State Tax Commission of Missouri

 

MIN LIU,                                                        )

)

Complainant,                )

)

v.                                                         )           Appeal Number 07-10173

)         

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 year 2007 and 2008 is set at $396,000, residential assessed value of $75,240.

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 $449,100, assessed value of $85,330, as residential property.  The Board reduced the value to $375,000, assessed value of $71,250.  Complainant proposed a value of $350,000, assessed value of $66,500.  A hearing was conducted on May 20, 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.  Ms. Liu gave her opinion of value to be $350,000 based upon a comparison chart she had prepared and multi-list sales information obtained from realtors (Exhibits A & B).  There was no explanation as to how the properties listed in Exhibits A or B established a value of $350,000 as of January 1, 2007.

The day after the hearing, Complainant emailed a revised copy of the comparison chart showing what was purported to be actual sales prices of the five properties used for comparison.  Parties are not permitted to submit additional documents after the close of hearing.  The comparison chart submitted on 5/21/08 was not received into evidence.  Exhibits A and B, as submitted at hearing were received into evidence, over Counsel for Respondent’s objection on the ground of hearsay.  Four of the five properties were the same properties utilized by Respondent’s appraiser, who relied in part on listing service data for these properties.

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Arthur Froeckmann, Missouri State Certified Residential Real Estate Appraiser.  The appraiser testified as to his appraisal of the subject property.  The Appraisal Report (Exhibit 1) of Mr. Froeckmann was received into evidence.  He arrived at an opinion of value for the subject property of $396,000 based upon a sales comparison approach to value.  In performing his sales comparison analysis, the appraiser relied upon the sales of four properties which he deemed to be comparable to the subject property. 

Exhibit 2 consisting of sales listing data on property at 2626 Chatham Place Court was received into evidence.  This property sold in October 2006 for $370,000.  Respondent’s appraiser elected to not use it as a comparable due to his determination that the seller was highly motivated and made a number of concessions into order to move the property quickly.

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 2650 Chatham Place Court, Wildwood, Missouri.  The property is identified by locator number 21U340390.  The property consists of a .38 of an acre lot improved by a two-story brick and frame sided, single-family structure of good quality construction.  The house was built in 1992 and appears to be in average condition.  The residence has a total of eight rooms, which includes four bedrooms, and two full baths and a half bath, and contains 2,883 square feet of living area.  There is a full basement, with an estimated 800 square feet of finished recreation room area and a full bath.  There is an attached three-car garage.

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 $350,000.

5.         The properties relied upon by Respondent’s appraiser in performing his appraisal were comparable to the subject. The four properties were located within less than three-quarters of a mile from the subject.  Each sale property sold at a time relevant to the tax date of January 1, 2007, in a range from October, 2005 to September, 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 2,712 to 3,110 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.  The net adjustments as a percentage of sale price ranged from -13.9% to 4.9%, with a median of 1.6% and an average of -1.45%.  The adjusted sales prices for the comparables fell in a range from $392,700 - $413,500, with a median of $396,850 and a mean of $399,975.  The appraiser concluded on a $396,000 value which calculated to a value per square foot of $137.36 compared with the sales prices per square foot of living area that ranged from $127.60 to $154.34.

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 $396,000.

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.

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 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 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 Board’s valuation is erroneous and what the fair market value should have been placed on the property.  Snider, Hermel & Cupples Hesse, supra.  In this instance, Complainant’s evidence failed to rebut the presumption of correct valuation and establish the value of $350,000 as the taxpayer proposed.  However, Respondent’s evidence met the required standard to rebut the presumption of correct assessment and establish the value of $396,000.

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).

            Respondent’s appraiser arrived at an opinion of fair market value based upon a well-recognized and accepted methodology.  The sales comparison approach is generally acknowledged to be the most appropriate approach to valuing owner occupied homes when there is sufficient market data.  The appraiser had sound market data on the four comparables he selected for valuing Complainant’s property.

            Complainant did not offer an opinion of value derived from a recognized approach to value.  Although she provided real estate information on the sale properties used by Mr. Froeckmann, neither Exhibit A or Exhibit B provided any explanation of how the value of $350,000 was conclude by Ms. Liu.  The taxpayer’s opinion of value was not demonstrated to have been derived from any recognized approach to value.

            Ms. Liu also contended her home suffered from some issues of siding damage, cracks in the basement and radon.  However, she would not permit the appraiser to do an interior inspection to view these items.  No evidence was presented to support the assertion of a positive result for radon testing.  The appraiser was not permitted to confirm the extent of any damage or basement cracks.  In the absence of permitting an interior inspection, a negative inference is drawn relative to any assertion that the overall condition of the subject would be other than average as concluded by the appraiser.

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.  Respondent’s appraisal of the subject property has met the required burden of proof.  The evidence established the fair market value of the subject property to be $396,000 as of January 1, 2007.

Complainant’s Burden of Proof

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). 

Complainant’s opinion of value was not demonstrated to have been based upon proper elements or a proper foundation. Therefore, it cannot be given any probative weight in this instance.  Ms. Liu presented her Exhibits and her opinion of value. However, she did not establish how the properties listed supported the value of $350,000.  Four of the properties were used by Mr. Froeckmann. When adjusted for differences, the four comparable sales establish a value of $396,000, not $350,000.

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 $75,240.

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.

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 5, 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 5th  day of June, 2008, to:     Min Liu, 2650 Chatham Place Court, Wildwood, 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