State Tax Commission of Missouri
| LEON STEINBACH, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal Number 13-11578 |
| ) | 13-11579 | |
| JAKE ZIMMERMAN, ASSESSOR, | ) | 13-11580 |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
An Evidentiary Hearing was held on August 20, 2014 at the St. Louis County Administration Building, Clayton, Missouri by Senior Hearing Officer John Treu. Complainant filed an Application for Review of Appeals 13-11578 through 13-11580. Respondent filed an Application for Review as to Appeals 13-11578 & 13-11580 only – the vacant lots.
CONCLUSIONS OF LAW
Standard Of Review
A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission. The Commission may then summarily allow or deny their request. The Commission may affirm, modify, reverse or set aside the decision. The Commission may take any additional evidence and conduct further hearings. See Section 138.432. RSMo.
DECISION
Complainant’s Application for Review
Complainant’s Claims of Error
Complainant claims of error are that the Hearing Officer improperly failed to consider Complainant’s statistical analysis regarding Appeals 13-11578 & 13-11580 and that the Hearing Officer improperly failed to take into consideration what Complainant contends to be improvements made to the property, the subject of Appeal 13-11579.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981). Thus, in the present appeals, even in the event the Hearing Officer determined Complainant qualified as an expert witness, the Hearing Officer was free to disbelieve Complainant’s testimony, in whole or in part.
Presumption In Appeal and Complainant’s Burden of Proof
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). This presumption is a rebuttable rather than a conclusive presumption. It places the burden of going forward with some substantial evidence on the taxpayer – Complainant. In order to prevail, Complainant was required to 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, 2013. Hermel, supra. It was Complainant’s sole burden to meet. Respondent was under no obligation to put on any evidence. The values of the Board of Equalization could simply have been affirmed with no evidence being offered by Respondent. Nevertheless, Respondent presented evidence to lower the value of the property which is the subject of appeal 13-11579.
Respondent’s Evidence
Respondent presented substantial and persuasive evidence to establish the fair market values of the subject property in Appeal 13-11579, as of January 1, 2013, to be $98,000, residential assessed value of $18,620. Such resulted in the Board of Equalizations value on such property being lowered and not simply affirmed due to Complainants failure to meet his burden of proof.
Discussion
The Commission denies Complainant’s points based upon various independent and separate reasons, including, but not limited to:
1) Complainant’s evidence did not constitute admissible appraisal evidence;
2) Based upon a review of the evidence in the present appeals, Complainant does not qualify as an expert witness and thus his statistical analysis and/or comparative market analysis was properly excluded. The Commission takes official notice of the Decision and Order in Appeal 07-10165 issued 11/5/08, the Order Affirming Hearing Officer in Appeal 05-10672 issued 11/9/06, the Order Affirming Hearing Officer in Appeal 05-10673 issued 11/9/06, the Order Affirming Hearing Officer in Appeal 05-10674 issued 11/9/06, the Decision and Order regarding Appeals 05-10672 through 05-10674 issued 6/30/06, the Decision and Order regarding Appeal 2001-10171 issued 3/6/02, the Decision and Order regarding Appeal 2001-10172 issued 3/6/02 and the Decision and Order regarding Appeal 2001-10173 issued 3/6/02;
3) Even in the event the Commission believed Complainant was/is an expert, Complainant’s evidence was not substantial and persuasive to meet Complainant’s burden of proof;
4) Complainant’s evidence regarding Appeal 13-11578 & 13-11580 lacked sufficient credibility to meet Complainant’s burden; and
5) Respondent’s evidence was substantial and persuasive to prove value as to the property the subject of Appeal 13-11579.
Regarding Complainant’s Exhibit D-1, such purported to analyze 2011 and 2012 assessed values and apply such to Complainant’s properties. Such evidence is not substantial and persuasive to meet Complainant’s burden of proving value as of January 1, 2013. Regarding Appeal 13-11579, Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach. The appraisal report specifically includes an entry by the Respondent’s appraiser that he noted that various condition issues and repairs were noted. Such report also notes the various structural issues and the roof. Complainant did not present any substantial and persuasive evidence to show that such appraisal report did not properly consider such issues.
