Charles Karam v. Jake Zimmerman, Assessor St. Louis County

STATE TAX COMMISSION OF MISSOURI

 

CHARLES KARAM,	)	Appeal Nos.
Complainant,	) )	17-112235 17-112236
	)	17-112237
v.	)	17-112239
	)	17-112240
JAKE ZIMMERMAN,  ASSESSOR, ST. LOUIS COUNTY, MISSOURI,	) )	17-112241 17-112242
Respondent.	)

 

DECISION AND ORDER

 

HOLDING

 

The decisions of the St. Louis County Board of Equalization (BOE) with regard to these appeals are AFFIRMED.  Charles Karam (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessments by the BOE.

Complainant appeared by counsel Richard J. Magee.

Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Steve Robson.

Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).

ISSUE

Respondent and the BOE, respectively, set the true value in money (TVM) of the subject properties, as residential property, as of January 1, 2017, as follows:

Appeal No.	Parcel/Locator No.	Assessor’s value	BOE’s value
17-112235	20J121966	$57,300	$57,300
17-112236	20J140042	$60,900	$44,500
17-112237	20R340516	$133,400	$60,000
17-112239	24M210362	$31,800	$15,000
17-112240	22K431422	$35,600	$35,600
17-112241	25L530992	$144,800	$122,100
17-112242	28V630015	$49,300	$49,300

 

Complainant appealed to the State Tax Commission (STC) on the ground of overvaluation.  The STC takes these appeals to determine the TVM for the subject properties as of January 1, 2017, under the economic conditions as they existed on January 1, 2017.  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 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.
2. Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on August 8, 2018, at the St. Louis County Government Administration Building in Clayton, Missouri.
3. Identification of Subject Properties. The subject properties are identified as follows:

Appeal No.	Parcel/Locator No.	Address
17-112235	20J121966	7756 W. Bruno
17-112236	20J140042	7708 W. Ranken
17-112237	20R340516	14443 Bantry Lane #6
17-112239	24M210362	361 Attucks
17-112240	22K431422	205 Almentor
17-112241	25L530992	1032 Coffey Court
17-112242	28V630015	4390 Acacia Road

 

4. Description of Subject Properties. The subject properties are described as follows:

Appeal No.	Parcel/Locator No.	Description
17-112235	20J121966	Approximately 5,700 square-foot vacant lot with unclear title and partially in floodplain (Exhibit A; St. Louis County Real Estate Information database)
17-112236	20J140042	Approximately 6,750 square-foot vacant lot zoned single family situated near multi-family low income housing (Exhibit A; St. Louis County Real Estate Information database)
17-112237	20R340516	1,659 square-foot single-family unit; built in 1973; three bedrooms; two full bathrooms; partial basement; one fireplace; basement two-car garage; brick exterior; construction quality C-; condition/desireability/utility rating Average; building involved in major fire and uninhabitable until July 2016 (Exhibit H; St. Louis County Real Estate Information database)
17-112239	24M210362	Approximately 11,040 square-feet of vacant land (Exhibit H; St. Louis County Real Estate Information database)
17-112240	22K431422	Approximately 7,000 square-feet of vacant land (Exhibit H; St. Louis County Real Estate Information database)
17-112241	25L530992	.289 acres improved by a 1,139 square-foot, multi-level, single-family home built in 1953; four bedrooms; one full bathroom; one half bathroom; full basement; one fireplace; aluminum and vinyl exterior; construction quality C-; condition/desireability/utility rating Average (Exhibit A; Exhibit 2; St. Louis County Real Estate Information database)
17-112242	28V630015	Approximately 36,000 square feet of vacant land with roadway easement and unclear title (Exhibit H; St. Louis County Real Estate Information database)

 

5. Assessment of the Properties. Respondent and the BOE, respectively, set the true value in money (TVM) of the subject properties, as residential property, as of January 1, 2017, as follows:

