State Tax Commission of Missouri

Complainants’ Points on Appeal

Complainants put forth five grounds in support of their Application for Review. The Commission states those grounds as follows:

1. The Hearing Officer committed reversible error in rejecting Complainants’ competent evidence of the fair-market value of the subject property.

2. The Hearing Officer committed reversible error by finding that Complainants’ failed to present substantial and persuasive evidence that the Assessor’s or the Board’s valuation was erroneous.

3. The Hearing Officer committed error in admitting into evidence the testimony and report of the Assessor’s appraiser, contrary to 12 CSR 30-3.065(4).

4. The Hearing Officer erred in that the Decision is contrary to law, against the overwhelming weight of the evidence, and reflects an abuse of the hearing officer’s discretion.

5. The Hearing Officer erred in considering the valuation evidence proffered by the Assessor’s appraiser.

Commission’s Holding

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995). Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980). The Hearing Officer did not err in his determinations as challenged by Complainants.

Rejection of Complainants’ Evidence

Complainants assert that the Hearing officer committed reversible error in that he “rejected Complainants’ competent evidence of the fair market value of the subject property.” This claim is founded upon two critical flaws. First, Complainants fail to identify what “evidence of fair-market value” was rejected.

The record establishes that Complainants were permitted to present testimony from Richard Adams, Andrew W. Dielmann, Michael S. Cohen II and Michael S. Cohen, Complainant. Furthermore, Exhibits A, D, E and F were all received into evidence. Complainants did not offer documents which had been marked as Exhibits B, C and G. Complainants fail to establish what evidence which they tendered on the subject of fair market value was rejected by the Hearing Officer.

Complainants in their Application for Review cite to testimony by Mr. Cohen, and Mr. Dielmann. However, they fail to offer what, if any ruling the Hearing Officer made which excluded relevant testimony on the issue of fair market value or what if any offer of proof was made after an objection was sustained to the admission of any given testimony. In short, Complainants leave it to the conjecture and speculation of the Commission as to what evidence of fair market value was rejected, that is excluded by the Hearing Officer that is the basis for their claim of reversible error.

Reversible error is predicated upon the admission or exclusion, i.e. rejection of evidence. Courtroom Handbook on Missouri Evidence, 2005, Wm. A. Schroeder, §103, pp.16-30. Reversible error cannot rest upon the weight which the trier of fact (Hearing Officer) gives to various exhibits or testimony. Complainants’ second critical flaw is that there is not a single citation to any case law which will support their position that the Hearing Officer’s determination that the testimony of Mr. Cohen and Mr. Dielmann was not persuasive on the issue of fair market value constitutes reversible error. Complainants’ failure to provide such case law authority is an admission that the weighing of evidence by the Hearing Officer cannot constitute reversible error.

Having determined that the Hearing Officer did not exclude relevant evidence, but only weighed the evidence submitted, the Commission turns to a review of that evidence. The Hearing Officer made specific findings of fact with regard to Complainants’ opinion of value of $54,000 and the evidence they offered in support thereof. The evidence in the form of testimony of three witnesses (Adams, Dielmann and Cohen II) was determined to not be based upon any recognized appraisal methodology that would support the opinion of $54,000. Decision, Findings of Fact 4, 5 & 6, p. 5. More importantly, Mr. Dielmann did not state an opinion of fair market value as of January 1, 2005. He would not offer an opinion of value. Therefore, it follows that his testimony cannot be given any weight to support the owner’s opinion.

As to Mr. Cohen’s testimony of an opinion of value of $54,000, the Hearing Officer found that opinion was not based upon proper elements or a proper foundation and accordingly gave it no weight. The Commission finds no basis to overrule the Hearing Officer relative to this finding of fact. See, Standard Upon Review, supra. Without a proper basis the owner’s opinion of value did not possess sufficient weight to rebut the presumptions of correct assessment. The Hearing Officer properly addressed the matter at pages 14 and 15 of the Decision, Fair Market Valuation. There is no need for the Commission to repeat the reasoning and conclusions of the Hearing Officer. It is sufficient to find they are well founded and proper.

Arguments raised under Point 1 of Complainants’ Application for Review are not well taken. The findings, conclusions and determinations of the Hearing Officer, with regard to the claims made by Complainants on this point, are supported by the evidence on the record.