Respondent’s Application for Review
Respondent’s Claims of Error
Respondent’s claim of error is that the Hearing Officer erred in finding that the Complainant has a due process right to notice prior to a more than fifteen percent increase in the property assessments because the notice requirement of Section 137.115.11 RSMO is directory and not mandatory and lack of notice alone does not trigger Section 138.060 RSMo.
Applicable Statutes
The statutes upon which the Hearing Officer relied in rendering his Decision were Sections 137.115.10, 137.115.11 and 138.060, RSMo. The Commission holds these are the appropriate provisions of law upon which the Decision should have been rendered. The Hearing Officer did not err in his reliance upon these statutes.
The cited statutes state in relevant part, as follows:
“Before the assessor may increase the assessed valuation of any parcel of subclass (1) real property by more than fifteen percent since the last assessment, excluding increases due to new construction or improvements, the assessor shall conduct a physical inspection of such property.” §137.115.10, RSMo. A.L. 2002 H.B. 1150, et al.
“If a physical inspection is required, pursuant to subsection 10 of this section, the assessor shall notify the property owner of that fact in writing and shall provide the owner clear written notice of the owner’s rights relating to the physical inspection. If a physical inspection is required, the property owner may request that an interior inspection be performed during the physical inspection. The owner shall have no less than thirty days to notify the assessor of a request for an interior physical inspection.” §137.115.11 RSMo. A.L. 2002 H.B. 1150, et al.
“A physical inspection, as required by subsection 10 of this section, shall include, but not be limited to, an on-site personal observation and review of all exterior portions of the land and any buildings and improvements to which the inspector has or may reasonably and lawfully gain external access, and shall include an observation and review of the interior of any buildings or improvements on the property upon the timely request of the owner pursuant to subsection 11 of this section. Mere observation of the property via a drive-by inspection or the like shall not be considered sufficient to constitute a physical inspection as required by this section.” Section 137.115.12 RSMo
“ … In any county … with a charter form of government with greater than one million inhabitants, … in the event a physical inspection of the subject property is required by subsection 10 of section 137.115, RSMo, the assessor shall have the burden to establish the manner in which the physical inspection was performed and shall have the burden to prove that the physical inspection was performed in accordance with section 137.115, RSMo. In such county or city, in the event the assessor fails to provide sufficient evidence to establish that the physical inspection was performed in accordance with section 137.115, RSMo, the property owner shall prevail on the appeal as a matter of law. … .” §138.060.1, RSMo. A.L. 2002 H.B. 1150, et al.
It is important that: a) subsection 10 was amended in 2002, b) subsection 11 was added in Section 137.115 in 2002 and c) subsection 1 of Section 138.060 was amended in 2002, all in the same legislation – H.B. 1150, et al. See, A.L. 2002 H.B. 1150 et al. Accordingly, it was proper for the Hearing Officer to read these provisions of the law together when addressing the notice issue in the Decision.
Notice Requirement Mandatory
Respondent argues that the provisions of Section 137.115.11 are only directory and not mandatory. Respondent is asserting the Hearing Officer erred in reading the word “shall” as “has a duty to do” or “is required to” or as an “obligation” or “necessity”. Respondent, in effect asserts the statute has no real meaning since the assessor is only directed to give notice and perform a property inspection and is not required to do so. To arrive at such a conclusion the Commission would have to conclude that the legislature enacted this statute to mean nothing. The argument is not persuasive.
Respondent’s line of reasoning that because the legislature did not include a penalty provision associated with an assessor failing to carry out the duties imposed by §137.115.11 and §137.115.12 RSMo it is not mandatory is likewise not persuasive.
