STATE TAX COMMISSION OF MISSOURI
|)||Appeal No. 20-10210|
|)||Parcel No. 12M420241|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
Aaron Wilke (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject residential property on January 1, 2020, was $147,000. Complainant claims the property is overvalued and proposes a value of $128,000. Complainant did not produce substantial and persuasive evidence of overvaluation. The BOE’s decision is affirmed.
The evidentiary hearing was conducted by Senior Hearing Officer Laura Storck-Elam on September 1, 2021, via WebEx. Complainant appeared pro se. Respondent was represented by counsel Tim Bowe.
FINDINGS OF FACT
- The Subject Property. The subject property is residential real property located 11339 Oak Avenue in Bridgeton, Missouri. The subject property consists of a 19,998 square foot lot improved with 1.5-story single-family home. The home has six rooms with approximately 1,575 square feet of gross living area. (Ex. 1 at 1) Complainant purchased the subject property for $104,000 in 2011. (Id.)
- Assessment and Valuation. The BOE classified the subject property as residential property and determined the TVM on January 1, 2020, was $147,000.
- Complainant’s Evidence. Complainant introduced Exhibits A through O. The hearing officer sustained Respondent’s hearsay objections to Exhibits A, B, and C and excluded those exhibits from the record. The remaining exhibits were admitted into evidence. Complainant’s exhibits and associated testimony is summarized as follows:
|A||Restricted appraisal report of subject property dated April 28, 2020. The report was prepared by licensed appraiser Jason Camenzind. Mr. Camenzind was not present for the hearing.|
|B||Photographs and property data of the comparable properties utilized in Exhibit A; compiled by the Mr. Camenzind.|
|C||Appraisal report of the subject property dated June 20, 2011. The report was prepared for Pulaski Bank by licensed appraiser Erin Hatzenbuhler. Ms. Hatzenbuhler was not present for the hearing.|
|D||Email from Complainant to Respondent asserting Respondent’s property data overstates the size of the residence and the number of rooms. The email also asserts Respondent’s property data erroneously assumes the kitchen and bath were remodeled and that the style of the home is Cape Cod rather than Old Style. Complainant testified the alleged data errors caused Respondent to overvalue the property. Complainant’s testimony did not tie alleged data errors to any quantified market-based value adjustments.|
|E||Lot survey of subject property.|
|F||Certificate of Exterior Appearance Compliance and Certificate of Occupancy issued by the City of Bridgeton. Both Certificates were issued in 2011.|
|G||2015 BOE decision setting the subject property’s TVM at $115,000. Exhibit G also includes photographs Complainant provided to the BOE in 2015 that, per Complainant’s testimony, depict upstairs rooms with ceilings that are less than seven feet tall.|
|H||Current photographs showing the ceiling height in staircase and closets are less than six feet, eight inches and that the ceiling heights in the upstairs rooms are less than seven feet tall. Complainant testified Respondent property data erroneously includes rooms with ceilings less than seven feet tall as living area to determine the square footage of the residence.|
|I||American National Standard for Single-Family Residential Buildings including a schematic drawing stating that a least one-half of the ceiling in a “finished attic or loft” should be at least seven feet tall and that space with a ceiling height less than five feet tall is “not counted in the area.”|
|J||St. Louis County Single-Family Dwelling Design Checklist dated March 12, 2020, and indicating a minimum ceiling height of seven feet in “habitable” areas except that rooms with sloped roofs must have at least a seven-foot ceiling over at least 50% of the room’s required floor areas with the remainder no less than five feet tall.|
|K||Photographs of an abandoned residence Complainant testified is approximately “two blocks” from the subject property.|
|L||Photographs of an abandoned residence Complainant testified is one block from the subject property. Complainant testified the abandoned properties in depicted in Exhibits K and L detract from the subject property’s value.|
|M||One-page description of an HBO documentary entitled “Atomic Homefront” regarding the radioactive contamination at West Lake landfill located approximately two miles from the subject property. The description is from the HBO.com website.|
|N||Bridgeton Police Department police report from March 2014 detailing Complainant’s report of a burglary at the subject property.|
|O||Bridgeton Police Department police report from February 2016 detailing a reported burglary at the subject property. Complainant testified the police reports show crime that detracts from the value of the property. Respondent’s hearsay objection was overruled and Exhibits N and O were admitted to be given the weight they are due.|
On cross-examination, Complainant acknowledged he is not an appraiser and has no training in making market-based adjustments for purposes of estimating market value with the sales comparison approach.
- Respondent’s Evidence. Respondent introduced Exhibits 1 and 2. Exhibit 1 is a restricted appraisal report prepared by Steven Zahner. Mr. Zahner is a Senior Residential Appraiser for Respondent. Zahner utilized the sales comparison approach to estimate the TVM of the subject property as of January 1, 2019, was $151,000. Zahner utilized three comparable properties located between 0.06 and 0.11 miles of the subject property. Like the subject property, each comparable property was a lot improved with a 1.5-story single-family home. The comparable properties sold between May and August of 2016. Zahner adjusted the sales prices upward to account for the time of sale. Zahner also adjusted for differences in lot size, home size, construction, and other home features and estimated adjusted sale prices ranging from $149,000 to $156,188. Based on this range of indicated values, Zahner estimated the TVM of the subject property was $151,000 as of January 1, 2019.