Substantial and Persuasive Evidence

Complainants next argue reversible error in the Hearing Officer’s conclusion that the testimony of Mr. Cohen that the fair market value of the subject property as of January 1, 2005, was $54,000 was not substantial and persuasive evidence to establish the Assessor’s or the Board’s valuation was erroneous. Once again, Complainants omit any case citation which would establish that a finding by a trier of fact on whether evidence meets the standard of substantial and persuasive constitutes reversible error. This omission leads the Commission to the conclusion, as with Complainants’ first point that the weight given to evidence does not establish reversible error.

Complainants assert the unsubstantiated opinion of value given by Mr. Cohen “… was probative and provided an accurate basis for valuation,” citing to Esmar v. Zurich Ins. Co., 485 S.W.2d 417, 424 (Mo. banc 1972). A reading of Esmar at page 424 only establishes the general rule “The owner as (sic – of) property is qualified to give his opinion as to the value of his own property, even though he was not a real estate expert.”

In the present case, that is the rule which the Hearing Officer followed. He allowed Mr. Cohen, although not a real estate or an appraisal expert to give his opinion of value. He did not exclude this testimony. The Hearing Officer included this principal as part of the Conclusions of Law. See, Decision, p. 9, Owner’s Opinion of Value. The Commission can not find it to be

reversible error when the Hearing Officer properly followed and applied the law and permitted Mr. Cohen to testify as an owner.

Complainants next take exception to the Hearing Officer’s reliance on Shelby County R-IV School District v. Herman, 392 S.W.2d 609, 613 (Mo. 1965). Complainants assert that the Hearing Officer erred because in Shelby County the landowner “… employed methods of valuation criteria that were contrary to Missouri law.” It is the position of Complainants that “no affirmative evidence of any improper basis for Mr. Cohen’s opinion exists.” Therefore, the owner’s opinion should stand on its own.

The Commission does not concur with the rational advanced by Complainants. The Commission recognizes that in Shelby County the taxpayer used what he described as “a different method of figuring the value of this land.” It is also clear form a reading of the case that the attempt to value based upon a capitalization of income method was not in keeping with recognized and accepted appraisal practice. However, the Commission notes the language of the Court in its rejection of the owner’s method, when it declared that the method “… must be based upon a foundation which minimizes, so far as possible, conjecture and uncertainty.”

This is a sound rule of practice in the present case. Mr. Cohen’s opinion of value is based upon the problem of the sewer backup on the subject property. A fact recognized by the Hearing Officer. See, Decision, Finding of Fact, 10, p. 5; Sewer Backup Issue, pp. 13-14. However, there is nothing further by which any rational and logical determination of value can be made based upon the owner’s unsupported opinion.

Following Complainants’ line of reasoning, Mr. Cohen could have given any amount for his opinion of value and the Hearing Officer would have to accept it as conclusive. However, any owner’s opinion, without substantiation leaves the trier of fact with nothing but “conjecture and uncertainty.” The standard for value which Complainants are seeking to establish is that value must be whatever the owner says it is. Neither Esmar nor Shelby County stands for such a proposition.

Arguments raised under Point 2 of Complainants’ Application for Review are not well taken. The findings, conclusions and determinations of the Hearing Officer, with regard to the claims made by Complainants on this point, are supported by the evidence on the record.

Violation of 12 CSR 30-3.065(4)

Complainants’ third point was adequately addressed by the Hearing Officer in his Decision. See, Decision, Ruling on Objection to Exhibit 1, pp. 9-12. The Hearing Officer overruled Counsel for Complainants objection at hearing. Counsel for Complainants failed again to present any case support to establish the ruling on this objection was reversible error on the part of the Hearing Officer. The Commission finds no basis from the record or the argument put forth in the Application for Review to reverse the Hearing Officer’s ruling on that objection. The admission of Exhibit 1 by the Hearing Officer is sustained.

Complainants argue under this point, “The Decision therefore is predicated on an extremely prejudicial and erroneous evidentiary ruling, given that the Decision concludes that the ‘appraisal report presents substantial and persuasive evidence of the fair market value of the subject property … .’ ” The flaw in the argument is that Counsel for Complainants failed to complete the cited quotation. What the Hearing Officer actually found was:

“The appraisal report presents substantial and persuasive evidence of the fair market value of the subject property, based upon a recognized, documented and properly performed appraisal, with a single exception. The appraisal fails to address the sewer backup problem. Therefore, the appraisal is the only probative evidence on the record to establish fair market value of the property in a condition unaffected by the sewer backups. However, without addressing this issue and adjusting for this negative influence, since it was not demonstrated that any of the three comparables suffered from this condition, the appraisal report is insufficient to rebut the presumption of correct assessment by the Board.”

