Christopher & Sarah Slusser v. Jake Zimmerman, Assessor St. Louis County

STATE TAX COMMISSION OF MISSOURI

 

CHRISTOPHER AND SARAH SLUSSER,	)
	)
Complainants,	)
	)
v.	)	Appeal No. 17-10066
	) )
JAKE ZIMMERMAN,  ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	) )
Respondent.	)

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

HOLDING

On June 14, 2018, Senior Hearing Officer Amy Westermann (Hearing Officer) entered her Decision and Order (Decision) setting aside the decision of the Board of Equalization of St. Louis County (BOE).  Jake Zimmerman, Assessor of St. Louis County, (Respondent) subsequently filed his Application for Review of Hearing Officer’s Decision and Order.  Christopher and Sarah Slusser (Complainants) filed no Response to Respondent’s Application for Review.

We AFFIRM the Decision and Order of the Hearing Officer.  Segments of the Hearing Officer’s Decision may have been incorporated into our Decision without further reference.

FACTS AND PROCEDURAL HISTORY

            The subject property is identified by parcel/locator number 18R210131.  It is further identified as 15274 Springrun Drive, Chesterfield, St. Louis County, Missouri.  The subject property consists of a .23 acre residential lot improved by a 2,056 square foot, two story, single family home built in 1973.  The home includes four bedrooms; two full bathrooms; one half bathroom; a full basement with 487 square feet of finished area; one fireplace; a two-car attached garage; a porch; and an in-ground pool.  The exterior finish consists of aluminum and vinyl construction.  Respondent’s property record card for the subject property indicated that the subject property also includes a 189-square foot wood deck attached to the rear elevation of the subject property.   Complainants testified and presented photographic evidence that the deck had been removed.  The evidence was unclear as to whether the deck had been removed prior to January 1, 2017.

Respondent valued the subject property at $215,300, as of January 1, 2015.  Complainants purchased the property in September 2015 for $273,500.  The property was appraised for the purpose of Complainants obtaining a mortgage to purchase it.  The appraisal for the sale found a value of $275,000.  Respondent valued the subject property at $272,900, as residential, as of January 1, 2017.  Complainants subsequently received a Change of Assessment Notice from Respondent, dated May 8, 2017, informing them of the 2017 assessed value of the property versus the 2015 assessed value and providing five[1] comparable sale properties.

Complainants appealed on the grounds of overvaluation and discrimination.  An evidentiary hearing was conducted on January 24, 2018, at the St. Louis County Government Building, 41 South Central Avenue, Clayton, Missouri.   During the hearing, Complainants introduced evidence establishing that the assessed value of the subject property had increased by more than 15% and specifically raised the issue of whether Respondent had met the requirements of Sections 137.115.10 through 137.115.12.[2]  Respondent did not object to Complainants’ evidence or to Complainants raising the issue of Respondent’s compliance with Sections 137.115.10 through 137.115.12 for the first time during the Evidentiary Hearing.  Respondent did not cross examine Complainants about their allegations.  Respondent did not present any evidence to refute Complainants allegations.

            Exhibits

At the Evidentiary Hearing, Complainants offered the following exhibits:

Exhibit A	Neighboring property at 15276 Springrun Drive.  Notice of Increase Assessment from $229,300 to $245,400.  Same comparable sales as subject.
Exhibit B	Neighboring property at 15278 Springrun Drive.  Notice of Increase Assessment from $231,500 to $250,700.  Same comparable sales as subject.
Exhibit C	Neighboring property at 1301 Still House Creek Road.   Notice of Increase Assessment from $221,900 to $234,200.  Same comparable sales as subject.
Exhibits D through W	St. Louis County Real Estate Information database records:  ownership and legal information for properties near subject property and located on Signal Knob Court, Springrun Drive, and Still House Creek Road and 2017 appraised values of those properties for tax assessment purposes
Exhibit X	Color photographs of rear exterior of subject property showing that the wood deck had been removed
Exhibit Y	Change of Assessment Notice dated May 8, 2017, for the subject property showing a change in appraised value from $215,300 as of 1/1/2015 to $272,900 as of 1/1/2017, an increase of 26.8%
Exhibit Z	Appraisal report of subject property dated August 24, 2015, valuing property at $275,000 prepared by Pascale Ledbetter for purpose of Complainants obtaining mortgage
Exhibit AA	Copy of Assessor’s Comparable Sales for subject property from St. Louis County Real Estate database and copy of directions and overview maps to three comparables with handwritten corrections of distance of comparable sales from subject property
Exhibit BB	Letter dated September 26, 2017, from Complainants explaining basis of appeal and identifying comparables within .25 miles of the subject property
Exhibit CC	Copy of STC Property Reassessment and Taxation booklet, Revised January 2017, highlighting two passages regarding fairness in taxation and treating all taxpayers fairly
Exhibit DD	Gallagher, Jim: “Mass Assessment Cut in St. Louis County Raises Question,” St. Louis Post-Dispatch August 30, 2015 (retrieved from http://www.stltoday.com/business/local/mass-assessment-cut-in-st-louis-raises-question/article_240871be-5a28-5bda-8171-88de265776eb.html)

 

Complainants’ exhibits were received into the record without objection.

