Darren McArthy v. Muehlheausler (SLCO)

December 31st, 2008

State Tax Commission of Missouri





v.) Appeal No.07-12775









Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2007 and 2008 is set at $175,000, residential assessed value of $33,250.Complainant appeared pro se.

Respondent appeared by Associate County Counselor Paula J. Lemerman. Case decided by Senior Hearing Officer W. B. Tichenor.


The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.


Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $195,200, assessed value of $37,090, as residential property.The Board reduced the value to $166,000, assessed value of $31,540.Complainant proposed a value of $125,000, assessed value of $23,750, in the Complaint for Review of Assessment.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant’s Evidence

Complainant submitted his narrative statement on the issue of true value in money, with exhibits on November 20, 2008.[1]Mr. McArthy stated his opinion of value to be $125,000 based on his calculation of a 32% increase over value set on his property in 2003.Complainant’s exhibits filed with the Commission are as follows:




Warranty Deed, Settlement Statement, Sale Contract, Inspection Report for purchase in 1994


Documents relating to the 2003 valuation of the subject property


2 listings of lot values on Sappington road, calculating lot values for subject property


3 Aerial photographs of portions of Sappington Road


Property Record Cards – supporting documents for Land values in Exhibit C.


2 Aerial photographs showing the area around the subject property


Drawing of subject property, showing location of structures, walk and driveway


Summary Residential Appraisal Report Pages from Exhibit 1 with Complainants calculations


Permit document relating to construction of detached garage and driveway in 1996-98


18 photographs of subject basement and yard showing water problem


Traffic Count Numbers for various streets taken in 2006-07, photograph of night traffic


Multi List Sale Sheets on the Sales utilized by Respondent’s Appraiser


5 newspaper articles on the housing market downloaded from the Internet


Tax bills for 2005 and 2007 on 8 properties owned by Complainant in Jefferson County


3 Multi List Sale Sheets on properties sold in 2006 and 2007


Mr. McArthy’s Narrative Statement

Exhibits are received into the record.No document marked by Complainant as Exhibit G was filed with the Commission, nor was any document identified as Exhibit G referenced in Exhibit P.

Respondent’s Evidence

Respondent filed the Appraisal Report (Exhibit 1) of Mr. Timothy Hannan, Residential Real Estate Appraiser for St. Louis County.[2]Exhibit 1 is received into evidence.Mr. Hannan arrived at an opinion of value for the subject property of $175,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of five properties deemed comparable to the subject property.


1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.

2.Case was set for Evidentiary Hearing by order dated July 21, 2008.Evidentiary Hearing was to be at 1:30 p.m., Thursday, August 14, 2008.On July 30, 2008, Complainant faxed to the Commission his request to be granted a continuance from the August 14th hearing date.Mr. McArthy requested “a continuance to a date in October.”By Order issued July 31, 2008, the August 14th hearing was cancelled and Complainant was advised the hearing would be rescheduled in October by a later Order.

3.By Order dated September 12, 2008, case was set for Evidentiary Hearing at

3:40 p.m., Wednesday, October 22, 2008.Complainant, by phone message on October 13, 2008, requested another continuance.By Order issued October 14, 2008, the Hearing Officer ordered the case submitted on documents in lieu of an evidentiary hearing.The procedure for submission of the case on documents was as follows:

“Complainant is ordered to file with the Hearing Officer, copy to Attorney for Respondent, all documents to be offered in Complainant’s case in chief to establish a true value in money (fair market value) as of January 1, 2007, the value of $125,000 for the property under appeal (Locator No. 27I440622 – 9345 Sappington Road, St. Louis, Missouri) as set forth in the Complaint for Review of Assessment.Complainant shall also provide a narrative statement setting forth the basis for his opinion of true value in money and any explanation of the documents filed as to how they establish the market value of the subject property as of 1/1/07.

Complainant’s documents and statement are to be filed on or before November 17, 2008. On or before November 17, 2008, Counsel for Respondent shall provide Complainant a copy of Exhibit 1 – Appraisal Report of Timothy Hannan, previously provided to the Hearing Officer.Counsel for Respondent may also file with the Hearing Officer and Complainant a copy of any narrative statement or written direct testimony of Mr. Hannan in support of his appraisal.”

