STATE TAX COMMISSION OF MISSOURI
| CONSTANCE PATTERSON, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal No. 15-32535 |
| ) | ||
| SCOTT SHIPMAN, ASSESSOR | ) | |
| ST. CHARLES COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
ORDER NUNC PRO TUNC
The Decision and Order, dated July 11, 2016, is amended nunc pro tunc as follows:
“5. Assessment. Respondent set a true market value (TMV) on the subject property at $175,000 residential, as of January 1, 2015.”
found in the Findings of Fact, in section 5, is stricken and the following is inserted in place thereof:
“5. Assessment. Respondent set a true market value (TMV) on the subject property at $358,912 residential as of January 1, 2015.”
The Decision and Order, dated July 11, 2016, is further amended nunc pro tunc as follows:
“The assessed value for the subject property for tax years 2015 and 2016 is set at $33,250 residential ($175,000 TMV).”
found in the Order, in the second paragraph, is stricken and the following inserted in place thereof:
“The assessed value for the subject property for tax years 2015 and 2016 is set at $68,190 residential ($358,912 TMV).”
In all other respects, the Decision and Order, dated July 11, 2016, is affirmed as issued.
SO ORDERED November 2, 2016.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
State Tax Commission of Missouri
| CONSTANCE PATTERSON, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal No. 15-32535 |
| ) | ||
| SCOTT SHIPMAN, ASSESSOR | ) | |
| ST. CHARLES COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Board of Equalization of St. Charles County (BOE) is AFFIRMED. Complainant Constance Patterson (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE. Assessed value in money for the subject property for tax years 2015 and 2016 is set at $68,190 residential ($358,912 true market value or TMV).
Complainant appeared pro se.
Respondent Scott Shipman, St. Charles County Assessor, (Respondent) appeared by Amanda M. Jennings, Associate County Counselor.
Case heard and decided by Senior Hearing Officer Amy S. Westermann.
ISSUE
Complainant appealed on the ground of overvaluation. Respondent initially set the true market value (TMV) of the subject property, as residential property, at $358,912. The BOE sustained Respondent’s valuation. The Commission takes this appeal to determine the TMV of the subject property on January 1, 2015.
The Senior Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing, which was held on May 5, 2016, at the St. Charles County Government Administration Building, 201 N. Second Street, St. Charles, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number T051500100. It is further identified as 632 Dunmore Place Dr., Cottleville, St. Charles County, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of an approximately .29 acre lot improved by a 2,556 square foot, single family, atrium ranch-style residence built in 2008. (Exhibit 1) The subject property includes a full basement with 152 finished square feet (the atrium space), three bedrooms, three bathrooms, a fireplace, a porch, a patio, a deck, a screened-in porch, and a three-car garage. (Exhibit 1) The exterior consists of brick, stone, and siding. (Exhibit 1)
- Assessment. Respondent set a true market value (TMV) on the subject property at $175,000 residential, as of January 1, 2015.
- Board of Equalization. The BOE sustained Respondent’s TMV of the subject property.
- Complainant’s Evidence. Complainant testified in her own behalf. Complainant opined that the subject property had been appraised at $340,000 in 2012. Complainant opined the subject property had a value of $330,000 as of January 1, 2015. Complainant offered as evidence several printed copies of information regarding other properties within the neighborhood of the subject property that had been obtained from Respondent’s Property Database (Exhibits A through G); a form contract dated September 3, 2015, proposing a new roof for a price of $15,342 from DALCO Home Remodeling (Exhibit H); a copy of specific pages extracted from Complainant’s 2012 appraisal of the subject property (Exhibit I); a copy of the BOE’s decision sustaining Respondent’s valuation of the subject property (Exhibit J); a copy of information regarding the subject property that had been obtained from Respondent’s Property Database (Exhibit K); and a copy of Respondent’s 2013 notice of assessment of the subject property (Exhibit L).
Respondent objected to Exhibits A through G on the ground that the information contained in them was irrelevant because it showed the values of neighboring properties, which was not probative of the value of the subject property. Respondent objected to Exhibit H on the grounds that it constituted hearsay, lacked foundation, and was irrelevant. The Senior Hearing Officer overruled the objections and received the exhibits to be given the weight deemed necessary in light of all the evidence. Respondent objected to Exhibit I on the grounds that it was hearsay because no expert was present to testify to its contents and because it was irrelevant to establishing the TMV of the subject property on January 1, 2015. The Senior Hearing Officer sustained the objection and excluded Exhibit I. Respondent did not object to Exhibits J and K. Respondent objected to Exhibit L on the ground that it was irrelevant. The Senior Hearing Officer overruled the objection and received it to be given the weight deemed necessary in light of all the evidence.
- Respondent’s Evidence. Respondent offered as evidence the testimony of St. Charles County Review Appraiser Erik R. Hart (the Appraiser). Respondent also offered Exhibit 1, which consisted of the professional qualifications of the Appraiser and the Appraisal Report of the Appraiser. (Exhibit 1)
The Appraiser opined that the subject property had a TMV of $365,000 as of January 1, 2015, which supported the BOE’s valuation of $358,912 as of January 1, 2015.[1] The Appraiser considered both the cost approach and the sales comparison approach in conducting the appraisal. The Appraiser found the income approach to be inapplicable to the subject property.
