State Tax Commission of Missouri

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[2] The Complainants cite to no error on the part of the Hearing Officer in his application of the facts to the law in rendering his Decision. The Hearing Officer correctly found that Complainants failed to meet their burden of proof to present substantial and persuasive evidence to establish the true value in money for the property under appeal as of January 1, 2009.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed. The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.

If no judicial review is made within thirty 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.

SO ORDERED July 21, 2010.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jeff W. Schaeperkoetter, Commissioner

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 $160,100, residential assessed value of $30,420. Complainant Larry Listenberger appeared pro se. Respondent appeared by Associate County Counselor Paula J. Lemerman

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

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 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 15, 2010, at the St. Louis County Government Center, Clayton, Missouri.

2. Assessment. The Assessor appraised the property at $160,100, residential assessment of $30,420. The Board of Equalization sustained the assessment.[3]

3. Subject Property. The subject property is located at #68 Fortune Lane, Oakland, Missouri. The property is identified by locator number 24M620101. The property consists of 9,526 square foot lot improved by a one-story brick, ranch, single-family structure of average quality construction. The house was built in 1956 and appears to be in good condition. The residence has a total of seven rooms, with three bedrooms and one bath. The home contains 1,341 square feet of living area. There is full unfinished basement and a detached two-car garage.[4] The property suffers from a water drainage problem due to basement window wells being set below ground level in such a manner that water can drain in. However, this problem has been addressed through a series of pumps and drains installed on the property.[5]

4. No New Construction and Improvement. There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010. Therefore, the assessed value remains the same for 2010 as that set for 2009.

5. Complainant’s Evidence. Mr. Listenberger testified in his own behalf. He arrived at an opinion of fair market value of $152,000. This opinion was concluded by calculating the per square foot sales price of a property which had sold at 475 Oakshire Lane. This per square foot value was then applied to the subject’s purported square footage.[6] Mr. Listenberger than deducted an additional $10,000 based upon a bid for additional work to address the water drainage problem.

The following exhibits were offered into evidence on behalf of Complainants:

EXHIBIT	DESCRIPTION	DISPOSITION
A	Newspaper listings	Obj.-Excluded
B	Valuation Calculation	Obj.-Received
C	2007-09 BOE Decision Letters	Received
D	Photographs of Subject – interior & exterior	Received

Exhibit A was excluded on the grounds of hearsay and lack of relevance. Newspaper listings of properties for sale or that have sold are hearsay and fail present sufficient information to establish comparability. Use of unadjusted sales data from newspaper sources is not acceptable evidence in a hearing before the Commission.

Exhibit B was received over objection on grounds of relevance and lack of foundation in that the methodology utilized by the owner was not an accepted appraisal approach to determine an indicated value. The objection was overruled as it is the general practice of the Hearing Officer to permit taxpayers to present the demonstration of how they arrived at their opinion of value. The method devised by Mr. Listenberger is not relevant and does not constitute a recognized appraisal methodology. The exhibit and supporting testimony was only received for the purpose of completing the record of the owner’s opinion of value and the basis for the opinion.

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 $150,000, as proposed on the Complaint for Review of Assessment, or $152,000 as testified to at the evidentiary hearing.

6. Respondent’s Evidence. The properties, relied upon by Respondent’s appraiser in performing his appraisal, were comparable to the subject property for the purpose of arriving at an indicated value. The properties were located within less than a mile of the subject. 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. The appraiser property adjusted for variances between each sale property and the subject. The gross and net adjustments as a percentage of sale prices were within the recognized and accepted ranges.

Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2009, to be $170,000. 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 $160,100.

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.[7]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[8] 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.[9] Complainant failed to meet the required evidentiary standard, therefore the presumption of correct assessment was not rebutted by Complainant.

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.[10] It is the fair market value of the subject property on the valuation date.[11] 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.[12]

Respondent’s appraiser made his conclusion of true value in money relying on this Standard.[13]

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.[14] 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.[15] Complainant failed to present any evidence to establish valuation of the subject property as of January 1, 2009, under any recognized appraisal methodology. Respondent’s appraiser concluded a fair market value relying on the development of the sales comparison approach to value. The sales comparison methodology generally will provide the best appraisal approach for valuing single family, owner occupied properties.

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, 2009.[16] 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.”[17]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[18] 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.[19]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[20] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[21] The owner’s opinion of value was derived from his application of a per square foot sale value to the subject property. The per square foot sale value was derived from a single sale of a property that was over four times large in living area than the subject. Furthermore, Mr. Listenberger used an incorrect square footage for his house when he made his calculation.

No probative weight can be given to the owner’s opinion of value as it was based on improper elements and an improper foundation. Accordingly, the taxpayers failed to meet their burden of proof to established by substantial and persuasive evidence the true value in money of their property as of January 1, 2009.

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 AFFIRMED.

The assessed value for the subject property for tax years 2009 and 2010 is set at $30,420.

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. 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. [24]

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 MISSOURI

W. B. Tichenor

Senior Hearing Officer

[1] Date received by the Commission.

[2] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).

[3] Exhibit 1, p. 1 of 8

[4] Exhibit 1, p. 2 of 8

[5] Testimony of Mr. Listenberger; Exhibit D

[6] Mr. Listenberger used a square footage of living area of only 1,280. County records establish a total living area for purposes of appraising the property to be 1341 square feet. Exhibit 1-Floor Plan

[7] Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.

[8] 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).

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

[10] 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).

[11] Hermel, supra.

[12] 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.

[13] Exhibit 1.

[14] 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).

[15] 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).

[16] Hermel, supra.

[17] 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).

[18] See, Cupples-Hesse, supra.

[19] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

[20] 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).

[21] 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).

[22] Section 138.060, RSMo; 12 CSR 30-3.075.

[23] 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)

[24] Section 138.432, RSMo.