4.The subject property is located at 9345 Sappington Road, Sunset Hills, Missouri.The property is identified by parcel number 27L440622.The property consists of a 19,240 square foot (.44 of an acre) lot improved by a vinyl siding over frame, ranch, single-family structure of average quality construction.The house dates from around or prior to 1951 and appears to be in fair condition.There have been two additions to the original structure.The residence has a total of six rooms, which includes three bedrooms, one and half baths, and contains 1,722 square feet of living area.There is a partial unfinished basement and a detached three-car garage. The subject is located on a busy street.[3]

5.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.

6.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2007, to be $125,000, as proposed.Complainant failed to present an opinion of true value in money for the property under appeal as of January 1, 2007, that was supported by an appraisal methodology recognized by the Commission and Courts of this state.

7.The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value. The five properties were located within .19 to .47 of a mile of the subject.Each sale property sold at a time relevant (5/05 – 9/06) to the tax date of January 1, 2007.The sale properties were similar to the subject in style (4 ranch, 1 story and a half), quality of construction (average), age (42 – 71 years), condition (average – good), room (5 – 7), bedroom (3) and bathroom (1.5 – 2) count, living area (1,260 – 1,886), location (suburban-busy street), site size (10,560 – 19,982 square feet) and other amenities of comparability.

8.The appraiser made various adjustments to the comparable properties for differences existing between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The net adjustments ranged from -1.7% to -11.5%, with a median of -9.6% and a mean of -7.86%.These adjustments are in an appropriate range for this appraisal problem.

9.The adjusted sales prices for the comparables calculated to $174,400, $191,100, $202,100, $184,000 and $155,500, respectively.The appraiser concluded on a $175,000 value which calculated to a value per square foot of living area of $101.63 compared with the sales prices per square foot of living area for the comparables of $140.87, $114.53, $155.86, $118.29 and $103.30.The lower indicated value per square foot of living area represents the subject’s generally inferior site and condition in comparison to the sale properties.

10.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2007, to be $175,000.



The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[4]

Submission of Case on Documents

A hearing officer is to issue a decision after affording the parties reasonable opportunity for fair hearing.[5]In some cases, the parties will stipulate to submit a case on the exhibits that are filed with the Commission. In other instances, the Hearing Officer on his own initiative will order a case submitted on documents, as was done in this appeal.Such action is taken generally to expedite the process, and as a convenience to taxpayers not having to take off work to appear in person at the evidentiary hearing.

In the instant appeal, Complainant was granted his request for continuance because of his personal schedule as a self-employed person in that his busiest months were April through September.[6]Continuances are generally to be granted for good cause shown, i.e. serious illness of the party or prior commitment of party.[7]A second continuance is to be denied except in extraordinary circumstances.[8]

No extraordinary circumstances were shown in the present case.Mr. McArthy desired to continue the case essentially to accommodate his personal business schedule.Therefore, rather than simply dismiss the case, and in attempt to accommodate Mr. McArthy’s business commitments, the Hearing Officer elected to have the parties submit the case on documents.In this manner, Complainant was given full opportunity to present whatever documents and statements he deem necessary to make a prima facie case that his property, as of January 1, 2007, would have had a true value in money of $125,000 as asserted on the Complaint for Review of Assessment. Complainant was also able to present his own opinion and criticism of Mr. Hannan’s appraisal.[9]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[10]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.

The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[11]Complainant’s evidence as will be addressed in detail below did not meet the standard of substantial and persuasive to rebut the presumption of correct assessment and establish the fair market value of the subject property as of January 1, 2007.Respondent’s evidence was substantial and persuasive.The Appraisal Report of Mr. Hannan rebutted the presumption of correct assessment and established the fair market value of the property as of January 1, 2007.

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.[12]It is the fair market value of the subject property on the valuation date.[13]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

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.[14]


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.[15]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.[16]Taxpayers who present opinions of value based on their own valuation methodology bear the burden of establishing that their method is acceptable to establish market value as of the given assessment date.Failure to establish that the taxpayer’s methodology has acceptance among those in the appraisal community renders it worthless.

The valuation methodology presented by Mr. McArthy is not accepted by any recognized authority in the appraisal of real estate.The procedure of applying some percentage to a value stipulated to in a prior assessment cycle is not a method accepted by the Commission or Missouri courts.The McArthy valuation process is not persuasive and can be given no probative weight on the issue of fair market value of his property on January 1, 2007.

