Aspen Resource Group v. Muehlheausler (SLCO)

 

ASPEN RESOURCE GROUP,)

)

Complainant,)

)

v.) Appeal Nos.07-10368, 07-10369

)& 07-10374

PHILIP MUEHLHEAUSLER, ASSESSOR,)08-10059, 08-10060

ST. LOUIS COUNTY, MISSOURI,)& 08-10061

)

Respondent.)

 

 

DECISION AND ORDER

 

HOLDING

 

Decisions of the St. Louis County Board of Equalization are SET ASIDE.No material issue of fact exists on the issue of true value in money for the properties under appeal as of January 1, 2007.True value in money for the subject property in Appeal Nos. 07-10368 and 08-10059 for tax years 2007 and 2008 is set at $2,500,000, commercial assessed value of $800,000.

True value in money for the subject property in Appeal Nos. 07-10369 and 08-10061 for tax years 2007 and 2008 is set at $8,000,000, commercial assessed value of $2,560,000.True value in money for the subject property in Appeal Nos. 07-10374 and 08-10060 for tax years 2007 and 2008 is set at $250,000, commercial assessed value of $80,000.

Complainant appeared by Counsel Richard D. Dvorak, Overland Park, Kansas. Respondent appeared by Associate County Counselor Paula J. Lemerman.

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

ISSUE

The Commission takes these appeals to determine the true value in money for the subject properties on January 1, 2007.

SUMMARY

Complainant appeals, on the ground of overvaluation and discrimination, the decisions of the St. Louis County Board of Equalization, which reduced the valuation on two properties and sustained the valuation of the third property.

The Hearing Officer, having (1) considered the admissions as to value by Respondent, (2) the arguments presented by Counsel for Complainant and Counsel for Respondent and (3) determined there are no material issues of fact requiring an evidentiary hearing, enters the following Decision and Order.

FINDINGS OF FACT

1.Jurisdiction: Jurisdiction over these appeals is proper.Complainant timely appealed to the State Tax Commission from the decisions of the St. Louis County Board of Equalization.

2.Appeal 07-10368: The property in this appeal is located at 10176 Corporate Square Drive, Creve Coeur, Missouri.It is identified by Locator Number 16M210123. The Assessor determined an appraised value of $6,665,200, assessed value of $2,132,860, as commercial property for the 2007 – 2008 assessment cycle.The Board of Equalization reduced the value to $4,372,600, assessed value of $1,399,230.Complainant proposed a value of $2,500,000, assessed value of $800,000.[1]This is the same property that is the subject of Appeal No. 08-10059.[2]

3.Appeal 07-10369: The property in this appeal is located at 9666 Olive Boulevard, Olivette, Missouri.It is identified by Locator Number 17M640037. The Assessor determined an appraised value of $14,126,800, assessed value of $4,520,580, as commercial property for the 2007 – 2008 assessment cycle.The Board of Equalization reduced the value to $11,279,400, assessed value of $4,609,410. Complainant proposed a value of $8,000,000, assessed value of $2,560,000.[3]This is the same property that is the subject of Appeal No. 08-10061.[4]

4.Appeal 07-10374: The property in this appeal is located at 9701 Olive Boulevard, Olivette, Missouri.It is identified by Locator Number 17M640521. The Assessor determined an appraised value of $617,000, assessed value of $197,440, as commercial property for the 2007 – 2008 assessment cycle.The Board of Equalization sustained that value. Complainant proposed a value of $250,000, assessed value of $80,000.[5]This is the same property that is the subject of Appeal No. 08-10060.[6]

5.Exchange Schedule Orders: Orders Setting Discovery and Exchange Schedules were issued in each of the 2007 appeals on November 13, 2007.Pursuant to Joint Request for Continuance, the Discovery and Exchange Schedules were continued pursuant to Order issued March 18, 2008.Neither party complied with the exchange dates set by the March 18^th Order.A new Order setting the Exchange Schedule was issued June 16, 2008. Neither party complied with the exchange dates set by the June 16^th Order.A new Order setting the Exchange Schedule was issued July 9, 2008.Parties filed on August 15, 2008, their Joint Motion for a further extension of the Exchange Schedule.By Order dated August 19, 2008, filing and exchange of exhibits and written direct testimony was set for September 8, 2008.

