Andrew Oberman v. Jake Zimmerman, Assessor St. Louis County

August 17th, 2018

STATE TAX COMMISSION OF MISSOURI

 

ANDREW OBERMAN, )  
  )  
Complainant, )  
  )  
v. ) Appeal No. 17-112134
  )  
JAKE ZIMMERMAN, ASSESSOR )  
ST. LOUIS COUNTY, MISSOURI, )  
  )  
Respondent. )  

 

DECISION AND ORDER

 

HOLDING

 

The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED.  Complainant Andrew Oberman (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the true value in money (TVM) of the subject property as of January 1, 2017.

Complainant appeared pro se.

Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by Counsel Steven Robson.

Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).

ISSUE

Complainant appealed on the ground of overvaluation.  Respondent initially set the TVM of the subject property, as residential property, at $1,383,800.  The BOE lowered Respondent’s valuation and set the TVM at $1,298,800.  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 or improvement to the property.  Section 137.115.1 RSMo   The State Tax Commission (STC) takes this appeal to determine the true value in money for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

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.
  2. Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on June 12, 2018, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
  3. Identification of Subject Property. The subject property is identified by parcel/locator number 19N240302.  It is further identified as 6 Frontenac Place, St. Louis County, Missouri.  (Complaint; Exhibit 1)
  4. Description of Subject Property. The subject property consists of a 1.01 acre irregularly-shaped residential lot improved by a 5,547 square foot, single-family, two-story home built in 2002.  (St. Louis County Real Estate Records Database)  The home includes five bedrooms; five full bathrooms; two half bathrooms; a full basement with 1,400 square feet of finished area; a three-car attached garage; a porch and a patio; and an in-ground pool.  The exterior consists of brick construction.  The home has a construction quality grade of A- and a condition/desirability/utility code of average.  (St. Louis County Real Estate Records Database) 
  5. Assessment. Respondent set a TMV on the subject property at $1,383,800 residential, as of January 1, 2017.
  6. Board of Equalization. The BOE lowered Respondent’s valuation of the subject property and set the TVM at $1,298,800.
  7. Complainant’s Evidence. Complainant opined that the subject property’s TVM as of January 1, 2017, was $815,914.05.  To support his opinion of value, Complainant offered the following evidence:
Exhibit Description Ruling
Exhibit A Complaint for Review Admitted
Exhibit B Letter from Complainant dated October 20, 2017, explaining nature of appeal and summarizing exhibits Admitted
Exhibit C BOE Findings and Notice of Decision dated September 20, 2017 Admitted
Exhibit D Property Assessment Appeal form dated July 10, 2017, containing Section I: Assessor’s Data, Review and Recommendation to BOE; and Section II: Property Owner Data Admitted
Exhibit E Comparable Property No. 1, 11321 Conway Road; 2017 appraised land value $411,300, 2017 appraised improvements value $43,400 Admitted
Exhibit F Comparable Property No. 2, 11134 Conway Road; 2017 appraised land value $391,200, 2017 appraised improvements value $252,400 Admitted
Exhibit G Comparable Property No. 3, 11322 Conway Road; 2017 appraised land value $429,200, 2017 appraised improvements value $37,100 Admitted
Exhibit H Comparable Property No. 4, 11314 Conway Road; 2017 appraised land value $425,200, 2017 appraised improvements value $1,783,900 Admitted
Exhibit I Comparable Property No. 5, 939 Tucker Lane; 2017 appraised land value $319,000, 2017 appraised improvements value $3,449,800 Admitted
Exhibit J Summary page of comparable properties land values on per acre basis Admitted
Exhibit K Real Estate Information for subject property obtained from Respondent’s public information website, http://revenue.stlouisco.com, showing increase in land value and improvements value from 2015 to 2017 Admitted

 

Complainant testified in his own behalf.  Complainant testified that he had purchased the subject property’s lot in 2000 and that the home was completed in December of 2002.  Complainant testified that the purchase price was $461,000, and that he had paid too much because the land had been “for sale by owner” and not listed with a realtor or publicly advertised.  Complainant testified that the subject property was encumbered by a mortgage of approximately $330,000 to $350,000.  Complainant testified that the subject property had not been listed for sale or appraised within the three years preceding the Evidentiary Hearing.  Complainant testified that he did not know what price he would place on the property if he were to list it for sale.  Complainant testified that no offers had been made to purchase the property.  Complainant testified that new cabinets were installed in the home office of the subject property between January 1, 2015, and January 1, 2017, but that no other improvements were made.

In conjunction with the presentation of his exhibits, Complainant argued that the assessed land values of other properties in the subject property’s neighborhood were substantially lower per acre than the assessed land value of the subject property.  The BOE determined that the assessed land value of the subject property is $400,400.  The subject property consists of 1.01 acre of land plus the improvements.  Complainant presented evidence of other properties with per acre values ranging from $115,162.45 per acre to $259,268.29 per acre.  (Exhibits E-K)

On cross examination, Complainant testified that the total build price for the subject property was $731,000.  Complainant testified that he is not a certified appraiser.

