STATE TAX COMMISSION OF MISSOURI
| CARL G. CIBULKA, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal No. 17-112691 |
| ) | Parcel/locator: 16K122675 | |
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED. Complainant Carl G. Cibulka (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the true value in money (TVM) of the subject property as of January 1, 2017.
Complainant appeared pro se.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by Counsel Steven Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
ISSUE
Complainant appealed on the ground of overvaluation. Respondent initially set the TVM of the subject property, as residential property, at $33,000. The BOE sustained Respondent’s valuation and set the TVM at $33,000. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes this appeal to determine the true value in money for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on August 9, 2018, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 16K122675. It is further identified as 1421 Coolidge Drive, University City, St. Louis County, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of a .14 acre residential lot improved by a 900 square foot, single-family, bungalow-style home built in 1950. (St. Louis County Residential Real Estate Database) The home includes two bedrooms; one full bathroom; and a full unfinished basement. The exterior consists of brick construction. The home has a construction quality grade of D+ and a condition/desirability/utility code of poor. (St. Louis County Residential Real Estate Database)
- Assessment. Respondent set a TVM on the subject property at $33,000 residential, as of January 1, 2017.
- Board of Equalization. The BOE sustained Respondent’s valuation of the subject property and set the TVM at $33,000.
- Complainant’s Evidence. Complainant opined that the subject property’s TVM as of January 1, 2017, was $8,500[1]. To support his opinion of value, Complainant offered his testimony but did not present any exhibits. Complainant testified that he had purchased the subject property in 1997 for $17,500. Complainant testified that he had purchased the subject property from his mother. Complainant testified that the subject property was not encumbered by a mortgage. Complainant testified that the subject property had not been listed for sale but that he had been in contact with persons regarding a possible sale. Complainant testified that he had received three offers to purchase the subject property: $5,000; $7,500, and $8,500. Complainant did not accept any of the offers. Complainant testified that the highest offer was from “developers.” Complainant testified that he would need to consult with a realtor to determine an asking price for the subject property. Complainant testified that the subject property had not been appraised within the three years preceding the Evidentiary Hearing. Complainant testified that the only improvements to the subject property between January 1, 2015, and January 1, 2017, were the removal of a tree and some landscaping.
Complainant testified that the subject property needed numerous repairs and was not in saleable condition. Complainant testified that the repairs needed include the removal of a 90-foot to 100-foot tall sycamore tree at a cost of $3,000 and plumbing repairs in the amount of $10,000. Complainant testified that the roof and heating system are 20 years old. Complainant testified that the subject property has only one bathroom and that the bathroom and kitchen are original to the home. Complainant testified that the subject property has no central air conditioning, has damaged and worn hardwood floors, and has its original doors and windows. Complainant testified that the driveway had an asphalt overlay in 1998. Complainant further testified that the subject property backs to an unimproved valley with drainage problems and that the backyard accumulates water to a depth of 12 inches.
On cross examination, Complainant testified that he is not a certified appraiser.
On redirect, Complainant testified that he has accumulated many possessions and belongings within the subject property and has tried to find storage for them. Complainant further testified that his financial situation did not allow for the rental of a storage unit for his “accumulation of stuff” so that he could move to another home.
- Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject property as of January 1, 2017, $33,000, was correct. Respondent presented the following evidence:
| Exhibit | Description | Ruling |
| Exhibit 1 | BOE Findings and Notice of Decision | Admitted |
| Exhibit 2 | Comparative Market Analysis (CMA) | Admitted |
Respondent also presented the testimony of Certified Residential Real Estate Appraiser Nancy McGrath (Ms. McGrath). Ms. McGrath testified that she had viewed the exterior of the front and south elevations of the home. Ms. McGrath testified that the roof of the home was worn but that she was informed by Complainant that the roof did not leak. Ms. McGrath testified that the home had its original windows and had flaking and worn paint on the exterior. Ms. McGrath testified that Complainant had explained the condition of the interior of the home but did not allow her to inspect it. Ms. McGrath testified that the subject property had a new furnace but no central air conditioning.
