State Tax Commission of Missouri

 

PHILIP & BARBARA CASSIDY,                  )

)

Complainants,               )

)

v.                                                         )           Appeal Number 05-10115

)                        

PHILIP MUEHLHEAUSLER, ASSESSOR,   )

ST. LOUIS COUNTY, MISSOURI,               )

)

 Respondent.                )

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, Hearing Officer finds true value in money for the subject property for tax years 2005 and 2006 to be $148,300, assessed value of $28,180.

Complainant Philip Cassidy appeared pro se.

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

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

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2005.

SUMMARY

Complainants appeal, 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 $148,300, assessed value of $28,180, as residential property.  Complainants proposed a value of $128,400, assessed value of $24,400 in their Complaint for Review of Assessment.  A hearing was conducted on May 11, 2006, at the St. Louis County Government Center, Clayton, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainants’ Evidence

Mr. Cassidy testified in his own behalf.  He offered an opinion of value of $131,000 based upon an offer to buy that he had solicited from a real estate broker two days prior to the evidentiary hearing.  Complainant offered the following exhibits into evidence.

Exhibit A – Copy of Change of Assessment Notice, copy of a June 5, 2005, Post-Dispatch news story, calculation of percentage of increases on the subject property and the five sale comparables listed on the Change of Assessment Notice and a copy of an August 9, 2005, Post-Dispatch article.

Counsel for Respondent objected to each document except the Change of Assessment Notice on the grounds of hearsay, relevance, lack of foundation.  The objections were sustained.  Only the Change of Assessment Notice was received into evidence. 

Exhibit A-1 through A-6 – Copies of the Property Record Cards on the Subject and each of the five comparables shown on the Change of Assessment Notice, with copies of floor plan overlays for the subject and each comparable to show the difference in size of the homes.  No objection was made and these exhibits were received into evidence.

Exhibit A-7 – Copy of a Special Sale Contract offered by Matthew W. Dunaway of Bellington Realty, dated May 9, 2006, making an offer to purchase the subject property for $131,000.  Counsel objected to this exhibit on the grounds of hearsay, lack of foundation, relevance, not valuing the property as of January 1, 2005, the quoted price being the result of a solicited offer.  Objection was sustained and the Special Sale Contract was excluded from evidence.

Respondent’s Evidence

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 $154,800 based upon a sales comparison approach to value.  In performing his sales comparison analysis, the appraiser relied upon the sales of five properties he deemed to be comparable to the subject property. 

FINDINGS OF FACT

1.         Jurisdiction over this appeal is proper.  Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.

2.         The subject property is located at 127 Timka Drive, Ballwin, Missouri.  The property is identified by locator number 22 R 120284.  The property consists of .29 of an acre lot improved by a single-family brick and vinyl-sided, split-foyer style house with full basement, two-car basement garage, open front porch, wood deck, paved walkway, paved driveway leading to the side entry garage.  The improvements are considered to be overage quality construction.  The home was built in 1968 and the improvements are in average condition.  There was a room addition about 1980.  The house has updated windows and an updated kitchen from about 10 years ago.  There is some deferred maintenance items relating to the blacktop driveway and weather damage to the front porch beams.  The house has 7 rooms, including 3 bedrooms and 2 full baths, containing 1,568 square feet of living area above grade.  The full basement is approximately 1,170 square feet with about 316 square feet of finish.

3.         There was no evidence of new construction and improvement from January 1, 2005, to January 1, 2006.

4.         Complainant’s evidence was not substantial and persuasive to rebut the presumptions of correct assessment by the Assessor and the Board and establish the true value in money as of January 1, 2005, to be $128,400 or $131,000, as proposed.

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. Four of the five properties were located within one-tenth to six-tenths of a mile of the subject.  The fifth property was located 2 miles west of the subject, but within the subject’s market neighborhood.  Each sale property sold at a time relevant to the tax date of January 1, 2005.  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.  The appraiser made appropriate adjustments to account for differences between the subject and each sale comparable to arrive at his indicated value.

6.         Respondent’s evidence was clear and convincing to sustain the valuation made by the Assessor and sustained by the Board.  Exhibit 1 was not received to advocate an increase in value above the fair market value of $148,300.

7.         An offer of purchase solicited by the owner of a property from a real estate broker two days prior to an evidentiary hearing does not constitute substantial and persuasive evidence of fair market value.

 

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.  Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.  The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.  Section 138.431.4, RSMo.

Presumptions In Appeals

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  Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).  Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

            The presumptions of correct assessment are rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.  Snider, Hermel & Cupples Hesse, supra.

Standard for Valuation

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, supra.

Market Value

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

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

1.         Buyer and seller are typically motivated.

 

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

 

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

 

4.         Payment is made in cash or its equivalent.

 

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

 

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

 

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

Complainants Fail To Prove Value

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, 2005.  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 burden of proof has not been met in this appeal.  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).   The opinion of value tendered by Mr. Cassidy was not based upon proper elements or a proper foundation therefore it is of no probative benefit in this case.

            By Mr. Cassidy’s own admission he does not desire to sell his home and is not going to accept the offer to purchase he solicited from Mr. Dunnaway.  Mr. Cassidy only obtained this Special Sale Contract for the purpose of putting forth his spurious opinion of value in the evidentiary hearing on his appeal. This action on the part of the taxpayer is not a genuine attempt to explore the market for what his home is worth.  This does not represent any exposure to the market for his property.  The Commission, the Courts of this state or the appraisal industry do not recognize such solicited offers as an appropriate method to value property.

Missouri courts have approved the comparable sales or market approach, the cost approach 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).   

As to the other evidence presented by Mr. Cassidy, none of it will support a valuation of the subject property at $128,400 or $131,000.  The property record cards on the properties listed in the taxpayer’s Notice of Assessment Change do not establish the fair market value of the subject.  Nor does a calculation of the percentage of increase in value from one assessment cycle to the next establish fair market value.  The burden of proof for the taxpayer is not to attempt demonstrate why properties on the Change of Assessment Notice are not what the taxpayer considers to be proper comparables.  The taxpayer’s burden of proof is very simply to present substantial and persuasive evidence of the fair market value of the property on the assessment date.  As Mr. Cassidy was advised and informed at the prehearing conference conducted by the Hearing Officer, he should not rely upon the properties shown on the Change of Assessment Notice and he should understand that the County in its narrative appraisal may find better comparables and based the appraisal on those, as was done in this case.

Since Complainants failed to meet their burden of proof, there is no need to do an analysis of Mr. Froeckmann’s appraisal.  It is sufficient that the Hearing Officer found it to meet the standard of clear and convincing evidence to establish the fair market value of the subject property on January 1, 2005 to be at least $148,300.  Section 137.115.1, RSMo; Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980). Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974); 30 AmJur2d. 345-346, Evidence section 1167.

Evidence of Increase in Value

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.  The Froeckmann appraisal was not received to increase the value of the subject property above the value set by the Assessor and sustained by the Board.  Exhibit 1 provided clear and convincing evidence that the fair market value of the subject property was at least $148,300 on January 1, 2005.  Section 137.115, RSMo.

ORDER

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 2005 and 2006 is set at $28,180.

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 2000.

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 22, 2006.

STATE TAX COMMISSION OF MISSOURI

 

 

_____________________________________

W. B. Tichenor

Senior Hearing Officer

 

 

 

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 22nd  day of May, 2006, to:    Philip Cassidy, 127 Timka Drive, Ballwin, MO 63011, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip A. Muehlheausler, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.

 

 

___________________________

Barbara Heller

Legal Coordinator