Complainants offered evidence that the assessed value of the subject property was $215,300, as of January 1, 2015.  Complainants offered evidence that the assessed value of the subject property was $272,900 as of January 1, 2017, an increase of 26.8%. from the previous tax cycle.  Complainants testified that the property record card showed the presence of a deck on the property but that the deck had been removed.  Complainants argued that if an employee of Respondent’s office had actually inspected the property as statutorily required the deck would not have been shown on the property record card.

Respondent advocated that the BOE’s determination of TVM of the subject property was correct and should be affirmed.  To support his position, Respondent offered as evidence the following exhibits:

Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017
Exhibit 2	MARIS Matrix/MLS data sheet for the subject property showing an original listing price of $280,000, a revised listing price of $275,000, and a sold price of $273,500
Exhibit 3	Certificate of Value for the subject property dated September 11, 2015, showing a total purchase price of $273,500

 

Complainants objected to Exhibits 2 and 3.  Complainants argued that they had overpaid for the subject property because they had been pressured to purchase the property due to selling their previous residences and their desire to obtain a residence quickly for their children.  They argued that the property next door to the subject property had been for sale at the same time as the subject property but sold for only $245,000 because the buyer had time to negotiate the purchase price.  Complainants’ objection was overruled and the exhibits were admitted.

On June 14, 2018, the Hearing Officer issued her Decision setting aside the valuation of $272,900, holding that (1) Complainants specifically raised the issue of whether Respondent satisfied the requirements of Sections 137.115.10 through 137.115.12, thereby shifting the burden of proof to Respondent to establish, by substantial and persuasive evidence, that the statutory requirements were met; (2) Respondent did not present substantial and persuasive evidence that the statutory requirements were met; and (3) the increase in the assessed value of the subject property as of January 1, 2017, must be limited to 15% more than the assessed value from previous tax cycle, resulting in a valuation of $247,600.

Respondent timely filed his Application for Review.  Respondent attached to his Application for Review the Decision of the Hearing Officer four additional exhibits that he did not offer at the evidentiary hearing:

Application for Review Exhibit 1	Decision and Order
Application for Review Exhibit 2	Letter to Complainants from Respondent dated March 6, 2017
Application for Review Exhibit 3	Postcard that allows the Complainants to affirm an exterior inspection or deny an exterior inspection.
Application for Review Exhibit 4	Letter from the STC to Respondent dated July 10, 2007
Application for Review Exhibit 5	Letter from the STC to BOE dated July 10, 2007

 

Exhibit 2 of the Application for Review is a letter from Respondent to Complainants that states (1) the value may have increased by more than 15%; (2) Respondent is required to inspect your property; (3) an appraiser from Respondent’s office performed a physical, on-site exterior inspection of the property; and (4) Complainants may request a more complete exterior and/or interior inspection.  The letter also states that Complainants need to make the request for inspection within 30 days.

Exhibit 3 consists of a postcard designated as a “Property Access Authorization Form” from Respondent to Complainants.  Exhibit 3 gave Complainant the option of  checking either a yes or no box allowing Respondent to enter upon the property for physical inspection of the entire exterior of the structures on the subject property. 

Exhibits 4 and 5 consist of letters from the STC to a non-party to the case, Mr. Gamble, and to the BOE explaining that Section 137.115 requires Respondent to submit evidence of inspection and notification to the property owner of their rights.  The letters inform the BOE that, if Respondent fails to meet his burden, the property owner shall prevail.

The STC thereafter issued its Order allowing the Application for Review and granting Complainants time to file a response.  Complainants did not file a response.

CONCLUSIONS OF LAW

Respondent’s Point on Review

            In his sole point on review, Respondent claims that the Hearing Officer erred by limiting the increase in the assessed value of the subject property for tax year 2017 to an increase of 15% from the 2015 tax cycle.  Respondent argues that the Hearing Officer acted arbitrarily basing her Decision on the failure to conduct a physical inspection as called for in Sections 137.115.10-137.115.12.  Respondent further argues that “the issue was not specifically raised. Complainants did not make any citations to statutes and did not ask that the appeal be decided on this issue.”

STC’s Ruling

For the reasons that follow, the STC finds Respondent’s arguments to be unpersuasive.  The ruling is limited to Respondent’s sole point of error raised that the Hearing Officer acted arbitrarily basing her Decision on allegations that Respondent failed to comply with Section 137.115.10 to .12 RSMo.  The STC, having thoroughly reviewed the whole record and having considered the Hearing Officer’s Decision, the Application for Review of Respondent, and Respondent’s exhibits attached to the Application for Review, affirms the Hearing Officer’s decision.

Standard of Review

A party subject to a Decision and Order of a Hearing Officer of the STC may file an application requesting the case be reviewed by the STC.  Section 138.432[3].  The STC may then summarily allow or deny the request.  Section 138.432.  The STC may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the STC.  Section 138.432.    

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).   This presumption is a rebuttable rather than a conclusive presumption.