In addressing the rules of statutory construction, Missouri courts have held:
“The primary rule of statutory construction is to determine the intent of the legislature from the language used, to give effect to that intent if possible, and to consider the words used in their plain and ordinary meaning. The use of the word ‘shall’ in a statute will usually be interpreted to command the doing of what is specified, but the term is frequently used indiscriminately and courts have not hesitated to hold that legislative intent will prevail over common meaning. ‘In determining whether a statute is mandatory or directory, the general rule is that when a statute provides what results shall follow a failure to comply with its terms, it is mandatory and must be obeyed; however, it if merely requires certain things to be done and nowhere prescribes results that follow, such a statute is merely directory.’” 401 North Lindbergh Associates v. St. Louis County Board of Equalization, 807 SW 2d 100, 104 (Mo. App. ED 1990) (citations omitted and emphasis added)
Generally, the use of the word “shall” in a statute connotes a mandatory duty. The absence or presence of a penalty provision is only one method for determining whether or not a statute is directory or mandatory. The absence of a penalty provision does not automatically override other considerations. St. Louis Police Officers’ Ass’n v. Board of Police Com’rs of City of St. Louis, 2007 WL 2915186 (Mo. App. ED 2007). When a statute mandates that something be done by providing that it “shall” occur and also provides what results “shall” follow a failure to comply with the statute, it is clear that it is mandatory and must be obeyed. SSM Health Care St. Louis v. Schneider, 229 S.W.3d 279 (Mo. App. ED 2007); Valli v. Glasgow Enterprises, Inc., 204 S.W.3d 273 (Mo. App. ED 2006). Generally, the use of the word “shall” in a statute connotes a mandatory duty. Neske v. City of St. Louis, 218 S.W.3d 417 (Mo. 2007); Fireman’s Retirement System v. City of St. Louis, 2006 WL 2403955 (Mo. App. ED 2006). The word “shall” in the text of a statute is usually used to express compulsion, obligation or necessity, and, therefore, it generally mandates an action. State ex rel Hunter v. Lippold, 142 S.W.3d 241 (Mo. App. ED 2004).
Respondent’s claim ignores the provisions of §138.060, enacted in the same bill as the amendment which placed subsection 11 into §137.115. To read subsection 11 only in the context of itself and that since it provides for no results which follow for failure to carry out the duties prescribed there is to read the statute too narrowly. Sections 138.060.1 and 137.115.11 must be read together. Section 138.060.1 specifically refers to §137.115. The result that follows for failure of the assessor to carry out the duties set forth in §137.115.11 is clearly found in §138.060.1 “… the property owner shall prevail on the appeal [before the Commission] as a matter of law.”
This application of the law, as was done by the Hearing Officer finds clear support in the holding of the Missouri Supreme Court in Buck v. Leggett, 813 S.W.2d 872, 874-5 (SCt.Mo, 1991). There the Court ruled:
‘in construing a statute it is appropriate to take into consideration statutes involving similar or related subject matter when such statutes shed light upon the meaning of the statute being construed, even though the statutes are found in different chapters and were enacted at different times.’ (citation omitted).
In the present instance, the two statutes (§§137.115.11 & 138.060) were not enacted at different times. They were enacted in the same bill. The section of law – 138.060.1 – setting forth the results to follow or the penalty to be imposed for failure to carry out the duty set by the other section of law – 137.115.11 –specifically refers to §137.115. It is clear with that reference the legislature intended the inspection and notice set forth in §137.115 must be read in conjunction with §138.060.1. Not reading the two statutes together and in harmony with one another ignores the plain language of §138.060.1. It is ignoring the rule of construction the Court established in Buck v. Leggett, supra.
Even using Respondent’s own argument that a result or penalty must be set out by the legislature for a “shall” statute to be mandatory, no error was committed by the Hearing Officer in his Decision. The result to follow or penalty to be imposed for the Assessors failure to comply with §137.115.11 is clearly established in §138.060.1. The Hearing Officer did not err as asserted by Respondent under this point.
If §138.060.1 did not exist, then the determination that the taxpayers in these appeals were to prevail would have been arbitrary. The rule of law says failure of the assessor to establish compliance with §137.115.11 results in the property owners prevailing in an appeal before the Commission. The Hearing Officer’s Decision is not capricious. A determination based upon the clear language of a statute is neither arbitrary nor capricious. Respondent’s point is not well taken. The Hearing Officer did not err as challenged by the Respondent.
The values appealed by the Complainants were the increased values placed on the properties by Respondent. As a consequence of a finding that those values were invalid as a matter of law, Complainants were entitled to have the increases removed. This is precisely the effect of the Hearing Officer’s Decision. The challenged statutes contain a provision for notice and the results to follow if the Respondent fails to establish compliance with §137.115.11.
