State Tax Commission of Missouri

LEON STEINBACH, )

)

Complainant, )

)

v. ) Appeal Number 05-10674

)

PHILIP MUEHLHEAUSLER, ASSESSOR, )

ST. LOUIS COUNTY, MISSOURI, )

)

Respondent. )

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

Procedural History

On June 30, 2006, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) affirming the assessment by the St. Louis County Board of Equalization.

On July 28, 2006, Complainant filed his request to be given until August 28, 2006, to file his Application for Review of the Decision.

Complainant was given until August 21, 2006, to file Application for Review stating specific grounds upon which it was claimed the Decision was erroneous.

On August 22, 2006, the Commission received Complainant’s five (5) page Application for Review with twenty-four (24) pages of documents not offered as exhibits at the evidentiary hearing in this case.

By Order dated August 24, 2006, Complainant was ordered to serve his Application for Review on Counsel for Respondent.

On August 30, 2006 (postmark date – received by Commission 9/5), Complainant filed six (6) pages of corrections, additional arguments and discussion.

Respondent was given until and including October 9^th to make any Response to the Application for Review. Respondent did not file a Response.

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

Exclusion of Additional Documents

The Commission first notes that Complainant’s Application for Review sought to introduce documents into the record which were not offered as exhibits at the evidentiary hearing. Complainant also by his letter dated August 27, 2006 attempted to offer other documents into the record. Neither party is permitted to supplement the record once the case has been submitted for decision.

The Decision was rendered based upon the evidence presented by each party and admitted in evidence. There is no provision for either party to offer additional evidence after the Hearing Officer has concluded the hearing and thereby closed the record. Parties are instructed to bring to the evidentiary hearing “any documents which be introduced into evidence at the evidentiary hearing that will support the party’s opinion of value.” Order, dated 2/23/06.

Specifically in this appeal, Complainant offered into evidence two exhibits as set forth in the Decision, page 2. Respondent offered into evidence one exhibit, an appraisal report. Decision, p. 2. The review by the Commission must be based upon these exhibits and the determinations made by the Hearing Officer with regard to the evidence in the record.

Neither party is entitled to a second bite at the evidentiary apple, especially to have documents placed into the record without the opposing party have the opportunity to cross-examine relative to such documents or offer rebuttal evidence. Accordingly, the documents submitted by Complainant with his Application for Review (received 8/22/06) and the documents submitted with his letter of 8/27/06, are excluded from the record in this appeal. They were not evidence properly submitted at the evidentiary hearing.

Decision Supported by Clear and Convincing Evidence

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 properly found that Complainant failed to meet his burden of proof. Therefore, the presumptions of correct assessment made by the Assessor and the Board of Equalization had not been rebutted. Decision, pp. 3; 8. In addition, the Hearing Officer determined that Respondent presented clear and convincing evidence to establish fair market value. The Commission, upon review of the record in this appeal, concurs with these findings and conclusions of the Hearing Officer.

Complainant Failed to Present Substantial and Persuasive Evidence at Hearing

Complainant’s letter setting forth his Application for Review simply set forth arguments against the conclusions reached by the Hearing Officer and the appraisal received into evidence on behalf of Respondent. Complainant failed to set forth any legal claim or basis as a ground to find the Hearing Officer had abused his discretion or acted in an arbitrary or capricious manner. Complainant simply had an opinion as to the fair market value of the property different from that determined by the Hearing Officer.

The Hearing Officer considered the evidence submitted by both parties. He found Complainant’s evidence lacking as substantial and persuasive evidence. Decision, pp. 7-8. The Commission finds no legal basis upon which it can or should overturn the Hearing Officer’s determination on this point. The Commission concurs with the Hearing Officer that Complainant does not qualify as an expert for the appraisal of real property before the Commission.

The Hearing Officer did not err in his determinations as challenged by Complainant.

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 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.

SO ORDERED November 9, 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 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 $81,600, assessed value of $15,500.

