State Tax Commission of
)
Complainant, )
)
v. ) Appeal Number 09-12279
)
MICHAEL BROOKS, )
ACTING ASSESSOR, )
)
Respondent. )
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED. True value in money for the subject property for tax years 2009 and 2010 is set at $331,200, residential assessed value of $62,930. 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
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 Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009. The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1. Jurisdiction. 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. Evidentiary hearing was held on June 21,
2010, at the
2. Assessment. The Assessor appraised the property at $331,200, residential assessment of $62,930. The Board of Equalization sustained that assessment.[1]
3. Subject Property. The subject property is located at
4. Complainant’s Evidence. Mr. Cotlar testified his opinion of fair market value as of January 1, 2009 was $290,000. The opinion was based upon the subject having been a display unit when purchased in 1997. It had no add-ons. Property values have been down and properties are not selling. 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, 2009, to be $290,000, as proposed. There was no evidence of new construction and improvement during 2009. Therefore the value set for 2009 remains the vale for 2010.[3]
5. Respondent’s Evidence. Respondent offered into evidence as Exhibit 1 the appraisal report of Sarah Curran, Missouri State Certified Residential Real Estate Appraiser. Ms. Curran testified in support of her appraisal. Exhibit 1 was received into evidence. Ms. Curran concluded a value for the subject property as of January 1, 2009, of $353,000 relying on the sales comparison approach to value. The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within less than a tenth of a mile of the subject, on the subject street. Each sale property sold at a time relevant to the tax date of January 1, 2009. 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.
Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2009, to be $353,000. However, Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value. Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $331,200.
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. 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.[4]
Presumptions In Appeals
There is a
presumption of validity, good faith and correctness of assessment by the
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.[7] It is the fair market value of the subject property on the valuation date.[8] 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.[9]
Respondent’s appraiser utilized the Standard
for Valuation in her appraisal.[10]
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.[11]
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, 2009.[13] 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.”[14]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[15] 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.[16]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[17] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[18] Mr. Cotlar’s opinion of value was not based upon any accepted appraisal methodology for the valuation of real property for ad valorem tax purposes in an appeal before the Commission. The owner’s argument that a comparison must be made between what the comparable properties originally were purchased for by the seller in the transaction used to value his property was not shown to be a practice or methodology relied upon by real estate appraisers. The purchase price of a property six, eight or a dozen years ago is irrelevant to establishing value for the 2009-2010 assessment period. The further argument of some type of comparison between what the subject was originally purchased for and what each comp originally sold for is likewise not a practice or approach to value recognizes by appraisers, the Courts or the Commission. Accordingly, the opinion of value proffered by Mr. Cotlar was based upon improper elements and an improper foundation. Therefore, it can be given no probative weight in this appeal. Complainant failed to meet his burden of proof.
The other factors which Mr. Cotlar addressed relative to the subject not having had any add-ons when purchased in 1997, that it was a display home, lowering of the value in a prior appeal and real estate property values being down provide no market data that is relevant to a valuation for January 1, 2009. None of the testimony provided on any of these elements established that on January 1, 2009, the price most likely to be paid in a transaction between a willing buyer and willing seller of the property under appeal would have been $290,000.
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.[19] The evidence presented by the Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the fair market value of the property under appeal, as of January 1, 2009, to be $353,000. However, under the Commission rule just cited and Supreme Court decision[20] the assessed value cannot be increased above $62,930 in this particular appeal.
Respondent’s Burden of Proof
The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program. There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program. There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $331,200, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1) The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof. As used in this paragraph, the word comparable means that:
(a) Such sale was closed at a date relevant to the property valuation; and
(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used. Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.[21]
Clear, cogent
and convincing evidence is that evidence which clearly convinces the trier of
fact of the affirmative proposition to be proved. It does not mean that there may not be
contrary evidence.[22] The quality of proof, to be clear and
convincing must be more than a mere preponderance but does not require beyond a
reasonable doubt.[23] “For evidence to be clear and convincing, it
must instantly tilt the scales in the affirmative when weighed against the
evidence in opposition and the fact finder’s mind is left with an abiding
conviction that the evidence is true.”[24] The appraisal performed by Ms. Curran
constitutes clear, cogent and convincing evidence that the true value of the
property under appeal as of January 1, 2009, was at least $331,200 as set by
the Assessor and sustained by the Board of Equalization. Accordingly, that value must be affirmed by
the Hearing Officer.
ORDER
The assessed
valuation for the subject property as determined by the Assessor and sustained
by the Board of Equalization for
The assessed value for the subject property for tax years 2009 and 2010 is set at $62,930.
Application
for Review
A party may file
with the Commission an application for review of this decision within thirty days
of the mailing date set forth in the Certificate of Service for this 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,
Failure to state specific facts or law upon which the appeal is based will result in summary denial. [25]
Disputed
Taxes
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 2, 2010.
STATE TAX COMMISSION OF
_____________________________________
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 2nd day of July, 2010, to: Stanley Cotlar, 14733 Whitebrook Dr., Chesterfield, MO 63017, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, Acting 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
[1] BOE Decision Letter; Exhibit 1. page 1 of 4
[2] Exhibit 1; Sales Grid; pages 1 & 2 of 4
[3] Section 137.115, RSMo
[4] Article
X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
[5] Hermel,
Inc. v. STC, 564 S.W.2d 888, 895 (
[6] Hermel,
supra; Cupples-Hesse
Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (
[7] St.
Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo.
App. E.D. 1993);
[8] Hermel, supra.
[9] 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.
[10] Exhibit 1 – Certification Page
[11] See, Nance
v. STC, 18 S.W.3d 611, at 615 (
[12] 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).
[13] Hermel,
supra.
[14] See,
Westwood Partnership v. Gogarty,
103 S.W.3d 152 (
[15] See, Cupples-Hesse, supra.
[16] Brooks
v. General Motors Assembly Division, 527 S.W.2d 50, 53 (
[17] Rigali v.
[18] Cohen v. Bushmeyer, 251
S.W.3d 345, (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).
[19] Section
138.060, RSMo; 12 CSR 30-3.075.
[20] The Supreme Court of Missouri has interpreted
Section 138.060. The Court stated:
“Section 138.060 prohibits an assessor from advocating
for or presenting evidence advocating for a higher ‘valuation’ than the ‘value’
finally determined by the assessor.
... . Because the legislature uses the singular terms ‘valuation’ and ‘value’
in the statute, however, it clearly was not referring to both true market value
and assessed value. While the assessor
establishes both true market value and assessed value, which are necessary
components of a taxpayer’s assessment, as noted previously, the assessed value is
the figure that is multiplied against the actual tax rate to determine the
amount of tax a property owner is required to pay. The assessed value is the ‘value that is
finally determined’ by the assessor for the assessment period and is the value
that limits the assessor’s advocacy and evidence. Section
138.060. By restricting the assessor
from advocating for a higher assessed valuation than that finally determined by
the assessor for the relevant assessment period, the legislature prevents an
assessor from putting a taxpayer at risk of being penalized with a higher
assessment for challenging an assessor’s prior determination of the value of
the taxpayer’s property.” State ex
rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 SW3d 80,
87-88 (Mo 8/4/09)
[21] Section 137.115.1(1) & (2).
[22] Grissum
v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974).
[23] 30 AmJur2d.
345-346, Evidence section 1167.
[24] Matter
of O’Brien, 600 S.W.2d 695, 697 (
[25] Section
138.432, RSMo.