Notice is an inherent part of the assessment process. In a case involving failure of a county Board of Equalization to give notice of an increase in value to a taxpayer, the court said:
“The rule … that procedural requirements as enunciated by the Legislature before administrative agencies must be strictly complied with, should apply with equal force to legislative requirements imposed upon county boards of equalization. Such boards are statutory tribunals and derive their jurisdiction, powers and duties from the statutes. The legislature … place the mandatory (shall) duty upon the Board of Equalization to give the plaintiff the notice and that such notice was to contain certain specific facts and information. The Supreme Court … declared such notice to be jurisdictional. It is neither logical nor morally justifiable that such a state agency be permitted to disregard such definite legislative directions and still retain any defense to an action to correct its void revaluation order, either upon the theory of governmental immunity or failure of plaintiff to exhaust administrative remedies.” (citations omitted) McGraw-Edison Company v. Curry, 485 S.W.2d 175, 180 (Mo. App. 1972).
The Missouri Supreme Court, in a case involving failure of an assessor to give notice of an assessment increase, cited the McGraw-Edison case approvingly, and added:
“Where, as here, the failure to give notice of the increased assessment prevents the taxpayer from pursuing his administrative remedies, the increased assessment made by the assessor is void and, consequently, so is the tax computed thereon ….” John Calvin Manor, Inc. v. Aylward, 517 S.W.2d 59, 65 (Sup. Ct. 1974).
The Court continued to adhere to this line of reasoning in a later case, stating:
“As is obvious from the previous discussion of the effect of an assessor’s failure to provide the taxpayer with notice of increased valuation, an increase without notice is invalid … .” Crest Communications v. Kuehle, 754 S.W. 2d 563, 567 (Sup. Ct. 1988).
Respondent’s focus solely on a requirement of “interior inspection” fails to address the due process requirements for an increase in the assessed value. The statutes require the assessor to conduct a physical inspection. The statutes require that the physical inspection be on-site personal observation and review of all exterior portions of the land. The statutes require that the assessor notify the property owner that the assessed valuation will increase by more than fifteen percent. The statutes require that the assessor notify the property owner that an inspection will occur. The statutes require that the owner be notified in writing. The statutes require that the assessor provide “the owner clear written notice of the owner’s rights relating to the physical inspection.”
Notice is notice and any assessment made without a required notice is invalid. The lack of improvements on the property do not eliminate the notice requirement or somehow diminish the property owner’s statutory rights.
Respondent argues that even if the owner was entitled to notice, Respondent established compliance with Section 138.060 RSMo. Respondent argues that the testimony of an employee (witness) that another employee inspected the property, the witness recognizes the employees handwriting, and the handwriting on a post card notice is the employees handwriting. The witness testified that the office completes two postcards when inspecting the property. One postcard is left at the property and one is mailed. The Respondent then argues that business records may come into evidence.
The employee that inspected the property did not testify. No one testified as to whether or not the cards were mailed to the Complainant. The witness is not a records custodian. The witness did not conduct the inspection or mail the notice. Such evidence fails to meet the burden of proof required.
Conclusion
The Points raised by Respondent are not well taken. The Hearing Officer did not err in finding the provisions of Sections 137.115.11 and 138.060.1, RSMo were mandatory upon the Respondent. The points raised by Complainant are equally not well taken, due to that set forth above. The Hearing Officer’s Decision was neither arbitrary nor capricious, but rather a
proper application of the law to the facts in the record. The Decision does not violate either the uniformity or equal protection clauses of the Missouri or the United States Constitution.
The Points raised by Complainant are not well taken as Complainant’s evidence was not admissible and even if admissible, the evidence is not substantial and persuasive to rebut the presumption of correct assessment by the County Board of Equalization.
ORDER
The Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, is AFFIRMED and incorporated by reference, as if set out in full herein verbatim, 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 this 20th day of January, 2015.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Randy B. Holman, Commissioner
Victor Callahan, Commissioner
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 22nd day of January, 2015 to:
Leon Steinbach, 570 Coach Light Lane, Hazelwood, MO 63042
Paula Lemerman, Associate County Counsel, Attorney for Respondent, PLemerman@stlouisco.com
Jake Zimmerman, Assessor, syoutzy@stlouisco.com
Mark Devore, Collector, collector@stlouisco.com
Jacklyn Wood
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
State Tax Commission of Missouri
| LEON STEINBACH, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| ) | Appeal Number 13-11578 | |
| ) | 13-11579 | |
| JAKE ZIMMERMAN, ASSESSOR, | ) | 13-11580 |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| ) |
DECISION AND ORDER
HOLDING
Three separate appeals are being addressed herein, such being 13-11578, 13-11579 and 13-11580.