Ms. McGrath testified that she had compiled Exhibit 2, which reported the sales of 30 comparable properties in the same neighborhood as the subject property occurring between January 1, 2015, and July 1, 2017. The sale prices of all of the comparable properties ranged from $10,000 to $104,900. Seven of the comparable properties were located on the same street as the subject property. The sale prices of those seven comparable properties ranged from $24,100 to $104,900.
Some of the comparable properties listed in Exhibit B had been reported as bank owned or government owned, indicating that the sales of those particular properties were below-market transactions in that the sales did not involve typically motivated buyers and sellers. In response to questioning from the Hearing Officer, Ms. McGrath testified that the properties in Exhibit B most similar to the subject property were four bank owned or government owned properties: 8334 Archer (sale date 09/29/16, sale price $23,219); 1471 Coolidge (sale date 03/27/15, sale price $24,100); 8338 Archer (sale date 06/10/16, sale price $28,800); and 8476 Fullerton (sale date 07/14/16, sale price $29,005).
- Presumption of Correct Assessment Not Rebutted – Value Established. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary, or capricious, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the Board of Equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Basis of Assessment
The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2 RSMo (2000) as amended. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” Westwood Partnership, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.” See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. E.D. 1980).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer, as the trier of fact, may consider the testimony of an expert witness and give it as much weight and credit as deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
Here, Complainant did not present any expert witness testimony. Respondent presented the expert testimony of Ms. McGrath, who is a certified residential real estate appraiser.
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE – the BOE presumption. In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways.
The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then it also would be applicable to the Respondent.
The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer assisted method. The BOE’s valuation is assumed to be an independent valuation.
In the present appeal, the BOE sustained the initial valuation of Respondent, and Complainant is now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies to Complainant.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission. It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). Missouri courts have approved the comparable sales or market approach, the cost approach, and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347. “Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.
Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; see also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.
Discussion
Complainant’s evidence was neither substantial nor persuasive to support an opinion that the subject property had a TVM of $8,500 as of January 1, 2017. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id.
Although Complainant testified that he had received three offers, the highest of which being $8,500, Complainant did not accept the offer and did not present objective evidence in the form of a written offer or testimony from the potential buyer regarding the reasoning behind the amount of the offer. Complainant’s testimony concerning value focused on the condition of the subject property and the need for substantial repairs. Complainant did not present any bids or the testimony of any contractors regarding the potential cost of repairs.
Respondent’s expert, Ms. McGrath, acknowledged that the roof of the subject property was worn, that the windows were original, and that the exterior of the home had some flaking and worn paint. The St. Louis County Real Estate Database rated the quality and condition of the subject property as “D+” and “poor.” Respondent’s Exhibit B established that seven homes on the same street as the subject property had sale prices ranging from $24,100 to $104,900. Exhibit B also established that the four “most similar” comparable properties in the same neighborhood as the subject property had sale prices ranging from $23,000 to $27,900. Each of the four “most similar” comparable properties were bank owned or government owned, which indicates that the sales were below-market price transactions. Respondent’s Exhibit 2 established that the BOE’s valuation of the subject property fell squarely within the wide range of the reported sale prices of the comparable homes in the subject property’s neighborhood, $10,000 to $104,900.
Although the Hearing Officer is sympathetic to Complainant’s stated dilemma with regard to the cost of storing his possessions and moving to a different home, one cannot reasonably conclude from Complainant’s evidence that the BOE’s determination of value was incorrect.
ORDER
The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax years 2017 and 2018 is $6,270 residential ($33,000 TVM).
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
Disputed Taxes
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED September 18, 2018.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 18 day of September, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator
[1] On the Complaint for Review Complainant filed with the STC, Complainant claimed the subject property had a TVM of $7,500.