STATE TAX COMMISSION OF MISSOURI
| KAREN CRUSE, | ) | |
| Complainant, | ) | Appeal No. 19-20395 |
| ) | ||
| ) | Parcel No. 1454-00-00200 | |
| v. | ) | |
| ) | ||
| MICHAEL DAUPHIN, ASSESSOR, | ) | |
| CITY OF ST. LOUIS, MISSOURI | ) | |
| Respondent. | ) |
ORDER AFFIRMING
HEARING OFFICER DECISION UPON APPLICATION FOR REVIEW
HOLDING
On June 4, 2021, Senior Hearing Officer Laura Stork-Elam (Hearing Officer) entered a Decision and Order (Decision) affirming the determination made by Michael Dauphin, Assessor of the City of St. Louis, (Respondent). Karen Cruse (Complainant) subsequently filed an Application for Review of the Decision of the Hearing Officer. Respondent filed his Response in Opposition to Complainant’s Application for Review.
We AFFIRM the Decision of the Hearing Officer. Segments of the Hearing Officer’s Decision may have been incorporated into our Decision and Order without further reference.
FINDINGS OF FACT AND PROCEDURAL HISTORY
The subject property is identified by Parcel Locator No. 1454-00-00200. The subject property is further identified as being located at 2948 Michigan Ave. in the City of St. Louis, Missouri. The subject property is a parcel of real property classified as residential and consisting of a lot of approximately 25 feet by 125 feet with a 2,014 square-foot single-family home that previously was a two-family flat. The two-story brick home has six rooms, three bedrooms, one and one-half bathrooms, and a full basement.
Respondent assessed the value of the subject property at $73,900. Complainant timely appealed to the State Tax Commission (STC) alleging that the subject property was overvalued. The Hearing Officer held an evidentiary hearing on August 13, 2020, at St. Louis City Hall in the City of St. Louis, Missouri. Complainant and Respondent each presented evidence in the form of testimony and exhibits. The Hearing Officer issued the Decision and Order on June 4, 2021, affirming Respondent’s valuation on the ground that Complainant failed to present substantial and persuasive evidence establishing overvaluation.
Complainant filed a timely Application for Review. The STC thereafter issued its Order allowing the Application for Review and granting Respondent time to file a response. Respondent filed a timely response.
CONCLUSIONS OF LAW
Complainant’s Points on Review
In her sole point on review, Complainant alleged the Hearing Officer erred by finding that Complainant did not produce substantial and persuasive evidence to establish that Respondent overvalued the subject property. Complainant specifically argued that the subject property does not have three bedrooms but only one bedroom, which adversely affects its value.
Standard of Review
A party subject to a Decision and Order of a hearing officer of the STC may file an application requesting the case be reviewed by the STC. Section 138.432[1]. The STC may then summarily allow or deny the request. Section 138.432. The STC may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the STC. Section 138.432.
Commission’s Ruling
For the reasons that follow, the Commission finds Complainant’s arguments to be unpersuasive. The Commission, having thoroughly reviewed the whole record and having considered the Hearing Officer’s Decision, the Application for Review of Complainant, and Respondent’s Response, affirms the Hearing Officer’s decision.
There is a presumption of validity, good faith and correctness of assessment by the BOE. 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. The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the BOE’s valuation is erroneous and what fair market value should have been placed on the property. Id.
Here, Complainant did not appeal to the BOE but directly to the STC. However, the taxpayer in a STC appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, Complainant bears the burden of proving by substantial and persuasive evidence 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. W.D. 1991). Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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 Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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).
Complainant argues that the subject property is overvalued because, if it were listed for sale, it would have to be listed as a one bedroom home, not a three bedroom home as shown by Respondent’s evidence. (Application for Review) The evidence in the record before the Hearing Officer did not support this argument.