Complainant’s Burden of Proof

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).  Such must be proved by substantial and persuasive evidence.  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).

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).

Increase in the Assessed Valuation in Excess of 15%

            Section 137.115.10 requires an assessor to conduct a physical inspection of a residential property if the increase in the assessed valuation is more than 15% since the last assessment.  A physical inspection is defined as “an on-site personal observation and review of all exterior portions of the land and any buildings or improvements to which the inspector has or may reasonably and lawfully gain external access, and shall include an observation and review of the interior of any buildings or improvements on the property upon timely request of the owner . . . .”  Section 137.115.10.

Section 137.115.11 requires, in those instances where a physical inspection is required under Section 137.115.10, the assessor to (1) notify the property owner in writing of the fact of the physical inspection being required; and (2) provide the owner with clear written notice of the owner’s rights relating to the physical inspection.  The owner’s rights include requesting an interior inspection to be performed and having no less than thirty days to notify the assessor of a request for an interior physical inspection.

Respondent has the burden to provide sufficient evidence to establish that the physical inspection was performed in accordance with section 137.115; if he does not, the property owner shall prevail on the appeal as a matter of law.  Section 138.060.1.

Discussion

Respondent’s point on review alleges error on the ground that the Hearing Officer acted “arbitrarily” basing her decision on allegations Respondent failed to comply with Section 137.115 and “Complainants’ cursory discussion of Respondent’s failure to note that a back yard deck was removed.”   The Decision of the Hearing Officer was based upon the evidence in the record before the Hearing Officer and the mandate of Section 138.060.1, which states that the property owner shall prevail on the appeal as a matter of law in the event the assessor fails to provide sufficient evidence to establish that the physical inspection was performed in accordance with Section 137.115.

The parties can use Section 137.115 as either a sword or a shield.  When a taxpayer claims that Respondent did not comply with the statute and Respondent fails to provide evidence of compliance with the statute, the taxpayer prevails as a matter of law.  Section 138.060.1.  When a taxpayer makes the claim but Respondent provides evidence of compliance with the statute, Respondent is absolved of the claim.  Id.  When a taxpayer injects the issue that Respondent did not comply with Section 137.115.10 and Respondent (1) fails to object to the taxpayer’s raising of the issue until after the Hearing Officer issues the decision; (2) fails to discredit or refute the taxpayer’s claim through cross examination or rebuttal evidence; and (3) fails to file a post-hearing motion with the Hearing Officer requesting the re-opening of the record for the receipt of additional evidence, Respondent cannot later complain that the decision of the Hearing Officer based upon the record and evidence was “arbitrary.”

At the Evidentiary Hearing, Complainants presented Exhibit Y showing a greater than 15% increase in the assessment of the subject property between 2015 and 2017.  Exhibit Y stated that the notice of increase in assessment met the requirements of Section 137.355, which requires notification of the increase in value, and that the increase may impact Complainants’ property tax obligation.  Exhibit Y did not contain any notification of inspection nor did it notify Complainants of their rights under Section 137.115.  Complainants presented Exhibit DD, a newspaper article discussing the statutory requirement “that an appraiser actually visit” a property before the assessed value can be increased 15% or more above the assessed value of the previous tax cycle.  Complainants testified regarding their exhibits.  Complainants thereby injected the issue of Respondent’s compliance with Section 137.115.   The issue was injected by Complainants and Respondent did not object. Respondent did not object, rebut, or introduce additional evidence to address the issue at the hearing nor did Respondent cross-examine Complainant as to the issue.   Any evidence received without objection which has probative value shall be considered by the Hearing Officer along with the other evidence in the case.  Section 536.070(8).

Once the issue was injected, Respondent had the burden to establish that he or his representatives had conducted an on-site personal observation and review of all exterior portions of the land and any buildings and improvements of the subject property in compliance with Section 137.115 before increasing the assessed value by more than 15%.  No evidence was presented that the inspection occurred and no evidence was presented that Complainants were notified of their rights under Section 137.115. 

Respondent will not be allowed to present exhibits purporting to show compliance with Section 137.115 when the exhibits, through the exercise of reasonable diligence, could have been presented at the Evidentiary Hearing.  See Tibbs v. Poplar Bluff Associates I, L.P., 411 S.W.3d 814, 820 (Mo. App. S.D. 2013) (reasoning that party could not raise issues on appeal that were not raised during evidentiary hearing before the hearing officer); see also Schneider v. Housing Bd. of Appeals of City of Bridgeton, 969 S.W.2d 873, 875 (Mo. App. E.D. 1998) (absence of certain evidence from the record is a fatal defect because it was not part of record for review[4]); and see Consumer Contact Co. v. State Dept. of Revenue, 592 S.W.2d 782, 787 (Mo. banc 1980) (Finding that where competent and material evidence was not presented during administrative hearing, the court may hear such additional evidence or remand the case to agency with directions to reconsider only if the evidence could not have been produced in the exercise of reasonable diligence or the evidence was improperly excluded at the hearing).

