2. The subject property is located at 4 Old Colony Lane, Town and Country, Missouri. The property is identified by locator number 21P310107. The property consists of 3.41 acres. The site is located on a private asphalt street, which is common in the subject’s market area. The property does not currently utilize public water, sewer or gas lines. There is a private well and septic system. This does not constitute an adverse affect on marketability.

The lot is improved by a one-story masonry, single-family structure of average quality construction. The house was built in 1952 and appears to be in below average physical condition attributable to deferred maintenance and lack of updates. The residence has a total of seven rooms, which includes three bedrooms, two full baths, and contains 2,410 square feet of living area. There is a partial basement and an attached two-car, front-entry garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2005. Exhibit 1, p. 4.

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 presumption of correct assessment by the Board and establish the true value in money as of January 1, 2005, to be $450,000, as proposed in the Complaint for Review of Assessment or $400,000 as testified to at the evidentiary hearing.

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 three properties were located within less than a mile of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2005. The sale properties were similar to the subject in lot area, zoning density, topography, landscape, shape, utilities, drainage, view, road, traffic, degree of build-up, off site improvements, and location influences. Mr. Rebsamen properly performed a valuation for land value only and gave no contributory value to the subject’s improvements. Exhibit 1, pp. 12-16.

6. The highest and best use of the subject property is vacant and available for a new single-family construction. Exhibit 1, p. 6.

7. Respondent’s evidence constituted clear and convincing evidence to establish the fair market value of the subject property to be at least $624,200 as originally determined by the Assessor. Respondent’s evidence was only received for the purpose of sustaining the original assessment and not for increasing it above the value established by the Assessor.

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 presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any substantial proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.

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, 348-349 (Mo. 2005). Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

The presumption of correct assessment is 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. The Respondent when advocating a value greater than the value set by the Board must also present substantial and persuasive evidence to rebut the Board presumption and establish fair market value. In this instance Respondent has rebutted the Board presumption and presented clear and convincing evidence that the true value in money of Complainant’s property on January 1, 2005, was at least $624,200.

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. “For 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 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 value determined by Mr. Rebsamen, absent the restriction of 12 CSR 30-3.075 would have been sufficient to have set the true value in money on the Lechtreck property at $855,000. However, under the mandate of the rule, the Rebsamen value was only received for the purpose of sustaining the Assessor’s original value, which was higher than the Board’s value. Exhibit 1 was not received as advocating an increase in value above that determined by the Assessor.

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.

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, 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).

Mr. Lechtreck failed to meet the required standard in the present appeal. The sum and substance of Complainant’s evidence on the issue of fair market value was only Mr. Lechtreck’s opinion of valued based upon what a 40 acre tract of property had been valued at by the Assessor. This is not a recognized method of valuation for ad valorem tax purposes.

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). An opinion of value based upon comparing assessment of one property to another is not recognized by the Commission, the courts or the appraisal industry as a valid method to establish fair market value. 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).

Mr. Lechtreck did not plead in his Complaint for Review of Assessment that his property was misclassified, nor did he assert a claim for discrimination. Therefore, he could not raise these claims at the evidentiary hearing as grounds for a reduction in true value in money (appraised value), change in classification or reduction in assessed value. Assertions related to these claims at the evidentiary hearing were not established by substantial and persuasive evidence.

Complainant’s Brief

At the evidentiary hearing, Counsel for Complainant asserted that the land value for Complainant’s property had been set at $328,500 in 2004 and that the doctrine of estoppel applies to the land value and it cannot be increased. The Hearing Officer advised Counsel for Complainant he would be permitted to file a brief on his estoppel claim. Consequently, Complainant’s Brief was filed.

Section 138.060 Argument

Complainant’s Brief objected to the testimony of Mr. Rebsamen and his appraisal report. Counsel for Complainant puts forth his argument that the appraisal violates §138.060(1), RSMo. The argument is that the Rebsamen appraisal is advocating a valuation higher than the value determined by the Assessor or the Board. Complainant’s Counsel asserts that the Rebsamen testimony and appraisal should be stricken from the record.