Appeal No.	Parcel/Locator No.	Assessor’s value	BOE’s value
17-112235	20J121966	$57,300	$57,300
17-112236	20J140042	$60,900	$44,500
17-112237	20R340516	$133,400	$60,000
17-112239	24M210362	$31,800	$15,000
17-112240	22K431422	$35,600	$35,600
17-112241	25L530992	$144,800	$122,100
17-112242	28V630015	$49,300	$49,300

 

6. Evidentiary Objections. Immediately prior to the start of the Evidentiary Hearing, Respondent raised an objection to the admission of all of Complainant’s exhibits on the ground that Complainant had failed to comply with the Hearing Officer’s scheduling order requiring the formal exchange of exhibits by the deadline stated in the order.  The deadline was set for June 15, 2018.  Respondent argued that he did not receive Complainant’s evidence until late July 2018, about a week before the Evidentiary Hearing.  Respondent argued that Complainant’s evidence should be excluded as the late filing violated the Hearing Officer’s order and 12 CSR 30.060.  Complainant did not dispute that his evidence had been filed late but counter argued that the evidence should not be excluded because he had been out of the country around the time of the deadline, June 15, 2018.  The Hearing Officer noted the objection and took it under advisement for ruling with the Decision.

Respondent also requested that Complainant’s testimony at the Evidentiary Hearing should be limited to his prefiled written direct testimony (WDT), which request was granted.  Complainant stated that he had no objection to Respondent’s rebuttal evidence, which had not been prefiled.             

During the Evidentiary Hearing, when Complainant offered his exhibits for admission into the record, Respondent renewed the objection and asked for a continuing objection to the admission of Complainant’s exhibits.  The Hearing Officer issued an interlocutory ruling allowing the introduction and admission of Complainant’s WDT and exhibits subject to the continuing objection and notwithstanding any specific objections Respondent might make with regard to individual exhibits and given that Complainant’s live testimony would be limited to his WDT and subject to cross examination.  The Hearing Officer reserved a final ruling on Respondent’s continuing objection for the Decision and Order. 

In proceedings before the STC, the admission or exclusion of evidence is within the Hearing Officer’s discretion.  Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence apply.  Homa v. Carthage R-IX School District, 345 S.W.3d 266, 282 (Mo. App. S.D. 2011); see also Luscombe v. Missouri State Bd. of Nursing, 2013 WL 68899 (Mo. App. W.D. 2013) at *13.  When a proper objection is made and preserved, statements in violation of evidentiary rules do not qualify as competent and substantial evidence to support an agency’s decision.  Homa, 345 S.W.3d at 282, quoting Dorman v. State Bd. of Registration for Healing Arts, 62 S.W.3d 446, 454 (Mo. App. W.D. 2001).  However, Section 536.070(7) allows an administrative tribunal to receive proffered evidence into the record regardless of the merit of any evidentiary objections:

Evidence to which an objection is sustained shall, at the request of the party seeking to introduce the same, or at the instance of the agency, nevertheless be heard and preserved in the record, together with any cross-examination with respect thereto and any rebuttal thereof, unless it is wholly irrelevant, repetitious, privileged, or unduly long . . . .

 

“Reception of hearsay or other inadmissible evidence does not dictate a reversal unless there is not sufficient competent evidence to sustain the decision.”  Homa, 345 S.W.3d at 282 (quotation omitted).

In this case, Respondent’s continuing objection was grounded on a procedural error by Complainant that had allegedly prejudiced Respondent’s ability to adequately prepare his evidence.  However, Respondent acknowledged that he was in possession of Complainant’s evidence for one week and one day prior to the Evidentiary Hearing.  Respondent was, in fact, able to prepare and present rebuttal evidence and witnesses to oppose Complainant’s evidence, and Complainant expressly waived any objection to Respondent’s rebuttal evidence.  Respondent could have objected to Complainant’s failure to file his WDT and exhibits as soon as the deadline passed in June 2018 rather than waiting until immediately prior to trial.  Given that Complainant bears the burden of proof in appeals before the STC and reflecting upon the arguments of the parties and the circumstances of these particular appeals, the Hearing Officer, exercising discretion with regard to the admission of evidence, finds that Respondent was not prejudiced by Complainants’ technical non-compliance with the scheduling order.  Respondent’s continuing objection to the admission of Complainant’s WDT and exhibits is hereby overruled.