Summary & Conclusion

In an appeal of ad valorem taxation before the STC, 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.  In this appeal, the Hearing Officer issued the Decision modifying the determination of the BOE based on the evidence in the record.   The record established that the BOE’s determination of the subject property’s value was more than 15% above the value determined in the previous tax cycle.  The record was devoid of evidence that Respondent complied with Sections 137.115.   The Hearing Officer abided by the mandate of Section 138.060.1, which states that the property owner shall prevail on the appeal as a matter of law in the event the assessor fails to provide sufficient evidence to establish that the physical inspection was performed in accordance with Section 137.115.

We find that the Hearing Officer did not act arbitrarily based upon the record established at the time the Decision was rendered.  Respondent did not rebut the claim when it was raised by Complainants during their testimony at the Evidentiary Hearing.  By failing to object or to produce evidence prior to the Hearing Officer rendering her decision, Respondent deprived the Hearing Officer of the opportunity to develop the record to fully consider the issue and to support proper review of the case.

ORDER

The Decision of the Hearing Officer is AFFIRMED.  The Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, in this final decision of the STC.

Segments of the Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, have been incorporated without reference, as if set out in full, in this final decision of the STC.

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 January 8, 2019.

STATE TAX COMMISSION OF MISSOURI

 

Bruce E. Davis, Chairman

 

Victor Callahan, Commissioner

 

Will Kraus, Commissioner

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 8th day of January, 2019, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

Jacklyn Wood

Legal Coordinator

 

[1] One of the comparable sale properties was the sale of the subject property in September 2015 in which Complainants purchased the subject property.

[2] All statutory references are to RSMo 2000, as amended, unless otherwise noted.

[3] RSMo Cum. Supp. 2015.

[4] In Schneider, the evidence omitted from the record and on which the case turned was a city ordinance.  The Court ruled that courts may not take judicial notice of city or county ordinances.  Other administrative decisions have similarly ruled that administrative tribunals may not take official notice of the contents of city or county ordinances.  See Tri-County Truck Stop v. Director of Revenue State of Missouri, 1987 WL 51122 (Mo.Admin.Hrg.Com.).  In contrast, administrative tribunals, like the courts may take judicial notice of state statutes.  Here, even though Complainants did not introduce the specific language of Section 137.115 into evidence, other evidence admitted into the record referred to the statute, and the STC takes judicial notice of Section 137.115.  Section 536.070(6).

STATE TAX COMMISSION OF MISSOURI

 

CHRISTOPHER F. SLUSSER & SARAH L. SLUSSER,	) )
	)
Complainants,	)
	)
v.	)	Appeal No. 17-10066
	) )	Parcel/Locator No. 18R210131
JAKE ZIMMERMAN,  ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI, Respondent	) )

 

DECISION AND ORDER

 

HOLDING

 

The decision of the St. Louis County Board of Equalization (BOE) is SET ASIDE.  Complainants Christopher F. Slusser and Sarah L. Slusser (collectively referred to as Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to find their opinion of value to be correct or to prove their claim of discrimination.  However, Complainants specifically raised the issue of whether Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) satisfied the requirements of Sections 137.115.10 through 137.115.12[1], thereby shifting the burden of proof to Respondent to establish, by substantial and persuasive evidence, that the statutory requirement was met.  Respondent did not present substantial and persuasive evidence that the requirements of Sections 137.115.10 through 137.115.12 were met; thus, the increase in the appraised value of the subject property as of January 1, 2017, is limited to an increase of 15% more than the appraised value from the previous tax cycle, $247,600.

Complainants appeared pro se.

Respondent 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

Complainants appealed on the ground of overvaluation.  Respondent initially set the true value in money (TVM) of the subject property at $272,900, as residential property, as of January 1, 2017.  The BOE valued the subject property at $272,900, thereby sustaining Respondent’s valuation.  The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as of 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

1. Jurisdiction. Jurisdiction over this appeal is proper.  Complainants timely appealed to the State Tax Commission.
2. Evidentiary Hearing. The issues of overvaluation, discrimination, and percent of increase in appraised value were presented at an evidentiary hearing on January 24, 2018, at the St. Louis County Government Building, 41 South Central Avenue, Clayton, Missouri.
3. Identification of Subject Property. The subject property is identified by parcel/locator number 18R210131.  It is further identified as 15274 Springrun Drive, Chesterfield, St. Louis County, Missouri.  (Complaint; Exhibit 1)
4. Description of Subject Property. The subject property consists of a .23 acre (approximately 10,062 square feet) residential lot improved by a 2,056 square foot, two story, single family home built in 1973.  (Exhibits Y and AA)  The home included four bedrooms; two full bathrooms; one half bathroom; a full basement with 487 square feet of finished area; one fireplace; a two-car attached garage; a porch; and an in-ground pool.  (Exhibits X, Y, Z, AA; Exhibit 2) The exterior finish consisted of aluminum and vinyl construction.  (Exhibit AA)  The subject property had a quality grade of C+ and a construction, desirability, and utility (CDU) rating of Average.  (Exhibit Y)  Respondent’s property record card for the subject property indicated that the subject property also included a 189-square foot wood deck attached to the rear elevation of the subject property.  (Exhibits Y and AA)  However, Complainants testified and presented photographic evidence that the deck had been removed.  The evidence was unclear as to whether the deck had been removed prior to January 1, 2017.  (Exhibit X)
5. Assessment. Respondent set a TVM for the subject property of $272,900, residential, as of January 1, 2017.
6. Board of Equalization. The BOE set a TVM of the subject property at $272,900, residential, as of January 1, 2017.
7. Complainant’s Evidence. Complainants opined that the subject property’s TVM as of January 1, 2017, was $245,000.  Complainants also claimed that the subject property had been discriminated against in assessment and that the appraised value of the subject property had increased more than 15% but Respondent had not satisfied the requirements of Sections 137.115.10 through 137.115.12.  To support Complainants’ opinion of value and claims, Complainants offered as evidence the following exhibits:

Exhibit A	Comparable No. 1, 15276 Springrun Drive
Exhibit B	Comparable No. 2, 15278 Springrun Drive
Exhibit C	Comparable No. 3, 1301 Still House Creek Road
Exhibits D through W	St. Louis County Real Estate Information database records:  ownership and legal information for properties near subject property and located on Signal Knob Court, Springrun Drive, and Still House Creek Road and 2017 appraised values of those properties for tax assessment purposes
Exhibit X	Color photographs of rear exterior of subject property showing that the wood deck had been removed
Exhibit Y	Change of Assessment Notice dated May 8, 2017, for the subject property showing a change in appraised value from $215,300 as of 1/1/2015 to $272,900 as of 1/1/2017, an increase of 26.8%
Exhibit Z	Appraisal report of subject property dated August 24, 2015, prepared by Pascale Ledbetter for purpose of Complainants obtaining mortgage
Exhibit AA	Copy of Assessor’s Comparable Sales for subject property from St. Louis County Real Estate database and copy of directions and overview maps to three comparables with handwritten corrections of distance of comparable sales from subject property
Exhibit BB	Letter dated September 26, 2017, from Complainants explaining basis of appeal and identifying comparables within .25 miles of the subject property
Exhibit CC	Copy of STC Property Reassessment and Taxation booklet, Revised January 2017, highlighting two passages regarding fairness in taxation and treating all taxapyers fairly
Exhibit DD	Gallagher, Jim: “Mass Assessment Cut in St. Louis County Raises Question,” St. Louis Post-Dispatch August 30, 2015 (retrieved from http://www.stltoday.com/business/local/mass-assessment-cut-in-st-louis-raises-question/article_240871be-5a28-5bda-8171-88de265776eb.html)

 

Respondent did not object to Complainants’ exhibits, all of which were received into the record.

Complainants’ evidence established that Complainants had purchased the subject property in September 2015 for $273,500.  Complainants testified that the subject property had been listed with a realtor and publicly advertised on the multi-listing service (MLS).  Complainants testified that a mortgage encumbered the subject property and the balance was approximately $250,000.  Complainants testified that they had not listed the subject property for sale since purchasing it and that no offers to purchase the subject property had been made.  Complainants testified that, if they were to list it for sale, their asking price would be $255,000.  Complainants testified that the subject property had been appraised for the purpose of obtaining a mortgage when they purchased the property.  Complainants testified that the appraisal amount was $275,000.  The appraiser who had prepared the report was not present at the evidentiary hearing to testify.  Complainants testified that they had not made any improvements to the subject property between the date of purchase in 2015 and January 1, 2017.

On cross-examination, Complainants testified that they had not conducted a ratio study but that they had presented evidence in Exhibits D through W showing that neighboring properties in the subdivision had been assessed lower than the subject property.

8. Respondent’s Evidence. Respondent advocated that the BOE’s determination of TVM of the subject property should be affirmed.  To support his position, Respondent offered as evidence the following exhibits:

Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017
Exhibit 2	MARIS Matrix/MLS data sheet for the subject property showing an original listing price of $280,000, a revised listing price of $275,000, and a sold price of $273,500
Exhibit 3	Certificate of Value for the subject property dated September 11, 2015, showing a total purchase price of $273,500

 

Hearing no legal objection to Respondent’s exhibits, the Hearing Officer received Respondent’s exhibits to be given the weight deemed necessary in light of all of the evidence.

9. Presumption of Correct Assessment Not Rebutted. Complainants did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the TVM of the subject property as of January 1, 2017, to be $245,000.

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 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 STC, 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.

The BOE Presumption and the Computer-Assisted Presumption

            There exists a presumption of correct assessment by the BOE – the BOE presumption.  There also 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 substantial and persuasive evidence to rebut it.  If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption.

The computer-assisted presumption only comes into play if the BOE lowered the value of the assessor and Respondent is seeking to sustain the original assessment and it has not been shown that the assessor’s valuation was not the result of a computer-assisted method.  The BOE valuation is assumed to be an independent valuation.

In the present appeal, the BOE determined the TVM of the subject property to be $272,900, thereby sustaining the initial valuation of Respondent.  Complainant is now seeking to lower the BOE’s valuation while Respondent is seeking to sustain the BOE’s valuation; therefore, the BOE presumption applies only to Complainants.  The computer-assisted presumption is not applicable in this case.

