13 HWY BYPASS LLC v. KESSINGER (Greene)

 

13 HWY BYPASS LLC, )

)

Complainant, )

)

v. ) Appeal Nos. 09-33001 – 09-33005

)

RICK KESSINGER, ASSESSOR, )

GREENE COUNTY, MISSOURI, )

)

Respondent. )

 

DECISION AND ORDER

 

HOLDING

 

Decisions of the Greene County Board of Equalization sustaining the assessments made by the Assessor are AFFIRMED.

True value in money for the subject property in Appeal 09-33001 for tax years 2009 and 2010 is set at $27,200, assessed residential value of $5,170 and at $126,400, assessed commercial value of $40,450.

True value in money for the subject property in Appeal 09-33002 for tax years 2009 and 2010 is set at $45,900, assessed commercial value of $14,690.

True value in money for the subject property in Appeal 09-33003 for tax years 2009 and 2010 is set at $253,800, assessed commercial value of $81,220.

True value in money for the subject property in Appeal 09-33004 for tax years 2009 and 2010 is set at $41,200, assessed residential value of $7,830.

True value in money for the subject property in Appeal 09-33005 for tax years 2009 and 2010 is set at $34,500, assessed commercial value of $11,040.

Complainant appeared by Counsel, Bruce McCurry, Springfield, Missouri. Respondent appeared by County Counselor, Theodore Johnson.

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

ISSUE

Complainant appeals, on the ground of overvaluation and discrimination, the decisions of the Greene County Board of Equalization, which sustained the valuations of the subject properties. The Commission takes these appeals to determine (1) the true value in money for the subject property on January 1, 2009; and (2) whether there was an intentional plan by the assessing officials to assess the properties under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2009 residential assessment ratio for Greene county for the residential portions of the properties under appeal; and an intentional plan by the assessing officials to assess the properties under appeal at a ratio greater than 32% of true value in money, or at a ratio greater than the average 2009 commercial assessment ratio for Greene County for the commercial portion.

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 decisions of the Greene County Board of Equalization. A hearing was conducted on October 19, 2010, at the Old Historic Greene County Courthouse, Springfield, Missouri. Transcript of the hearing was received by the Commission Legal Section on November 22, 2010.

2. Assessment.[1]

Appeal Number 09-33001: The Assessor appraised the residential portion of the property at $27,200, an assessment of $5,170[2], and appraised the commercial portion of the property at $126,400, an assessment of $40,450[3]. The Board sustained the assessment.

Appeal Number 09-33002: The Assessor appraised the property at $45,900, a commercial assessment of $14,690. The Board sustained the assessment.

Appeal Number 09-33003: The Assessor appraised the property at $253,800, a commercial assessment of $81,220. The Board sustained the assessment.

Appeal Number 09-33004: The Assessor appraised the property at $41,200, a residential assessment of $7,830. The Board sustained the assessment.

Appeal Number 09-33005: The Assessor appraised the property at $34,500, a residential assessment of $11,040. The Board sustained the assessment.

3. Subject Properties.

Appeal Number 09-33001: The subject property is located at 3639 W. Division, Springfield, Missouri. The property is identified by map parcel number 88-13-08-401-032. The property consists of 9.96 acres, with a one story frame house built in 1945 with a 374 square foot garage.[4]

Appeal Number 09-33002: The subject property is located at 1733 N. West Bypass, Springfield, Missouri. The property is identified by map parcel number 88-13-08-401-039. The property consists of 1.55 acres of vacant land.[5]

Appeal Number 09-33003: The subject property is located at 1805 N. West Bypass, Springfield, Missouri. The property is identified by map parcel number 88-13-08-401-002. The property consists of 9.93 acres, improved by a one-story metal building built in 1960 with 5,600 square feet, a 9,000 square foot block warehouse and a 20 x 80 block building.[6]

Appeal Number 09-33004: The subject property is located at 1715 N. West Bypass, Springfield, Missouri. The property is identified by map parcel number 88-13-08-401-038. The property consists of 1.01 acres, improved by a one-story stone house built in 1950 with a 216 square foot detached garage.[7]

Appeal Number 09-33005: The subject property is located at 1743 N. West Bypass, Springfield, Missouri. The property is identified by map parcel number 88-13-08-410-003. The property consists of 1.4704 acres of vacant land.[8]

4. Complainant’s Evidence. Complainant presented the testimony of W. L. Gehrs, Jr., a member and the manager of Complainant, and tendered the following exhibits:

EXHIBIT	DESCRIPTION
A	Complaint for Review of Assessment -09-33001/BOE Decision Letter
B	Complaint for Review of Assessment -09-33002/BOE Decision Letter
C	Complaint for Review of Assessment -09-33003/BOE Decision Letter
D	Complaint for Review of Assessment -09-33004/BOE Decision Letter
E	Complaint for Review of Assessment -09-33005/BOE Decision Letter
F*	Property Record Card – Parcel 13-08-102-012
G*	Property Record Card – Parcel 13-08-201-029
H*	Property Record Card – Parcel 13-08-202-003
I*	Property Record Card – Parcel 13-08-202-004
J*	Property Record Card – Parcel 13-08-306-093
K*	Property Record Card – Parcel 13-08-306-116
L	Property Record Card – Parcel 13-08-401-002
M	Property Record Card – Parcel 13-08-401-003
N	Property Record Card – Parcel 13-08-401-032
O*	Property Record Card – Parcel 13-08-401-035
P	Property Record Card – Parcel 13-08-401-038
Q	Property Record Card – Parcel 13-08-401-039
R*	Comparison of Property Values West Side of NW Bypass and West Division Street
S	13 Hwy Bypass LLC – Balance Sheet – December 2008
T	13 HWY Bypass LLC – Income Statement – 12/31/08
U	13 Hwy Bypass LLC – Balance Sheet – December 2009
V	13 HWY Bypass LLC – Income Statement – 12/31/09
W	Assessor Appraised Values/Cost Per Acre for each subject parcel
X	Actual Purchase Price/Cost Per Acre for each subject parcel
Y*	Assessor Appraised Values/Cost Per Acre – West Bypass LLC – 2 Properties
Z*	Sign Photo – Adjoining Property
aa	Responses to Complainant’s First Interrogatories
bb	Assessor’s Website Photo & Plat of property in Appeal 09-33003
cc	Assessor’s Website Photo & Plat of property in Appeal 09-33005
dd	Assessor’s Website Photo & Plat of property in Appeal 09-33001
ee	Assessor’s Website Plat of property in Appeal 09-33004
ff	Assessor’s Website Plat of property in Appeal 09-33002
gg	Assessor’s Website Photo & Plat of property in Appeal 09-33001 (Same As DD)
hh*	Assessor’s Website Photo & Plat of West Bypass LLC – 2044 Eldon Ave. Property
ii*	Assessor’s Website Plat of West Bypass LLC – 2044 Kearney St. Property
jj*	Assessor’s Website Photo & Plat of West Bypass LLC – 2033 Eldon Ave. Property
kk*	Assessor’s Website Plat of West Bypass LLC – N. Eldon Ave. Property
ll*	Assessor’s Website Plat of West Bypass LLC – W. State HWY EE. Property
nm*	Assessor’s Website Plat of West Bypass LLC – N. Eldon Ave. Property
nn*	Assessor’s Website Photo & Plat of West Bypass LLC – N West Bypass. Property
oo*	Plat of area bounded by Hwy 166, Division Street and Eldon Avenue
PP	Written Direct Testimony of W. L. Gehrs, Jr. – Q & A: 1 – 17; 75 – 81
QQ	Written Direct Testimony of W. L. Gehrs, Jr. – Q & A: 1 – 17; 70 – 76
RR	Written Direct Testimony of W. L. Gehrs, Jr. – Q & A: 1 – 17; 80 – 84
SS	Written Direct Testimony of W. L. Gehrs, Jr. – Q & A: 1 – 17; 74 – 81
TT	Written Direct Testimony of W. L. Gehrs, Jr. – Q & A: 1 – 17; 69 – 72

 

By Order issued August 5, 2010, the Hearing Officer ruled on objections to certain exhibits.[9] The objections were sustained as to those exhibits marked by an asterisk and they were stricken from the record. Stricken exhibits are maintained in the Commission file, but are not part of the evidentiary record for rendering a decision in these appeals.

There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed values for 2009 remain the assessed values for 2010.[10]

Complainant proposed the following true value in money for the respective properties:

Appeal 09-33001 – $55,000[11]; Appeal 09-33002 – $15,500/$17,603.63[12]; Appeal 09-33003 – $110,000[13]; Appeal 09-33004 – $22,000[14].

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 the values proposed.

5. Dismissal of Appeal 09-33005. Complainant withdrew Appeal 09-33005 at the beginning of the evidentiary hearing.[15] Accordingly, the assessment as made by the Assessor and sustained by the Board stands.