Complainant’s Application for Review described the subject property as having three bedrooms on the second floor whereby one would have to walk through each room to access the other rooms, a layout that was “grandfathered in” after the current property maintenance codes became effective. Complainant submitted a copy of a document labeled “2018 International Property Maintenance Code” and hand-drawn sketches of the subject property along with her Application for Review. This new, unsubstantiated information states that bedrooms cannot constitute the only means of access to other bedrooms or other habitable spaces within a home. This information has not been shown to be relevant to the issue of overvaluation. This information is not self-authenticating and was not available to Respondent or the Hearing Officer at the evidentiary hearing. Accordingly, Complainant will not be allowed to claim the Hearing Officer committed error on the basis of specific arguments and exhibits not presented to the Hearing Officer when the exhibits, through the exercise of reasonable diligence, could have been presented at the Evidentiary Hearing. See Tibbs v. Poplar Bluff Associates I, L.P., 411 S.W.3d 814, 820 (Mo. App. S.D. 2013) (reasoning that party could not raise issues on appeal that were not raised during evidentiary hearing before the hearing officer); see also Slusser v. Zimmerman, Mo. STC Appeal No. 17-10006 (June 14, 2018).
The record reveals that Hearing Officer received and considered all the evidence presented at the Evidentiary Hearing, which included evidence regarding the number of bedrooms within the subject property. The Hearing Officer found that Complainant’s testimony and exhibits did not constitute an accepted approach for determining value. The Hearing Officer found that the exhibits regarding Complainant’s comparable properties reflected listing prices rather than sales prices and failed to make market-based adjustments for similarities and differences between the proposed comparables and the subject property. These findings are supported by the record. Although a significant amount of testimony concerned the dated characteristics of the subject property and the number of bedrooms within the subject property, Complainant’s evidence did not persuasively link the dated characteristics or number of bedrooms to an overvaluation of the subject property.
Furthermore, although not required to present evidence, Respondent presented the testimony and report of an appraiser, which relied on an accepted approach to determining value, the sales comparison approach. The appraiser selected three sales of properties that were considered to be most comparable to the subject property and made market-based adjustments to account for similarities and differences between the comparables and the subject property. The Hearing Officer found Respondent’s evidence credible.
The taxpayer in a STC appeal bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, in this appeal, Complainant had the burden of proving that Respondent’s valuation was erroneous and of establishing what should be the fair market value of the subject property. The Hearing Officer found that Complainant did not present substantial and persuasive evidence establishing the true value of the subject property as of January 1, 2019. The Hearing Officer found that Respondent’s evidence in support of the valuation was persuasive. The record supports the Hearing Officer’s findings. The Commission finds that a reasonable mind could have conscientiously reached the same result as the Hearing Officer based on a review of the entire record. Hermel, 564 S.W.2d at 895-96; Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998). The Hearing Officer did not err in affirming Respondent’s valuation.
ORDER
The Decision of the Hearing Officer is AFFIRMED.[2] 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 within 30 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.
If no judicial review is made within 30 days, this decision and order is deemed final and the Collector of St. Louis City, 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 September 24, 2021.
STATE TAX COMMISSION OF MISSOURI
_____________________________________
Gary Romine, Chairman
_____________________________________
Victor Callahan, Commissioner
_____________________________________
Will Kraus, Commissioner
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid September 24, 2021, to:
Elaina Mejia
Legal Coordinator
STATE TAX COMMISSION OF MISSOURI
| KAREN CRUSE | ) | |
| Complainant, | ) | Appeal No. 19-20395 |
| ) | ||
| ) | ||
| v. | ) | |
| ) | ||
| MICHAEL DAUPHINE, ASSESSOR, | ) | |
| CITY OF ST. LOUIS, MISSOURI | ) | |
| Respondent. | ) |
DECISION AND ORDER
Karen Cruse (Complainant) appeals the determination made by Michael Dauphin, Assessor, City of St. Louis, Missouri, finding the true value in money (TVM) of the subject property on January 1, 2019, was $73,900, with an assessed value of $14,040. Complainant claims the property is overvalued and proposes a value of $46,000 to $47,000. Complainant did not produce substantial and persuasive evidence establishing overvaluation. Respondent’s determination is affirmed.[3]
The evidentiary hearing was held on August 13, 2020, at St. Louis City Hall in the City of St. Louis, Missouri. Complainant appeared pro se. Respondent was represented by counsel Chelsea Mannery.