The Complainant’s Burden of Proof

To obtain a reduction in assessed valuation based upon an alleged overvaluation, a 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 (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 STC “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).

In this case, Complainants opined that the TVM of the subject property was $245,000 as of January 1, 2017.  Complainants’ presented numerous exhibits to support their opinion of value.

Respondent’s Burden of Proof

Respondent, when advocating a value different from that determined by the original valuation or a valuation made 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.

In this appeal, Respondent advocated that the BOE’s valuation, which was the same as Respondent’s initial valuation, should be affirmed.  To support the BOE’s valuation of $272,900, Respondent presented evidence consisting of the BOE’s Findings and Notice of Decision, the MLS data sheets for the sale of the subject property in September 2015, and the Certificate of Value signed by Mr. Slusser in 2015.

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).

Neither Complainants nor Respondent presented any expert witnesses.

Hearsay

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

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

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

In this case, Complainants presented an appraisal report prepared by Pascale Ledbetter, Exhibit Z.  The appraisal report reported an opinion of value of $275,000 for the subject property as of August 21, 2015.  Pascale Ledbetter was not present to testify and to authenticate the contents of the report or to be cross-examined by Respondent.  However, Respondent did not object to any of Complainants’ exhibits; therefore, any objection to Exhibit Z on hearsay grounds was waived and Exhibit Z was received into the record to be given the weight deemed necessary when weighed with all of the other evidence.

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:

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.

Missouri courts have held that evidence of the actual sale price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.  The actual sale price is a method that may be considered for estimating true value.  St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993).

Complainants presented evidence of the actual price they paid for the subject property in September 2015, $273,500.  Complainants also presented evidence of three comparable properties in the same neighborhood as the subject property with lower appraised values as of January 1, 2017.  (Exhibits A, B, C)  Of the three comparables, only Comparable No. 1, 15276 Springrun Drive, was a recent sale.  Comparable No. 1 was located next door to the subject property.  Comparable No. 1 sold for $245,000 in December 2015.  (Exhibit A)  Comparable No. 1 was similar to the subject property.  Comparable No. 1 consisted of an approximately .23 acre residential lot improved by a 2,056 square foot, two story, single family home built in 1973.  Comparable No. 1 had four bedrooms; two full bathrooms; one half bathroom; a full basement; a two-car attached garage; two concrete or masonry patios; an enclosed porch; and an open porch.  Comparable No. 1 had a grade of C+ and a CDU rating of Average.  The evidence did not indicate whether Comparable No. 1 had additional similarities with the subject property, i.e., a partially-finished basement, a fireplace, or an in-ground pool.  (Exhibit A)  Complainants evidence did not make any market-based dollar adjustments to Comparable No. 1 for any differences between it and the subject property.

Discrimination in Assessment (Assessment Ratio)

To obtain a reduction in the assessment of real property based upon discrimination, the complaining taxpayer must (1) prove the true value in money of the subject property as of the taxing date; and (2) show an intentional plan of discrimination by the assessor, which resulted in an assessment at a greater percentage of value than other property within the same class and the same taxing district, or, in the absence of such an intentional plan, show that the level of assessment is “so grossly excessive as to be inconsistent with an honest exercise of judgment.”  Zimmerman v. Mid–America Financial Corp., 481 S.W.3d 564, 571 (Mo. App. E.D. 2015), quoting Savage v. State Tax Comm’n of Missouri, 722 S.W.2d 72, 78 (Mo. banc 1986).  Evidence of value and assessments of a few properties does not prove discrimination.  Substantial evidence must show that all other property in the same class, generally, is actually undervalued.   State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964). The difference in the assessment ratio of the subject property and the average assessment ratio in the subject county must be shown to be grossly excessive.  Savage, 722 S.W.2d at 79.  No other methodology is sufficient to establish discrimination.  Cupples-Hesse, supra.

Where there is a claim of discrimination based upon a lack of valuation consistency, the complainant has the burden to prove the level of assessment for the subject property in the relevant tax year.  This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.  The complainant must then prove the average level of assessment for residential property in St. Louis County for the relevant tax year.  This is done by (a) independently determining the market value of a representative sample of residential properties in the county; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.  This process is commonly known as a ratio study.

To establish discrimination, the difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in St. Louis County must demonstrate a disparity that is grossly excessive.  See Savage, supra.

Missouri courts have consistently held that (1) a taxpayer alleging discrimination must show the true value in money of his property as a necessary part of his discrimination claim; and (2) the proper method of determining discrimination is to compare the actual level of assessment of the subject property as determined by the assessor to the common level of assessment for the subject property’s subclass.  Mid-America Financial Corp., 481 S.W.3d at 574, citing Savage, 722 S.W.2d at 72.

“By requiring that the level of an assessment be so grossly excessive as to be inconsistent with an honest exercise of judgment in cases in which intentional discrimination is not shown, the courts and the STC refrain from correcting assessments which reflect no more than de minimus errors of judgment on the part of assessors.”  Mid-America Financial Corp., 481 S.W.3d at 571 (internal quotation omitted).  “This standard recognizes that while practical uniformity is the constitutional goal, absolute uniformity is an unattainable ideal.”  Id. (internal quotation omitted).