Regarding 13-11578 the Decision of the County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE. Although Complainant did not present admissible evidence which was substantial and persuasive to rebut the presumption of correct assessment by the Board of Equalization, Respondent did not meet their burden of proof under 137.115 regarding the increase in value above 15%.
Regarding 13-11579 the Decision of the County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE. Complainant did not present admissible evidence which was substantial and persuasive to rebut the presumption of correct assessment by the Board of Equalization. Respondent’s presented substantial and persuasive evidence to further lower the value determined by the Board of Equalization; although not obliged to, as Complainant had the burden of proof.
Regarding 13-11580 the Decision of the County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE. Although Complainant did not present admissible evidence which was substantial and persuasive to rebut the presumption of correct assessment by the Board of Equalization, Respondent did not meet their burden of proof under 137.115 regarding the increase in value above 15%.
True value in money for the subject properties for tax years 2013 and 2014 are set at:
1) 13-11578: $1,900, residential assessed value of $360.
2) 13-11579: $98,000, residential assessed value of $18,620.
3) 13-11580: $900, residential assessed value of $170.
Complainant appeared pro se.
Respondent appeared by attorney Paula Lemerman
Case heard and decided by Senior Hearing Officer John Treu.
ISSUE
Complainant appeals, on the ground of overvaluation, on the decisions of the St. Louis County Board of Equalization. The Commission takes this appeal to determine the true value in money for the subject properties on January 1, 2013. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction and improvement to the property. Section 137.115.1 RSMo
The Hearing Officer, having considered all of the competent evidence upon the whole record and enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over these appeals is proper. Complainant timely appealed to the State Tax Commission from the decisions of the St. Louis County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing was held on August 20, 2014 at St. Louis County Administration Building, Clayton, Missouri.
- Identification of Subject Property. The subject properties are identified as follows:
a) 13-11578: Identified by map parcel number or locator number 12E640121. It is further identified as 9831 Valley Drive, Riverview, St. Louis County, Missouri.(Ex. 1)
b) 13-11579: Identified by map parcel number or locator number 08L320798. It is further identified as 574 Coach Light Lane, Hazelwood, St. Louis County, Missouri.(Ex. 1)
c) 13-11580: Identified by map parcel number or locator number 12E640163. It is further identified as 9835 Valley Drive, Riverview, St. Louis County, Missouri.(Ex. 1)
- Description of Subject Property. The subject properties are as follows:
a) 13-11578: consists of a vacant tract of land having .560 acres. (Ex. 2)
b) 13-11579: consists of a 7,497 square foot tract of land improved by a single family, residential ranch style home with a quality rating consistent with economy of construction and basic functionality, with 1,590 square feet of living area. Amenities include 4 bedrooms and two bathrooms. It has a 1 car garage, a fireplace, and an enclosed porch. (Ex. 1)
c) 13-11580: consists of a vacant tract of land having .4 acres. (Ex. 2)
- Sale of Subject. None of the subject properties were sold in the previous three years prior to January 1, 2013. However, Complainant did list the properties, the vacant lots, which are the subject of appeals 13-11578 and 13-11580, for a combined listing price of $200,000. (Exs. 2 & 3)
- Assessment. The Assessor and Board of Equalization appraised the subject properties as follows:
Assessor for tax year 2013:
1) 13-11578: $4,400, residential assessed value of $836.
2) 13-11579: $108,900, residential assessed value of $20,690.
3) 13-11580: $11,800, residential assessed value of $2,240.
Board of Equalization for tax year 2013:
1) 13-11578: $4,400, residential assessed value of $836.
2) 13-11579: $105,300, residential assessed value of $20,010.
3) 13-11580: $3,700, residential assessed value of $703.
(Respondent’s Ex. 1 and Complainant’s Ex. D-2)
- 2011 & 2012 Assessment. The appraised and assessed valuation for tax years 2011 & 2012 for the subject properties in appeals 13-11578 and 13-11580 are as follows:
1) 13-11578: $1,900, residential assessed value of $360.
2) 13-11580: $900, residential assessed value of $170.