FINDINGS OF FACT
- Subject Property. The subject property is located at 2948 Michigan Ave. in St. Louis, Missouri. The parcel/locator number is 1454-00-00200.
The subject property consists of an approximately 25 feet by 125 feet lot and a 2,014 square foot single family home that previously was a two-family flat. The two-story brick home has six rooms, three bedrooms, one and one-half bathrooms, and a full basement.
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $73,900. Complainant indicated that she did not appeal to the BOE because she was not notified of the increase in valuation until her tax bill was received on November 12, 2019.
- Complainant’s Evidence. Complainant testified that she believes $46,000 or $47,000 is the TVM of the subject property. Complainant submitted the following exhibits:
| Exhibit | Description | Ruling |
| A | Two-page printout for home located at 4327 California, St. Louis, Missouri 63111 listed for sale for $29,500 on www.point2homes.com. | Admitted |
| B | Four-page printout for home located at 4138 Oregon Ave. St. Louis Missouri 63118 listed for sale for $59,000 on ColdwellBankerHomes.com. | Admitted |
| C | One-page printout for three homes listed for sale on www.point2homes.com: 3624 Virginia Avenue listed for $24,900; 4327 California listed for $29,500; and 540 Bates Street listed for $59,900. | Admitted |
| D | Four-page document from Price Real Estate Investments Inc. that includes letter dated March 3, 2020, and offers to purchase the subject property for $40,000. | Admitted |
| E | Two-page document from Price Real Estate Investments that includes letter dated March 10, 2020, with offer to purchase the subject property for $45,000. | Admitted |
| F | Two-page property detail for the subject property that indicates a total market value of $73,894 for the 2019 assessment year. | Admitted |
| G | One-page handwritten document indicating addresses, prices, and square footage for six properties. | Admitted |
| H | One-page handwritten document indicating sale price, sale date, and square footage for five properties. | Admitted |
| I | Four-page printout for home located at 540 Bates Street, St. Louis, Missouri 63111 listed for sale for $59,900 on www.point2homes.com. | Admitted |
| J | Two-page printout for home located at 3624 Virginia Avenue, St. Louis Missouri 63118 listed for sale for $24,900 on www.point2homes.com. | Admitted |
Respondent’s counsel objected to Exhibits A through J. The objections were overruled, and the exhibits were admitted to be given the weight deemed appropriate.
Complainant testified that she believes the TVM of the subject property was $46,000 to $47,000, and that the subject home was previously a two-family flat and has two front doors. Complainant indicated that the subject property is in need of many repairs, including plumbing repairs, gutter repairs, replacement of the old roof with a new roof that would cost about $6,000, and new front steps. Complainant further testified that Exhibits D and E show that she received offers to sell the subject property for $40,000 and $45,000, respectively; Exhibit F shows the decrease in the value by the BOE for a previous year; Exhibit A shows a house that she believes is comparable to the subject property that is listed for $29,500; Exhibit B shows a house that appears to be nicer on the inside than the subject home that is listed for $59,000; Exhibit C shows the front of some homes that are similar to the subject property; Exhibits G and H are lists of houses that she compiled from information on the internet; Exhibits I is a house on Bates listed for $59,000 that she thinks has been renovated; and Exhibit J is a house on Virginia with wood floors rather than the subject property’s old carpet listed for $24,900. Complainant indicated that she chose properties based on similar square footage that were located in her general area.
