State Tax Commission of Missouri

 

CONNIE & CONNIE CURRAN,                  )

)

Complainants,               )

)

v.                                                         )           Appeal Number 07-10098

) 

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 is SET ASIDE.  Hearing Officer finds presumptions of correct assessment rebutted. True value in money for the subject property for tax year 2007 and 2008 is set at $179,000, assessed value of $34,010.

Complainant Connie L. Curran appeared pro se.

Respondent appeared by Assistant County Counselor, Paula Lemerman.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject properties on January 1, 2007, and whether there was an intentional plan by the assessing officials to asses the property under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2007 – 2008 residential assessment ratio for St. Louis County.

 

SUMMARY

Complainants appeal the decision of the St. Louis County Board of Equalization, which sustained the valuations of the subject properties.  The Assessor determined an appraised value of $180,400, assessed value of $34,280, as residential property. The  Board of Equalization sustained the valuation.  Complainants proposed a value of $157,200, assessed value of $29,870 in their Complaint for Review of Assessment.  A hearing was conducted on May 22, 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.

Complainants’ Evidence

            Mr. Curran testified on behalf of Complainants.  He stated his opinion of value for the property is $157,200 as of January 1, 2007.  Mr. Curran offered Exhibit A which consisted of seven pages of materials. 

            Exhibit A1 is a Comparable Property Analysis for Tax Year 2007.  The Complainant made a grid listing the subject property and five other properties, each property’s assessed value in 2007, each property’s value in 2006, the dollar difference between 2006 and 2007 and the percentage difference between 2006 and 2007.  The Assessor’s attorney objected based upon relevance, foundation and improper valuation evidence.  The objections were sustained.

            Exhibit A2 is another comparison grid.  The grid compares the subject property to three other properties.  One of the comparable properties is a foreclosure property.  The other two properties sold in 2004.  The Complainant averaged the three “sale” prices and averaged the price per square foot.  The Complainant listed the 2007 value for the subject property and the foreclosure property and the 2005 value for the other two properties.  The Complainant stated that the purpose of the grid was to show that the comparable properties that sold in 2004 had a value in 2005 close to that sale price.  However, the “sale” price for the foreclosed property  in 2006 was not close to the valuation in 2007.   The Assessor objected to the relevance, lack of foundation and improper methodology.  The Hearing Officer accepted the evidence as to sale prices for two properties but the evidence lack significant weight since little is known about the comparable properties.

            Exhibits A3-6 lists the address of properties, the 2005-2006 valuation of the improvement according to the Assessor’s website, the 2007 valuation of the improvement according to the Assessor’s website, and the percent increase.  Exhibit 7 is a map of the area.  Exhibit 7 was admitted without objection.  Assessor objected to A3-6 as to relevance and foundation.  The objection was sustained.

Respondent’s Evidence

Respondent placed into evidence the testimony of Ms. Sarah Curran, Missouri State Certified Residential Appraiser.  The appraiser testified as to her appraisal of the subject properties.  The Appraisal Report, Exhibit 1, was received into evidence.  The appraiser arrived at an opinion of value for the subject property of $179,000 based upon a sales comparison approach to value.

In performing her sales comparison analysis, the appraiser relied upon the sales of three properties which she deemed to be comparable to the subject property. The adjusted sales prices of the comparables fell in a range from $176,050 to $187,100.  The gross adjustments ranged from 13.5% to 30.5%.

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 3231 Lin Tel Rd, Unincorporated, Missouri.  It is identified by parcel number 29H120451.

3.         The property is a single-family, one-story brick house with a basement.  There is a two car attached garage and a porch and patio. The residence was built in 1959 of average construction and appears to be in average condition.  The residence has 1,816 square feet with a total of seven rooms which includes four bedrooms and one full bath and one half bath.  The basement has approximately 1,176 square feet and is partially finished.

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

5.         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 $157,200, as proposed in the Complaint for Review of Assessment and as testified to at the evidentiary hearing.

6.         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.

7.         Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2007, to be $179,000.

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, 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. 

Notwithstanding the provision of Section 138.431.3, RSMo – “There shall be no presumption that the assessor’s valuation is correct,” – 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 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 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, p. 4.

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).

Complainants’ Burden of Proof

In order to prevail, Complainants 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). 

Owner’s Opinion of Value

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). 

In the present instance, the opinion of Mr. Curran is based upon an incorrect development of a sales approach to value.  The sales approach requires comparison of the subject property to properties that sold in a relevant time period.  Adjustments are made to the comparable properties to make them more like the subject property for the purpose of determining value.  Exhibit A1 is a comparison grid for comparing the Assessor’s valuations in 2006 and 2007.  This is not a recognized method of determining value.  Exhibit A2 is a comparison grid comparing the sale prices of comparable prices and the year following the sale’s valuation set by the Assessor.  Once again, this is not a recognized method of determining value. 

Discrimination

Complainant’s discrimination claim fails because of the failure to establish the market value of the property under appeal.  Without establishing market value, Mr. Curran cannot establish the assessment ratio for his property.  Without establishing the ratio on the subject property, it cannot be establish that the subject property was being assessed at a higher percentage of market value that any other property. 

However, even if Complainant had established market value for his property, the discrimination claim would still fail because he did not demonstrate that a statistically significant number of other residential properties within St. Louis County are being assessed at a lower ratio of market value than the property under appeal.  The taxpayer’s claim of discrimination is based upon his comparison of past valuations of the Assessor and current valuations of the Assessor and the percentage increase or decrease.  Complainant did not meet his burden of proof to establish discrimination in the assessment of his property.   Complainant failed to show there was an intentional plan by the assessing officials to asses the property under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2007 – 2008 residential assessment ratio for St. Louis County.

Respondent’s Burden of Proof

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 appraisal meets the required evidentiary standard in this appeal to establish fair market value for the subject at $179,000.

The appraiser located three comparable sales within .48 miles of the subject property.  The sales occurred between April 2004 and March 2006.  The properties were similar in location, view, age, and room count.  The properties were within 188 and 640 square feet of the subject.  The adjusted sales prices ranged from $176,050 to $187,100.  The appraiser reconciled the values and concluded a value for the subject property on January 1, 2007, of $179,000. 

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 are SET ASIDE.

The assessed value for the subject property for tax years 2007 and 2008 is set at $34,010.

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.  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.

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 and an order to the Collector to release and disburse the impounded taxes, unless said taxes have been disbursed pursuant an order of the circuit court under the provisions of Section 139.031.8, RSMo.  §139.031.3, RSMo.  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. 

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 2, 2008.

STATE TAX COMMISSION OF MISSOURI

 

 

 

_____________________________________

Maureen Monaghan

Hearing Officer

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2nd  day of June, 2008, to:     Connie Curran, 3231 Lin Tel Rd., St. Louis, MO 63125, 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