(Complainant’s Ex. D-2)
- Complainant’s Evidence. Complainant offered into evidence Exhibit A-1 through F. Exhibit A-1 consisted of a statement of complainant and a summary of Exhibit A-2. Exhibit A-2 consisted of a Comparative Market Analysis by Complainant, a real estate broker, for the 13-11579 property Exhibit B consisted of documents relating to repairs to the property the subject of appeal 13-11579. Exhibit C consisted of a document regarding the roof of the property, the subject of appeal 13-11579. Exhibit D-1 consisted of summary sheet comparing the subject properties in appeals 13-11578 (9831 Valley Drive) and 13-11580 (9835 Valley Drive) to various “comparable properties and making calculations. Exhibit D-2 consisted of various St. Louis County documents relating to the subject properties in appeals 13-11578 and 13-11590 and the “comparable properties” set forth in Exhibit D-1. Such also clearly and unequivocally showed that the valuations of the subject properties in appeals 13-11578 and 13-11590 had increased by more than 15% since the previous assessment. Exhibit E consisted of a MARIS Matrix regarding comparable #3 of the appraiser for Respondent. Exhibit F consisted of a MARIS Matrix regarding comparable #2 of the appraiser for Respondent.
Exhibits A-1 through D-2 were objected to. Pages 1 & 2 of Exhibit A-1 were admitted into the evidentiary record; however, page 3 was not. Exhibit A-2 was excluded. Exhibit B and C were admitted into the evidentiary record. Exhibit D-1 was excluded. Exhibit D-2 was admitted into the evidentiary record. Exhibits E and F were admitted into the evidentiary record without objection.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvements from January 1, 2013, to January 1, 2014, to any of the properties; therefore the assessed value for 2013 remains the assessed value for 2014. Section 137.115.1, RSMo. Complainant did offer evidence of maintenance done or contemplated to the property the subject of appeal 13-11579.
- Respondent’s Evidence. Respondent offered into evidence Exhibits 1 through 5 (An Exhibit 6 was initially offered and not objected to, but was withdrawn by Respondent). Exhibit 1 consisted of an Appraisal Report, regarding the property the subject of appeal 13-11579, dated 4/18/2014 with an Effective Date of 1/1/13 of James Kralemann. Exhibit 2 consisted of a MARIS Matrix regarding the property the subject of appeal 13-11578 (9831 Valley Drive). Exhibit 3 consisted of a MARIS Matrix regarding the property the subject of 13-11580. Exhibits 2 & 3 showed a listing price, by Complainant, for the properties combined of $200,000. Exhibit 4 consisted of an inspection notice of the property the subject of appeal 13-11578 (9831 Valley Drive). Exhibit 5 consisted of an inspection notice of the property the subject of appeal 13-11578 (9835 Valley Drive).
Exhibits 1 through 5 were all admitted into the evidentiary record without objection.
- Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessments by the Board and establish the true value in money of any of the subject properties as of January 1, 2013. Mr. Steinbach is not a licensed or certified appraiser and therefore his Comparative Market Analysis, which was excluded from the evidentiary record, provided no admissible evidence which was substantial and persuasive.
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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Basis of Assessment
The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.
Lack of Admissibility of Comparative Market Analysis
by a Real Estate Broker or Salesperson
12 CSR 30-3.065 states:
“…
(4) Any appraisal or appraisal report, as those terms are defined in section 339.503 (1) and (4), which is filed with the commission or offered into evidence pursuant to 12 CSR 30-3.060 shall contain the Missouri Real Estate Appraisers Commission certificate or license number of the person or persons who developed the appraisal or appraisal report, or a statement setting forth the basis for exemption from licensure and certification for such persons pursuant to section 339.501.5, RSMo Supp. 1998. Any such appraisal or appraisal report failing to comply with this provision will be excluded from evidence at the evidentiary hearing on the valuation of the property under appeal.”
