State Tax Commission of Missouri

 

ARTHUR ZOBEL,                                          )

)

Complainant,                )

)

v.                                                         )           Appeal Number 05-10214

)                        

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 $490,100, assessed value of $93,120.

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 $490,100, assessed value of $93,120, as residential property.  Complainant proposed a value of $306,000, assessed value of $58,140.  A hearing was conducted on May 16, 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.  He offered his opinion of value for the subject property as of January 1, 2005, to be $306,000.  This was based upon his purchase price in 1994.  It was the opinion of Mr. Zobel that the property was not worth any more than the price he paid for it because he hasn’t sold the property.  Mr. Zobel also testified as to the location of power lines adjacent to his property, the location of a transformer for the underground power lines and a transformer on a pole also adjacent to his property.  It was Complainant’s contention that he had always received a 15% discount on his valuation from the County because of the location of the power lines near his property.

Mr. Zobel offered the following exhibits into evidence:

Exhibit A – a photograph showing the power lines and pole which are adjacent to the subject property.

Exhibit B – Information on electromagnetic fields from Union Electric, dated 1992.

Exhibit C – Copy of a page from the Property Record Card on property at 1412 Wild Horse Parkway.

Exhibit A was received.  Counsel for Respondent objected to Exhibit B on the grounds of relevance, hearsay and it being dated material.  Objection was sustained.  Exhibit B was not received into evidence.  Objection was made to Exhibit C on the grounds of lack of foundation, relevance and the document being incomplete.  Objection was sustained.  Exhibit C was excluded.

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Arthur R. Froeckmann, State Certified Real Estate Appraiser for St. Louis County.  The appraiser testified as to his appraisal of the subject property.  The Appraisal Report, Exhibit 1, of Mr. Froeckmann was received into evidence.  Mr. Froeckmann arrived at an opinion of value for the subject property of $490,600 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. 

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 1532 Wildhorse Parkway, Wildwood, Missouri.  The property is identified by locator number 19 V 210202.  The property consists of .57 of an acre lot improved by a two-story brick and frame, single-family structure, of average quality construction.  The house has a masonry front porch, 2 wood decks, paved walkway, and paved driveway leading to the side entry garage.  The house was built in 1986 and appears to be in average condition for its age.  The residence has a total of 8 rooms, which includes 4 bedrooms, 3 full baths and a half bath, and contains 3,676 square feet of living area.  There is a full unfinished basement and an attached three-car garage. 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 $306,000, as proposed.

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 properties were located within less than a half 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 style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. The adjustments made by the appraiser were appropriate to account for the slight differences between the subject and each comparable.

            6.         Respondent’s evidence met the standard of clear and convincing to establish the value of the subject, as of January 1, 2005, to be $490,100, and was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.

CONCLUSIONS OF LAW

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 of Correct Assessment

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.

            The Complainant has failed to rebut the presumptions of correct assessment in the present appeal.

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 Fails 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).

Complainant failed to present substantial and persuasive evidence to establish fair market value as of January 1, 2005.  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).  Mr. Zobel’s opinion of value was based upon what he had paid for the property in 1994.  This only established the fair market value of the home in 1994.  It did not provide any evidence as to what a willing buyer and seller would have agreed to as a price on January 1, 2005.

            The owner’s opinion of value based upon his purchase some 11 years prior to tax date is not a recognized methodology for appraisal of real property.  Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) 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).  Therefore, no probative weight can be given to Mr. Zobel’s opinion of value, because it is not based upon proper elements or a proper foundation.

Mr. Zobel, by his own admission, doesn’t know if there is any actual health hazard due to his home being located next to a power line, a ground transformer and a transformer on a pole off the back of his property.  Although Exhibit B was excluded, a review of the material provides no basis to establish that such power lines as are on ground adjacent to the subject property presents any health hazard.  Nor does the material provide any basis upon which the Hearing Officer or an appraiser could be any deduction to account for this.  Mr. Froeckmann made a deduction to account for the location of power lines, assuming it had some negative impact on the subject versus the comparables which did not have power lines on poles adjacent to them.

Finally, the claim by Mr. Zobel as to having received some sort of discount of 15% on the value of his property in the past has no probative merit to establish true value in money.  What someone may have done in the past concerning some type of adjustment for the existence of power lines is not binding on the current assessor, or on the Commission.  This line of argument simply provides nothing to show fair market value as of 2005.

            The failure of the taxpayer to meet his burden of proof requires that the value sustained by the Board be affirmed, notwithstanding that Respondent has proven by clear and convincing evidence the true value in money for the subject property.

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 offered by Mr. Froeckmann was only $500 or .001021 of a percent more than the valued originally determined by the Assessor and sustained by the Board.  Therefore, it was clearly in support of the value of $490,100.  The Froeckmann appraisal constituted clear and convincing evidence to sustain the Assessor’s original value.  Section 137.115.1, RSMo.

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).

 

 

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 $93,120.

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:  Arthur Zobel, 1532 Wildhorse Parkway, Chesterfield, MO 63005, 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