In his redirect testimony, Complainant testified that the house had not been a “good build” at $731,000.  Complainant testified that he had fired the contractor and had been required to put more money into the project as a result.  Complainant testified that the subject property had the steepest driveway and was on the highest point in the subdivision.  Complainant referred to the map in Exhibit K and testified that the back of the subject property’s lot is unbuildable and unusable and covered with trees.

  1. Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject property as of January 1, 2017, $1,298,800, was correct.  Respondent offered the following evidence:
Exhibit Description Ruling
Exhibit 1 BOE Findings and Notice of Decision dated September 20, 2017, valuing the subject property at $1,298,800 Admitted

 

Complainant did not object to Respondent’s Exhibit 1, which was received into the record.

  1. Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.

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, including the application of any abatement.  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 property and tangible personal property are assessed at set percentages of true value in money:  residential property at 19%; commercial property at 32%; and agricultural property at 12%.  Section 137.115.5 RSMo (2000) as amended.

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.  Section 138.430.2 RSMo (2000) as amended.  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.  Id.

Complainant’s Burden of Proof

To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day.  Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).  True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so.  Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974).  True value in money is defined in terms of value in exchange and not in terms of value in use.  Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973).  In sum, true value in money is the fair market value of the subject property on the valuation date.  Hermel, Inc., 564 S.W.2d at 897.

A presumption exists that the assessed value fixed by the BOE is correct.  Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895.  “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348.  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). See also, 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).

There is no presumption that the taxpayer’s opinion is correct.  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 the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”  Westwood Partnership, 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).

Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land.  Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992).  “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.”  Carmel Energy, Inc., 827 S.W.2d 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. E.D. 1980).

Weight to be Given Evidence

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).

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 deemed necessary when viewed in connection with all other circumstances.  Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991).  The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part.  Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).

Board Presumption and Computer-Assisted Presumption

            There exists a presumption of correct assessment by the BOE – the BOE presumption.  In charter counties or the City of St. Louis, 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 BOE 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 BOE, then it also would be applicable to the Respondent.

The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer assisted method.  The BOE’s valuation is assumed to be an independent valuation.

In the present appeal, the BOE lowered the initial valuation of Respondent, and Complainant is now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies to Complainant.

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.  It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.  See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).  Missouri courts have approved the comparable sales or market approach, the cost approach, and the income approach as recognized methods of arriving at fair market value.   St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. 1974).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).  “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof  Corp., 789 S.W.2d at 869.  “The method used depends on several variables inherent in the highest and best use of the property in question.”  Snider, 156 S.W.3d at 347.  “Each method uses its own unique factors to calculate the property’s true value in money.”  Id.  “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 348.  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. (quotation omitted).  “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.”  Id.

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.

 

  1. Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

  1. A reasonable time is allowed for exposure in the open market.

 

  1. Payment is made in cash or its equivalent.

 

  1. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

  1. 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.

 

Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; see also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.

Discussion

Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the TVM of the subject property as of January 1, 2017.  Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion.  Cupples Hesse Corp., 329 S.W.2d at 702.  Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion.  Id.

Complainant did not present any evidence utilizing one or more of three generally accepted approaches to valuing real property for ad valorem tax purposes.  Complainant’s evidence focused on the assessed land values of the subject property versus the assessed land values of other properties in the neighborhood.  Complainant argued that the per-acre land value of the subject property was higher than the per-acre land value of the comparable properties and should be reduced by 3% to equalize the assessment of the subject property with the assessment of the comparable properties.  However, Complainant did not provide any market-based sales data to support his opinion of value.  Complainant’s exhibits of comparable properties consisted of the data from the St. Louis County Real Estate Information database.  Complainant did not provide any photographs, maps, or other documentation comparing the specific geographic locations and features of the land of the subject property versus the features of the land of the comparable properties, which might affect market value.  Notably, upon close scrutiny, the comparable properties in Exhibits E, G, and H had assessed land values similar to the assessed land value of subject property, ranging from $411,300 to $429,200.  Complainants’ proposed method of valuing the land of the subject property on a per acre basis as compared to the per-acre value of nearby properties is not one of the three court-approved approaches to valuing residential real property and will not be followed here.  Furthermore, Complainant’s evidence would require one to conclude that the assessed values of the land of the comparable properties were correct while the assessed value of the land of the subject property was incorrect.

ORDER

The TVM for the subject property as determined by the BOE is AFFIRMED.  The assessed value for the subject property for tax years 2017 and 2018 is $246,772 residential ($1,298,800 TVM).

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 August 17th, 2018.

 

STATE TAX COMMISSION OF MISSOURI

Amy S. Westermann

Senior Hearing Officer

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 17th day of August, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

Jacklyn Wood

Legal Coordinator