Decision, p. 12.

The Commission finds no error in this conclusion. It is clear that the Hearing Officer Decision in this case is no “predicated on an extremely prejudicial and erroneous evidentiary ruling,” i.e. admission of Exhibit 1. The Hearing Officer’s finding was that Complainants had failed to meet their burden of proof under the law. Therefore, had Respondent simply rested after the conclusion of Complainants case in chief the outcome of the appeal would have been the same. The failure of Complainants to present substantial and persuasive evidence to establish fair market value left the presumption of correct assessment by the Board in tact.

Exhibit 1 while received into evidence, failed to rebut the presumption of correct assessment by the Board and establish fair market value of the subject property accounting for the sewer backup problem. This is clear from a reading of the Decision. There was nothing prejudicial to Complainants in receiving Exhibit 1 into evidence, nor was it erroneous.

Arguments raised under Point 3 of Complainants’ Application for Review are not well taken. The findings, conclusions and determinations of the Hearing Officer, with regard to the claims made by Complainants on this point, are supported by the evidence on the record.

Abuse of Discretion

Complainants’ fourth point is the catch-all argument that the Decision is contrary to law, against the overwhelming weight of the evidence, and abuse of discretion on the part of the Hearing Officer. However, there is no development of the argument. The problem with this generic assertion is much the same as the fatal problem of Mr. Cohen’s opinion of value. Neither is supported by evidence and sound reasoning.

When a party elects to raise the claims of contrary to law, against the weight of evidence and abuse of discretion it is necessary to develop the argument. In this instance the assertions are put forth, but then there is nothing given in support of any of these arguments. In other words, Counsel for Complainants failed to put forth any specific elements which establish that the Decision is contrary to the law, or against the weight of the evidence, or how the Hearing Officer abused his discretion. Nothing is provided in the Application for Review under this point which ties any one of these claims to any specific finding of fact, conclusion of law or determination set forth in the Decision. In other words, the Commission is apparently supposed to rely upon surmise or conjecture to arrive at what it is Complainants are actually asserting under this point.

If this is intended as a summary claim for points 1, 2 and 3 it is redundant and therefore unnecessary. If this was the intention of Complainants’ Counsel in raising these claims, then each has been addressed and rejected in the Commission’s holdings under Complainants’ first three arguments.

Arguments raised under Point 4 of Complainants’ Application for Review are not well taken. The findings, conclusions and determinations of the Hearing Officer, with regard to the claims made by Complainants on this point, are supported by the evidence on the record.

Consideration of Assessor’s Evidence

The final argument which Counsel for Complainants advances is that the Hearing Officer erred in “consideration of the fundamentally flawed valuation evidence proffered by the Assessor’s appraiser.” Counsel labors under this misunderstanding, as previously addressed, that the basis of the Decision was Exhibit 1. The Hearing Officer could not have erred in giving consideration to Exhibit 1. It was necessary for him to consider it and to give it as much weight as he deemed it merited. The Hearing Officer properly concluded that it did represent fair market value, but for the failure to account for the problem of the sewer back-up.

However, the determination that the presumption of correct assessment by the Board was to stand in this case was not predicated upon Exhibit 1. The Board presumption stood because Complainants failed to meet the required burden of proof. The Hearing Officer admitted into evidence the testimony of Complainants’ four witnesses and all exhibits which they tendered. These actions were all for the benefit of Complainants and cannot represent any “serious flaws in the proceeding below.” In point of fact, nothing which Counsel for Complainants has raised in the Application for Review even border on a flaw in the proceedings, let alone a “serious flaw.” Therefore, the request to reopen the hearing to take “additional evidence” under 12 CSR 30-3.080(5)(A) is denied. Counsel has failed to even offer a single item of additional evidence which Complainants seek to offer that the Hearing Officer excluded. There is none.

Arguments raised under Point 5 of Complainants’ Application for Review are not well taken. The findings, conclusions and determinations of the Hearing Officer, with regard to the claims made by Complainants on this point, are supported by the evidence on the record.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts. If no judicial review is made within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis City, 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.

