State Tax Commission of Missouri

 

EILEEN M. CIBULKA,                                  )

)

Complainant,                )

)

v.                                                         )           Appeal Number 07-10192

)         

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 presumption of correct assessment rebutted. True value in money for the subject property for tax years 2007 and 2008 is set at $195,000, residential assessed value of $37,050.

Complainant appeared pro se.

Respondent appeared by Associate County Counselor, Paula J. Lemerman.

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, 2007.

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 $218,000, assessed value of $41,420, as residential property.  The Board reduced the value to $200,000, assessed value of $38,000.  Complainant proposed a value of $150,000, assessed value of $28,500.  A hearing was conducted on June 3, 2008, 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 her own behalf.  Mrs. Cibulka stated her opinion of value to be $150,000.  This opinion was based upon the fact that the subject home was built in 1975 and it has had no updating or remodeling.

Complainant offered into evidence Exhibit A.  Exhibit A consisted of the following documents: (1) photographs and the 2007 Property Record Card on the subject property; (2) photographs of the subject’s back yard and cracked concrete patio; (3) photograph and 2007 Property Record Card on property at 5352 Royal Hills Drive; and (4) copy of the floor plan of Complainant’s home. 

Mrs. Cibulka also offered into evidence a bathtub faucet pipe (Exhibit B) to demonstrate the original fixtures and the hard water corrosion on the fixture. 

Exhibits A and B were received into evidence.

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Timothy Hannan, residential 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. Hannah was received into evidence.  Mr. Hannan arrived at an opinion of value for the subject property of $195,000 based upon a sales comparison approach to value.  In performing his sales comparison analysis, the appraiser relied upon the sales of three properties he deemed 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 3527 Queens Hill Drive, Unincorporated St. Louis County, Missouri.  The property is identified by parcel number 31K630414.  The property consists of an 11,089 square foot lot improved by a one-story frame and brick veneer, ranch style, single-family structure of average quality construction.  The home has seven rooms, with three bedrooms, two full baths and 1,885 square feet of living area.  There is a full unfinished basement and a two-car rear entry basement garage.  The house is in only fair condition. The roof on the home was replaced approximately 8 years ago. The furnace was replaced approximately 12 years ago.  Air conditioning was replaced approximately 5 years ago. The property suffers from having a “MSD” storm water drain in the middle of the back property line.  This collects water runoff from neighboring properties in both directions.  This has caused some yard erosion.

3.         There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.

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, 2007, to be $150,000.

5.         The properties relied upon by Respondent’s appraiser were comparable to the subject property for the appraisal problem. The properties were located within less than .17 of a mile of the subject.  Each sale property sold at a time relevant to the tax date of January 1, 2007, in a range from August, 2004 to November, 2006.  The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area (range of 1,935 to 2,091 square feet), location, site size and other amenities of comparability.

6.         The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.  All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.  Specifically, a negative adjustment was made to each of the comparables to account for the influence of the storm water drain from which the subject property suffers.  An additional adjustment of -$15,000 was made to the first two comparables and a -$30,000 to the third comparable to account for their superior condition as compared to the subject.

7.         The indicated values of the subjects ranged from $181,400 to $226,700, with a median of $200,000 and an average of $202,700.  The appraiser concluded on a value of $195,000, which equated to a per square foot of living area value of $103.45.  The per square foot values of the sale properties ranged from $111.43 to $139.60.  The lower per square foot value concluded on, reflects the allowance to account for the impact of the storm water drain and the fair condition of the subject.

8.         Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2007, to be $195,000.

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 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 when advocating a value different than that determined by the Board, 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 appraisal report of the Respondent’s appraiser rebutted the presumption of correct assessment and establish the true value in money for the subject property.  Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment.

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 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 are 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 both 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.

Methods of Valuation

            Proper methods of valuation and assessment of property are delegated to the Commission.  It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.  See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;  Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).  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 method of valuation relied upon by Respondent’s appraiser was a recognized and accepted approach to find the indicated value for the subject property.  Complainant did not present evidence consistent with a method of valuation recognized by the Commission and the courts of this state.

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, 2007.  Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.  There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.  The taxpayer is the moving party seeking affirmative relief.   Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”  See, 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).  Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).

 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). 

The owner of property is generally held competent to testify to its reasonable market value.  Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); 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.  Cohen v. Bushmeyer, --- S.W.3d ----, 2008 WL 820938 (Mo.App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965). 

Mrs. Cibulka’s opinion of value was predicated upon the overall condition of her home and its age.  She also felt that the existence of the storm drain in the back yard detracted from the value of her property.  She was correct that these factors impact upon value.  However, noting such negative influences does not establish that the property on January 1, 2007 was only worth $150,000.  There was no market data upon which a conclusion of value could be based.  Without a basis in market data of sales of similar properties adjusted to account for differences, an owner’s opinion does not rest upon the proper elements or foundation upon which a determination of value can be made.

Respondent Proved Value

Respondent, when advocating a value different from that determined by the original valuation or a valuation made 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.  The burden of proof imposed upon Respondent to establish a value different than that established by the Board was met by the appraisal of Mr. Hannan.  The appraiser relied upon good sale properties and appropriately adjusted for the two major negative influences which burden the subject property – storm water drain and overall condition.  The adjustments for other differences brought the sale properties into line with what the subject would expect to have sold for in January, 2007.

ORDER

The assessed valuation for the subject property as determined 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 years 2007 and 2008 is set at $37,050.

Complainant 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.  Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service. 

  Failure to state specific facts or law upon which the appeal is based will result in summary denial.  Section 138.432, RSMo 2000.

The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 139.031.8 RSMo.  If no Application for Review is filed, the Collector is ordered to disburse the disputed taxes in accordance with the assessment set by this Decision and Order.

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 June 24, 2008.

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 24th  day of June, 2008, to:     Eileen Cibulka, 3527 Queens Hill Drive, St. Louis, MO 63129, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip 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