State Tax Commission of Missouri
ANTHONY & BETH DANIELE,)
)
Complainants,)
)
v.)Appeal No.09-10147
)
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On April 7, 2011, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) affirming the assessment by the St. Louis County Board of Equalization.
Complainants filed their Application for Review of the Decision.[1]Respondent filed his Response.[2]Complainants filed their Reply.[3]
CONCLUSIONS OF LAW
Standard Upon Review
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.[4]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 or owners who testify on the issue of reasonable value, but may believe all or none of the expert’s or owner’s testimony and accept it in part or reject it in part.[5]The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[6]
DECISION
A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer affirming the assessment made by the Board of Equalization of a true value in money of $137,300.Complainants failed to provide substantial and persuasive evidence to establish the value asserted or to prove discrimination by the assessing officials.[7]A reasonable mind could have conscientiously reached the same result based on a review of the entire record.The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[8]
The Hearing Officer did not err in his determinations as challenged by Complainants.
Complainants’ objection to the Commission allowing only thirty days to respond without providing a copy of the transcript is not well taken, as Complainants did not request a transcript prior to filing their application for review.The Commission does not routinely go to the expense of providing a transcript to the parties in pro se residential appeals, unless one of the parties requests a transcript.
ORDER
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.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, 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 July 7, 2011.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Randy B. Holman, Commissioner
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax years 2009 and 2010 is set at $137,300, residential/agricultural assessed value of $24,240 ($110,800, residential assessed value of $21,060; $26,500, agricultural assessed value of $3,180).Complainants appeared pro se.Respondent appeared by Associate County Counselor Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainants appeal, on the ground of overvaluation and discrimination, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal 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 property under appeal at a ratio greater than 19% of true value in money for the residential portion, or at a ratio greater than the average 2009 residential assessment ratio for St. Louis County.
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.Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.A hearing was conducted on December 9, 2010, at the St. Louis County Government Center, Clayton, Missouri.[9]
2.Assessment.The Assessor appraised the property at a total value of $137,300, a residential assessment of $21,060 and an agricultural assessment of $3,180.[10]The Board sustained the assessment.[11]The agricultural assessment was not challenged by Complainants.[12]
3.Subject Property.The subject property is located at 2 Wood Duck Lane, St. Louis County, Missouri.The property is identified by locator number 06D220035.The residential portion of the property consists of .5 of an acre lot improved with a one and a half story style, single-family residence built in 2001-2002.The structure is considered to be in average condition and the quality of materials and workmanship is average, consistent with surrounding properties.The gross living area is 2,480 square feet.It has a full basement that has no finished area.The exterior is vinyl siding over frame construction.The house has seven rooms, three bedrooms, one full and one half baths.Other features include a patio, wood deck, large open frame porch in the front, and an attached oversized two-car side entry garage.On May 6, 2005, a signed St. Louis County Board of Equalization Real Property Appeal Form states that the cost to
build the house was $106,156.16.The house was built by the owner and the building costs do not appear to include the cost of labor nor the entrepreneurial profit a builder would expect.[13]
4.Filing and Exchange of Exhibits.By Order issued April 15, 2010, the parties were ordered to file with the Commission and exchange all exhibits to be used in their case in chief.Complainants failed to serve a copy upon Counsel for Respondent of the exhibits they filed with the Commission.By Order issued August 17, 2010, Complainants were given until and including September 1, 2010, to serve upon Counsel for Respondent a complete copy of Exhibits A through F that had been filed with the Commission.Counsel for Respondent confirmed to the Hearing Officer that the only exhibits that were filed pursuant to the Order of August 17, 2010 were Exhibits A, B, E and F.
5.Complainant’s Evidence.Mr. Daniele testified on behalf of Complainants.He stated his opinion of the fair market value of the subject property to be $85,260.He had arrived at this value by relying on the appraised value of $103,000 from which he had made deductions for repairs consisting of: Heating and air-conditioning – $5,800, Concrete Work – $3,500 and water damage – $8,440.[14]
The exhibits which Complainant had filed with the Commission and Counsel for Respondent were as follows:
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DESCRIPTION |
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A |
Appraisal – Denise R. Grandberry, dated 1/1/09 – $103,000 |
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B |
Letter to Michael Brooks, dated 4/15/10 |
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E |
Columbia Bottom Conservation Area Monthly Report June 2009 |
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F |
Newspaper Article, dated 10/22/09 |
Counsel for Respondent objected to Exhibit A, with the exception of page 17,[16] on the ground of hearsay since the appraiser was not present to lay the foundation for admission of the exhibit into evidence.[17]The objection was sustained and Exhibit A was excluded from evidence,[18]page 17 of Exhibit A was received into the record.Counsel for Respondent objected to Exhibit F on the ground of hearsay and relevance.The objection was sustained and Exhibit F was excluded from evidence.[19]
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[20]
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, for the residential portion, to be $85,260, as testified to at hearing.[21]See, Complainants Fail to Prove Value of $85,260, infra.
Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish a claim of discrimination.No evidence was presented to establish that the subject property had be assessed at a ratio of its true value in money greater than 19% or the average residential assessment ratio for St. Louis County for the 2009 assessment cycle.See, Complainants Fail To Prove Discrimination, infra.
6.Respondent’s Evidence.Respondent presented the testimony and appraisal report – Exhibit 1 – of Timothy Hannan, Residential Real Estate Appraiser for St. Louis County.Mr. Hannan developed both the cost and sales comparison approaches to value in Exhibit 1.The valuation determined by the cost approach was $195,100.[22]The value concluded under the sales comparison approach was $175,000.[23]Complainant objected to Exhibit 1.The objections were overruled at hearing.See, Objection to Mr. Hannan’s Qualifications and Impeachment Attempt – Photographs, infra.
The properties relied upon by Respondent’s appraiser were comparable to the subject for the purpose of making a determination of value of the subject property. The three sale properties were located within 1.66 miles of the subject (.17, 1.66 and .41 mile).Each sale property sold at a time relevant to the tax date of January 1, 2009 (2/08, 5/07 & 1/09).The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.
7.Clear, Convincing and Cogent Evidence.Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2009, to be $175,000.However, Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value. See, Evidence of Increase in Value, infra. Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $110,800 for the residential portion of the property under appeal.See, Respondent Presents Clear, Convincing and Cogent Evidence, infra.
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.[24]
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.[25]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.[26]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.In the present appeal, the only evidence in the record which actually addresses the issue of fair market value is the appraisal presented on behalf of Respondent.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[27]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.[28]Complainants’ evidence failed to meet the required standard of substantial and persuasive to demonstrate an erroneous assessment by the Board and establish what the fair market value should have been as of January 1, 2009.
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.[29]True value in money is defined in terms of value in exchange and not value in use.[30]It is the fair market value of the subject property on the valuation date.[31]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.[32]
The appraiser for Respondent valued the subject property under the Standard For Valuation.[33]Complainants’ opinion of value was predicated upon a conclusion that was excluded from evidence, and adjustments to the excluded conclusion of value that were not established to be consistent with the Standard For Valuation.Accordingly, the opinion of $85,260 does not come within the required standard that must be met for valuation of real property for ad valorem tax purposes.
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.[34]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.[35]Respondent’s appraiser developed both the cost and market approaches to value.He arrived at a final opinion of value based upon his market approach.Mr. Daniele’s opinion of value was not concluded based upon a properly developed approach to value that has been recognized by the courts and this Commission.
Complainants Fail to Prove Value of $85,260
In order to prevail, Complainants 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.[36]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.”[37]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[38]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.[39]
Complainants’ Exhibits
Complainants sought to have introduced into the record the four exhibits identified in Finding of Fact 5, supra.
Exhibit A – Appraisal Report
Exhibit A is not a part of the record in this appeal for purposes of concluding value.Taxpayers appearing before the Commission are informed and advised that when they wish to offer into evidence an appraisal report, the appraiser must be present to lay the foundation for admission of the report, as well as, be subject to cross-examination on their appraisal.Complainant’s were so informed and advised in this appeal.[40]When a Complainant elects to ignore or intentionally disregard the clearly stated order of the Commission regarding the necessity of having the appraiser present when an appraisal is to be presented, he suffers the consequence of having the appraisal excluded.
In the first place, until the appraiser who has prepared an appraisal report testifies under oath that the document tendered as an exhibit is in fact the appraisal he or she has prepared the Hearing Officer has no foundation upon which to admit the report.Absent the appraiser’s foundational testimony, any such document is simply an out of court statement offered to prove the true of what it asserts.It is hearsay and inadmissible.Furthermore, the opposing party, the Respondent in this case, has the right of cross-examination of the appraiser.It is impossible to cross-examine a document.The person who has prepared the document must be available to testify and answer questions which Counsel for Respondent may wish to pose regarding the appraisal.If the appraiser is not present to be cross-examined, Respondent’s due process rights would be violated.Upon the failure of Mr. Daniele to present the appraiser who prepared Exhibit A, after clear notification of the penalty to be imposed for failure to comply with the Commission’s Order, the objection of Counsel for Respondent had to be sustained and Exhibit A excluded from evidence.Accordingly, it is not a part of the evidentiary record for consideration by the Hearing Officer.
Exhibit B – Letter to Michael Brooks
Exhibit B was not objected to and thereby was received into the record.The document is a letter written by Mr. Daniele to Respondent on April 25, 2010, and received by the Commission on April 27, 2010.Mr. Daniele informs Mr. Brooks of certain documents he is disclosing in response to the Commission Order on exchanging exhibits issued April 15, 2010.Complainant also requested the Assessor to “produce any Comparables that they intend to use.”
This document provides no information or data upon which either a finding of value or a claim of discrimination can be based.It does nothing to move forward the question of what a willing buyer and seller would have paid for the property under appeal on January 1, 2009.Nor does the Exhibit provide any of the required data to establish that the subject property is not being assessed at the proper ratio.See, Complainants Fail To Prove Discrimination, infra.Accordingly, there is no probative value to Exhibit B.In short, it is irrelevant.
Exhibit E – Columbia Bottom Conservation Area Monthly Report – June, 2009
No objection was made to this Exhibit therefore it was received into evidence.Mr. Daniele offered this Exhibit for the purpose of showing “The declining values in Spanish Lake, contrary to the appraisal that – that didn’t consider this.”[41]No further evidence was tendered to connect up that this police report for June 1 – 30, 2009, to established a decline in the value of the subject property as of January 1, 2009, or what the previously established value for which the alleged decline would be applicable.Mr. Daniele has simply drawn a conclusion that property values have declined in the subject neighborhood due to a crime problem in the Missouri Department of Conservation Columbia Bottoms.[42]Absent relevant sales data from the subject neighborhood over an applicable time period and a proper comparison of incidents of crime in the Columbia Bottoms over the same period of time, the conclusion drawn by Mr. Daniele is nothing more than conjecture and speculation as to what, if any, effect the incidents noted on the June, 2009 report would have on the value of the subject property.Here again, there is no relevance of this Exhibit to providing value or discrimination.
Exhibit F – Post Dispatch Article – 10/22/09
Complainants’ final exhibit is a portion of an October 22, 2009, Post-Dispatch article on the overall reduction in real estate values in St. Louis County.The Exhibit was excluded upon objection as hearsay and relevance.Taxpayers in appeals before the Commission often become quite enamored with newspaper and Internet articles about the decline in the housing market.The first problem with such documents as exhibits is that they are simply an out of court statement offered to prove the truth of itself.In other words they are hearsay. Furthermore, they are usually hearsay upon hearsay, since the person writing the article is generally relying upon other sources for the data about which they are writing and drawing their conclusions and opinions.Without the person who has written the article present to testify the proper foundation cannot be laid to receive the exhibit.
However, even assuming that in this instance, the authors[43] of the article had been present to lay the foundation and be cross-examined there is the additional evidentiary hurdle that must be cleared of the information contained in the article being relevant to the issues present in the appeal.In the present case, there is no issue as to the percentage or dollar decline in the value of St. Louis County’s real property from 2007 to 2009.[44]Establishing a percentage or amount of dollar decline in real property values in St. Louis County does nothing to prove what a willing buyer and seller would have agreed to as the purchase price of Complainants’ property on January 1, 2009.Likewise, such information does not move forward in any meaningful or logical manner the inquiry as to the average assessment ratio for 2009 for St. Louis County and whether the Daniele property was being assessed at that ratio.The information contained in the article has no relevance as to the issue of overvaluation or discrimination.It is therefore inadmissible on both the grounds of hearsay and relevance as objected to at hearing and was so excluded.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[45]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[46]Mr. Daniele tendered an opinion of value that was based upon a hearsay document that had been excluded from evidence.
Mr. Daniele’s methodology was to adopt the conclusion of value tendered by the excluded document, but then to subtract for various items of deferred maintenance or repair.Even assuming that the excluded appraisal had been received into evidence, Complainant failed to establish that his methodology is an accepted appraisal practice.In point of fact, it is not.
The conditions outlined by Mr. Daniele for which he wished to subtract cost to repair would be covered as part of a properly developed appraisal by making a condition adjustment to each sale property that did not have the same or similar deferred maintenance or condition problems.Because the appraiser who prepared excluded Exhibit A was not present to testify, no foundation could be laid to establish that the appraiser had or had not taken into account in her appraisal all of the conditions for which Mr. Daniele sought to use as a further adjustment to the conclusion of value.If the appraiser had not been informed or had not discovered the alleged condition issues, then having been given access to the subject property, she failed to properly conduct her appraisal.If the appraiser had in fact been made aware by the owners of the condition of the subject and had verified same by her inspection, then her appraisal would have accounted for that and Mr. Daniele’s methodology to make his subtraction for cost to repair would have been a double dip for condition.That is not proper appraisal methodology.
In addition, Mr. Daniele elected to not file with the Commission and Counsel for Respondent as ordered any exhibits which would verify the asserted costs for repairs.It has long been the practice of the Hearing Officer, that when a taxpayer wishes to establish costs for repairs that an actual bid or contract for the repair work must be presented.It is not enough for the owner to testify that he has been told by some contractor or repairman what the cost and work on a given project might be.There must be documentation to verify that the owner had obtained a bid or contracted for the work.Such was not done in this instance.
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.”[47]Mr. Daniele’s opinion of value is derived from a methodology that was not established to be proper appraisal practice.It was concluded based upon speculation that the appraisal done on his property had not accounted for the condition of the house.In short, the owners’ opinion was not founded upon proper elements or a proper foundation and cannot be given any probative weight on the issue of true value in money.
Complainants Fail To Prove Discrimination
In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2009; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction.[48]Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.[49]The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive.[50]No other methodology is sufficient to establish discrimination.[51]
Complainants presented no evidence to establish that the property under appeal was assessed at a higher percentage of market value than a statistically significant number of other properties in St. Louis County, nor did they present substantial and persuasive evidence to establish the fair market value of their property on January 1, 2009.Therefore, the taxpayers failed to establish discrimination.
Summary
Complainants failed to present substantial and persuasive evidence to establish either their claim of overvaluation or discrimination.Accordingly, the presumption of correct assessment by the Board was not rebutted.
Complainants’ Attack on the Credibility of Respondent’s Appraiser
Sequestration of Mr. Hannan
Mr. Daniele at the outset of his presentation of his case requested that anyone who was going to testify for the county be sequestered.The basis for the request by the taxpayer was that he did not want Mr. Hannan to hear what the Complainant was going to testify to until he was ready to question Mr. Hannan.The Hearing Officer initially granted the request although nothing had been established that Mr. Hannan was going to testify in rebuttal as to any of the
documents which had been received into evidence (Exhibits B & E), but would only testify as to his appraisal.[52]
Upon Mr. Hannan leaving the hearing room, Mr. Daniele was then permitted to proceed to present his general statement of the case.In so doing, the Complainant revealed to the Hearing Officer for the first time, the taxpayer’s opinion that St. Louis County had been “tremendously vindictive” and “not professional” and that this would be developed in Mr. Daniele’s “impeachment” of Mr. Hannan.At that point, the Hearing Officer interrupted the Complainant and informed him, “If you are going to seek to impeach the witness, then I’m going to have the witness in here, because you’re going to be making statements relative to the case that Mr. Hannan ought to be permitted to at least be present for.”[53]When Mr. Daniele reiterated his intention to impeach Mr. Hannan’s credibility,[54] the Hearing Officer allowed Mr. Hannan to return to the hearing room to be present for the presentation of Mr. Daniele’s claims against him being vindictive and not professional.
The exclusion of potential witnesses from the courtroom during the presentation of other evidence is not a matter of right.[55]The decision to invoke the rule excluding witnesses rests in the discretion of the trial judge.[56]The rule does not authorize the exclusion of a person whose presence is shown by a party to be essential to the presentation of the party’s cause.[57]
Mr. Hannan was the only witness for Respondent.He was the person who was essential for the presentation of the party’s cause.The Hearing Officer’s initial exercise of discretion to placate the taxpayer and have Mr. Hannan leave the hearing room was based solely upon an attempt to grant some latitude to Mr. Daniele.The Hearing Officer believed that Mr. Daniele did not want Mr. Hannan to listen to his further explanation of his methodology for valuing his property.The Hearing Officer had no indication, until after Mr. Hannan was out of the hearing room, that Mr. Daniele wanted to lay a foundation of vindictive and non-professional actions by Mr. Hannan and that he intended to offer testimony to attempt to impeach the appraiser.
Upon learning of the intent and basis for Mr. Daniele’s request for sequestration, the Hearing Officer deemed that fundamental due process required that Mr. Hannan be present to face his accuser.If charges asserting unprofessional conduct as a basis to impeach the representations made in Mr. Hannan’s appraisal were to be put forth, Mr. Hannan had a right to hear those charges first hand.[58]Accordingly, the decision to sequester the witness was rescinded.
Objection to Mr. Hannan’s Qualifications
Following the foundation testimony of Mr. Hannan and the offering of Exhibit 1 into evidence, Mr. Daniele objected to the appraisal report on the ground of the qualifications of the appraiser.The objection was overruled and Exhibit 1 was received into evidence.[59]
Mr. Hannan was asked on direct examination as to his qualifications, education and experience as an appraiser as report in Exhibit 1.[60]The appraiser possesses the necessary education, training and experience to testify as an expert in the appraisal of the property that is the subject of this appeal.He has been so recognized by the Commission in other appeals as an expert witness on the appraisal of residential real estate.The objection posed by Mr. Daniele on this point was without merit.
Mr. Daniele later attempted to attack the appraiser’s qualifications on the basis he was not a certified or licensed appraiser under the applicable Missouri statutes.[61]There was never a representation by Mr. Hannan that he was a certified or licensed real estate appraiser under Missouri Law.The appraiser’s Professional Qualifications[62] established that he has passed the Missouri State Exam for Certified Residential Appraiser.The testimony of Mr. Hannan established that due to his working for St. Louis County he is unable to complete the practical experience requirement to be certified, because he cannot do appraisals for individuals.[63]Furthermore, Mr. Hannan set out in his appraisal, reference to the applicable statutory requirement that permits him to perform appraisals for submission in appeals before the Commission.[64]The fact that Respondent’s appraiser has not been certified in Missouri as a residential real estate appraiser does not disqualify him from testifying as an expert on the appraisal of given residential properties before the Commission.Complainants’ point is not well taken.
Impeachment Attempt – Photographs
Mr. Daniele’s initial attempt to impeach Mr. Hannan rests upon the claim that Mr. Hannan committed perjury by his testimony that the two photographs of the subject house shown in his appraisal were taken from the Missouri Conservation property.It was Mr. Daniele’s assertion that the photographs had to be taken from an elevated platform above the subject street.[65]He further claimed violation of county ordinance and state statue for first degree trespassing, violation of Complainants’ right to privacy and that the appraisal was the fruit of the poisonous tree, in that if the pictures were taken illegally, this tainted the whole appraisal and it should be excluded.None of these allegations provide a basis in evidentiary law for the exclusion of Exhibit 1 or the testimony of Mr. Hannan.
Suffice it to say that, from where or how Mr. Hannan may or may not have taken the two photographs of the Daniele house that appear in Exhibit 1 has no relevance to the underlying conclusion of value determined by the appraisal.The cost and sales comparison approaches developed by Mr. Hannan are still valid irrespective of the two photographs.
Location for Taking Photographs
The evidence on the location from which Mr. Hannan took his photographs of the subject house is as follows:
1.The appraisal is based upon an exterior viewing from the Columbia Bottoms Conservation Area and the street only.[66]
2.The site and improvements could not be observed from the street at the entrance to the gravel road due to the fact there is a “private road/keep out” sign posted on a steel drum at the beginning of the gravel road.The site and improvements are situated in a private setting from the neighboring properties but were observed from The Columbia Bottoms Conservation Area.[67](Emphasis added)
3.On June 7, 2010, the appraiser viewed the exterior of the subject property from the street and The Columbia Bottoms Conservation Area.[68]
4.The testimony of Mr. Hannan at the evidentiary hearing established that he did not enter upon the property of Mr. and Mrs. Daniele to take the two photographs of their house.[69]
The only conclusion that can be reached on this matter is that the two photographs of the subject house which appear in Exhibit 1 – Subject Property Photo Addendum as the Front View and Rear View of the Subject Property were taken from off Complainants’ property on the property of the Missouri Department of Conversation, just as Mr. Hannan testified.The Hearing Officer finds no basis upon which he can conclude that Mr. Hannan trespassed on Complainants’ property.The uncontroverted evidence is that Respondent’s Appraiser never entered upon the property that is the subject of this appeal.The allegation of Mr. Daniele is based upon nothing but pure speculation and conjecture.
Therefore, the attempt of Mr. Daniele to impeach the witness by establishing that he perjured himself as to the location of where he took the two photographs is completely without merit.The objection to Exhibit 1 on the ground of perjury is overruled.
Evidence of Increase in Value
In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, 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.[70]The evidence presented by the Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the fair market value of the property under appeal, as of January 1, 2009, to be $175,000.However, under the Commission rule just cited and Supreme Court decision[71] the assessed value of the residential property cannot be increased above $21,060[72] in this particular appeal.
Respondent Presents Clear, Convincing and Cogent Evidence
The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program.There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the residential valuation of the subject property at $110,800, appraised value, Respondent’s evidence
must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1)The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof.As used in this paragraph, the word comparable means that:
(a)Such sale was closed at a date relevant to the property valuation; and
(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.[73]
Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved.It does not mean that there may not be contrary evidence.[74]The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.[75]“For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”[76]
Respondent filed with the Commission the Hannan appraisal report.This report satisfied the statutory requirements of §137.115.1 (1) & (2), RSMo set out above to meet the standard of clear, convincing and cogent evidence.The only other inquiry necessary to affirm the value of $110,800 for the residential portion of the Daniele property is whether this evidence along with the testimony of Mr. Hannan “instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”The Hearing Officer first notes there is no evidence in the record in opposition to the Hannan conclusion of value to be weighed against that opinion.Therefore, the only evidence on the scales is the opinion of fair market value developed by Respondent’s appraiser relying on the sales comparison approach.From this evidentiary record, the scales were instantly tilted in the affirmative for the value found in Exhibit 1.The Hearing Officer has no basis to conclude that the appraisal evidence is anything other than true.