SO ORDERED August 10, 2006.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jennifer Tidwell, Commissioner

Charles Nordwald, Commissioner

DECISION AND ORDER

HOLDING

Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2005 and 2006 set at $169,260, assessed value of $31,160.

Complainant appeared in person and by Counsel, Elkin Kistner, St. Louis, Missouri.

Respondent appeared by Counsel, Carl W. Yates, III, Associate City 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 City Board of Equalization, which reduced the valuation of the subject property. The Assessor determined an appraised value of $217,210 (assessed value of $41,270, as residential property). The Board reduced the value to $169,260, assessed value of $32,160. Complainants proposed a value of $42,325, assessed value of $8,040 in the Complaint for Review of Assessment. A hearing was conducted on March 7, 2006, at the St. Louis City Hall, St. Louis, Missouri. Elkin Kistner entered his appearance on the record as Counsel for Complainants at the evidentiary hearing.

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

Complainants’ Evidence

Complainants offered into evidence the testimony of Richard Adams, appraiser for St. Louis City; Andrew W. Dielmann, Real Estate Broker, Michael S. Cohen II, son of Complainants, and Michael S. Cohen (Complainant). Complainant testified that his opinion of the fair market value for the subject property as of January 1, 2005, was $54,000 based upon his understanding of what a speculator would give for the property knowing of the sewer backup problem.

Complainant also offered into evidence the following Exhibits, which were received into evidence over objection:

Exhibit A – Copy of Grand-Bates Stormwater Relief Study, prepared by Campbell Design Group, February, 1987 for the Metropolitan St. Louis Sewer District (MSD). Counsel for Complainant objected to the exhibit on the ground of hearsay and no foundation. The testimony of Complainant established this document had been received from MSD as part of his investigation concerning the ongoing problem of storm water and sewage backups at the subject home. Objection was overruled. The document is on its face a record kept in the ordinary course of business by MSD.

Exhibit D – Copy of a letter from Elkin L. Kistner to the attorney for MSD, dated March 8, 2005 requesting documents on behalf of Complainants from MSD relative to overcharged sewer lines or sewer backups on the residences on the 4600 block of Tower Grove Place. Objection was made on ground of relevance. Objection was overruled. The document is simply background to establish the means by which Exhibit A and other documents were obtained from MSD by or on behalf of Complainants.

Exhibit E – Copy of three letters from Corporate Claims Management, Inc. on claims made by Complainants to MSD for sewer backups. Objection on ground of hearsay was overruled under business document exception.

Exhibit F – Copy of four pieces of correspondence from 1992 and 1994 relating to the continuing problem of sewer backups on the 4600 block of Tower Grove Place. Objection on ground of hearsay was overruled under the business document exception.

Documents which had been marked for identification as Exhibits B, C and G were not offered by Complainants.

Respondent’s Evidence

Respondent placed into evidence the testimony of Richard Adams. The appraiser testified as to his appraisal of the subject property (Exhibit 1). Mr. Adams arrived at an opinion of value for the subject property of $205,000 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.

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 one block of the subject. 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.

Mr. Adams 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. Mr. Adams made no adjustment for the negative influence of the subject being subject to periodic storm water and sewage backups into the basement of the Complainants’ house.

Counsel for Complainant objected to Exhibit 1. The objection was taken under advisement to be ruled on in this decision. Objection is overruled and Exhibit 1 is received into evidence as part of this record. See, Ruling on Objection to Exhibit 1, infra.

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 City Board of Equalization.

DECISION

Ruling on Objection to Exhibit 1

Counsel for Complainants objected to the receiving into evidence of Exhibit 1 on the grounds of it not being a proper appraisal in two respects. Mr. Adams did not identify that he was exempt from licensure or certification under the Missouri Real Estate Appraisers act and since the appraisal did not adjust to properly recognize the negative influence of the water backup problem it did not conform to USPAP (Uniform Standards of Professional Appraisal Practice). Complainants’ objection is overruled with respect to both grounds. The appraisal report of Richard Adams (Exhibit 1) is received into evidence.

12 CSR 30-3.065(4) Objection

Commission Rule 12 CSR 30-3.065(4) provides that an appraisal report filed with the Commission is to contain either the Missouri Real Estate Appraisers Commission certificate or license number of the appraiser, or a statement setting forth the basis for exemption from licensure and certification for the appraiser. Mr. Adams is not a licensed or certified appraiser under the Real Estate Commission. Mr. Adams is an employee of the Office of the Assessor of the City of St. Louis.