In deciding whether the assessment of the subject property is “grossly excessive” or nothing more than a “de minimus error of judgment,” the STC must determine the common level of assessment for the class of property at issue within the taxing district.   In Savage, 722 S.W.2d at 79, the Missouri Supreme Court reasoned:

The “common level of assessment” has been defined as a single ratio of true value used in assessing each property in a taxing district.  [citation omitted]  The “average level of assessment” means the “arithmetical mean of the varying percentages of true value applied by . . . the assessor in assessing properties within a taxing district.”  [citation omitted]

A taxpayer has the right to have his “assessment reduced to the percentage of that value at which others are taxed[.]” [citation omitted]

 

The Missouri Supreme Court has held that the proper method of analyzing discrimination compares the common level of assessment for similarly-situated properties to the actual level of assessment imposed on the subject property.  Mid-America Financial Corp., 481 S.W.3d at 571; Savage, 722 S.W.2d at 74.  A necessary component of this comparison is the TVM of both the subject property and the similarly-situated properties, i.e., properties within the same class as the subject property.  See Id.; see also Savage, 722 S.W.2d at 74.  Once the TVM of the subject property and the similarly-situated properties has been determined, the STC can calculate at what percentage or ratio of TVM the subject property and the similarly-situated properties, respectively, have been assessed.  Mid-America Financial Corp., 481 S.W.3d at 571.  This determination requires a comparison not between the common level of assessment and the statutory assessment ratio, but between the common level of assessment and the actual level of assessment for the subject property.  Id. at 574.   Neither Missouri courts nor the STC has established a “bright-line” test to identify what constitutes a grossly excessive assessment as opposed to a mere de minimus error in judgment.  Id. at 575.  The assessment in each given case must be analyzed against the assessment under the median ratio to address the grossly excessive factor.  Id.  The STC has found a 5% disparity between the common level of assessment and the actual level assessment to be de minimus.  Town and Country Racquet Club v. Morton, 1989 WL 41005 (Missouri State Tax Commission) (affirmed on appeal in Town & Country Racquet Club v. State Tax Commission of Missouri, 811 S.W.2d 403 (Mo. App. E.D. 1991).

Increase in TVM of More Than 15%

Under Missouri law, before the assessor may increase the assessed valuation of any parcel of residential real property by more than 15% since the last assessment, excluding increases due to new construction or improvements, the assessor shall conduct a physical inspection of such property.  Section 137.115.10.  If a physical inspection is required pursuant to Section 137.110.10, the assessor shall notify the property owner of that fact in writing and shall provide the owner clear written notice of the owner’s rights relating to the physical inspection.  Section 137.115.11.  If a physical inspection is required, the property owner may request that an interior inspection be performed during the physical inspection.  Id.  The owner shall have no less than thirty days to notify the assessor of a request for an interior physical inspection.  Id.

A physical inspection, as required by Section 137.115.10, shall include but not be limited to an on-site personal observation and review of all exterior portions of the land and any buildings and improvements to which the inspector has or may reasonably and lawfully gain external access, and shall include an observation and review of the interior of any buildings or improvements on the property upon the timely request of the owner pursuant to Section 137.115.11.  Section 137.115.12.  Mere observation of the property via a drive-by inspection or the like shall not be considered sufficient to constitute a physical inspection as required by this section.  Id.

            In this case, Complainants presented evidence establishing that Respondent increased the appraised value of the subject property from $215,300, as of January 1, 2015, to $272,900, as of January 1, 2017, an increase of approximately 26.8%.  Complainants specifically argued that the increase in appraised value of more than 15% required a site visit and a physical inspection of the subject property.  Complainants testified that they would have welcomed an exterior inspection.  Respondent did not present any evidence establishing that an on-site personal observation and review of all exterior portions of the land and any buildings and improvements had occurred prior to the increase in appraised value of more than 15%.^[2]

Discussion

Overvaluation Claim

In this case, Complainants’ evidence was neither substantial nor persuasive to rebut the presumption of correct assessment by the BOE and to establish that the subject property’s TVM as of January 1, 2017, was $245,000.  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. 

Complainants argued that they had paid too much for the subject property in September 2015 because they were motivated by external factors, i.e., to quickly find a home in a specific geographical area to satisfy their family’s specific needs.  Complainants argued that these subjective reasons influenced the price they paid but did not accurately reflect the subject property’s TVM on January 1, 2017.

The objective evidence of the actual sale price of the property in September 2015, $273,500, is relevant for establishing value at the time of assessment on January 1, 2017, only 15 months after the sale date.  This evidence, even when weighed against Complainants’ Exhibit A, which related to Comparable No. 1, compels the conclusion is that the TVM of the subject property as of January 1, 2017, was not $245,000.

