Calvin & Janet Bowers v. Charles Alford, Assessor Oregon County

December 22nd, 2015

State Tax Commission of Missouri

 

CALVIN & JANET BOWERS, )  
  )  
Complainant, )  
  )  
v. ) Appeal Number 15-75001
  ) 15-75002, and 15-75003
CHARLES ALFORD, ASSESSOR, )  
OREGON COUNTY, MISSOURI, )  
  )  
Respondent. )  

 

DECISION AND ORDER

 

HOLDING

 

Decision of the County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.  Complainants did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization

True value in money for the subject properties are set at:

Appeal True Value Assessed Value
15-75001 $7,180 $1,364
15-75002 $29,710 $5,645
15-75003 $36,500 $6,935

 

Complainants appeared in person

Respondent appeared in person

Case heard and decided by Hearing Officer Maureen Monaghan.

  

ISSUE

Complainants appeal, on the ground of overvaluation, the decision of the Oregon 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, 2015.  The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction and improvement to the property.  Section 137.115.1 RSMo

 

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 Oregon County Board of Equalization.
  2. Evidentiary Hearing. The Evidentiary Hearing was held on November 30, 2015 at the Oregon County Courthouse, Alton, Missouri.
  3. Identification of Subject Property. The subject properties are identified by map parcel numbers:
Appeal Parcel No.
15-75001 23-9-31-4-17-6.0000
15-75002 24-6.2-24-0-0-0018.000
15-75003 24-6.2-24-0-000-0020.01

 

  1. Description of Subject Property.
Appeal Description
15-75001 A vacant parcel of .358 acres.  The property has access to utilities.
15-75002 The parcel is 1 acre of land with a residence of approximately 700 sf.  It has a detached garage and a shed.
15-75003 The property is 20 acres of land with a mobile home and utility buildings.

 

  1. Assessment. The Assessor appraised the property as follows and the Board of Equalization sustained the assessment:
Appeal True Value Assessed Value
15-75001 $7,180 $1,364
15-75002 $29,710 $5,645
15-75003 $36,500 $6,935

 

  1. Complainant’s Evidence. Complainants testified as to the increase in the value of the residential property, more specifically the value the assessor placed on the land. The Complainants expressed concern regarding the amount of the increase.  The Complainants also provided a large number of listings of properties for sale in the County and neighboring counties.  The properties include a variety of residential, agricultural and commercial vacant land and land with improvements.
  2. Respondent’s Evidence. Respondent stated that he reviewed land values and increased the values across the county.  The Assessor provided copies of property record cards showing that the same land value was used on all properties.
  3. Presumption of Correct Assessment Not Rebutted.  Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board.

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.  Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo

Basis of Assessment

            The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.  Article X, Sections 4(a) and 4(b), Mo. Const. of 1945.   The constitutional mandate is to find the true value in money for the property under appeal.  By statute real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.

Presumption In Appeal

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.  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). 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. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra.   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.   Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

Complainants’ Burden of Proof

 

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, 2015.  Hermel, supra.   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.”  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).  A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.   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).   The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.  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).

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.  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)  True value in money is defined in terms of value in exchange and not value in use.  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).

It is the fair market value of the subject property on the valuation date. Hermel, supra.

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.

 

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

 

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

 

  1. Payment is made in cash or its equivalent.

 

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

 

  1. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in  the transaction.  Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of   Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.

 

Methods of Valuation

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

 

Hearsay

            Black’s Law Dictionary, Seventh Edition (1999), p. 726, defines hearsay as follows: “Traditionally, testimony that is given by a witness who relates not what he or she knows personally, but what others have said, and that is therefore dependent upon the credibility of someone other than the witness.  Such testimony is generally inadmissible under the rules of evidence.”  McCormick on Evidence, Third Edition, (1984), p. 729, defines the term as; “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”  The Courtroom Handbook on Missouri Evidence Missouri Practice, William A. Schroeder – 2012, Principle 800.c, p. 504,

follows the definition given by the Federal Rules and cited by McCormick.  The out of court statement can take the form of either oral or written assertions.  Therefore, documents which make assertions of facts are hearsay, just as well, as the speech of another person.

The hearsay rule provides that “no assertion offered as testimony can be received unless it is or has been open to test by cross-examination or an opportunity for cross-examination, except as otherwise provide by the rules of evidence, by court rules or by statute.” Black’s, supra – hearsay rule, p. 726.   The rationale behind the rule is quite simply that out of court hearsay statements are not made under oath and cannot be subject to cross-examination.  Accordingly, when various documents, such as but not limited to, Internet, newspaper and magazine articles are offered as exhibits in a hearing before the Commission, unless the document falls within one of the exceptions to the hearsay rule, upon objection such must be excluded.

Relevance

            The principle of relevance is the second critical evidentiary factor that must be considered when testimony and documents are tendered for admission into an evidentiary record.  For facts, information or opinions to be relevant they must be connected in a logical manner and tend to prove or disprove a matter that is at issue in the proceeding. Black’s, supra – relevant, p. 1293.    McCormick explains that “There are two components to relevant evidence: materiality and probative value.  Materiality looks to the relation between the propositions for which the evidence is offered and the issues of the case.  If the evidence is offered to help prove a proposition which is not a matter in issue, the evidence is immaterial.  . . .  The second aspect of relevance is probative value, the tendency of evidence to establish the proposition that it is offered to prove.”  McCormick, supra – p. 541.  Evidence, that tends to prove or disprove a fact that is at issue or of consequence, is relevant.  Missouri Practice,  supra – p. 95.

In appeals on the value of property, the issue is what a willing buyer and seller would have agreed to as the purchase price on the applicable valuation date.  The various listings presented by complainants do not establish market value of the subject properties.  First, the properties are listings; they only establish the price a seller would potentially accept. Second, the listings do not provide sufficient information to make a comparison to the subject properties.  Therefore, such information is not probative on the issue of value.  It does nothing to prove the market value of a given property on a date certain.

 

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Oregon County for the subject tax day is AFFIRMED.

 

Application for Review

A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision.  The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.  Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

            Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo

 

Disputed Taxes

The Collector of Oregon 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 this 22nd day of December, 2015.

 

STATE TAX COMMISSION OF MISSOURI

 

Maureen Monaghan

Hearing Officer

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 22nd day of December, 2015, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.

 

Jacklyn Wood

Legal Coordinator

 

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

573-751-2414

573-751-1341 Fax