Mr. Kistner’s direct examination of Mr. Adams as part of Complainants’ case in chief, actually cross-examination on the Adams appraisal before Mr. Adams had testified as to his appraisal, established the foundation by which Mr. Adams is exempt from licensure and therefore, his appraisal could be received into evidence. Section 339.501.5(3), RSMo provides an exemption from licensure for any employee of a local, state or federal agency who performs appraisal services within the scope of his or her employment.

The provision in 12 CSR 30-3.065(4) calling for the appraiser’s state certification or license number or a statement setting forth the basis for exemption from licensure and certification applies to an appraisal filed with the commission or offered into evidence pursuant to 12 CSR 30-3.060 – Exchange of Exhibits, Prefiled Direct Testimony and Objections. There was no order issued requiring the parties to exchange exhibits and profile written direct testimony under 12 CSR 30-3.060 in the present appeal. The Commission has not applied the requirement of 12 CSR 30-3.065(4) to appeals where no exhibit exchange has been ordered. Nevertheless, the Hearing Officer is of the opinion that non-state licensed persons preparing appraisals to be submitted in cases before the Commission would be well served to include on the certification page of the appraisal a general statement that the appraiser is exempt for licensure under the statutory provision relating to local government employees preparing appraisals in the scope of employment. However, failure to do so does not provide a basis for exclusion of the appraisal report, since the necessary foundation to establish exemption from licensure can be developed in testimony from the appraiser, as was done in this instance by Mr. Kistner. Objection as to improper appraisal under 12 CSR 30-3.065(4) is overruled.

Uniform Standards of Professional Appraisal Practice (USPAP) Objection

Counsel for Complainants objected to Exhibit 1 being received into evidence on the ground of an improper appraisal based upon Mr. Adams’ failure to account for or address the negative influence of the sewer backups which occur in the basement of the house at 4662 Tower Grove Place. Mr. Adams as part of his testimony as a witness called by Complainants did testify it was his understanding of USPAP that a negative influence such as the sewer backups should be addressed in an appraisal. Mr. Adams admitted he did not specifically address this issue, but did recognize evidence of previous basement water damage. Adams’ Testimony, Exhibit 1, p. 2.

Although no specific provision of USPAP was cited by either Mr. Adams or Counsel for Complainants relative to the matter of accounting for such a negative influence, this is a matter covered by USPAP. Standards Rule 2-1(c) requires an appraisal report to “clearly and accurately disclose all … limiting conditions.” USPAP, 2005, p. 22. The Comment to this provision gives as an example of limiting conditions – “a known but not yet quantified environmental issue.”

The existence of a periodic sewer backup in the subject basement is an environmental issue which impacts in a negative manner on the value of the subject property. Mr. Adams’ recognition of previous water damage in the basement is not a sufficient recognition of the cause or source of the water damage. That is it does not address what the appraiser knew was not water damage from a basement foundation leak, that is subsurface water seepage, but was damage from sewer backups.

The appraiser in his Statement of Contingent and Limiting Conditions (Exhibit 1, Condition 4, p. 8) assumed that there were no “hidden or unapparent conditions of the property, subsoil or structures, which would render it more or less valuable.” The appraiser should have as an exception to Condition 4 recognized the subject basement suffers from periodic sewer backups. This failure to recognize and acknowledge this factor in the appraisal is not basis for the exclusion of the report. The failure to account for the sewer backup condition simply goes to the weight which can be given the appraisal report for the purpose of valuation as of January 1, 2005.

The appraisal report presents substantial and persuasive evidence of the fair market value of the subject property, based upon a recognized, documented and properly performed appraisal, with a single exception. The appraisal fails to address the sewer backup problem. Therefore, the appraisal is the only probative evidence on the record to establish fair market value of the property in a condition unaffected by the sewer backups. However, without addressing this issue and adjusting for this negative influence, since it was not demonstrated that any of the three comparables suffered from this condition, the appraisal report is insufficient to rebut the presumption of correct assessment by the Board.

Objection as to failure to comply with USPAP is overruled.