The objection is not timely. This is not the objection raised at hearing. At the close of cross-examination of Mr. Rebsamen by Mr. Fenlon, the Hearing Officer asked if there was any objection to Exhibit 1 being received and Mr. Fenlon responded “ No.” The objection now put forth in Complainant’s Brief is untimely. It is well established that objections must be made and the basis for the objection given at the earliest possible moment when evidence is offered. See, Courtroom Handbook on Missouri Evidence, 2006, Wm. A. Schroeder, §103.2, p. 17.

However, that notwithstanding, the objection is not well taken. The Commission has enacted 12 CSR 20-3.075 to specifically address the fact that an appraiser cannot prepare an appraisal for a predetermined fair market value. For example, in the present case, Mr. Rebsamen as a state certified real estate appraiser is precluded from performing this appraisal assignment to arrive at either the value set by the Board, the value set by the Assessor or any other pre-set fair market value. An appraiser must arrive at an opinion of fair market value based upon the methods which are employed in a given appraisal problem and the relevant data which is relied on in the development of each approach to value. Mr. Rebsamen is bound by the standards contained in the Uniform Standards of Professional Appraisal Practice (USPAP). The fact that the opinion of fair market value is higher or lower than the Board or Assessor’s value is irrelevant. The appraiser must provide his opinion of value irrespective of Section 138.060.

If the opinion of value is greater than either the Board or Assessor’s appraised value, then under the Commission rule it cannot be received to advocate an increase in value above the Board or Assessor’s value – whichever is higher. That is exactly what happened in this appeal. The Board reduced the fair market value. The appraisal came in higher than either the Board or the Assessor’s value. Therefore, the Rebsamen appraisal could not be received to advocate the value of $855,000. It could only be received and was only received to sustain the Assessor’s original value. 12 CSR 30-3.075.

Claim of Estoppel

Counsel advances his claim of estoppel by arguing that what Complainant was appealing was the assessment of $624,200 by the Assessor. Counsel bases this estoppel argument upon the Assessor’s Change of Assessment Notice, dated March 24, 2005, on the subject property. Counsel asserts that since the Change Notice was the basis of the appeal to the Board that Respondent should be precluded from introducing new evidence at the evidentiary hearing on the issue of fair market value. Counsel looks to the case of Missouri Highway & Transportation Com’n v. Myers, 785 S.W.2d 70 (Mo. banc 1990), to support the estoppel claim. However, all that the case citation provides is the three elements to support a claim for equitable estoppel.

In the Myers case the Court held at 78: “Estoppel requires: (1) an admission, statement, or act inconsistent with the claim afterwards asserted and sued upon, (2) action by the other party on the faith of such admission, statement, or act, and (3) injury to such other party, resulting from allowing the first party to contradict or repudiate the admission, statement or act.
Brown v. State Farm Mutual Automobile Insurance Company, 776 S.W.2d 384, 386 (Mo. banc 1989), quoting Mississippi-Fox Drainage Dist. v. Plenge, 735 S.W.2d 748 (Mo. App. 1987).

Counsel’s argument is that the Assessor made a representation in the Change Notice that the fair market value of the subject property as of January 1, 2005, was $624,200, based upon sales of five properties from November 2002 to April 2004. Relying on this representation, Mr. Lechtreck appealed to the Board of Equalization. This is asserted to be the second element of the estoppel claim. Counsel claims that Complainant has now been injured because Respondent has substituted new evidence and opinions for that presented in the Change Notice.

However, Respondent did not assert a statement inconsistent with the original valuation, nor did he repudiate the original value. The Board reduced the value. Respondent, consistent with the Rebsamen appraisal, asserted that the Board’s value should be set aside and the original value should be affirmed. Nothing presented by Complainant’s Counsel in his estoppel argument provides a legal basis to hold that in an appeal before the Commission the Assessor is estopped from presenting evidence of fair market value irrespective of whether such evidence indicates a value greater than what the Board found or what the assessor originally determined. Under 12 CSR 30-3.075, the value cannot be raised above the higher of the two values based upon any evidence the Assessor might offer at hearing.

If Complainant was only appealing the Assessor’s original valuation, then he received a reduction by the Board. The Board set the value at $579,100. Therefore, when Complainant appealed to the Commission he could have only been appealing the value set by the Board, because if Complainant had not appealed to the Commission, the valuation would have remained at $579,100. Furthermore, if Complainant was not appealing the valuation made by the Board he would not have asserted a value less than that set by the Board.

