State Tax Commission of Missouri
|CHESTERFIELD WG 2005 LLC||)|
|v.||)||Appeal Number 09-13192|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
ORDER AFFIRMING HEARING OFFICER DECISION
On July 14, 2015, Hearing Officer Maureen Monaghan issued her order setting aside the value placed upon the subject property by the St. Louis County Board of Equalization. Respondent timely filed an Application for Review and the parties have fully briefed the issue. The issue is ripe for Decision.
Standard Upon Review
A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission. The Commission may then summarily allow or deny their request. The Commission may affirm, modify, reverse or set aside the decision. The Commission may take any additional evidence and conduct further hearings.
Respondent puts forth the following alleged errors in the Decision.
- The Decision of the Hearing Officer is erroneous, arbitrary, capricious, unreasonable, constitutes an abuse of discretion, is contrary to the evidence in the record, and is contrary to Missouri law in ruling by implication that parts or all of Respondent’s Appraisal Review Report were inadmissible as invading the province of the trier of fact.
- The Decision of the Hearing Officer is erroneous, arbitrary, capricious, unreasonable, constitutes an abuse of discretion is contrary to the evidence in the record, and is contrary to Missouri law in holding that Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
DISCUSSION AND RULING
Contentions of Respondent’s Counsel
In both of Respondent’s points of error, Respondent’s counsel states that the Decision was: 1) erroneous 2) arbitrary 3) capricious 4) unreasonable 5) constitutes an abuse of discretion 6) is contrary to the evidence in the record and 7) is contrary to Missouri law. See Respondent’s Application for Review. In Respondent’s first point of error Respondent’s counsel states that the Decision of the Hearing Officer ruled “by implication” that certain parts or all of an Appraisal Review Report was excluded. Id. The Commission respectfully disagrees with Respondent’s arguments.
Regarding the ruling “by implication” that certain parts of the Appraisal Review Report was excluded, no ruling as to admissibility was made. The Hearing Officer simply determined such Respondent’s evidence not compelling. All evidence was given such weight, consideration, credibility, belief and thought as the Hearing Officer and trier of fact, deemed appropriate, reasonable and due.
Weight to be Given Evidence
Neither the Hearing Officer nor the Commission is bound by any single formula, rule or method in determining true value in money, but 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 and the Commission 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). In the present appeal, the Hearing Officer simply felt that the evidence presented by Complainant, considered in light of all the evidence, was substantial and persuasive and that Complainant met its burden of proof. Respondent is not entitled to expect that the evidence submitted on his behalf will be believed above all other evidence by the trier of fact, whether such be a jury or, as in this case, the Hearing Officer.
Opinion Testimony by Experts
The testimony of an expert is to be considered like any other testimony, is to be tried by the same test, and receives just so much weight and credit as the trier of fact may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer and Commission, as the trier of fact, has the authority to weigh the evidence and is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and may accept it in part or reject it in part. Beardsley v. Beardsley, 819 S.W. 2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W. 2d 605, 607 (Mo. 1981); Scanlon v. Kansas City, 28 S.W. 2d 84, 95 (Mo. 1930).
In addition to the obligation of the Hearing Officer to conduct the evidentiary hearing, the Hearing Officer also acts as the trier of fact. Due to such dual role, the Hearing Officer must review all the evidence, make credibility determinations and consider what is and is not persuasive. The Commission finds no error in the Hearing Officer’s Decision.
Complainant chose to submit an appraisal, Respondent, which is his right, chose not to submit an appraisal. Evidentiary Hearing strategy is left to the sound discretion of the respective parties counsel. However, such strategy is at the parties own peril. Substantial and persuasive evidence was submitted by Complainant, via an Appraisal and Written Direct Testimony. Respondent chose not to submit an appraisal, instead opting to have a desk review report done. The contentions within such were and are not deemed to be persuasive.
The Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, is AFFIRMED. True value in money is determined to be $1,735,000, commercial assessed value of $555,200.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.
If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.
If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.
SO ORDERED this 2nd day of February, 2016
STATE TAX COMMISSION
Bruce E. Davis, Chairman
Randy Holman, Commissioner
Victor Callahan, Commissioner
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2nd day of February, 2016, to:
James Gamble, Attorney for Complainant; firstname.lastname@example.org
Edward Corrigan, Attorney for Respondent; email@example.com
Jake Zimmerman, Assessor, firstname.lastname@example.org
Mark Devore, Collector, email@example.com
State Tax Commission of Missouri
|CHESTERFIELD WG 2005, LLC||)|
|v.||)||Appeal Number 09-13192|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
Decision of the County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2009 and 2010 is set at $1,735,000, commercial assessed value of $555,200.
Complainant appeared by Counsel Thomas Caradonna
Respondent appeared by Associate County Counselor Ed Corrigan
Case heard and decided by Hearing Officer Maureen Monaghan.
Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property. The ground of discrimination has been abandoned. Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009. 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
- 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.