In stark contrast, Mr. Hannan arrived at an indicated value for the property under appeal by developing an opinion of value relying upon a well established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally understood to be the most reliable methodology to be utilized in the valuation of single-family residences.In a case such as this, where there is sufficient market data, the sales comparison approach is the best tool the appraiser can employ for an appraisal of a single-family residence.

Complainant Fails To Prove Value

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, 2007.[17]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.”[18]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[19]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.[20]

The owner of property is generally held competent to testify to its reasonable market value.[21]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[22]When the owner’s opinion rests upon a valuation approach that is not used by appraisers in ad valorem tax appeals or in other appraisal areas it lacks proper elements and is grounded on an improper foundation.Therefore, it can be given no probative weight in arriving at the true value in money of the property being appealed.Such is the case with the methodology that Mr. McArthy developed to support his opinion of fair market value.

The McArthy Methodology

Mr. McArthy’s approach to value is contained in a single paragraph on page 2 of his Narrative Statement.

“Using this 2003 assessment as a basis of valuation, one that the County offered, a price of $125,000 represents a 32% increase in valuation over a 4-year period.That being said, my offer of $125,000 as a fair market value is more than fair.”

Complainant’s opinion of value is based on a stipulation between him and St. Louis County in 2003 to place a true value in money of $95,000 on his property.The defects in this line of reasoning are legion.

A stipulated value settling a 2003 appeal is not binding on either party with regard to later assessment cycles.A stipulated value although setting value in a given appeal before the Commission does not in point of fact establish that the true value in money for the given assessment date was as stipulated.A stipulation simply represents that the parties for purposes of a given appeal for a given year agree to an arbitrary amount.Both parties may have various motivations for agreeing to a value.The value stipulated to in a prior appeal does not provide a proper basis for finding what a willing buyer and seller would give for the property four years later.

A further flaw in the taxpayer’s reasoning is that he apparently does not understand that the term “fair market value” is a legal term of art.Mr. McArthy asserts that his value of $125,000 for 1/1/07 “is more than fair.”This is based on his circular reasoning that a 32% increase from the 2003 stipulated value is fair for a 4 year period.Although the taxpayer may be of the opinion that a value for the 2007-08 assessment cycle of $125,000 is “more than fair,” that is not the issue to be decided.It is not only fair that the McArthy property be assessed based upon its true value in money, but that is the required standard in the appeal.[23]

There is no evidence that this percentage of increase has any relation to the actual real estate market for homes like the subject in the period of 2003 to 2007.More importantly, there is no market data to establish that any percentage of increase from the 2003 stipulated value establishes what a willing buyer and seller would have agreed to as the purchase price of the McArthy property as of January 1, 2007.

Complainant’s opinion of value was not established by substantial and persuasive evidence.It was not founded upon proper elements and a proper foundation.Therefore, it has no probative merit in the appeal.Complainant failed to meet his burden of proof.

Complainant’s Exhibits

Mr. McArthy submitted a number of exhibits.The Hearing Officer has reviewed and considered each of the exhibits, as well as, the narrative discussion provided giving explanation as to the reason for the submission of the exhibits.As detailed below the Exhibits failed to establish the true value in money for the property under appeal as of January 1, 2007.

Exhibit A – Documents of Purchase

There is no issue concerning the ownership of the property at 9345 Sappington Road, Sunset Hills, Missouri by Mr. McArthy on January 1, 2007, and January 1, 2008.Therefore, these documents are irrelevant to the issue in the appeal, i.e. fair market value of the property as of the valuation date.

Exhibit B – 2003 Assessment and Settlement Documents

Mr. McArthy relies on this group of documents to establish that he and the Respondent stipulated to a value for the 2003-2004 assessment of $95,000 market value, assessed value of $18,050.This point is not at issue.It is irrelevant.It provides nothing to establish material facts on the issue of the true value in money of the property under appeal for the 2007-2008 assessment.

Exhibit C – Lot Valuations on Sappington Road

This exhibit was presented by Complainant to demonstrate a comparison of values per tenth of an acre for properties on the subject street.He then concluded that by this standard he had one of the highest land valuations on Sappington Road.Irrespective of the appraised lands values the Assessor has placed on the listed properties on Sappington Road, this does not establish the market value as of January 1, 2007.Neither does it rebut the presumption of correct assessment by the Board.

