State Tax Commission of Missouri
BRIAN & BARB FINNEGAN,)
v.) Appeal Number 09-10666
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $368,000, residential assessed value of $69,920.Complainants appeared pro se.Respondent appeared by Associate County Counselor Paula Lemerman
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
Complainant appeals, 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 the true value in money for the subject property on January 1, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.A hearing was conducted on July 8, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property under appeal at $391,700, a residential assessed value of $74,420.The Board of Equalization reduced the value to $360,000, assessed value of $68,400.
3.Subject Property.The subject property is located at 109 Emerald Green Court, Creve Coeur, Missouri.The property is identified by locator number 18O610248.The property consists of a 20,000 square foot lot improved by a two-story predominately brick, single-family structure of average quality construction.The house was built in 1963.It is well maintained and in average condition.The residence has a total of twelve rooms, four bedrooms, three full and one half bathrooms, and contains 3,436 square feet of living area.There is a basement with 800 square feet of finish, with a full bathroom and an attached two-car garage. The home has an updated kitchen, granite countertops, hardwood flooring, recessed lighting, chair rail molding, crown molding, vaulted ceilings, and sky lights.There is 624 square feet of unfinished area, which includes a full bathroom (some problems/not fully functional) located above the garage.There was no sale of the property noted within three years prior to the tax date of January 1, 2009.
4.Complainant’s Evidence.Both Mr. and Mrs. Finnegan testified regarding the valuation of their home.Mr. Finnegan stated the owner’s opinion of value to be $290,000 based upon looking at the current appraised values by the Assessor of what he deemed to be comparable properties in the subject neighborhood.Complainants offered into evidence Exhibit A.Counsel for Respondent objected on the grounds of hearsay, relevance, and lack of foundation.The objections were taken under advisement at the hearing to be ruled on in the decision.See, Ruling on Exhibit A, infra.
Exhibit A consisted of the following documents.
Owners’ Letter of Appeal for July 2009 BOE Appeal; Sketch of Neighborhood
Site Diagrams of Subject, 125 Emerald Green Ct and 11956 Emerald Green Dr
Comparable Sales on Change of Assessment for Subject & 11956 Emerald Green Dr
Data on 7 properties in Subject neighborhood for which 2009 assessment declined.
Assessment/sales data/photographs & locator map on various properties within 1 -2 miles of subject
Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $290,000, as proposed.
5.Respondent’s Evidence.Respondent presented the appraisal report and testimony of Sharon Kuelker, Residential Appraiser Senior for St. Louis County.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The properties were located within less than a half mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.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.
Respondent did not have to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, as he was not seeking to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program. Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, to be $368,000, residential assessed value of $69,920.
CONCLUSIONS OF LAW AND DECISION
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.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.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, or Respondent when advocating a value different than that set by the Board, 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.Complainant’s evidence failed to rebut the presumption of correct assessment by the Board.The evidence presented on behalf of Respondent was substantial and persuasive to rebut the presumption in favor of the Board’ Value and establish the value of $368,000.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.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.
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.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.Complainants did not present an opinion of value derived from any accepted methodology for the appraisal of real property for ad valorem tax purposes.Respondent’s appraiser concluded fair market value based upon the sales comparison approach to valuation, a well recognized and accepted methodology for the appraisal of owner occupied residential properties.
Ruling on Exhibit A
As described above in Finding of Fact 4, Exhibit A was divided, as presented by Complainants into five separate parts.Therefore, the Hearing Officer will address the objections of Counsel for Respondent separately for each section of the exhibit.
Exhibit A-1 – Owners’ Letter – Sketch of Neighborhood
This exhibit consists of a two page typed letter of the owners and a sketch of the subject neighborhood, on which the subject and two other properties are high-lighted in yellow.Complainants’ letter essentially compares the assessment on their property with the assessment on the 125 Emerald Green Court and 11956 Emerald Green Drive properties.The Finnegans also address errors in the original assessment on their property for the 2009 assessment.In the last paragraph their opinion of value of $290,000 is stated.
Presentation of a document such as this exhibit demonstrates how taxpayers often focus on the wrong issue.Property owners want to point out all of the problems they perceive with the original assessment of their property and fail to recognize the burden of proof they bear in an appeal before the Commission.Simply pointing out alleged errors or believed inconsistencies in the assessment of the property being appealed or the assessment of neighboring properties provides nothing of substance to prove what the true value in money for taxpayers’ property was on January 1, 2009.Such is the case in this instance.Nothing in Exhibit A-1 provides any market data from which it can be properly concluded that a willing buyer and seller would have agreed to a purchase price of $290,000 on January 1, 2009, for the subject property.
