State Tax Commission of Missouri

WALTER & SHARON JUNIEWICZ, )

)

Complainants, )

)

v. ) Appeal Number 07-11477

)

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 AFFIRMED. Hearing Officer finds presumption of correct assessment not rebutted. True value in money for the subject property for tax years 2007 and 2008 is set at $457,000, residential assessed value of $86,830.

Complainant Walter Juniewicz appeared in person.

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

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 property on January 1, 2007.

SUMMARY

Complainants appeal, 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 $457,000, assessed value of $86,830, as residential property. Complainant proposed a value of between $395,000 and $412,000. A hearing was conducted on June 25, 2008, at the St. Louis County Government Center, Clayton, Missouri.

The Hearing Officer enters the following Decision and Order.

Complainant’s Evidence

Complainant testified at the hearing. He stated that he purchased the property in 1999. The Complainant submitted the following exhibits:

A. Summary of his argument; said exhibit was taken by the Hearing Officer as a summary of his argument and not as evidence as of value;

B. Change of Assessment Notice; exhibit was not accepted into evidence as it has no evidentiary value as to the market value of the property on January 1, 2007;

C. Comparative Market Analysis by a Realtor; exhibit was excluded as hearsay and lack of foundation; and

D. An appraisal on the subject property dated July 29, 2003; exhibit was excluded for relevance and hearsay.

Complainant stated that he was not aware that he needed the appraiser to be present at the hearing. The booklet provided by the State Tax Commission entitled “Property Tax Appeals Before the State Tax Commission of Missouri” which is provided to each homeowner appealing their residential value clearly states on page 5 “If you wish to have an appraisal report introduced into evidence it will be necessary for the appraiser to be present to testify and be cross-examined. If the appraiser is not present at the Evidentiary Hearing, the appraisal report cannot be received into evidence.”

The Hearing Officer instructed the Complainant that she would allow the Complainant to present the testimony of an appraiser the following day, June 26, 2008, at 10:40 a.m. The Complainant did not appear the following day and the Hearing Officer closed the record.

Respondent’s Evidence

Respondent placed into evidence the Appraisal Report (Exhibit 1) of Mr. Arthur Froeckmann, Residential Appraiser for St. Louis County. Mr. Froeckmann arrived at an opinion of value for the subject property of $481,000 based upon a sales comparison approach to value.

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 17413 Wildhorse Meadows Lane, Chesterfield, Missouri. The property is identified by parcel number 18U420335. The subject property is a ranch-style, brick, single-family dwelling located on a site of .42 acres. The residence is good quality construction built in 1999 and appears to be in average condition. The improvement has a total of 5 rooms which includes 3 bedrooms and 2 baths with gross living area of 2,807 square feet. The residence has a full unfinished basement and a three-car attached garage.

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 $395,000 to $412,000, 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 1.55 miles of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2007. 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.

6. The comparables were described as follows:

Comparable 1 sold in March 2005 for $510,000. This property consists of a .51 acre lot improved by a one-story brick and vinyl single-family structure of good quality construction. The house was built in 1998 and appears to be in good condition. The residence has a total of 9 rooms, which includes 4 bedrooms, 2.5 baths, and contains 2,544 square feet of living area. There is a full basement, which is partially finished. There is an attached three car garage.

Comparable 2 sold in December 2005 for $485,000. This property consists of a .28 acre lot improved by a one-story brick and frame single-family structure of good quality construction. The house was built in 1994 and appears to be in average condition. The residence has a total of 8 rooms, which includes 4 bedrooms, 2.5 baths, and contains 2,427 square feet of living area. There is a full basement, which is partially finished. There is an attached three-car garage.

Comparable 3 sold in October 2006 for $478,000. This property consists of a .24 acre lot improved by a one-story brick and vinyl single-family structure of good quality construction. The house was built in 2001 and appears to be in average condition. The residence has a total of 7 rooms, which includes 3 bedrooms, 3 baths, and contains 2,493 square feet of living area. There is a full basement, which is partially finished. There is an attached three-car garage.

Comparable 4 sold in June 2005 for $470,000. This property consists of a .40 acre lot improved by a one-story brick and frame single-family structure of average quality construction. The house was built in 1991 and appears to be in average condition. The residence has a total of 7 rooms, which includes 3 bedrooms, 2.5 baths, and contains 2,588 square feet of living area. There is a full basement, which is partially finished. There is an attached three-car garage.

7. 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.

8. The gross adjustments ranged from 11.9% to 15.3%. The resulting adjusted sales prices were $480,800, $493,500, $474,900, and $483,900. Most weight was placed on Comparables 1 and 2 due to their proximity to the subject property.

9. Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2007, to be $481,000. Respondent’s appraisal 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 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.

Presumption 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 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. Hermel; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959), 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.

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).

Complainant failed to present substantial and persuasive evidence that the subject property’s value as of January 1, 2007, is between $395,000 and $412,000. Complainant testified that the median of the home prices used on his notice of change of assessment was $485,500. He multiplied that figure by 85% to calculate the value of his home at $412,675. This is not a recognized approach to determine value.

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). “Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.” Carmel Energy at 783.

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).

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).

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.

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 SUSTAINED.

The assessed value for the subject property for tax years 2007 and 2008 is set at $86,830.

Complainants 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 Section 139.031.8, RSMo.

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 July 8, 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 8^th day of July, 2008, to: Walter Juniewicz, 17413 Wildhorse Meadows Lane, Chesterfield, MO 63005-1352, 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