The division of appraised values for residential properties between land and improvements by the Assessor or the Board is not the critical matter.It is part of the mass appraisal system.However, the important factor is the appraised or indicated market value for the property, not for part of the property.The market doesn’t make a distinction between land values and improvement values.The seller and buyer of residential real estate are concerned with the value of the property as a whole, not whether the Assessor has made a correct allocation between the value of land and improvements.

In like manner, a comparison of the tenth of an acre or per square foot value of land for one property against another property, or even a group of properties is probative of nothing with regard to a claim of overvaluation before the Commission.Generally smaller lots sell for more per square foot than larger lots.Averaging of lot values based on any unit value fails to provide any evidence of merit to establish the value of a property (land and improvements).

The calculations presented by Mr. McArthy establish nothing with regard to his claim that the value of $166,000 by the Board for January 1, 2007, is in error.

Exhibit D – Aerial Photographs & Property Record Cards

This exhibit consists of aerial photographs and property record cards of the properties listed in Exhibit C.This is an area along Sappington Road from approximately 9236 to 9345 (subject) Sappington Road and another area from approximately 9519 to 9630 Sappington Road.The photographs, while showing an overhead view of the subject street for the addresses indicated, provide nothing of benefit regarding what a willing buyer and seller would have agreed to as of January 1, 2007, for the purchase price of Mr. McArthy’s property.Since the photographs were provided in support of Exhibit C, they are irrelevant to the issue of overvaluation of Mr. McArthy’s property.

In like manner the property record cards (PRC) are attached to Exhibit C.The PRC’s are the source for Mr. McArthy’s Exhibit C figures and calculations.Nevertheless, given that Exhibit C is irrelevant to the issue presented in this appeal, the PRC’s supporting Exhibit C are likewise irrelevant.

Exhibit E – Aerial Photographs of Subject & Adjacent Tracts

This exhibit was presented as support from Mr. McArthy’s claim that the percentage of commercial land use given in Exhibit 1 was in error.Complainant asserts that for his property the “surroundings would be at least 50% commercial.”[24]Mr. McArthy is attempting to compare his surrounding area with the subject neighborhood.This is improper when appraising real estate.It is appropriate to take into consideration the subject property’s location.However, limiting the neighborhood to essentially the property across the street from the property being appealed is not proper appraisal practice.

The neighborhood utilized by Mr. Hannan is bounded by Eddie and Park Road to the North, Baptist Church Road to the East and Lindbergh to the South and West.[25]This is proper description of the assessment neighborhood established by the Assessor.Exhibit E provides no evidence to rebut that the present land use in this described neighborhood is not 5% as set forth in Exhibit 1.Therefore, for the purpose of challenging the commercial land use in the subject neighborhood the exhibit is irrelevant.

The photographs were also provided to establish the location of the subject in relation to the intersections of Sappington Road with Denny Road and Gravois Road.In this respect the Exhibit provides location information.To that extent it has relevance, although the photographs in and of themselves do not to establish fair market value.Nor do they establish that Mr. Hannan erred in his adjustment for the subject’s location compared to Comparables 3 and 5.

Exhibit F – Sketch of Subject Lot

Exhibit F is a sketch showing the front portion of the McArthy tract with improvements (house, driveway, concrete apron and detached garage).The sketch of the house identifies (1) a 24.1’ x 22’ area as original house with cellar (A); (2) a 27.2’ x 34.2’ addition with basement (B); (3) a 12’ x 23.5’ addition (C); and 15’ x15’ new deck (D).Mr. McArthy submitted the sketch to establish the square footage of the basement under Area B to be only 941.

A comparison of Exhibit F and the floor plan in Mr. Hannan’s appraisal,[26] shows that the overall measurements to be in agreement, allowing for rounding by the Assessor’s computer generated floor plan.Exhibit F admits that Area A has a cellar.It is noted that Mr. Hannon was not permitted an interior inspection of the subject.[27]Furthermore, Mr. Hannan recognized that the subject basement/cellar was only a partial basement and that it was unfinished.

Exhibit F fails to rebut that the basement under Area B and the cellar under Area A do not comprise approximately 1,182 square feet as shown on the subject’s floor plan.In the absence of the taxpayer allowing the appraiser to make an interior inspection in order to verify or correct measurements, no negative inference will be drawn based upon Mr. McArthy’s claim.Mr. McArthy admits the basement under Area B is 941 square feet.However, he conveniently omitted to provide the square footage for the “cellar” area under Area A.The Hannan floor plan accounts for a 22’ x 12’ area under Area A on Exhibit F to have a basement.This apparently accounts for the “cellar” area.The Hearing Officer is persuaded that the 1,182 square feet of area assigned to the “basement” by the Hannan floor plan properly accounts for the below ground area of both the basement and cellar areas.