Exhibit A^[3] established that Comparable No. 1 had a sale price of $245,000 in December 2015, closer in time to the tax date at issue and only three months after the sale of the subject property.  Comparable No. 1 was located next door to the subject property.  Comparable No. 1 and the subject property were strikingly similar in all major respects, from age of the improvements to lot dimensions to home style to square footage to bedroom and bathroom count.  However, Complainants did not perform a comparative sales analysis using market-based dollar adjustments to account for any differences between Comparable No. 1 and the subject property, which might have affected their respective sale prices.  The evidence was silent as to whether Comparable No. 1 did or did not have a partially-finished basement, a fireplace, or an in-ground pool, elements which might have a positive or a negative impact on the sale price of a property.  The evidence was silent as to whether the interior finishes within Comparable No. 1 were similar to the subject property, another factor that might have a positive or a negative impact on the sale price of a property.

The evidence established that the subject property and Comparable No. 1 had some differences.  The evidence established that a 189-square foot wood deck had been present on the rear elevation of the home at the time Complainants purchased the subject property in September 2015.  Complainants’ evidence established that the deck had been removed prior to the evidentiary hearing, but the evidence was unclear as to whether the deck had been removed prior to January 1, 2017, the tax date at issue.  The evidence also established that Comparable No. 1 lacked a wood deck but included a 216-square foot enclosed porch and two concrete or masonry patios that the subject property did not have, yet the 2015 sale price of Comparable No. 1 had been $28,500 less than the subject property’s 2015 sale price.  Nevertheless, Complainants’ did not present any evidence establishing that the a particular dollar amount should be subtracted from the TVM of the subject property to account for the deck’s removal or that a particular dollar amount should be subtracted from the TVM of the subject property to account for the lack of an enclosed porch and two concrete or masonry patios.

Notwithstanding the general similarities and the few known differences between Comparable No. 1 and the subject property, in light of all of the evidence, including the sale prices of the two properties, one would be forced to speculate that the subject property’s TVM as of January 1, was 245,000.

Discrimination Claim

With regard to their claim of discrimination in assessment, Complainants’ evidence failed to establish that the TVM of the subject property was $245,000 as of January 1, 2017 – the necessary first step of proving a claim of discrimination in assessment.  Furthermore, there was no evidence of an intentional plan of discrimination by Respondent resulting in an assessment at a greater percentage of value than other property within the same class and the same taxing district.  There was no evidence that the level of assessment of the subject property was so grossly excessive as to be inconsistent with an honest exercise of judgment.  Complainants’ claim of discrimination was based primarily upon the assessment records of properties within the subject property’s subdivision.  (Exhibits D through W)  This evidence does not provide any independent information from which the market value of the other properties can be determined and compared to their appraised value in order to establish the ratio at which they were assessed.  Complainants’ evidence did not establish that a statistically significant number of other residential properties within St. Louis County are being assessed at a lower ratio of market value than their property.  Complainants did not provide a ratio study that calculated a common level of assessment of residential properties in St. Louis County for tax year 2017.  Consequently, Complainants’ discrimination claim fails.

Increase of More Than 15% in TVM

During the evidentiary hearing, Complainants presented evidence and argued that Respondent had appraised the subject property at a TVM that was approximately 26.8% higher than its TVM for the 2015 tax cycle.  Complainants specifically raised the issue of whether Respondent met the requirements of Sections 137.115.10 through 137.115.12.  The burden of proof thereafter shifted to Respondent to show, by substantial and persuasive evidence, that the requirements of Sections 137.115.10 through 137.115.12 were satisfied.  Respondent presented no evidence establishing that he or his representatives had conducted an on-site personal observation and review of all exterior portions of the land and any buildings and improvements of the subject property before increasing the TVM more than 15%.  Consequently, Respondent failed to satisfy his burden of proof on this claim.

ORDER

The TVM for the subject property as determined by the BOE is SET ASIDE.  The assessed value for the subject property for tax year 2017 is limited to an increase of 15% of the appraised value from the 2015 tax cycle.  The assessed value for the subject property for tax year 2017 is set at $47,044 residential ($247,600).

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 June 14, 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 14th day of June, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

Jacklyn Wood

Legal Coordinator

 

[1] All statutory references are to RSMo. 2000, as amended.

^[2] The Change of Assessment Notice (Exhibit Y), dated May 8, 2017, that Respondent sent to Complainants contained the following language:

The indicated value of your property was determined by using generally accepted appraisal techniques as specified by 137.115 RSMO.

However, the Change of Assessment Notice did not state whether an on-site personal observation and review of all exterior portions of the land and any buildings and improvements had occurred and did not inform Complainants of their rights relating to the physical inspection.

^[3] Exhibit A included the reassessment notice for Comparable No. 1, which listed the actual sale prices of five comparable properties.  The subject property was listed as a comparable for Comparable No. 1.  Exhibit Y included the reassessment notice for the subject property, which listed the actual sale prices of five comparable properties.  All five were the same comparables that had been listed on the reassessment notice for Comparable No. 1, including the subject property as a self-comparable.  These exhibits indicated that Respondent had compared the subject property to Comparable No. 1 and vice versa for purposes of determining the TVM of Comparable No. 1 and of the subject property.