State Tax Commission of Missouri

 

STANLEY SHRYOCK,                                  )

)

Complainant,                            )

)

v.                                                         )           Appeal No.      05-68500

)

GRACE THOMAS, ASSESSOR,                   )

MADISON COUNTY, MISSOURI,              )

)

Respondent.                             )

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On February 3, 2006, Senior Hearing Officer, W. B. Tichenor, entered his Decision and Order (Decision) setting aside the assessment by the Madison County Board of Equalization.

Complainant timely filed his Application for Review of the Decision. 

CONCLUSIONS OF LAW

Standard Upon Review

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.  The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.  St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.  The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert=s testimony and accept it in part or reject it in part.  St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992);   Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.  Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).

DECISION

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).

Complainant’s Application for Review seeks the disallowance of Respondent’s Exhibit 1 received into evidence, based upon three arguments.  The three arguments are: (1) the square footage for the subject home should be 2,026; (2) valuation of site improvements for subject of $20,000 instead of $7,500 as for all of Madison County; and (3) large discrepancy between assessor’s Hunnicutt cost value and Marshall and Swift manual used by Arnzen.

As to Complainant’s claim that the square footage should be 2,026 as shown on the manufacturer’s brochure, the brochure is in error.  The brochure does have printed on it the following:  2,026 Sq. Ft. – 80 x 28.  However, 80 x 28 equals 2,240.  The actual diagram, which was used by Mr. Arnzen and the relied upon by the Hearing Officer shows a measurement of not 80 by 28 but 76 by 28 feet 4 inches.  A 76 by 28 modular home does contain 2,218 square feet.  Neither Mr. Arnzen, nor the Hearing Officer erred in this regard.

As to the other two reasons put forth in the Application for Review neither warrant a reversal of the Hearing Officer Decision.  As the Hearing Officer properly concluded the Complainant did not present substantial and persuasive evidence as to the fair market value of the 13 acre tract with the various improvements.  Complainant wanted to simply separate out one item, the modular home and value it based on its purchase price, separate and apart from being affixed to and located on the subject land.  The Hearing Officer did not err in finding that Complainant’s method of valuation was not proper and therefore, the valuation determined by the Board was to be affirmed.

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.

SO ORDERED March 9, 2006.

STATE TAX COMMISSION OF MISSOURI

 

 

_____________________________________

Bruce E. Davis, Chairman

 

 

_____________________________________

 Sam D. Leake, Commissioner

 

 

_____________________________________

Jennifer Tidwell, Commissioner

 

 

                                                                             

STANLEY SHRYOCK,                                  )

)

Complainant,                )

)

v.                                                         )           Appeal Number 05-68500

)                        

GRACE THOMAS, ASSESSOR,                   )

MADISON COUNTY, MISSOURI,              )

)

 Respondent.                )

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Madison 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 $105,500 ($104,600 – Residential; $900 – Agricultural) assessed value of $19,980 ($19,870 – Residential; $110 – Agricultural).

Complainant appeared pro se.

Respondent appeared in person and by Counsel, Dwight Robbins, Prosecuting Attorney.

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 Madison County Board of Equalization, which sustained the valuation of the subject property.  The Assessor determined an appraised value of $105,500, $104,600, assessed value of $19,870, as residential property and $900, assessed value of $110, as agricultural property.  Complainant did not challenge the agricultural valuation.  A hearing was conducted on January 19, 2006, at the Madison County Courthouse, Fredericktown, 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 offered into evidence a valuation document which was marked as Exhibit A.  Exhibit a consisted of a total of ten pages.  These included a statement by Complainant with various supporting documents.  Exhibit A was received into evidence.  Complainant did not contest the value placed on the land and improvements, or garage by the Assessor.  He only contested the value placed on the manufactured home on the property under appeal.  Complainant asserted the manufactured home should have a value of $53,400, the amount he paid for the home in August 2003.

Respondent’s Evidence

            Respondent presented the testimony and appraisal report of Roger Arnzen, state certified general real estate appraiser.  The Arnzen appraisal report was marked as Exhibit 1 and was received into evidence.  Mr. Arnzen performed both a cost and sales comparison approach to arrive at an indicated value for the subject property.  The final opinion of value placing most weight on the cost approach was $103,700.

FINDINGS OF FACT

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

2.         The subject property is located at 2562 Madison 234, Fredericktown, Missouri.  The property is identified by locator number 08-9.2-31-000-000-012.000.  The property consists of a thirteen acre tract of land improved by a one-story manufactured home with five rooms, two bedrooms and two baths.  There is a gross dwelling area of 2,128 square feet of living area.  There is no basement the home being set on a pier system.  There is a twelve by twenty foot open porch.  There is a detached garage/utility building of 1,500 square feet in size on a concrete pad.  There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2005.  The manufactured home was purchased in August 2003 for $53,400.

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 Assessor and the Board and establish the true value in money as of January 1, 2005, for the subject property.

5.         The sales comparison approach developed by Mr. Arnzen established a range of values for the subject property of $89,290 to $107,695.  The sale most comparable to the subject gave an adjusted value of $104,030 as an indicated value.

6.         The value for the property proposed by the Arnzen appraisal  (Exhibit 1) being less than 2% less than the value established by the Assessor and the Board does not justify a change in the valuation, but does provide substantial and persuasive evidence of the fair market value for the subject property as of January 1, 2005, to be $105,500 as determined by the Assessor and sustained by the Board.

CONCLUSIONS OF LAW

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment 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.

Board of Equalization Presumption

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. 

Presumption on Assessor’s Value

The Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”  Donna Snider v. Casino Aztar/Aztar Missouri Gaming Corp., SC86181, 3/01/2005.   Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

Rebutting of Presumption of Correct Assessment

            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’s Burden of Proof

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).

This standard has not been met in this case.  Complainant failed to meet his burden of proof to establish fair market value of the subject property as of January 1, 2005.  Accordingly, the presumption of correct assessment was not rebutted.

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).  In this case, Mr. Shryock’s theory of value was to separate out the manufactured home and base his case on his purchase price of the home in 2003.  This method of valuation is flawed as it is not a valuation of the property under appeal, i.e. a 13 acre tract with various improvements.   

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or reproduction) 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).   These approaches to value have been likewise recognized and followed by the Commission.  These are the methods of valuation utilized by professional appraisers when valuing property for tax appeals.  Complainant’s method for valuation does not comply with any of these recognized approaches to value.  Therefore the opinion of value proffered by Mr. Shryock is not based upon proper elements or a proper foundation and can be given no probative weight or value in this appeal.  The original assessment sustained by the Board must be affirmed.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Madison County for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2005 and 2006 is set at $19,980.

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 Madison 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 February 3, 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 3rd  day of February, 2006, to:  Stanley Shryock, 2562 Madison 234, Fredericktown, MO 63645, Complainant; Dwight Robbins, Prosecuting Attorney, 116 N. Mine La Motte, Fredericktown, MO 63645, Attorney for Respondent; Grace Thomas, Assessor, #1 Court Square, Fredericktown, MO 63645; Joan Whitener, Clerk, #1 Courthouse Square, Fredericktown, MO 63645; Danny Thompson, Collector, #1 Courthouse Square, Fredericktown, MO 63645.

 

 

___________________________

Barbara Heller

Legal Coordinator