baths and one half bath, two fireplaces and contains 1,440 square feet of living area. There is a full basement, with approximately 450 square feet of finished area, a rear patio, a small open front porch, large wood deck, paved driveway and an oversized attached two-car garage. There is also a 33 x 24 barn, and a 20 by 20 frame shed. The subject is on a septic tank and a private well, which is typical of the market area and does not appear to 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. Exhibit 1, p. 5.

3. The subject house has a main floor area that measures 28 by 48 feet with an additional 2 foot by 48 foot overhang extending beyond the basement. Therefore the actual exterior measurement of the main floor is 48 by 30 feet, or 1440 as set out on the Assessor=s records and as used by Respondent=s appraiser in his appraisal.

4. Complainant testified he had paved the driveway in September, 2003, however, there was in sufficient evidence to establish the amount the market would provide for this improvement. The assessed value for 2003 will remain as the assessed value for 2004.

5. 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 $154,000.

6. 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 1.25 to 2.7 miles 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. 6-8.

7. The comparables were described as follows:

Comparable 1 (4624 Cliff Forest Drive - 2.5 miles southeast of the subject) sold in January 2002 for $205,000. This property consists of a 3.01 acre lot improved by a one-story frame single-family structure of average quality construction. The house was built in 1986 and appears to be in average physical condition. The residence has a total of seven rooms, which includes three bedrooms, two full baths, and contains 1,883 square feet of living area. There is a full unfinished basement with a two-car side entry garage. The property has a public water supply and a septic system.

Comparable 2 (4095 Montgomery Lane - 1.25 miles southeast of the subject) sold in November 2002 for $197,000. This property consists of a 3.05 acre lot improved by a one-story brick single-family structure of average quality construction. The house was built in 1983 and appears to be in average physical condition. The residence has a total of seven rooms, which includes three bedrooms, two full baths and a half bath, and contains 1,976 square feet of living area. There is a full basement, which has a part finished area. There is an attached two-car garage. The property has a private well and a septic system.

Comparable 3 (4631 Fox Creek Road - 2.7 miles south of the subject) sold in September, 2002 for $146,000. This property consists of a 3.5 acre lot improved by a one-story brick single- family structure of average quality construction. The house was built in 1968 and appears to be in fair physical condition. The residence has a total of five rooms, which includes three bedrooms, one full bath, and contains 1,248 square feet of living area. There is a full basement, which has a recreation room area. There is a two-car basement garage. The property has a well and a septic system.

8. 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.

9. The net adjustments for Comparable 1 amounted to -$5,700 or 2.78% of the sales price. The net adjustments for Comparable 2 amounted to -$2,900 or 1.47% of the sales price. The net adjustments for Comparable 3 amounted to +$31,300 or 21.44% of the sales price.

10. The adjusted sales prices for the comparables calculated to $199,300, $194,100 and $177,300, respectively. The appraiser concluded on a $192,800 value which calculated to a value per square foot of $133.89 compared with the sales prices per square foot of living area for the comparables of $108.87, $99.70 and $116.99.

11. Respondent did not have to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, as he was not seeking to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program.

12. Respondent=s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2003, to be $192,800.

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 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 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).

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).

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.

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).

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, 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.

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).

Complainants= opinion of value was based upon an appraisal performed by Mr. Manne. Mr. Manne testified that he had taken some appraisal courses at community college. He is not at licensed appraiser, nor does he have any appraisal experience. The taking of college courses on appraisal of real property does not provide sufficient qualification by education, training and experience for an individual to testify as an expert on appraisal before the Commission.

Mr. Manne urged that he was not representing himself to be an expert in appraisal. Since by his own admission he is not an expert in appraisal, then no weight can be given to his appraisal document. There is not one standard for the admission of an appraisal document prepared by taxpayers and a different standard for the Respondent. A taxpayer attempting to perform his own appraisal, must demonstrate that he possesses the education, training and experience to have his appraisal received into evidence. That was not the case in this instance.

Furthermore, the appraisal document itself reveals the lack of necessary training and experience for it to be received into evidence. The adjustments made for difference in living area were not properly based upon what the market would reflect, but upon some per square foot cost factor calculated by the Complainant. For example, Mr. Manne=s first comparable was adjusted at $74.37 per square foot of living area. Comparable two was adjusted at $68.18 per square foot. Comparable three was adjusted at $67.82. An adjustment for living area in the range of $25 to $35 per square foot would be more reasonable and more in line with what is generally accepted and relied upon by appraiser for making the adjustment for difference in living area. Other adjustments were likewise suspect as to their appropriateness.