7. Complainant’s Evidence. Complainant opined that the TVM of the subject properties, as of January 1, 2017, was as follows:

Appeal No.	Parcel/Locator No.	Complainant’s opinion of TVM
17-112235	20J121966	$10,000
17-112236	20J140042	$15,000
17-112237	20R340516	$60,000
17-112239	24M210362	$3,000
17-112240	22K431422	$12,000
17-112241	25L530992	$75,000
17-112242	28V630015	$20,000

 

To support his opinions of value, Complainant offered the following exhibits:

Appeal No.	Exhibit	Description	Ruling
17-112235, 17-112236, 17-112237, 17-112239, 17-112240, 17-112241, 17-112242	WDT of Complainant	Written Direct Testimony of Complainant	Admitted
17-112235, 17-112236, 17-112241	Exhibit A	Lists of comparable sales	Admitted
17-112235	Exhibits B and C	Letter dated July 27, 2018, from Anthony J. Traxler, Assistant City Manager/Director of Public Works for City of Maplewood, stating subject property’s lot is not a “buildable lot” in the City of Maplewood, and residential zoning would not allow for development of lot	Admitted
17-112235	Exhibit D	Letter dated July 30, 2018, from Dana Lane of Title Experts, LLC, stating subject property is not insurable because no quiet title suit has been filed	Admitted
17-112236	Exhibit E	Letter dated July 30, 2018, from Dana Lane of Title Experts, LLC, stating subject property is insurable with condition that proof of satisfactory notice of right of redemption to all owners of record and all lien holders at the time of tax sale no less than 90 days before the end of the one-year redemption period	Admitted
17-112241	Exhibit F	Photographs of exterior and interior condition of subject property	Admitted
17-112235, 17-112236, 17-112237, 17-112239, 17-112240, 17-112241, 17-112242	Exhibit G	Property record cards for subject properties	Admitted
17-112237, 17-112239, 17-112240, 17-112242	Exhibit H	Lists of comparable sales identified by street address and noting sale prices	Admitted

 

In his WDT, Complainant testified that his exhibts explained the reasons that the BOE decisions in each appeal were wrong.  (WDT of Karam)  Respondent did not cross examine Complainant.

7. Respondent’s Evidence.  Respondent opined that the BOE’s determinations of the TVM of the subject properties, as of January 1, 2017, should be upheld as follows:

Appeal No.	Parcel/Locator No.	Respondent’s opinion of TVM
17-112235	20J121966	$57,300
17-112236	20J140042	$44,500
17-112237	20R340516	$133,400
17-112239	24M210362	$15,000
17-112240	22K431422	$35,600
17-112241	25L530992	$122,100
17-112242	28V630015	$49,300

 

To support the BOE’s determinations of value, Respondent offered the following exhibits:

Appeal No.	Exhibit	Description	Ruling
17-112235	Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017	Admitted
17-112235	Exhibit 2	Email correspondence between Debbie Freukes and Anthony J. Traxler in which Traxler confirmed subject property not a buildable lot without variances	Admitted
17-112235	Exhibit 3	Satellite photograph of subject property with lot boundaries and neighboring properties with lots similar in size to subject property and homes on the neighboring properties	Admitted
17-112235	Exhibit 4	Property record card for neighboring property, 7758 W. Bruno Ave. with lot nearly same square footage as subject property and land value of $57,400	Admitted
17-112236	Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017	Admitted
17-112236	Exhibit 2	Comparative Market Analysis (CMA) of similar properties with sale prices ranging from $11,500 to $70,000 and sales dates ranging from 05/15/15 to 10/30/17	Admitted
17-112237	Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017	Admitted
17-112237	Exhibit 2	Multi-Listing Service (MLS) for subject property as a rental stating occupancy available 10/01/16	Admitted
17-112237	Exhibit 3	CMA of similar properties with sale prices ranging from $70,000 to $154,000 and sales dates ranging from 03/24/16 to 06/22/17	Admitted
17-112239	Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017	Admitted
17-112239	Exhibit 2	Comparable properties with sale prices ranging from $5,500 to $10,000 and sales dates ranging from 06/18/14 to 12/03/15	Admitted
17-112239	Exhibit 3	MLS listings of two comparable properties with sale prices of $7,500 (sale date 07/12/17) and $10,000 (sale date 06/13/14)	Admitted
17-112240	Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017	Admitted
17-112240	Exhibit 2	Comparable properties with sale prices ranging from $2,500 to $56,000 and sales dates ranging from 09/29/14 to 02/09/15	Admitted
17-112241	Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017	Admitted
17-112241	Exhibit 2	MLS for subject property expired lease listing with photos showing average condition and rent price of $1,225/annually as of 09/29/16	Admitted
17-112241	Exhibit 3	Comparable properties with sale prices ranging from $110,000 to $185,000 and sales dates ranging from 05/21/15 to 06/07/16	Admitted
17-112242	Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017	Admitted
17-112242	Exhibit 2	Satellite photograph of subject property with lot boundaries and neighboring properties	Admitted
17-112242	Exhibit 3	MARIS Matrix listing of three comparable properties with sale prices ranging from $56,000 to $100,000 and sales dates ranging from 07/27/15 to 08/10/16	Admitted

 

Respondent also presented the testimony of four witnesses:  Debbie Fruekes (Fruekes), Barry Hough (Hough), Nancy McGrath (McGrath), and Sharon Kuelker (Kuelker), all of whom are Missouri certified real estate appraisers.  Each of Respondent’s witnesses testified that he or she had investigated specific subject properties and had found that the BOE’s determinations of value were correct.  Each of the witnesses identified and described Respondent’s exhibits applicable to the subject properties he or she had investigated.

Fruekes’ Testimony

Fruekes testified regarding Appeal Nos. 17-112235, 17-112236, and 17-112241.  Fruekes has been an appraiser employed by Respondent for three years.

Fruekes testified that the subject property in Appeal No. 17-112235 could not be built upon without approval for a variance from the municipal board of adjustment, which was consistent with Complainant’s evidence.  Fruekes testified that Respondent had applied an adjustment to the value of the subject property in Appeal No. 17-112235 for existence of floodplain on the back of the lot near the property line.

Fruekes testified that, with regard to the subject property in Appeal No. 17-112236, Complainant’s comparables were located more than one mile from the subject property.  Fruekes testified that the subject property had been purchased through a tax sale, which was not an open market sale.

Fruekes testified that the photos in the expired lease listing for the subject property in Appeal No. 17-112241 showed the interior to be in average condition.  Fruekes testified that Complainant’s comparable properties did not have basements but the subject property had a basement and was similar to the comparable properties shown in Exhibit 3.

Hough’s Testimony

Hough testified regarding Appeal No. 17-112242.  Hough has been an appraiser employed by Respondent for two-and-a-half years.

Hough testified that Respondent’s comparable properties were more similar in size to the subject property than Complainant’s comparables.  Hough testified that he had personally viewed the subject property and the aerial photo in Exhibit 2, which showed a well-kept paved road on the edge of the subject property.  Hough testified that the road enhanced the subject property, provided ingress and egress, and was used by neighboring properties.  Hough testified that he did not know whether the road was privately or publicly maintained, which a potential buyer would take into consideration like any other characteristic of the property.

McGrath’s Testimony

McGrath testified regarding Appeal Nos. 17-112239 and 17-112240.  McGrath has been an appraiser employed by Respondent for 18 years.

McGrath testified that, with regard to Appeal No. 17-112239, Exhibits 2 and 3 showed five comparable properties in the subject property’s neighborhood, all of which were less than half of the size of the subject property.  McGrath testified that Exhibits 2 and 3 showed that the comparables were priced at $1.10 per square foot to $2.08 per square foot while the subject property had been valued by the BOE at $1.36 per square foot.  McGrath testified that this method of calculating the value of the comparables was acceptable and could indicate a range of value.

