State Tax Commission of Missouri

 

RONALD E. LEVY,                                        )

)

Complainant,                )

)

v.                                                         )           Appeal Number 05-10111

)                        

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 $117,000, assessed value of $22,230.

Complainant 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

Complainant appeals, 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 $117,000, assessed value of $22,230, as residential property.  Complainant proposed a value of $89,000, assessed value of $16,910.  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.

Complainant’s Evidence

Complainant testified in his own behalf and offered an opinion of value for the property under appeal of $89,000.  Mr. Levy testified it was unfair to value his property based upon sales of houses in his neighborhood.  He expressed his opinion that the valuation of real property for assessment purposes should be grandfathered to the purchase price and then adjusted by a factor for inflation.  He believed a fair assessment system would be something like what California has under Proposition 13.

Mr. Levy offered into evidence Exhibit A.  Exhibit A consisted of nine pages.  The cover page and page 1 were documents written by Complainant on which he declared his opinion of value of $89,000 and that the home was in its original condition, no updating since he purchased it in 1966.  Pages 2 and 3 were copies of information from AARP on Reverse Mortgages.  Mr. Levy contended that under a reverse mortgage he would be paid $89,000 for his home.  Pages 4 and 5 contained a listing of deferred maintenance items and the taxpayer’s own estimate of cost to repair.  Pages 6 and 7 consisted of copies of portions of the Change of Assessment Notices for 2001, 2003 and 2005, with photos and comments on two of the computer generated comparables use in 2003 and 2005 to generate the original assessments on the property.  Page 8 was a locator map for the subject property.

Counsel for Respondent did not object to the cover page and pages 1 and 8.  Counsel did object to the remained of the pages on the grounds of relevance, lack of foundation and improper method for determining fair market value for assessment purposes.  The objections were sustained and pages 2 through 7 of Exhibit A were excluded from evidence.  The cover page, pages 1and 8 were received into evidence. 

Respondent’s Evidence

Respondent placed into evidence the testimony of Ms. Shirley V. Clifton, appraiser for St. Louis County.  The appraiser testified as to her appraisal of the subject property.  The Appraisal Report, Exhibit 1, of Ms. Clifton was received into evidence.  Ms. Clifton arrived at an opinion of value for the subject property of $136,000 based upon a sales comparison approach to value.  In performing her sales comparison analysis, the appraiser relied upon the sales of three properties she 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 4635 Candace, St. Louis County, Missouri.  The property is identified by locator number 26 H 431350.  The property consists of .13 of an acre lot improved by a split foyer single family residence having primarily brick exterior walls, composition shingle roof, concrete foundation, built in 1966 with a two-car built-in garage and approximately 500 square feet of recreation area with no attributable value due to long-term water damage and mold.  The interior condition of the main floor is fair to poor due to lack of updates, maintenance and repairs.  Carpeting and painting need throughout the home and the baths are original.  The residence has a total of 6 rooms, including 4 bedrooms and 2.5 baths and contains 1,319 square feet of living area on the main floor.

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 $89,000, as proposed.

5.         The properties relied upon by Respondent’s appraiser in performing her 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, with on property being on the same block.  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, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.   The adjustments made by the appraiser properly accounted for the differences between the subject and the comparables.  The appraiser properly adjusted for the subject’s poor condition which was inferior to each of the sale properties.

6.         Respondent’s evidence was clear and convincing to establish the fair market value to be $117,000 as established by the Assessor and sustained by the Board.

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 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.

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.

Complainant Failed To Prove Value

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. Levy failed to meet his burden of proof 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 based upon improper elements or an improper foundation.  Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965). 

            Complainant presented no evidence under any recognized methodology for the appraisal of real property to support his opinion of value.  What a lending institution might be willing to loan on a reverse mortgage does not meet the definition of a market sale, nor does it establish market value.  Mr. Levy’s desire to have Missouri adopt some system of property taxation tying assessment to the purchase price adjusted for inflation is not authorized under existing statutes or case law.  The Commission has no jurisdiction to arbitrarily value property under some system which a given taxpayer feels is better than that adopted by the legislature of the State.  A taxpayer’s claim that the system needs to be changed to suit his or her own desires does not establish fair market value.  Such arguments and assertions are irrelevant to the issue presented in this appeal.

 

Mr. Levy’s testimony and evidence failed to establish that his opinion of value was based upon proper elements or a proper foundation and therefore was of no probative value in this appeal.  As a result of the taxpayer failing to meet his burden of proof, the valuation made by the Assessor and sustained by the Board must be affirmed.  There is no need to do an analysis of Respondent’s appraisal.  It is sufficient to say the Hearing Officer finds the Clifton appraisal to establish by clear and convincing evidence that the fair market value of the subject property on January 1, 2005, was at least $117,000.  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.  Therefore, Exhibit 1 was not received to increase the value above that determined by the assessor and sustained by the Board.  The Clifton appraisal did provide clear and convincing evidence that the value of the subject property was at least $117,000 as of 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 $22,230.

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:    Ronald Levy, 4635 Candace Drive, St. Louis, MO 63123, 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