Complainants Fail to Prove Fair Market Value

Virtually all of Complainant’s case centered on establishing that the subject property suffers from periodic sewer backups, and nothing of probative value was presented to establish fair market value. Exhibits A, D, E and F all go to addressing the sewer backup matter and demonstrating the loss of use, as well as financial loss to Complainants because of this condition. These matters have no probative benefit as to what a willing buyer and seller would have agreed to as the purchase price for the subject on January 1, 2005. These are matters Counsel will no doubt address in the pending civil action against MSD by the Cohens and others. However, they missed the mark on the evidence necessary to reach the level of substantive and persuasive to rebut the presumption of the Board’s correct assessment of the property and establish fair market value.

Sewer Backup Issue

The fact of periodic sewer backups over a period of years was simply and well established by the testimony of Mr. Cohen. This should not have been a factual dispute in any form or fashion. It is unnecessary in judicial or administrative law proceedings to waste the time of the trier of fact and concluder of law, as well as the parties, presenting evidence on a fact which is not in dispute. The parties in this instance could have and should have simply stipulated on the record that the subject property has had a history and continues to suffer from periodic backups of rain waste water and raw sewage in the basement. Furthermore, a simple agreement that the periodic backups constitute a negative influence on value would have greatly reduced the unduly long amount of time at evidentiary hearing on this case.

The subject property has experienced periodic backups during times of rain over the past 15 years or more. There is no reason, based upon the evidence in this record to assume that this condition did not exist as of January 1, 2005, nor that it will not continue, unless some remediation is made for the problem. The existence of this ongoing problem would result in a prospective buyer giving a lower purchase price than would be commanded in the market if this factor did not exist. It takes neither a Philadelphia Lawyer nor a Philadelphia Appraiser to arrive at that conclusion, common sense dictates it.

Fair Market Valuation

Complainants only evidence of fair market value was the opinion proffered by Mr. Cohen. The owner is always entitled to offer an opinion of value. However, an owner’s opinion of value without being supported by substantial and persuasive evidence to establish fair market value is never sufficient to rebut the presumption of correct assessment by the Board. In an appeal such as this involving a residence, substantial and persuasive evidence will either be an appraisal of the subject or data as to a recent sale of the subject. No such evidence was forthcoming on behalf of Complainants in this appeal.

The owner’s opinion of $54,000 was based upon some type of conversations he had with unidentified individuals as to what a “speculator” might pay for the property. Testimony of Mr. Cohen. This information is not substantial and persuasive evidence of what a willing buyer and seller would have given for the property in a market transaction on January 1, 2005. An opinion of value based upon this information is not based upon proper elements for arriving at fair market value for ad valorem tax purposes. An opinion of value as to what a speculator might or might not give is not grounded in a proper foundation to be given any probative weight in an appeal before the Commission. The basis upon which Mr. Cohen formed his opinion of value is not a methodology or an approach for determining fair market value recognized by the Courts of this state, this Commission or by professionals in the field of real estate appraisal.

The owners’ opinion of value can be given no probative weight in this case. Accordingly, there is no relevant evidence in Complainants’ case which addresses in a substantial and persuasive manner the issue of fair market value. Complainants failed to meet their burden of proof on the only issue before the Commission – fair market value. Having failed to meet the required burden of proof, the presumption of correct assessment by the Board stands and that value must be affirmed.

Respondent Fails to Prove Fair Market Value

The failure of Respondent’s appraiser to address in his appraisal the negative influence from the backup problem was rendered moot upon Complainants’ failure to present a prima facie case to establish fair market value. Since the Board presumption was not rebutted by Complainants’ case in chief, their claim was lost at that point, irrespective of whether Respondent offered evidence of fair market value or not.

The offering of Exhibit 1 was for the purpose of establishing a value less than the Assessor’s original value, but more than the Board value. Since, as has been addressed above, Respondent’s appraisal was substantial and persuasive to establish fair market value in the absence of the backup factor. However, it failed to reach the required evidentiary level to rebut the presumption and establish fair market value for 4662 Tower Grove Place as it existed subject to the backup factor on January 1, 2005.

Respondent carried no burden to prove value in this appeal. He could have declined to offered any evidence of value. He assumed the burden to prove value by offering an appraisal report supporting a value different than that established by the Board. However, this in no manner relieved Complainants of their separate and independent burden of proving fair market value. Respondent failed to meet the assumed burden. Accordingly, the presumption in favor of the Board’s value stands and value cannot be increased as proposed by Respondent.

True value in money for the subject property for 2005 and 2006 is set at $169,260 as determined by the Board.

ORDER

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

The assessed value for the subject property for tax years 2005 and 2006 is set at $32,160.

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 City, 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.