10.Complainant’s Exhibits and Written Direct Testimony:Complainant filed the following exhibits and written direct testimony in response to the August 19^th Order.

Appeal 07-10368

 

Appeals 07-10369 & 07-10374

 

11.Respondent’s Exhibits and Written Direct Testimony: Respondent did not file any exhibits or written direct testimony in any of the appeals.Respondent was precluded from offering evidence on the issue of valuation in the hearing in these appeals.[7]

12.Motion to Compel & Motion for Summary Judgment:On November 7, 2008, the Commission received Complainant’s First Amended Motion to Compel and Motion for Summary Judgment.Motion for Summary Judgment prayed the Commission “to rule in favor of the Complainant in these tax appeals.”

13.Withdrawal of Motion for Summary Judgment.By email attachment sent on December 11, 2008, at 3:35 p.m., Counsel for Complainant submitted Complainant’s Withdrawal of Motion for Summary Judgment, Request for Hearing and Prehearing Case Management Conference.

14.Response to First Amended Motion to Compel.By email attachment sent on December 11, 2008, at 3:53 p.m., Counsel for Respondent submitted Respondent’s Response to the First Amended Motion to Compel.In said Response, Respondent advised the Commission (1) he was not seeking to sustain either the values set by the Assessor or Board of Equalization; (2) he agreed with and would stipulate to the proposed true value as stated by Complainant in each of the three Complaints for Review of Assessment.[8]Respondent prayed the Commission to find true value in money for each of the subject properties claimed by the Complainant in the Complaints for Review of Assessment filed with the Commission on September 4, 2007.[9]

15.Response to Motion for Summary Judgment.By email attachment sent on December 11, 2008, at 3:53 p.m., Counsel for Respondent submitted Respondent’s Response to the Motion for Summary Judgment.Respondent advised the Commission he agreed with and would stipulate to the proposed true value as stated by Complainant in each of the three Complaints for Review of Assessment.[10]Respondent prayed the Commission to find true value in money for each of the subject properties claimed by the Complainant in the Complaints for Review of Assessment filed with the Commission on September 4, 2007.[11]

16.Order to Show Cause.By order dated, December 12, 2008, Complainant was given until and including December 31, 2008, to show cause why a Decision and Order should not be entered setting value for tax years 2007 and 2008 as follows:

 

17.Response to Order to Show Cause.On January 2, 2009, the Commission received Complainant’s Response to Order to Show Cause.On January 7, 2009, the Commission received Complainant’s First Amended Response to Order to Show Cause.[12]The prayer for relief in both Responses was to find the 2007 value for the properties as follows:

 

18.Exhibits submitted with Response to Order to Show Cause.Complainant submitted a group of documents as exhibits and written direct testimony for Appeal 07-10368 and Appeals 07-10369 & 07-10374 with its Response. The documents filed as exhibits and written direct testimony all address the issue of valuation for the given properties.By Commission Order, dated August 19, 2008, the last date for filing exhibits and written direct testimony on the issue of valuation was September 8, 2008.Exhibits and written direct testimony not prefiled and exchanged in accordance with the Commission rule on prefiling and exchanging exhibits and written direct testimony cannot be admitted into evidence at any evidentiary hearing.[13]

19.No New Construction and Improvement.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.

20.True Value in Money – 1/1/2007.The true values in money and assessed values for each property as commercial real property as of January 1, 2007, are as follows:

 

21.Complainant’s Evidence Moot.As a matter of law, there is no material fact in dispute with regard to the true value in money of the subject properties as of January 1, 2007.There is no material issue to which Complainant’s exhibits and written direct testimony are relevant, as they are not probative on any issue in dispute in these appeals.