The exhibit contains numerous examples of hearsay information.No foundation is laid for the stated opinion of value.The various assertions as to errors in the original computer generated assessment and alleged inconsistencies in decreasing values of other homes while increasing the value of the subject home provide nothing relevant to establish the value asserted by Complainants.Objection is sustained.Exhibit A-1 and testimony related thereto is taken only as an offer of proof.It is maintained in the Commission file only for that purpose and not as part of the evidentiary record for rendering a decision.
Exhibit A-2 – Site Diagrams
The site diagrams of the Finnegan home and the properties at 125 Emerald Green Court and 11956 Emerald Green Drive provide nothing from which the Hearing Officer can determine value of the property under appeal.While these are diagrams of the floor plans from the assessor’s records, they lack any foundation or relevance to prove value of the subject property.Objection is sustained.Exhibit A-2 and testimony related thereto is taken only as an offer of proof.It is maintained in the Commission file only for that purpose and not as part of the evidentiary record for rendering a decision.
Exhibit A-3 – Change Notice Comparables
This exhibit shows that different sales comparables were selected in the computer generated valuation of the subject and the property at 11956 Emerald Green Drive.The exhibit lacks any foundation or relevance to the issue of the fair market value of the subject as of January 1, 2009.The fact that the computer-generated valuation of a neighboring property selected a difference set of sale properties, does not establish a value for the subject.Complainants’ reliance on this exhibit appears to be for the purpose of attacking the original assessment of the subject property.That assessment is not under review by the Commission.The appeal to the Commission is de novo.The purpose of the appeal is to provide the Complainants with the opportunity to present evidence material to the issue of what a willing buyer and seller would have agreed to as a sales price on January 1, 2009, for their property.The value set by the Assessor was set aside by the decision of the Board.
The objection is sustained.The exhibit is not relevant to establishing value of the subject.Exhibit A-3 and testimony related thereto is taken only as an offer of proof.It is maintained in the Commission file only for that purpose and not as part of the evidentiary record for rendering a decision.
Exhibit A-4 – Data on Assessment Decline Properties
In this Exhibit, the taxpayers seek to present to the Hearing Officer information from the assessor’s website on seven properties in the subject neighborhood the assessments of which declined for the 2009-10 assessment.The fact that the appraised values of certain properties in the subject neighborhood declined for the 2009-10 assessment proves nothing as to what the true value in money of the subject should be on January 1, 2009.Complainants are making a comparative assessment argument by the use of the exhibit.The argument is essentially because certain properties were valued at a certain range the subject property should be placed in that range of values.Valuing properties based upon the values set by the assessor on neighboring properties is not an acceptable methodology for finding fair market value of any given property.Accordingly, no probative weight can be given to a conclusion of value derived from this unacceptable theory of valuation.Furthermore, the exhibit fails to establish how the values placed on these other properties forms a basis to value the subject property at the value asserted by Complainants of $290,000.
The objection is sustained.The information provided in the exhibit lacks foundation to establish value based upon any recognized appraisal approach.The exhibit is not relevant to establishing value of the subject.Exhibit A-4 and testimony related thereto is taken only as an offer of proof.It is maintained in the Commission file only for that purpose and not as part of the evidentiary record for rendering a decision.
Exhibit A-5 – Miscellaneous Property Information
The final part of Exhibit A consists ofa number of documents.
List of Homes
There is a list of homes asserted to be “comparable 2 story brick houses within 1-2 miles” by address and assessed value.The first defect with this document is that neither Mr. or Mrs. Finnegan provide sufficient information to establish either of them as experts in appraisal of real property and therefore their opinion of what is or is not comparable can be given no weight.A property address and assessed value fails to provide sufficient information from which the Hearing Officer can conclude that any of the properties are comparable to the subject for purpose of appraising the subject.Even if detailed information describing the properties had been
provided, without sales data, the information is worthless as a tool for valuing the subject.This document is simply a further extension of Complainants’ comparative assessment argument.
Whispering Hills List
The next document is a listing of sales and a single 2009 listing of properties purported to be in Whispering Hills Subdivision, asserted to be “comparables.”The sales dates on these properties range from 1998 to 2008.Therefore, even if there was evidence to establish that any of these properties were in fact comparable to the subject, many of the sales are too dated to be utilized in an appraisal of the subject.However, the greater defect in this document is nothing is provided concerning any of the properties other than sale date, sale price and address.There is no basis upon which it can be concluded that any of the properties are in face comparable to the subject for purposes of an appraisal for ad valorem tax purposes.