McGrath testified that, with regard to Appeal No. 17-112240, Exhibit 2 established that two comparable properties on the same street as the subject property had been sold for $2,500 each.  The sales were unverified.  Two other comparable properties on streets different from the subject property were sold for $28,000 and $56,000, respectively.  The sales were verified as valid.

Keulker’s Testimony

Keulker testified regarding Appeal No. 17-112237.  Keulker has been an appraiser employed by Respondent for 16 years.

Keulker testified that the fire damage to the subject property had been repaired and available for occupancy as of October 1, 2016.  Keulker testified that the entire building in which the subject property was located had been completely renovated.  Keulker testified that Exhibit 3 showed two “compelling” comparables for establishing the TVM of the subject property as of January 1, 2017.  The comparables sold in May 2016 for $136,000 and in January 2017 for $136,000, both of which were units in the same condominium complex as the subject property and had the same square footage as the subject property.

6. Presumption of Correct Assessment Not Rebutted. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment of the subject properties by the BOE.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The STC 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 BOE, and correcting any assessment that 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.

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.

“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.”  Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993).  “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.”  Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).

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, the 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; Daly, 77 S.W.3d 645; Reeves, 115 S.W.3d 375; Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).

Complainant advocated the reduction of the BOE’s valuations of the subject properties.  Therefore, Complainant bore the burden of rebutting the presumption that those valuations were correct and of establishing that his opinions of TVM were correct.

Respondent’s Burden of Proof

Respondent, when advocating a value different from that determined by the BOE, 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.  Hermel, Inc., 564 S.W.2d at 895; Cupples-Hesse, 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.

Respondent specifically advocated that the BOE’s valuations of the subject properties should be affirmed.  Accordingly, Respondent did not have the burden of proof in these appeals.

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).

Respondent presented the testimony of four appraisers as experts in the field of real property valuation.

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.

Comparable Sale Approach

“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:

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.

 

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

            In this case, Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.  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. 

            First, although Complainant presented Exhibits A through H, some of which contained information on properties Complainant compared to the subject properties, Complainant’s evidence does not reasonably support the conclusion that the BOE’s determinations of TVM were incorrect. As owner of the subject properties, Complainant was entitled to provide his opinions as to the TVM of the properties.  However, Complainant had the burden of proving the vital elements of the case, i.e., the assessment was unlawful, unfair, improper, arbitrary or capricious, to rebut the presumption of correctness.  None of the exhibits analyzed the comparable properties using one or more of the three court-approved approaches to valuing real property.  Complainant’s evidence resembled the sales comparison approach but failed to apply market-based dollar adjustments to account for the similarities and differences between the comparable properties and the subject properties.

Second, Complainant’s evidence was not persuasive of Complainant’s opinions of value.    The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.  Respondent did not have the burden of proof in these appeals; however, Respondent’s evidence, weighed against Complainant’s evidence, rebutted Complainant’s opinions of value.  Specifically, Respondent’s evidence established that some of the subject properties had not been open market sales (some were purchased at tax sales and had clouded titles) and established that some of Complainant’s comparables were unverified sales.

ORDER

The assessed values for the subject properties for tax years 2017 and 2018  as determined by the BOE are AFFIRMED as follows:

Appeal No.	Parcel/Locator No.	2017-2018 TVM	2017-2018 Assessed value
17-112235	20J121966	$57,300	$10,887
17-112236	20J140042	$44,500	$8,455
17-112237	20R340516	$60,000	$11,400
17-112239	24M210362	$15,000	$2,850
17-112240	22K431422	$35,600	$6,764
17-112241	25L530992	$122,100	$23,199
17-112242	28V630015	$49,300	$9,367

 

Application for Review

A party may file with the STC 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 October 23 , 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 23rd day of October, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

Jacklyn Wood

Legal Coordinator