6. Respondent’s Evidence. In each appeal, Respondent offered into evidence the following Exhibits: Exhibit 1 – Appraisal Report – Joe Durnall; Exhibit 2 – Listing advertisement of properties under appeal; Exhibit 3 – Written Direct Testimony of Joe Durnall; and Exhibit 4 – Analysis of True Value in Money for all appeals. Exhibits 1 through 4 were received into evidence in each appeal. Testimony of Mr. Durnall was that the assessor’s valuations under the mass appraisal methodology should be retained or affirmed.[16]

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.[17]

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.[18] The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[19] In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[20] 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. 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.[21] Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment in the appeals and establish the values for each property as proposed in the Complaints for Review of Assessment.

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.[22] True value in money is defined in terms of value in exchange and not value in use.[23] It is the fair market value of the subject property on the valuation date.[24] 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.[25]

 

Complainant Failed To Prove Values Asserted

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.[26] 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.”[27]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[28] 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.[29]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[30] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[31] Mr. Gehrs testified as to the owner’s opinion in each appeal. In each instance, the opinion of value was based upon the purchase of the properties by Complainant on October 17, 2008.[32] The witness also indicated that some “improvements” had been done to the properties after purchase but prior to January 1, 2009, that altered the opinion of value somewhat from the October, 2008 purchase price.

Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time. The actual sale price is a method that may be considered for estimating true value.[33] In this particular instance, the testimony of Complainant’s witness[34] relative to the sales which took place involving the properties under appeal raises serious question as to the sales establishing a “market value.”

The properties were purchased at a foreclosure auction. However, the testimony of Mr. Gehrs was that the sales at which Complainant obtained title to the subject properties “… was a planned agreement type foreclosure to be able to clear the title work of all this land, as Mr. Bryant[35] had a tremendous amount of federal, state sales tax, liens against him and this land. It had to be cleaned before anything could be done to it.”[36] This testimony and that given in response to questions of the Hearing Officer lead the Hearing Officer to conclude that whatever the foreclosure auction involving these properties might have been it did not satisfy the Standard For Valuation, supra. 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.”[37] On the critical point of Complainant’s case, the basis for his opinion of value for each parcel, the Hearing Officer finds himself in that nebulous twilight of speculation, conjecture and surmise. It appears that the foreclosure sale, while apparently having the outward appearance of simply a foreclosure sale, was in fact a disguise for the purpose of clearing title to the land. It was by the admission of Mr. Gehrs, “a planned agreement” between himself and the prior owner to do just that. Therefore, irrespective of the witness’ claim that the transaction was arms-length, the Hearing Officer is not so persuaded.

For the Hearing Officer to conclude values as proposed by Complainant’s witness on the basis of the foreclosure transaction would be to determine value resting only upon speculation, conjecture and surmise. Such does not constitute the proper elements or a proper foundation to support the opinions tendered on behalf of Complainant. Accordingly, no probative weight can be given to the testimony of Mr. Gehrs on the issue of what a willing buyer and seller would have paid for the property on January 1, 2009. Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment and establish true value in money for the individual parcels under appeal. Therefore, the values set by the Board must be affirmed.

ORDER

The assessed valuations for the subject properties as determined by the Assessor and sustained by the Board of Equalization for Greene County for the subject tax day are AFFIRMED.

The assessed value for the subject property in Appeal 09-33001 for tax years 2009 and 2010 is set at $5,170 residential and $40,450 commercial.

The assessed value for the subject property in Appeal 09-33002 for tax years 2009 and 2010 is set at $14,690 commercial.

The assessed value for the subject property in Appeal 09-33003 for tax years 2009 and 2010 is set at $81,220 commercial.

The assessed value for the subject property in Appeal 09-33004 for tax years 2009 and 2010 is set at $7,830 residential.

The assessed value for the subject property in Appeal 09-33005 for tax years 2009 and 2010 is set at $11,040 residential.

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. [38]

Disputed Taxes

The Collector of Greene 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. If no Application for Review is filed with the Commission within thirty days of the mailing date set forth in the Certificate of Service, the Collector, 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.

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 March 14, 2011.

STATE TAX COMMISSION OF MISSOURI

 

 

_____________________________________

W. B. Tichenor, Senior Hearing Officer

w.b.tichenor@stc.mo.gov

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 14^th day of March, 2011, to: Bruce McCurry, 3249 E. Ridgeview Street, Springfield, MO 65804, Attorney for Complainant; Theodore Johnson, Greene County Counselor, 901 St. Louis Street, 20th Floor, Springfield, MO 65806, Attorney for Respondent; Rick Kessinger, Assessor; Richard Struckhoff, Clerk; Scott Payne, Collector, Greene County Courthouse, 940 Boonville, Springfield, MO 65806.

 

 

___________________________

Barbara Heller, Legal Coordinator

Barbara.Heller@stc.mo.gov

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