Comparability of a property cannot be established based upon the conclusion of a non-expert property owner.Especially, when all that is presented to support the owner’s conclusion of “comparability” is a listing of a sale price and address.The listing provides nothing that can be considered to be substantial and persuasive evidence to establish the fair market value of Complainants’ property on January 1, 2009.
The next portion of Exhibit A-5 consists of parts of property information on three different properties from the Assessor’s records.Once again, there is no way the Hearing Officer can logically find the properties to be comparable.Furthermore the information provided does nothing to move forward the position of the Finnegans that their home should be valued at $290,000.
The final documents presented in Exhibit A-5 are a series of 27 photographs of homes, and streets in the subject subdivision and a subdivision across I-270 from the subject subdivision and a map showing locations of various properties asserted to be “comparables” by the Complainants.The photographs and testimony given in support thereof addressed the Complainants’ assertion that the subject subdivision was not the same as the subdivision across from I-270.While that may or may not be the case, it does not prove value.Even though some will assert that “a picture is worth a thousand words” a thousand pictures cannot establish market value of any given property.Such is the case in this instance.None of the pictures or all of them together provided any substantive support to conclude any value for the property under appeal.To show in general what exists in parts of the two subdivisions the photographs have some probative value.However, that is not the issue on which the Complainants bear the burden of proof.The pictures provide no basis for the Hearing Officer to establish true value in money, accordingly, they have no relevance on the only issue pending in this appeal.
The objection is sustained.The various documents for the reasons just set forth are not probative on the issue of overvaluation.The exhibit is not relevant to establishing value of the subject.Exhibit A-5 and testimony related thereto is taken only as an offer of proof.It ismaintained in the Commission file only for that purpose and not as part of the evidentiary recordfor rendering a decision.
Complainants Fail to Prove Value of $290,000
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.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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.The opinion of value of $290,000 presented by the owners finds no support in any recognized appraisal methodology.Reliance on the appraised values of various properties within 1 to 2 miles of the subject property does not establish the true value in money of the Complainants’ property.There is no evidence in this record to establish the owner’s opinion of value based upon proper elements and a proper foundation.Therefore, the opinion of value has no probative weight in the appeal.
What Taxpayers Should Avoid
This appeal provides an excellent illustration of what taxpayers should avoid doing in an appeal before the Commission.Attempting to disprove the assessor’s original valuation is a waste of time and effort, especially when that value is not even at issue.In this particular instance, neither the Board nor the Respondent felt the computer generated valuation was correct.
Taxpayers need to remember what they must prove is what a willing buyer and seller would have agreed to as the purchase price of the property on the relevant valuation date – January 1, 2009 in this case.The opinion of value proffered by a taxpayer before the Commission must then be supported by substantial and persuasive evidence.A collection of documents on appraised values of other properties will never meet the substantial and persuasive standard.Relevant sales data properly adjusted for differences between the sale properties and the property being appraised provides the necessary foundation of evidence for a determination of fair market value.
Respondent Proves Value of $368,000
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.The appraisal report and testimony of Ms. Kuelker met the standard of substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $368,000 for the subject property.Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
Location of Respondent’s Comparables
Complainants argued at hearing that the subdivision in which the three comparables used by Ms. Kuelker in her appraisal were located was not the same as the subject subdivision.Ms. Kuelker felt the sale properties were the best indicators of value due to their location in the same neighborhood, if not the same subdivision.Furthermore, the matter of the subject’s proximity to I-270 was an issue to be considered in the appraisal.
The Finnegan home is located approximately 900 feet east of I-270.The three comparables are located less than a half mile the other side of I-270 to the northwest of the subject.Comparable 1 is approximately 900 feet west of the Interstate, a distance comparable to the subject.Comparable 2 is approximately 300 feet west of the Interstate, or two-thirds closer to the interstate traffic than the subject.Comparable 4 is approximately 450 feet west of the Interstate, or about half the distance closer to the traffic than the subject.
Ms. Kuelker was justified in utilizing these comparables to address the matter of location to the Interstate.This eliminated the need to attempt to adjust for this factor.As to the Complainants’ argument as to differences between the subdivisions, the appraiser’s opinion was that they were comparable and no location adjustment was warranted.Complainants’ testimony and photographs were not persuasive to the Hearing Officer to conclude that any adjustment was necessary.
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $69,920.
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, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
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 26, 2010.
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 26thday of August, 2010, to:Brian Finnegan, 109 Emerald Green Court, Creve Coeur, MO 63141, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, ActingAssessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
 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)
 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).
 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.
 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).
 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).
 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).