Exhibit B was excluded from evidence upon the objection of Respondent=s Counsel that the adjustments were on an improper bases and there was an improper foundation to establish the expertise of Mr. Manne to perform the appraisal. According, the owner=s opinion, relying on Exhibit B was not based upon proper elements or at proper foundation and had no probative weight or value in this hearing. In like manner, Exhibits D and E, as documents tied to Exhibit B were excluded upon objection, as standing alone they were not probative on the issue of the fair market value of the subject property.

Exhibit H7, the property record card on the property used by Respondent=s appraiser as his comparable three. This exhibit was excluded on the basis of relevancy. The property record cards on proerties used as comparables are not relevant to prove fair market value. The sale price of comparable properties must be adjusted to arrive at an indicated fair market value as compared to the property being appraised. The remainder of Exhibit H was excluded as the documents contained therein related to the claim of discrimination as to unequal land values which Complainants did not set forth on their Complaint for Review of Assessment, but sought to raise that issue at the evidentiary hearing.

The only ground stated in the pleading (Complaint for Review of Assessment) filed in this appeal was overvaluation. The introduction of the argument of unequal land values was an attempt to amend the grounds for appeal. Amendment of pleadings before the Commission is not permitted.

In Daly v. State Tax Commission, 120 S.W.3d 262 (Mo. App. E.D. 2003), the Court found that since the taxpayer=s Complaint for Review of Assessment did not specify Amisclassification@ for the relevant year, such issue Awas not properly before the Commission.@ Daly, at 271. Following the holding in the Daly decision, supra, the Commission is without authority to amend the grounds alleged in the Complaint to include an additional ground for appeal for discrimination or unequal land values. Lewis and Clark State Bank, et al., v. Muehlheausler, STC Appeals No. 01-11402 et al., Order, dated 3/04/04.

Even if discrimination had been stated as a ground for appeal, the Complainant=s proffered evidence fell completely short of establishing discrimination in assessment of the subject property. Taxpayers need to recognize that the issue before the Commission is the fair market value of the property under appeal. Even though assessment notices and assessment records may divide out land values and the value of improvements to the land, it is the fair market value of the property as a whole, as it sits on the valuation date that is relevant. What values may have been assigned to land or to improvements does not matter. It is the total value that is at issue and upon which evidence must be offered.

Where there is at claim of discrimination based upon at lack of valuation consistency, Complainants have the burden to prove the level of assessment for the subject property for 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.

Then Complainants would have to establish the average level of assessment for residential property in St. Louis County. 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 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 commercial 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).

A discrimination claim would have failed because Complainants failed to establish the market value of their property. Without establishing their market value, they cannot establish their assessment ratio. Without establishing their ratio, they cannot establish that they are being assessed at a higher percentage of market value that any other property. However, even if Complainants had established their market value, a discrimination claim would still fail because they have 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 their property.

Because Complainants failed to establish the market value of their property and their proffered evidence would have failed to establish that they are being assessed at a higher percentage of market value than a statistically significant number of other properties in St. Louis County, a claim of discrimination would have not bee established based upon the evidence which they sought to introduce.

The evidence presented by Respondent=s appraiser (Exhibit 1) constituted substantial and persuasive evidence of the fair market value of the subject property as of January 1, 2003. Mr. Froeckmann selected three sales of properties which he deemed to be the best comparables which he could utilize for the appraisal problem. The adjustments to account for the difference in the living area were appropriate and at a level which is generally recognized and accepted within the appraisal industry. Although a number of adjustments had to be made to all comparables, the net adjustments for comparables one and two were less than 3% of the sales price and the gross adjustments of approximatley 20% were within acceptable standards. The gross and net adjustments to comparable three while being somewhat higher than for the other comparables were appropriate given the need to adjust for the inferior condition and location of this comparable.

The fair market value of $192,800 concluded by the appraiser is well support and explained by the appraiser (Exhibit 1, p. 9). Accordingly, the presumption of correct assessment by the Board is rebutted and the value determined by the appraiser is established as the fair market value as of January 1, 2003.

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 $36,630.

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 April 29, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer