State Tax Commission of Missouri

 

ARLINE RUTH ROSENER,                           )

)

Complainant,                )

)

v.                                                         )           Appeal Number 07-10642

)         

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 presumption of correct assessment rebutted by Respondent’s Exhibit 1. True value in money for the subject property for tax year 2007 and 2008 is set at $260,000, residential assessed value of $49,400.

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, 2007.

SUMMARY

Complainant appeals, 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 $274,600, assessed value of $52,170, as residential property.  Complainant proposed a value of $220,000, assessed value of $41,800, on the Complaint for Review of Assessment.  At the request of Complainant, Respondent agreed to waive the evidentiary hearing and have the case submitted on documents.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant’s Evidence

Complainant submitted the following exhibits which were received into evidence.

            Exhibit A – four (4) photographs of the subject property’s driveway and tie wall

            Exhibit B – Project proposal of Team Green Landscaping, Inc. to repair subject’s driveway and tie wall for a total cost of $18,875.  This would replace the railroad tie retaining wall with a stone retaining wall.

            Exhibit C – Statement of Complainant setting forth the basis for her appeal.

Complainant believes that the deteriorated condition of the subject driveway and the tie wall detract from the value of her home.  She did not feel the value had increased from $219,700 (value for the 2005 assessment cycle) to $274,600.

Respondent’s Evidence

Respondent placed into evidence the Appraisal Report, Exhibit 1, of Mr. Arthur Froeckmann, Missouri State Certified Residential Real Estate Appraiser.  The appraiser arrived at an opinion of value for the subject property of $260,000 based upon a sales comparison approach to value.  In performing his sales comparison analysis, the appraiser relied upon the sales of four properties he deemed comparable to the subject. 


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 1464 Eagle Ridge Road, Wildwood, Missouri.  The property is identified by parcel number 25U420089.  The property consists of 3.41 acres improved by a one-story  frame and brick, ranch, single-family structure of average quality construction.  The house was built in 1977 and appears to be in fair to average physical condition.  The residence has a total of seven rooms, which includes three bedrooms, two full baths, and contains 1,722 square feet of living area.  There is a full unfinished basement and an attached two-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 $220,000, as proposed.

5.         The properties relied upon by Respondent’s were comparable to the subject property for purposes of the appraisal problem presented. The four properties were located within the general area of the subject, (2 being within a half mile of the subject and 2 being just under 4 miles from 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 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 appraiser considered the subject to be in only fair to average condition due to the driveway and retaining wall deterioration and made an negative $10,000 adjustment to account for this inferior aspect of the subject in relation to the comparables

7.         The adjusted sales prices for the comparables calculated to $262,500, $259,500, $273,900 and $258,400, respectively.  The appraiser concluded on a $260,000 value which calculated to a value per square foot of $150.98 compared with the sales prices per square foot of living area for the comparables of $ 147.33, $168.23, $145.00 and $154.22.

8.         Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and to establish the value of the subject, as of January 1, 2007, to be $260,000.

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 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 Board’s valuation is erroneous and what the fair market value should have been placed on the property.  Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).  The taxpayer failed to present substantial and persuasive evidence to rebut the presumption of correct assessment in this appeal.  Respondent’s evidence was substantial and persuasive to rebut the presumption in favor of the Board’s value.

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 followed by Respondent’s appraiser was an approach to value well recognized when appraising owner occupied homes.  Complainant did not present any evidence under an approach to value accepted by the Courts or by the Commission.

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 only argument in the appeal is that the retaining wall and driveway detract from the property’s value.  The Respondent’s appraiser recognized this factor and considered the condition to be only fair to average, instead of average for a thirty year old home.

            An estimate of repair can provide some basis to account for adjustment for the needed repair.  However, in this instances, the new retaining wall to be constructed was going to be of far superior material.  Furthermore, Complainant failed to present any evidence on the issue of fair market value.  Her only evidence addressed the condition of the retaining wall and the driveway.  No evidence of what this property would bring on the open market was tendered by the taxpayer.  Complainant failed to meet her burden of proof, therefore, the value cannot be reduced to $220,000 as advocated.

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 evidence met the required burden of proof and established the fair market value of the property under appeal to be $260,000.  Respondent’s appraiser properly recognized that the deteriorated retaining wall and driveway deducted from the market value of the property.  However, he also understood that the cost to replace the existing wall with a wall of higher cost material is not appropriate to account for what the market would recognize for the value of the property in the condition it sat on January 1, 2007.  The cost to repair in this instance overstated what the market would discount for the condition of the retaining wall and driveway.

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 SET ASIDE.

The assessed value for the subject property for tax years 2007 and 2008 is set at $49,400.

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.

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 July 21, 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 21st  day of July, 2008, to:     Arline Rosener, 1464 Eagle Ridge Road, Glencoe, MO 63038, 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