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.[14]

Motion for Summary Judgment and Withdrawal of Said Motion

Complainant’s Motion for Summary Judgment was based upon Respondent’s failure to make full and complete response to Complainant’s request for admissions and discovery documents.Complainant relied on Supreme Court Rule 61.01(c) that Respondent’s failure to respond to Complainant’s discovery should result in the genuineness of any relevant documents or the truth of any relevant and material matters of fact contained in the request for admissions being taken as admitted.Complainant prayed for relief of the Commission ruling in favor of the Complainant’s in each of the 2007 appeals.

The Withdrawal of the Motion for Summary Judgment was sent by email attachment on December 11, 2008, eighteen minutes before Counsel for Respondent sent by email attachment her Responses to the Motion for Summary Judgment and Motion to Compel.There is no record as to which email was received first by the Commission[15] or which was opened first and its attachments printed to be placed in the appeal files.It is irrelevant with regard to this decision.

Responses of Respondent

Respondent in both of his Responses made the following admissions: (1) Respondent was not seeking to sustain the Assessor’s or the Board of Equalization’s values in any of the appeals;[16] and (2) Respondent agreed with, and would stipulate to, the proposed true value as stated in each of the respective Complaints for Review of Assessment.[17]The prayer for relief that Respondent made in both Responses was to “find that the true value in money for each of the subject properties is that value claimed by the Complainant in each Complaint for Review of Assessment it filed on September 4, 2007.[18]

Complainant’s Prayer for Relief

A Complaint for Review of Assessment is for all purposes the pleading of the taxpayer when the appeal is filed with the Commission. The Complaint gives the basis or ground upon which the taxpayer is seeking to have the assessment of the property being appealed adjusted.The true value in money that a taxpayer sets forth on the Complaint is the prayer for relief as to the value upon which the assessment is to be based.

In other words in the present appeals, Complainant’s prayer for relief in Appeal 07-10368 was for the Commission to find true value to be $2,500,000.In Appeal 07-10369, Complainant prayed the Commission to set the true value at $8,000,000.In Appeal 07-010374, the relief prayed for was a finding of value at $250,000.

Therefore, irrespective of the Complainant’s filing of its Withdrawal of the Motion for Summary Judgment, upon Respondent filing its Responses, the prayer for relief sought by Complainant was agreed to by Respondent.Accordingly, the only issue presented to the Commission in each appeal had been rendered moot.There no longer existed any material issue of fact on Complainant’s claim of overvaluation in the 2007 appeals requiring an evidentiary hearing.Respondent had conceded the properties were overvalued and the relief sought by the taxpayer in the Complaints for Review of Assessment should be granted.

Complainant’s Response to Order to Show Cause

In response to the Order to Show Cause, issued December 12, 2008, Complainant made response as to the properties in Appeals 07-10368 and 07-10369.No response was presented with regard to the property in Appeal 07-10374.Respondent advanced various arguments relative to a determination of true value in money for tax year 2008.That matter will shortly be addressed below.However, as to tax year 2007, Complainant’s prayer for relief was to find the true value in money to be the values stated by Complainant in its Complaints for Review of Assessment, to wit: Appeal 07-10368 – $2,500,000; Appeal 07-10369 – $8,000,000 and Appeal 07-10374 – $250,000.[19]

Conclusion

There is no dispute between the parties as to the true value in money for each property that is the subject of these appeals for the valuation date of January 1, 2007.There is no material issue of fact requiring an evidentiary hearing on the issue of the value of the properties under appeal as of January 1, 2007.Accordingly, true value in money for each property as of

January 1, 2007, is found to be the values pleaded by Complainant in its Complaints for Review of Assessment and agreed to by Respondent in his Responses to Motion to Compel and Motion for Summary Judgment.Therefore true values are set as put forth in Finding of Fact 20, supra.

True Value in Money for Tax Year 2008

Two Year Assessment Cycle

Missouri operates under a two year assessment cycle for real property.[20]The controlling portion of section 137.115 reads as follows:

“The assessor shall annually assess all real property in the following manner: new assessed values shall be determined as of January first of each odd-numbered year and shall be entered in the assessor’s books; those same assessed values 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.”[21]

 

Complainant’s Response to Order to Show Cause

Complainant in its Response to the Order to Show Cause advanced essentially two lines of argument to support its claim that a different value should be set for the properties in Appeals 07-10368 and 07-10369 for tax year 2008.The arguments put forth were magnitude of deferred maintenance and recent offers reflecting a lower market value.Complainant sought an evidentiary hearing on the issue of true value in money for tax year 2008.Complainant argued that based upon its filing of the 2008 Complaints for Review of Assessment it had asserted different values for 2008.[22]

Issue of Valuation Litigated Once in Assessment Cycle

As a matter of law a taxpayer can litigate the issue of the assessed valuation of a property only once in each two-year assessment cycle.[23]The only exceptions to this limitation is when facts demonstrate the assessor or board should have decreased the assessed value pursuant to 12 CSR 30-3.001, but failed to do so, or the assessor or board raises the assessed value for the even numbered year pursuant to 12 CSR 30-3.001.[24]Value can be decreased where the property improvements have been destroyed or severally damaged in the odd-numbered year that results in a reduction in true value in money.[25]Value cannot either be increased or decreased based upon changes in economic conditions which directly or indirectly affect a property under appeal.[26]

No claim was presented by Complainant that property improvements had been destroyed or severally damaged during 2007.Neither the assessor nor the board increased the values due to new construction and improvements.Therefore, as a matter of law the true value in money for the subject properties as of January 1, 2007, conceded by both Complainant and Respondent cannot be litigated again for the 2008 tax year.The filing of the 2008 Appeals was unnecessary and of no effect.The Commission already had jurisdiction relative to the 2008 valuation under the 2007 appeals.The Commission’s administrative rules having been duly promulgated pursuant to authority granted that agency by the Missouri General Assembly have the force and effect of law and are binding upon the Commission.[27]

Deferred Maintenance Argument

The argument of Complainant for a different value for 2008 was that in preparation for the evidentiary hearing, the taxpayer became “more fully aware of the magnitude of deferred maintenance” of both the Olive Corporate Center and Cambridge Square properties.[28]Deferred maintenance does not equate to destruction or sever damage to improvements.The subject improvements existed as of January 1, 2007, and January 1, 2008.No evidence was presented to establish either the destruction or sever damage to the improvements for either Olive Corporate Center or Cambridge Square.The asserted fact that deferred maintenance may have been greater than realized on either January 1, 2007, or January 1, 2008, is irrelevant.Respondent conceded that values for the properties as of January 1, 2007, to be as plead by Complainant.Complainant cannot, as a matter of law, litigate the issue of value for 2008 based upon a claim of deferred maintenance.[29]

Recent Offers of Purchase

Complainant further argued that a different value for tax year 2008 should be determined based upon recent offers for the properties.Change in economic conditions from 2007 to 2008, as a matter of law, does not form a basis for the Commission to conduct an evidentiary hearing in these appeals.[30]As has previously been found and discussed the true values in money as of January 1, 2007, as plead by Complainant have been determined by Respondent’s admission to those values.There is no statutory or regulatory basis for the Commission to set new values for the 2008 tax year based upon offers of purchase made in 2008.

Conclusion

The values established, as addressed in detail in this Decision, for January 1, 2007, must be the values for the 2008 tax year.

ORDER

The assessed valuations for the subject properties as determined by the Board of Equalization for St. Louis County for the subject tax day are SET ASIDE.

The assessed value for the subject property in Appeal Nos. 07-10368 and 08-10059 for tax years 2007 and 2008 is set at $800,000.

The assessed value for the subject property in Appeal Nos. 07-10369 and 08-10061 for tax years 2007 and 2008 is set at $2,560,000.

The assessed value for the subject property in Appeal Nos. 07-10374 and 08-10060 for tax years 2007 and 2008 is set at $80,000.

Complainant 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 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 appeal is based will result in summary denial. [31]

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 a 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 February 6, 2009.

STATE TAX COMMISSION OFMISSOURI

 

 

_____________________________________

W. B. Tichenor

Senior Hearing Officer

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 6^th day of February, 2009, to:Richard Dvorak, 7111 W. 98^th Terrace, Suite 140, Overland Park, KS 66212, Attorney for Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip Muehlheausler, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.

 

 

___________________________

Barbara Heller

Legal Coordinator