339.501.5 RSMo states:
“The provisions of sections 339.500 to 339.549 shall not be construed to require a license or certificate for:
(1) Any person, partnership, association or corporation who, as owner, performs appraisals of property owned by such person, partnership, association or corporation;
(2) Any licensed real estate broker or salesperson who prepares a comparative market analysis or a broker price opinion;
(3) Any employee of a local, state or federal agency who performs appraisal services within the scope of his or her employment; except that, this exemption shall not apply where any local, state or federal agency requires an employee to be registered, licensed or certified to perform appraisal services;
(4) Any employee of a federal or state-regulated lending agency or institution;
(5) Any agent of a federal or state-regulated lending agency or institution in a county of third or fourth classification. “
339.503 RSMO states:
“As used in sections 339.500 to 339.549, the following words and phrases mean, unless the context clearly indicates otherwise:
(1) “Appraisal” or “real estate appraisal”, an objective analysis, evaluation, opinion, or conclusion relating to the nature, quality, value or utility of specified interests in, or aspects of, identified real estate. An appraisal may be classified by subject matter into either a valuation or an analysis;
…
(7) “Appraisal report”, any communication, written or oral, of an appraisal. The purpose of an appraisal is immaterial, therefore valuation reports, real estate counseling reports, real estate tax counseling reports, real estate offering memoranda, mortgage banking offers, highest and best use studies, market demand and economic feasibility studies and all other reports communicating an appraisal analysis, opinion or conclusion are appraisal reports, regardless of title;
…
(14) “Broker price opinion”, an opinion of value, prepared by a real estate licensee for a fee, that includes, but is not limited to, analysis of competing properties, comparable sold properties, recommended repairs and costs or suggested marketing techniques. A broker price opinion is not an appraisal and shall specifically state it is not an appraisal;
…
(19) “Comparative market analysis”, the analysis of sales of similar recently sold properties in order to derive an indication of the probable sales price of a particular property undertaken by a licensed real estate broker or agent, for his or her principal. A comparative market analysis is not an appraisal and shall specifically state it is not an appraisal
…”
Complainant offered into evidence Exhibit A-1, page 3, Exhibit A-2, a Comparative Market Analysis done by Complainant, a real estate broker and Exhibit D-1, a summary sheet comparing the subject properties in appeals 13-11578 (9831 Valley Drive) and 13-11580 (9835 Valley Drive) to various “comparable properties and making calculations”. All of such were excluded from the evidentiary record and not admissible. Complainant’s other exhibits were not substantial and persuasive to establish a true value for the subject properties.
Of special note is Complainant’s testimony of what he felt the value of the properties, the subject of appeals 13-11578 (9831 Valley Drive) and 13-11580 (9835 Valley Drive), were. Complainant testified he felt the value of the properties were $791 and $580 respectively. This is a total value for both properties of $1,371. This is .06855% of the listing price of Complainant ($200,000) for such properties combined, which Complainant readily acknowledged under oath. Although a listing price does not reflect the absolute market value of a property, such generally has some relationship to what the seller and/or the seller’s real estate agent believes the property is worth. Mr. Steinbach, in the opinion of this hearing officer, as a real estate broker and owner of a real estate agency, must have felt the listing price represented at least a reasonable starting point for negotiations on the properties.
Based upon what this hearing officer determines are absurd values, at best, posited by Mr. Steinbach of the values of his properties in appeals 13-11578 and 13-11580, this hearing officer finds that Mr. Steinbach’s testimony, at least regarding such, has no credibility, at all. To in one breath list two properties combined, for a certain value ($200,000) and in another breath to testify, under oath, that the properties values, are $791 and $580 respectively, (combined together by this hearing officer for a total of $1,371 and which represents .06855% of the listing price) is absurd.
Requirements of 137.115 Regarding Increase of More than 15%
137.115 RSMO states in pertinent part:
“…
10. Before the assessor may increase the assessed valuation of any parcel of subclass (1) real property by more than fifteen percent since the last assessment, excluding increases due to new construction or improvements, the assessor shall conduct a physical inspection of such property.
11. If a physical inspection is required, pursuant to subsection 10 of this section, the assessor shall notify the property owner of that fact in writing and shall provide the owner clear written notice of the owner’s rights relating to the physical inspection. If a physical inspection is required, the property owner may request that an interior inspection be performed during the physical inspection. The owner shall have no less than thirty days to notify the assessor of a request for an interior physical inspection.
12. A physical inspection, as required by subsection 10 of this section, shall include, but not be limited to, an on-site personal observation and review of all exterior portions of the land and any buildings and improvements to which the inspector has or may reasonably and lawfully gain external access, and shall include an observation and review of the interior of any buildings or improvements on the property upon the timely request of the owner pursuant to subsection 11 of this section. Mere observation of the property via a drive-by inspection or the like shall not be considered sufficient to constitute a physical inspection as required by this section.
13. The provisions of subsections 11 and 12 of this section shall only apply in any county with a charter form of government with more than one million inhabitants.