- Respondent’s Evidence. Respondent submitted Exhibit 1, an appraisal report prepared by Gerald C. Rowland, a real property appraiser I with Respondent, for the subject property determining the TVM of the subject property to be $110,400 as of January 1, 2019. Complainant did not object to Exhibit 1, and Exhibit 1 was received into evidence.
Mr. Rowland testified in support of Respondent’s value of $73,900. In Exhibit 1, Mr. Rowland utilized the sales comparison approach to estimate the market value of the subject property from recent sales of three comparable properties. The key property data in Exhibit 1 are as follows:
| Address | Subject Property | 2917 Michigan Ave. | 2916 Sidney St. | 3135 Arsenal St. |
| Style | 2 story brick | 2 story brick | 2 story brick | 2.5 story brick |
| Square feet | 2014 | 1552 | 1680 | 1580 |
| Bedrooms | 3 | 3 | 3 | 3 |
| Bathrooms | 1.5 | 1 | 2 | 1.5 |
| Age | 121 | 125 | 110 | 114 |
| Sale price | $72,000 | $147,600 | $158,000 |
The comparable properties are similar to the subject property with respect to number of bedrooms and approximate age. Two of the three comparables have the same style, and all of the comparable properties either have a one half bathroom difference or the same number of bathrooms as the subject property. The comparable properties differ from the subject property with respect to the size of the living area, which Exhibit 1 indicates has been adjusted for when determining an opinion of value.
- Value. The TVM of the subject property on January 1, 2019, was $73,900, with an assessed value of $14,040.
CONCLUSIONS OF LAW
- Assessment and Valuation. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. For this reason, the comparable sales approach is typically used to value residential property. “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.” Id. at 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
- Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). 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.” Section 138.430.2.
- Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020). The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous” and must prove “the value that should have been placed on the property.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
- Complainant Did Not Prove Overvaluation. Complainant did not produce substantial and persuasive evidence to support her $46,000 to $47,000 opinion of value. Although Complainant testified as to the similarities and differences between properties discussed in Exhibits A, B, C, G, H, I, and J and the subject property, Complainant’s approach is not a generally accepted approach to value property. Rather than considering comparable sales prices, Exhibits A, B, C, I and J reflect listing prices. Further, no adjustments are made to account for differences between the subject property and the other properties. Likewise, Exhibits G and H[4] do not utilize a generally accepted approach to value property as such exhibits include handwritten notes of addresses, prices, and square footage taken from the internet without making adjustments to account for differences between the subject property and the listed properties. Further, Complainant has not shown the specific source of the data included in Exhibits G and H, the reliability of such data, and other characteristics of the listed properties, such as the number of bedrooms, bathrooms, and style of home.
Additionally, the offers to purchase the subject property in Exhibits D and F are not persuasive evidence that the market value of the subject property was $40,000 or $45,000 in March of 2020 because the evidence does not establish that the subject property was listed for a period of time in the open market.
Respondent, although not required to, presented persuasive evidence in support of his valuation. Exhibit 1 and Mr. Rowland’s testimony that he visited the property, selected three comparable properties from six that he had considered based on similarities to the subject property, and relied on comparable one, 2917 Michigan Avenue, more than the other comparables because it was most similar to the subject property persuasively support the TVM of $73,900 determined by Respondent.
CONCLUSION AND ORDER
Respondent’s determination is affirmed. The TVM of the subject property as of January 1, 2019, was $73,900 with an assessed value of $14,040.
Application for Review
A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
Disputed Taxes
The Collector of the City of St. Louis, 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.
SO ORDERED June 4, 2021.
Laura A. Storck-Elam
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on June 4, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina Mejia
Legal Coordinator
[1] All statutory citations are to RSMo. 2000, as amended, unless indicated otherwise.
2 Missouri operates on a two-year reassessment cycle for valuing real property. See Section 137.115.1. Absent new construction or improvements to a parcel of real property, the assessed value as of January 1 of the odd year remains the assessed value as of January 1 of the following even year. Id.
[3] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
[4] Exhibit H also includes dates.