Complainant was advised in the Order of the Hearing Officer, dated February 14, 2006, which set the date, time and location for the evidentiary hearing – “It is possible the assessment might remain the same, be lowered, or raised.” In addition at the Prehearing Conference held on February 8, 2006, the Hearing Officer orally advised Complainant that because the value had been reduced by the Board that it could be raised back to the assessor’s original appraisal if the evidence showed the fair market value to be as much as the $624,200 determined in the original assessment. The appeal of the value which the Board set opened the door to allow Respondent to present relevant evidence on the issue of the fair market value of the subject property on

January 1, 2005.

Attempt to Punish Taxpayer

Counsel finally argues that “by substituting new evidence” the assessor is attempting to punish Complainant for exercising his Constitutional right to appeal the original assessment, citing to North Carolina v. Pearce, 395 U.S. 711, 724 (1969). The offering into evidence of an appraisal by a state certified real estate appraiser is not an attempt to “punish” a taxpayer for appealing to the Commission. A large number of appeals to the Commission in 2005, as every tax year, were settled by stipulation of the assessor and individual taxpayers which resulted in reductions in fair market values on individual properties. In numbers of other cases that went to appeal before the Hearing Officer, the Assessor offered into evidence appraisal reports which advocated a reduction in value below what the Assessor had originally set and what the Board had set. Such reductions were advocated because the market data supported a reevaluation of those properties based upon a new appraisal.

There is no statutory or case law mandate which requires the Assessor to only rely upon the sales data provided in the original Change Notice. Once a taxpayer avails themselves of their right to appeal to the Commission, the Assessor as the Respondent in the action has a duty to address the issue in the appeal. In an overvaluation case, the Assessor has the right, as well as, the responsibility to present evidence on what the fair market value (true value in money) for the property under appeal was on the relevant tax date. That is what the Respondent did in this appeal. Complainant’s assertion that the Respondent was attempting to punish the Complainant is simply not well founded.

Inequitable Assessment Claim

At the evidentiary hearing, Counsel for Complainant made an offer of proof relative to the valuation of the properties at 7 and 8 Old Colony Lane. This offer of proof was the basis for a claim of inequitable assessment as between the properties at 7 and 8 Old Colony Lane and the subject property. Counsel for Complainant described the difference in assessment as amount to an unconstitutional assessment. Counsel’s claim at hearing amounted to a claim of discrimination.

It is noted that Counsel when filing the Complaint for Review of Assessment did not allege the ground of discrimination, or a claim of an inequitable and unconstitutional assessment. Since no such ground for appeal was pleaded, the attempt to raise it at hearing comes too late. Amendment of pleadings before the Commission is not permitted. See, Daly v. State Tax Commission, 120 S.W.3d 262 (Mo. App. E.D. 2003). In Daly, at 271, the Court found that since the taxpayer’s Complaint for Review of assessment did not specify “misclassification” for the relevant year, such issue “was not properly before the Commission.”

The holding in Daly notwithstanding, the Hearing Officer finds that the offer of proof as to the value of a 20 acre and a 40 acre residential and agricultural tracts being compared to the subject 3.41 acre residential tract fails to meet the fundamental elements of a discrimination or inequitable assessment claim. 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, 2005. 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 and 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 offer of proof failed to satisfy the case law requirements to make the discrimination claim. Complainant failed to prove the true value in money of the subject property. Complainant failed to prove the true value in money of either 7 or 8 Old Colony Lane or that these properties are not being assessed at 19% of true value in money for the residential portions of the properties. Complainant failed to prove that in general residential properties in St. Louis County are undervalued resulting in the subject property being assessed at a ratio greater than either 19% as established by statute or at a ratio greater than the average residential ratio for St. Louis County.

Summary and Conclusion

Complainant failed to prove fair market value of the subject property. Respondent’s evidence was clear and convincing to affirm the Assessor’s original valuation of the subject property. The Board’s valuation has been rebutted and value for the property must be set at $624,200 as originally determined by the Assessor.