STATE TAX COMMISSION OF MISSOURI
|CHEZ PAREE PARTNERS LP,||)||Appeal No.||15-13764, 15-13765,|
|LYNNTOWN APARTMENTS,||)||15-13862, 15-13863|
|C&E INVESTMENT PROPERTIES, INC||)||15-14198, 15-14199|
|QUICK, JOHN PAUL AND NANCY,||)||15-14542|
|NORTH RIVER LLC,||)|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
ORDER NUNC PRO TUNC
The hearing in the appeals was held on September 27, 2017. Appeal 15-14542 was dismissed by the State Tax Commission on October 10, 2017 prior to the issuance of the Hearing Officer’s Order. The Decision and Order is amended to reflect the dismissal. Any reference to Appeal 14-14542 should be stricken.
SO ORDERED October 18, 2017.
STATE TAX COMMISSION OF MISSOURI
DECISION AND ORDER
The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED. Chez Paree Partners LP, Lynntown Apartment, C&E Investment Properties, Inc., John Paul and Nancy Quick, and North River, LLC. (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainants appeared by Jason Turk.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Edward Corrigan and Jeremy Shook.
Appeals heard by Senior Hearing Officer John Treu and Chief Counsel Maureen Monaghan. Appeals decided by Chief Counsel Monaghan. (Hearing Officer).
Complainants appealed on the grounds of overvaluation, discrimination and Sunshine Law violations. 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
- Jurisdiction. Jurisdiction over this appeal as to overvaluation and discrimination is proper. Complainant timely appealed to the STC. The STC does not have jurisdiction over any matters regarding Sunshine Law violations.
- Evidentiary Hearing. The parties submitted exhibits as to valuation. No exhibits were submitted as to discrimination.
- Identification of Subject Property.
|15-14542||Quick, John Paul & Nancy||29V510370|
|15-14728||North River, LLC||11E321003|
- Board of Equalization. The BOE classified the properties as residential and set the following true value in money (TVM):
|15-14542||Quick, John Paul & Nancy||29V510370||$2,864,900|
|15-14728||North River, LLC||11E321003||$575,400|
- Complainant’s Evidence. Complainant submitted the BOE’s decisions which established the TVM of the subject properties. No evidence was submitted on the issue of discrimination. Complainant conceded that the STC had no authority as to violations of the Sunshine Law.
- Presumption of Correct Assessment Not Rebutted. Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE. CONCLUSIONS OF LAW AND DECISION
The STC has jurisdiction to hear this appeal and to correct any assessment that 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 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.
The STC does not have jurisdiction to hear appeals as to issues of violation of the Sunshine Law. Section 610.027.1 states that “[s]uits to enforce sections 610.010 to 610.026 shall be brought in the circuit court for the county in which the public governmental body has its principal place of business.” “These provisions are clear that jurisdiction to hear Sunshine Law disputes lies with the circuit courts rather than other administrative bodies.” (Complainants’ Response to the Motion to Dismiss p.2)
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.
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 BOE, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2). Complainants agreed to submit these appeals upon the record. The filing of exhibits 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 Hearing Officer considered all the exhibits and then proceeded to ascertain if said exhibits met the standard of substantial and persuasive evidence to establish TVM or discrimination for the subject properties.
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).
In order to prevail, Complainant 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, 2016. Hermel, supra. There is no presumption that Complainant’s opinion is correct. The taxpayer in an STC appeal still bears the burden of proof because 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 true market value of the property under appeal is an unlawful, unfair and improper assessment.
Presumption in Appeal
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 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.” 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).
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).
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the STC. 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.
In addition to disputing the valuation of their property, Complainants alleged discrimination. The issue is whether the assessment is in violation of the Fourteenth Amendment of the Constitution of the United States, as it attempts to deprive and deny the Complainant the equal protection of the laws. “The purpose of the equal protection clause of the Fourteenth Amendment is to secure every person within the state’s jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents.” Sunday Lake Iron Co v Wakefield Tp, 247 U.S. 350, 38 S. Ct 495, 62 L.Ed 1154 (1918)
The STC is required to correct any assessment or valuation that is arbitrary, capricious, improper, or unfair. Section 138.430 RSMo. To prevail on a claim of discrimination in assessment, the Complainant must (1) prove the true value in money of their property on January 1, 2015; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction or show that the level of an assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment. Savage v. State Tax Commission, 722 S.W.2d 72 (Mo. banc 1986); Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003.)
When an assessor estimates TVM lower than the actual market value for a significant number of properties of the same sub-classification within the jurisdiction, the consequence is that the taxpayers whose properties were undervalued pay less than their fair share of taxes, while the taxpayers whose properties where either accurately valued or overvalued pay more than their fair share of taxes. When such disparity is so grossly excessive as to be entirely inconsistent with an honest exercise of judgment, it has the effect of intentional discrimination.
There was no evidence submitted to establish an intentional plan of discrimination by the assessing officials or that the level of their assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment.
The Sunshine Law is found in Chapter 610 RSMo. The statutes set forth a policy for “meetings, records, votes, actions, and deliberations of public governmental bodies be open to the public unless otherwise provided by law.” Jurisdiction in the enforcement of the law is with the Missouri Courts.
Complainants’ evidence supports the determination of valuation and assessment by the BOE. Complainants failed to submit evidence as to discrimination. Complainants categorized any further grounds of appeal as Sunshine Law violations which the STC has no jurisdiction.
The TVM for the subject properties as determined by the BOE is AFFIRMED.
Application for Review
A party may file with the STC an application for review of this decision within 30 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 October 17, 2017.
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 this 17th day of October, 2017, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
 The hearing took place on September 27, 2017 and the appeal was dismissed upon Motion of the Complainant and Order of the STC on October 10, 2017.
 On September 27, 2017, the STC convened to determine any remaining grounds, other than valuation and discrimination, in the appeals. Counsel for Complainants stated that their only remaining issue was Sunshine Law violations. Counsel for Complainant conceded that the STC had no jurisdiction over Sunshine Law violations.