…”
138.060 RSMO states in pertinent part:
“in the event a physical inspection of the subject property is required by subsection 10 of section 137.115, the assessor shall have the burden to establish the manner in which the physical inspection was performed and shall have the burden to prove that the physical inspection was performed in accordance with section 137.115. In such county or city, in the event the assessor fails to provide sufficient evidence to establish that the physical inspection was performed in accordance with section 137.115, the property owner shall prevail on the appeal as a matter of law.
In this appeal, Complainant asserts that he did not receive the notice pursuant to the foregoing. Exhibit D-2 clearly shows that the properties, the subjects of appeals 13-11578 (9831 Valley Drive) and 13-11580 (9835 Valley Drive), were increased by well over 15% from the last assessment. They were increased by approximately 131.6% and 311%, respectively.
Exhibits 4 and 5 also clearly show that the required notices were prepared for each property and that an inspection of each property was noted to have occurred on May 28, 2013. The only true question is whether the property owner, Complainant, was given proper notice. Although it is reasonable to presume that such were mailed and despite this hearing officers reservations about the credibility of Complainant, Respondent failed to meet his burden of proof that the notices were actually mailed in accordance with the pertinent statute. Respondent could have simply called a witness to testify as to such fact; however, failed to do so. When questioned by this hearing officer in reference to the notice actually being mailed, Respondent’s appraiser testified that the “assessors office doesn’t actually mail them.” Consequently, the valuations of the properties assigned by the Assessor and affirmed or lowered by the Board of Equalization for tax year 2013, which are the subjects of appeals 13-11578 (9831 Valley Drive) and 13-11580 (9835 Valley Drive), cannot stand as a matter of law.
Presumption In Appeal
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). This presumption is a rebuttable rather than a conclusive presumption. It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.
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, 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).
“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).
Board Presumption and Computer-Assisted Presumption
The Assessor’s original valuations were affirmed by the Board of Equalization in one appeal and lowered in two appeals. There exists a presumption of correct assessment by the Board of Equalization. There exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways. The Board presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the Board, then it also would be applicable to the Respondent. The computer-assisted presumption only comes into play if the Board of Equalization lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and it has not been shown that the Assessor’s valuation was not the result of a computer assisted method.
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). True value in money is defined in terms of value in exchange and not value in use. Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973). 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.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo. The Hearing Officer during the evidentiary hearing made inquiry of Complainant and Respondent’s appraiser.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
Complainants’ 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, 2013. Hermel, supra. As set forth above, it is the opinion of this hearing officer that Mr. Steinbach’s testimony, at least in part, completely lacks credibility. Complainant did not meet this burden in any one of the three appeals which are the subject of this Decision. Consequently, the values of the Board of Equalization could simply being affirmed with no evidence being offered by Respondent. Nevertheless, Respondent presented evidence to lower the value of the property which is the subject of appeal 13-11579 (574 Coach Light Lane).
Respondent Prove Value
Respondent presented substantial and persuasive evidence to establish the fair market values of the subject property in appeal 13-11579, as of January 1, 2013, to be $98,000, residential assessed value of $18,620. Respondent had not obligation to put on such evidence, but presumably did such in the interest of fair play and justice. Respondent’s good will resulted in the Board of Equalizations value on such property being lowered and not simply affirmed due to Complainants failure to meet his burden of proof. Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
ORDER
The assessed valuations for the subject properties, set by the Board of Equalization of St. Louis County, are SET ASIDE as to appeals 13-11578, 13-11579 and 136-11580.
The assessed value for the subject property for tax years 2013 and 2014 is set as follows:
1) 13-11578: $360
2) 13-11579: $18,620
3) 13-11580: $170
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 facts or law as 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 application for review is based will result in summary denial. Section 138.432, RSMo
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 the possible 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 this 8th day of September, 2014.
STATE TAX COMMISSION OF MISSOURI
John Treu
Senior Hearing Officer
Delivery or Notice was made via email, fax, mail or personally on September 8th, 2014 to the following Individuals of this Decision/Order/Holding
Leon Steinbach, 570 Coach Light Lane, Hazelwood, MO 63042
Paula Lemerman, Associate County Counsel, Attorney for Respondent, PLemerman@stlouisco.com
Jake Zimmerman, Assessor, syoutzy@stlouisco.com
Mark Devore, Collector, collector@stlouisco.com
Jacklyn Wood
Legal Coordinator