- Evidentiary Hearing. Exchange and Hearing order was issued by the State Tax Commission. Parties were ordered to file their exhibits by April 2, 2015, Objections by May 4, 2015, Responses and Surrebuttal by June 2, 2015 (extended by Order to June 24, 2015) and the parties were to request a hearing by June 15, 2015 or the appeal would be submitted upon the exhibits received. No party requested a hearing on this appeal and therefore the appeal was submitted on exhibits.
- Identification of Subject Property. The subject property is identified by map parcel number 17U130743. It is further identified as 97 Long Rd, Chesterfield, Missouri.
- Description of Subject Property. The subject property consists of a 1.87 acre tract of land. In 2005, a single tenant retail space used as a Walgreen’s was constructed. It is 14,722 square foot building.
- Assessment. The Assessor appraised the property at $1,864,100, an assessed commercial value of $596,510. The Board of Equalization sustained the assessment.
- Complainant’s Evidence. Complainant submitted Exhibit A and B. Exhibit A is an appraisal report by Certified General Appraiser Steven Teague. Exhibit B is Mr. Teague’s written direct testimony. The exhibits were received into evidence without objection.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010. Section 137.115.1, RSMo.
- Respondent’s Evidence. The Respondent submitted Exhibit 1 – the Board of Equalization decision. The Exhibit was received into evidence without objection. The Respondent submitted Exhibits for Rebuttal. The Exhibits include an Appraisal Review Report, the written direct testimony of John Gillick, and the CV of John Gillick. The Complainant objected to the rebuttal exhibits on the grounds of invading the province of the finder of fact. Mr. Gillick conducted a review appraisal. There are several types of review appraisal reports. One type is a desk review, which was submitted in this appeal, wherein the review appraiser reviews the contents of the appraisals to determine if an appraiser’s reasons and processes are facially valid. The reviewer may or may not validate data in the report she is reviewing.
Objections by counsel for Complainant go to the weight as well as the admissibility of the testimony. Witness Gillick’s testimony could only have been submitted to impeach Witness Teague as to proper appraisal methodology and practice. A rebuttal witness will not be permitted to testify to their opinion of the credibility of the other witness or the credibility of the work – it is the trier of facts province to determine credibility. Mr. Gillick would be able to testify as to specific facts to discredit the testimony, but not offer opinions as to the credibility of Mr. Teague’s testimony. For example, Mr. Gillick could testify that a sale which occurred on a date certain involved the sale of land and establish the basis of that knowledge. Mr. Gillick is not permitted to testify that he does not agree or that the report is not “credible”. Therefore the hearing officer has made the following rulings page by page of Rebuttal Exhibit 1:
Page 1 – Admitted
Page 2 – It is unknown how the review appraiser, conducting a desk review, is familiar with the subject and comparables. The review appraiser critiques the lease comparables and the comparables used to develop a capitalization rate. Complainant’s appraiser reviewed sales and used authoritative sources to develop a capitalization rate. Further, the lease comparables, without adjustments, support the Complainant’s appraiser’s rental rate.
Page 3 – It is unknown how the review appraiser is familiar with the subject and comparables. Hearing Officer may review the comparable properties and the information presented by the Complainant’s appraiser. The comparable properties support the Complainant’s appraiser’s finding of value using the sales comparison approach. The Conclusions invade the province of the trier of fact.
- Presumption of Correct Assessment Rebutted – Value Established. The evidence presented by Complainant was substantial and persuasive to both rebut the presumption of correct assessment by the Board and to establish the fair market value of the subject property to be $1,735,000, commercial assessed value of $555,200.
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. 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, 2009. 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.
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:
- 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.
set percentages of true value in money. Section 137.115.5, RSMo
Issuance of Decision Absent Evidentiary Hearing
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2). The filing of exhibits and written direct testimony establishes the basis upon which opportunity for an evidentiary hearing can be held. The Complainant has the burden to present substantial and persuasive evidence. The Respondent did not file any objections or rebuttal exhibits. Therefore, the Hearing Officer simply considered the exhibits filed and then proceeded to ascertain if said exhibist met the standard of substantial and persuasive evidence to establish the market value of the property.
Complainant Proves Value
Complainant presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $1,735,000. Complainant’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison and the income approach. The appraiser reviewed five sales that occurred from December 2006 to October 2009. The properties were similar to the subject. The appraiser also reviewed leases of properties to establish market net operating income and reviewed authoritative sources and sales to develop an appropriate capitalization rate. The adjustments made by the appraiser were consistent with generally accepted guidelines for the appraisal of property of the subject’s type. The appraiser concluded on a value of $1,734,000 using the income capitalization approach and $1,737,000 using the sales comparison approach. The appraiser found the sales comparison approach less reliable.
The assessed valuation for the subject property as determined by the Assessor and sustained 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 $555,200.
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
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 this 14th day of July, 2015.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid on this 14th day of July 2015, to: the county Assessor, county Collector and the following:
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