State Tax Commission of Missouri
LAWRENCE SAYRE, )
)
Complainant, )
)
v. ) Appeal Number 06-10005
)
PHILIP MUEHLHEAUSLER, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE. Hearing Officer finds presumptions of correct assessment rebutted by Respondent’s evidence. True value in money for the subject property for tax year 2006 is set at $190,000, assessed value of $36,100.
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 reduced the valuation of the subject property. The Assessor determined an appraised value of $196,000, assessed value of $37,240, as residential property. Complainant proposed a value of $147,129, assessed value of $27,955. A hearing was conducted on December 19, 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. Exhibit A – Valuation Data was received into evidence, without objection. Exhibit A contained the following documents:
1. Proposal Statement for State Tax Commission setting forth the basis for Complainants opinion of fair market value of $147,129.
2. Tree Status – a listing of values assigned to trees which had been removed due to taking by the Missouri Department of Transportation (MoDOT) for widening of Clayton Road.
3. Survey of subject property showing area of MoDOT taking and location of eleven (11) trees on subject property.
4 & 5. Photographs of subject property’s trees.
6. Letter dated 4/5/02 to Complainant from Dan Christie, Registered Consulting Arborist, Metropolitan Forestry Services, Inc.
7. Letter dated 2/9/06 to Complainant from Dan Christie, Registered Consulting Arborist, Metropolitan Forestry Services, Inc.
8 & 9. Photographs of subject property’s trees.
10. Basis for Just Compensation Pursuant to Offer of Settlement of MoDOT
11. Notice of Award of Damages, MoDOT v. Sayre, Cause No. 04CC-003959, St. Louis County Circuit Court.
Complainant arrived at his opinion of fair market value by subtracting $48,871 from the Assessor’s original appraised value of $196,000 ($196,000 - $48,871 = $147,129). The amount of $48,871 was arrived at by subtracting from the amount of the Court Award for the taking ($72,025) an amount for the worth of trees removed ($18,850) and the amount for a Temporary Construction Easement for MoDOT during the widening of Clayton Road ($4,304) – ($72,025 - $18,850 - $4,304 = $48,871)
Respondent’s Evidence
Respondent placed into evidence the testimony of Ms. Andrea E. Norton, 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. Norton was received into evidence. Ms. Norton arrived at an opinion of value for the subject property of $190,000 based upon a sales comparison approach to value. In performing her sales comparison analysis, the appraiser relied upon the sales of four properties which 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 349 Cherry Hill Drive, Ellisville, Missouri. The property is identified by locator number 22T640964. The property consists of .4011 of an acre lot improved by a one-story brick, ranch, single-family structure of average quality construction. The house was built in 1964 and appears to be in average physical condition for the area. The residence has a total of 8 rooms, which includes 3 bedrooms, 2 full baths, and contains 1,917 square feet of living area. There is a full basement (1,917 square feet) with approximately 75% finished rooms and an attached two-car garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2005. The property has a Cherry Hill Drive address, but the home fronts at an angle to Clayton Road. The property is located within Phase 1 of the Clayton Road expansion project which affects Clayton Road from Clarkson to Kehrs Mill Road. Exhibit 1, pp. 6-7 & Exhibit 3.
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 $147,129.
5. Respondent’s evidence was 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 $190,000.
6. The comparables were selected based upon the following criteria:
a. sales comparables selected were the
most recent sales of similar single-family homes located on
b. all four sales comparables are directly
influenced by the Phase 1 expansion of
c. all four sales comparables have similar front setback as the subject.
d. all sellers granted temporary and/or permanent easements to MoDOT for the duration of construction and received compensation.
e. all temporary and/or permanent easements are considered mostly similar by MoDOT.
f. all buyers were aware of the road construction prior to purchase and the temporary easements associated with the sales comparables passed to the new owners.
g. comparables were selected of similar
age, style, quality and condition, gross living area, setback from
7. 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 less than a third of 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 style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. The sale properties were impacted in a similar manner to the subject from the Phase 1 expansion of Clayton Road. Exhibit 1, pp. 14-19.
8. The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem. The net adjustments for Comparable 1 amounted to +$4,800 or 2.55% of the sales price. The net adjustments for Comparable 2 amounted to -$1,000 or 0.54% of the sales price. The net adjustments for Comparable 3 amounted to -$2,500 or 1.28% of the sales price. The net adjustments for Comparable 4 amounted to -$15,443 or 7.35% of the sales price.