Respondent’s Exhibit 2 is a copy of the BOE decision determining the TVM of the subject property “for 2020” was $147,000.
- Value. The TVM of the subject property on January 1, 2020, under the economic conditions as of January 1, 2019, was $147,000.
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). The assessed value in the odd-numbered year “shall apply in the following even-numbered year, except for new construction and property improvements which shall be valued as though they had been completed as of January first of the preceding odd-numbered year.” Section 137.115.1.
“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 true value in money is an issue of fact for the STC.” Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).
“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 STC has wide discretion in selecting the appropriate valuation method but “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.” Snider, 156 S.W.3d 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). “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
The hearsay rule is a fundamental rule of evidence applicable in administrative hearings. Speer v. City of Joplin, 839 S.W.2d 359, 360 (Mo. App. S.D. 1992). “Hearsay is an out-of-court statement offered for the truth of the matter asserted.” State v. McFadden, 391 S.W.3d 408, 431 (Mo. banc 2013). “Hearsay evidence is objectionable because the person who makes the statement offered is not under oath and is not subject to cross-examination.” Saint Louis Univ. v. Geary, 321 S.W.3d 282, 291 (Mo. banc 2009). Hearsay is inadmissible unless an exception applies. Id.
Respondent’s counsel made timely and specific hearsay objections to Complainant’s Exhibits A, B, and C. Exhibits A, B, and C consisted of appraisal reports and supporting documentation prepared by appraisers who were not present at the hearing and not subject to cross-examination. No hearsay exception applies. Consequently, Exhibits A, B, and C are inadmissible hearsay and are excluded from evidence.
Section 138.060.1 provides Respondent, in an STC appeal, “shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the BOE, whichever is higher, for that assessment period.” Respondent’s Exhibit 1 estimates a value higher than that determined by the BOE. Nonetheless, when Respondent introduces “evidence indicating a higher value than the value finally determined by the assessor or the value determined by the board of equalization … such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.” 12 CSR 30-3.075(1). Respondent’s Exhibit 1 is admissible for purposes of sustaining the BOE value.
- 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 misclassified or overvalued. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs, 599 S.W.3d at 7. The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.” Id. (internal quotation omitted). The taxpayer also 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 v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (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”).
- Official Notice. “Agencies shall take official notice of all matters of which the courts take judicial notice.” Section 536.070(6). A court may not take judicial notice of a municipal ordinance unless the ordinance is in the record. Union Ctr. Redevelopment Corp. v. St. Louis Pres. Bd. of Plan. & Urb. Design, 75 S.W.3d 784, 786 (Mo. App. E.D. 2002).
On Respondent’s request, the Senior Hearing Officer took official notice of two municipal ordinances. Excerpts from City of Bridgeton ordinances 505.010 and 510.020 were read into the record. Complainant did not object. The ordinances pertain to legal occupancy and the definition of a “habitable room.” The ordinance excerpts are officially noticed. Further consideration of the ordinances is unnecessary because Complainant’s evidence is neither substantial nor persuasive.
- Complainant Did Not Prove Overvaluation. Complainant did not produce substantial and persuasive evidence rebutting the BOE’s presumptively correct decision valuing the subject property at $147,000. Complainant’s Exhibits A, B, and C, consisting of appraisal reports or excerpts therefrom, are inadmissible hearsay and were not admitted into the record. Complainant’s remaining Exhibits, Exhibits D through O, are not substantial and persuasive evidence establishing overvaluation or the value that should have been placed on the subject property.
Even if Complainant’s Exhibits D through O demonstrate Respondent over-estimated the habitable square footage of the residence or that adverse neighborhood conditions detract from value, Complainant produced no admissible evidence quantifying the effect of these issues on the market value of the subject property. Adopting Complainant’s proposed value without demonstrated, quantified impacts on market value as of the valuation date would be an exercise in speculation. Speculation is not a substitute for proof. Rossmann v. G. F. C. Corp. of Mo., 596 S.W.2d 469, 472 (Mo. App. E.D. 1980). Complainant did not rebut the BOE’s presumptively correct decision and prove “the value that should have been placed on the property.” Tibbs, 599 S.W.3d at 7.
By contrast, though not required to do so, Respondent produced evidence supporting the BOE’s $147,000 valuation. Respondent’s Exhibit 1 used the sales comparison approach and market-based adjustment to estimate the TVM of the subject property was $151,000 as of January 1, 2019. Respondent’s restricted appraisal report supports the BOE’s presumptively correct decision.
CONCLUSION AND ORDER
The BOE’s decision setting the TVM at $147,000 for tax year 2020 is affirmed.
Application for Review
A party may file 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 of Missouri, 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.
The Collector of the St. Louis County, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.
SO ORDERED December 17, 2021.
Eric S. Peterson
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 December 17, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Contact Information for State Tax Commission:
Missouri State Tax Commission
421 East Dunklin Street
P.O. Box 146
Jefferson City, MO 65102-0146
 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.
 The appeal was initially assigned to Senior Hearing Officer Storck-Elam, who conducted an evidentiary hearing on the record but did not issue a decision and order. Pursuant to Section 138.431.5, “The commission may, prior to the decision being rendered, transfer to another hearing officer the proceedings on an appeal determination before a hearing officer.” Accordingly, this appeal is transferred to Senior Hearing Officer Eric Peterson for determination.