The evidence establishes clearly and convincingly that the true value in money for the property under appeal is at least $110,800 as determined by the Assessor and sustained by the Board.Accordingly, that valuation must be affirmed.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2009 and 2010 is set at $24,240.[77]
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.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, MO65102-0146, 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. [78]
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.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 April 7, 2011.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
[4] 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).
[5] 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).
[6] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[7] DECISION; Findings of Fact 5, pp. 3 – 4; Complainant’s Fail to Prove Value of $85,260, pp. 8 – 13;Complainants Fail to Prove Discrimination, pp. 13 – 14
[8] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[10] Residential property is assessed at 19% of true value in money (fair market value) and agricultural property is assessed at 12% of true value in money – Section 137.115.5(1), RSMo
[15] Exhibit C – How to Support Your Appeal and Exhibit D – Newspaper Article, dated 3/8/09 had been filed with the Commission, but were not exchanged with Counsel for Respondent as ordered and were therefore precluded from being offered into evidence.Neither appraisal provided any relevant information to establish Complainants’ claims of overvaluation or discrimination.
[16] Page 17 of Exhibit A consists of a copy of the Federal Emergency Management Agency Elevation Certificate for the subject property, dated 4/15/02.See, Tr. 7:1 – 9:14
[17] By Order, dated 10/4/2010, the parties were informed as follows (Emphasis in Original Order): If you are presenting an appraisal report as evidence, the appraiser MUST be present to testify and be cross-examined.If the appraiser is not present at the Evidentiary Hearing, the appraisal report cannot be received into evidence.
[18] Exhibit A is maintained in the appeal file, only as an offer of proof, but is not part of the evidentiary record for purposes of determining the fair market value of the Complainants’ property.
[19] Exhibit F is maintained in the appeal file, only as an offer of proof, but is not part of the evidentiary record for purposes of determining the fair market value of the Complainants’ property.
[27] 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)
[28] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[29] 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).
[30] 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).
[32] 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.
[34] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
[35] 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. Div. 2 1974).
[37] 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. 1991).
[45] 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).
[46] 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).
[55] State v. Foster, 394 S.W.2d 922, 923 (Mo. 1961); Grab ex rel. Grab v. Dillon, 103 S.W.3d 228, 234-36 (Mo. Ct. App. E.D. 2003)
[58] Note, at this point, Mr. Hannan had not given any testimony in the hearing, nor had his appraisal been received into evidence, it had only been filed and exchanged.It would only later be received into evidence upon Counsel for Respondent laying the proper foundation for its admission.
[64] Exhibit 1 – Additional Certification – Page 2 of 2 – 21.Under Missouri Revised Statutes, Chapter 339, the provisions of Sections 339.500 to 339.549 shall not be constructed to require a license or certificate for any employee of a local, state or federal agency who performs appraisal services within the scope of his or her employment. (Applicable for non-certified appraisers).See also, 12 CSR 30-3.065 (4)
[71] The Supreme Court of Missouri has interpreted Section 138.060.The Court stated:
“Section 138.060 prohibits an assessor from advocating for or presenting evidence advocating for a higher ‘valuation’ than the ‘value’ finally determined by the assessor. … . Because the legislature uses the singular terms ‘valuation’ and ‘value’ in the statute, however, it clearly was not referring to both true market value and assessed value.While the assessor establishes both true market value and assessed value, which are necessary components of a taxpayer’s assessment, as noted previously, the assessed value is the figure that is multiplied against the actual tax rate to determine the amount of tax a property owner is required to pay.The assessed value is the ‘value that is finally determined’ by the assessor for the assessment period and is the value that limits the assessor’s advocacy and evidence.Section 138.060.By restricting the assessor from advocating for a higher assessed valuation than that finally determined by the assessor for the relevant assessment period, the legislature prevents an assessor from putting a taxpayer at risk of being penalized with a higher assessment for challenging an assessor’s prior determination of the value of the taxpayer’s property.”State ex rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 S.W.3d 80, 87-88 (Mo 8/4/09)