9. The adjusted sales prices for the comparables calculated to $192,800, $183,000, 192,400 and $194,557, respectively. The appraiser concluded on a $190,000 value which calculated to a value per square foot of $99.11 compared with the sales prices per square foot of living area for the comparables of $103.41, $100.71, $107.32 and $115.77.
10. Respondent did not have to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, as he was not seeking to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program.
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.
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 is accepted as true only until and so long as there is no substantial evidence to the contrary.
The
presumption of correct assessment is rebutted when the taxpayer or Respondent
presents substantial and persuasive evidence to establish that the 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; Exhibit 1, p. 3.
Complainant Failed to Prove Fair Market 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 has not met the required burden of proof in this instance. 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). The basis for Mr. Sayre’s opinion in this appeal is not founded upon a recognized appraisal methodology.
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). The
methodology utilized by Mr. Sayre to arrive at his opinion of value is not one
of the recognized approaches for an estimate of fair market value. Therefore, the conclusion of value calculated
by the taxpayer has no probative value in this instance.
The crux of the valuation issue from Mr.
Sayre’s perspective is that because of impact of the Phase 1 widening of
Clayton Road, eight (8) trees had to be removed from his property. The estimated value of those trees was
$18,850. Under the Court award, Mr.
Sayre was given $72,025 for the taking along the north and west portions of his
property. The payment would have
included the estimated value for the lost trees and the payment for a temporary
easement for construction ($4,304).
The balance left from the Court award of $48,871, represents the
additional lost in value to the property from Mr. Sayre’s perspective. Therefore, he simply subtracted that amount
from the appraised value which the Assessor had placed on his property for
2005.
The fatal defect in Mr. Sayre’s valuation
process is that it is not in accord with any recognized method for the
appraisal of property. The subtraction
of an amount from the assessor’s appraised value is not supported by market
data on what a willing buyer would have given to a willing seller for the
property on January 1, 2005, both knowing of the impact of the Phase 1
expansion on the property. Without
relevant market data to support Mr. Sayre’s calculations, the conclusion of
value rests on mere speculation and conjecture.
A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.” See, Rossman v. G.G.C. Corp. Of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980). In the present case, it is not enough that Mr. Sayre’s math is correct. The basis for the calculations is not supported by market data. Therefore, the taxpayer has failed to meet his burden of proof on this essential element of his case.
Respondent
Proved Fair Market Value
Respondent, when advocating a value different from that determined by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Cupples-Hesse, Brooks, supra. Respondent has met that burden of proof. The appraisal of Ms. Norton was based on sound market data for the sale of homes extremely similar to the subject. The critical element, however, which established the Norton appraisal as substantial and persuasive evidence of fair market value was that each of the four sale properties were bought with the knowledge that they, like the subject, would be burdened by the Phase 1 expansion of Clayton Road.
No two pieces of property are exactly the same. They do not have to be for a sale property to be utilized as a comparable for performing a sales comparison approach to value. It is sufficient if the properties are sufficiently similar in relevant elements so that an appraiser and make necessary adjustments within parameters generally accepted for appraisal of such properties. The adjustments made by Ms. Norton certainly fall within well accepted standards. The net adjustments fell in the very narrow range from only -7.35% to +2.55%.
It was not necessary for the appraiser to make an adjustment as to impact on any of the sale properties due to the Phase 1 expansion. Each of the properties was similarly impacted by the widening, like the subject. The fact that the removal of trees was not identical on each property would not be necessary to rely upon the four sale properties in this appraisal problem. The estimated worth of the Sayre trees does not mean that the market would reduce the value by that exact amount. In short, any attempt to further adjust the four sale properties for the removal of the trees from the Sayre property would at best be based upon speculation, as there is no market data in this record from which the Hearing Officer could make any further adjustment to the value concluded by Ms. Norton.
Respondent’s
evidence rebutted the presumption of correct assessment by the Board and
establish fair market value to be $190,000.
ORDER
The assessed valuation for the subject property as determined by the Assessor and reduced by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2006 is set at $36,100.
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 January 10, 2007.
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 10th day of January, 2007, to: Lawrence Sayre, 349 Cherry Hill Drive, Ellisville, MO 63011, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent; Philip A. Muehlheausler, Assessor; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
___________________________
Barbara Heller
Legal Coordinator