Based on the cost approach, the Appraiser opined the subject property had a TMV of $358,912 (total replacement cost new of the improvements minus the total accrued depreciation of the improvements left a cost value of $278,912 plus the site value of $80,000). (Exhibit 1)
Based on the sales comparison approach, the Appraiser opined the subject property had a TMV of $365,000 as of January 1, 2015. The Appraiser chose three comparable properties close in proximity to the subject property that had sold between August 2013 and January 2015. (Exhibit 1) The Appraiser made market-based adjustments to the sale prices of the three comparables to account for the differences between them and the subject property. The adjusted sales prices ranged from $356,560 to $416,660. (Exhibit 1) In conducting his analysis as described in Exhibit 1, the Appraiser made adjustments to the sale price of each of the comparables based on lot size; whether the style was ranch or atrium ranch; the number of bathrooms; finished square footage in the basement; the number of fireplaces; miscellaneous amenities such as decks, patios, porches, and screened porches; and whether the basement was a walkout. (Exhibit 1) The Appraiser found Comparable No. 1 to be most similar to the subject property because it appeared to look almost identical to the subject property except for the fact that Comparable No. 1 was a ranch-style residence while the subject property was an atrium ranch-style residence. (Exhibit 1) Comparable No. 1 also required the fewest adjustments. (Exhibit 1)
Complainant did not object to Respondent’s evidence, which was received into the record.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. The Senior Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the Board of Equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Basis of Assessment
The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2 RSMo (2000) as amended. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id. The Hearing Officer during the evidentiary hearing made inquiry of Complainant and Respondent’s Appraiser.
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 is bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a 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).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.” See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. E.D. 1980).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer, as the trier of fact, may consider the testimony of an expert witness and give it as much weight and credit as deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE. In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways. The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then it also would be applicable to the Respondent. The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer assisted method. The BOE’s valuation is assumed to be an independent valuation.
In the present appeal, the BOE sustained the initial valuation of Respondent; therefore, the computer-assisted presumption is not applicable in the present appeal.
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).
Evidence of Increase in Value
In any case in charter counties or the City of St. Louis where the assessor presents evidence that indicates a valuation higher than the value finally determined by the assessor or the value determined by the BOE, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation and not for increasing the valuation of the property under appeal. Section 138.060 RSMo (2000) as amended; 12 CSR 30-3.075.
The evidence presented by the Respondent was substantial and persuasive to rebut the presumption of correct assessment by the BOE and establish the fair market value of the property under appeal, as of January 1, 2015, to be $365,000. However, the assessed value cannot be increased above $358,912 in this particular appeal. CSR 30-3.075; State ex rel. Ashby Road Partners, LLC et al. v. STC and Muehlheausler, 297 S.W.3d 80, 87-88 (Mo. banc 2009).
Discussion
In the present appeal based upon overvaluation, Complainant failed to present substantial and persuasive evidence to rebut the presumption of true market value advocated by Respondent. Exhibits A through G did not establish the value of the subject property on January 1, 2015, but merely provided data on the properties described in those exhibits. To the extent Exhibits A through G were offered to show that the subject property had been erroneously assessed, such a showing is not persuasive because it would require the assumption that the other properties were correctly assessed while only the subject property was erroneously assessed. Exhibit H, a bid proposal dated nine months after the tax date at issue, did not establish that the subject property needed more than $15,000 worth of roofing repairs on January 1, 2015. Exhibit H was not supported by a foundation of testimony from a representative of the company who provided the bid proposal, and Complainant’s testimony regarding the timing of the need for repairs in relation to January 1, 2015, was unclear. Exhibits J and K were repetitive of Respondent’s Exhibit 1 describing the subject property. Exhibit L was not relevant to establishing the value of the subject property on January 1, 2015, but showed the value Respondent had placed on the property on January 1, 2013. To the extent that Exhibit L was offered to show an increase in Respondent’s valuation of the subject property from 2013 to 2015, such a showing did not provide a reason to reduce the BOE’s valuation of the subject property as of January 1, 2015.
Although Complainant presented evidence to support her opinion of the subject property’s TMV, it is neither substantial nor persuasive because, if relied upon, the fact finder would be required to resort to speculation to conclude the TMV of the subject property on January 1, 2015, should be $315,000.
Conversely, Respondent presented substantial and persuasive evidence to support his conclusion that the TMV of the subject property was $365,000 on January 1, 2015. In arriving at an opinion of value, the Appraiser considered all three approaches to value the subject property: the cost approach, the income approach, and the sales comparison approach. The Appraiser ultimately utilized both cost approach and the sales comparison approach but found the income approach to be inapplicable to valuing the subject property.
With regard to the sales comparison approach, the Appraiser selected three comparable sales located in the same or similar marketing areas and made adjustments to the comparables. Specifically, the Appraiser made positive or negative adjustments to the price of the comparables to account for differences between them and the subject property. The sale prices of the comparable properties ranged from $356,560 to $416,660. The dates of sale of the comparable properties ranged from August 2013 to January 2015. The Appraiser gave the most weight to Comparable No. 1, which required the fewest market adjustments and appeared to be nearly identical to the subject property. Comparable No. 1 was located in the same neighborhood and on the same street as the subject property. The sale date of Comparable No. 1 was closest in time to the tax date at issue in this case. The adjusted sale price of Comparable No. 1 was $356,560. The most significant differences between the subject property and Comparable No. 1 were: the nature of the lots (the subject property backed to woods while Comparable No. 1 backed to Highway 364, a major freeway); and the style of the residence (the subject property was an atrium ranch-style residence while Comparable No. 1 was a ranch-style residence).
Given Respondent’s substantial and persuasive evidence, it is reasonable to find and conclude that the TMV of the subject property on January 1, 2015, was $358,912.
ORDER
The true market valuation for the subject property as determined by Respondent for the subject tax day and sustained by the BOE is SUSTAINED.
The assessed value for the subject property for tax years 2015 and 2016 is set at $33,250 residential ($175,000 TMV).
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
Disputed Taxes
The Collector of St. Charles 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 July 11, 2016.
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 11 day of July, 2016, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator
[1] Respondent did not advocate increasing the BOE’s assessment of the subject property’s value.