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 $81,600, assessed value of $15,500, as residential property. Complainant proposed a value of $76,000 in his Complaint for Review of Assessment, and a value of $77,000 at the evidentiary hearing. A hearing was conducted on May 23, 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 as to an appraisal he had performed on his property. The following exhibits were received into evidence.

Exhibit A – photographs of the subject property.

Exhibit B – copy of a Freddie Mac Form 70 that the homeowner had filled in and signed. Complainant arrived at an indicated value under the cost approach of $77,000.

Mr. Steinbach is not a state certified or licensed appraiser. He has taken some appraisal courses and took the exam, but has not completed the work necessary for being certified or licensed as a real estate appraiser in the state of Missouri.

Respondent’s Evidence

Respondent placed into evidence the testimony of Ms. Kathy Wikoff, State Certified Residential Real Estate Appraiser for St. Louis County. The appraiser testified as to her appraisal of the subject property. The Appraisal Report, Exhibit 1, of Ms. Wikoff was received into evidence. Ms. Wikoff arrived at an opinion of value for the subject property of $105,000 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 582 Coach Light Lane, Hazelwood, Missouri. The property is identified by locator number 08 L 320903. The property consists of .1956 of an acre lot improved by a one-story single-family home built in 1964 consisting of 6 rooms, 3 bedrooms and 2 baths and 1,193 square feet of living area. There is a full basement with an open family room. There is significant deferred maintenance and repairs that are needed. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2005.

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 either $76,000 or $77,000, 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 three properties were located on the subject street or within 5 blocks 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, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. Ms. Wikoff properly adjusted for the condition of the subject home and accounted for the various items of deferred maintenance and repair.

6. Respondent’s evidence constituted clear and convincing evidence to establish the

fair market value of the subject to be at least $81,600 as of January 1, 2005. Respondent’s evidence was received to sustain the value of the Assessor, which had been 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, 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 presumptions of correct assessment are rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property. Snider, Hermel & Cupples Hesse, supra.

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). It is the fair market value of the subject property on the valuation date. Hermel, supra.

Market Value

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

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

1. Buyer and seller are typically motivated.

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

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. Steinbach failed to meet his burden of proof in this appeal. The Freddie Mac Form Complainant completed does not qualify as an appraisal for purposes of an appeal before the Commission. It does not constitute substantial and persuasive evidence to establish fair market value.

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 be based upon improper elements or an improper foundation. Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965). The owner may not support an opinion of value by reference to comparable sales unless the owner qualifies as an expert. State ex rel. Missouri Hwy. and Tr. Comm’n v. McDonald’s Corp., 872 S.W.2d 108, 113 (Mo. App. E.D. 1994); State ex rel. Missouri Hwy. and Tr. Comm’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990).

Mr. Steinbach is not a state certified real estate appraiser. Taking appraisal courses and passing an examination does not qualify one as an expert in appraisal. Complainant does not possess the requisite training and experience to provide an expert opinion in this appeal. Completing a Freddie Mac Form is not performing an appraisal.

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6), RSMo.

Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898). In addition, courts may take judicial notice of records in earlier cases when justice requires - Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929) - or when it is necessary for a full understanding of the instant appeal. State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956). Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts. In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).

The Hearing Officer takes official notice of Complainant’s evidence in Appeal 05-10672, decided this date and the conclusion reached by the Hearing Officer as to the flawed appraisal attempt and lack of appraisal experience and training of the Complainant.

Complainant failed to meet his burden of proof. There is no substantial and persuasive evidence on this record upon which the Hearing Officer can make a finding of value as advocated by Mr. Steinbach. Therefore, the value of $81,600 established by the Assessor and sustained by the Board is presumed to be correct, not withstanding that Respondent’s evidence provided clear and convincing evidence to support the Assessor’s and the Board’s value.

Evidence of Increase in Value

In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal. Section 138.060, RSMo; 12 CSR 30-3.075.

The opinion of value proffered by Respondent’s appraiser is only received as evidence to support the Assessor’s original value that was sustained by the Board. The opinion of value cannot be used to increase the value above that set by the Assessor in this appeal. The Wikoff appraisal does provide substantiation for the value of $81,600.

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 $15,500.

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.