Exhibit H – Complainant’s Sales Grid Calculations

This exhibit is a copy of pages 3 and 4 of Exhibit 1, on which Mr. McArthy has blanked out Mr. Hannan’s adjustments and inserted his own figures for various adjustments to arrive his own indicated values on the five comparable sales.The adjustments made by Complainant are based on Mr. McArthy’s belief that his “figures are more accurate to the market and reflex (sic) real world figures, based on my thirty years in the field of real estate.”[28]No other information was provided by Complainant to establish that he has sufficient knowledge, skill, experience, training, or education in the appraisal of residential properties for ad valorem tax, lending or refinancing purposes to be qualified as an expert in appraisal in proceedings before the Commission.

The controlling statute regarding expert testimony is found in Section 490.065.1, RSMo.The statute provides “In any civil action, if scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.” The declaration of Mr. McArthy that he has “thirty years in the field of real estate” does not meet the statutory standard for him to be recognized as a real estate appraisal expert.[29]Therefore, the opinions of value set forth in Exhibit H lack a proper foundation and are irrelevant.

The conclusions of value proffered relying on net adjustments of .318%, .522%, .478%, .440% and .379%, with a median of .44% and a mean of .428% are so far beyond what would be accepted in sound appraisal practice as to render the conclusions of value as totally worthless.The indicated per square foot values under the McArthy calculations come to $70.34, $59.99, $67.81, $66.70 and $59.93, with a median of $66.70 and a mean of $63.95.When compared to the unadjusted per square foot values of $140.87, $114.53, $155.86, $118.29 and $103.30, it is obvious that the McArthy adjustments have no basis in market data.

The testimony of Complainant contained in Exhibits H and P regarding the attempt at a “sales comparison” analysis lack fundamental reliability, given Mr. McArthy’s lack of expertise as a real estate appraiser.There are limited explanations of the adjustments.[30]All of which constitute simple conjecture on the part of the Complainant. “Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[31]Accordingly, this testimony is rejected.It lacks probative weight on the issue of the true value in money for Complainant’s property.

Exhibit I – Permit Documents

The permit documents for construction of the deck and detached garage in 1996 – 98 are not probative on any fact in dispute in the appeal.The Respondent has not challenged the existence of either the deck or the garage.Mr. Hannan references the additions in his appraisal report.[32]The documents lack any relevance to establish fair market value of the property under appeal as of January 1, 2007.

Exhibit J – Photographs of Basement and Yard

The photographs of the basement condition, standing water and drains in the subject year are helpful to the extent that they show these conditions.Mr. McArthy rests his claim for a $15,000 deduction for these conditions on these photographs.[33]However, photographs never establish an amount to adjust for a given condition.The Exhibit has relevance only to show the conditions.It has no relevance to establish the amount of any adjustment for these conditions.

Exhibit K – Traffic Count & Photograph

Mr. McArthy offers traffic count statistics and a photograph of traffic in front of his property on Veterans Day to establish that there is a higher traffic count on Sappington Road in front of his home than the area on Sappington Road where Mr. Hannan’s Comps 1 and 4 are located.To the extent, Complainant is attempting to rebut any conclusions reached by Respondent’s appraiser on this factor the documents fail to do so.Mr. Hannan’s appraisal recognized this location factor of the subject and adjusted for it.The documents only serve to confirm that the subject is located, as denoted by Mr. Hannan, on a busy street.[34]Beyond that point they provide no relevant information to establish the value proposed by Complainant.

Exhibit L – Multi-List Sale Sheets

Exhibit L is the Multi-List Sale Sheets (MLS) on the five properties utilized by Mr. Hannan in his appraisal. The documents only provide confirmation for the information provided by Exhibit 1 on the sales comparables.[35] Mr. Hannan set forth that he did utilize the listing service data as part of his appraisal process.It is, of course, proper for appraisers to rely on MLS data as part of their data collection and research for preparing an appraisal.Exhibit L validates the selection of these properties as comparables for valuing the subject.It provides no basis to conclude on a fair market value of $125,000 as proposed by Mr. McArthy.

Exhibit M – Newspaper Articles

Mr. McArthy tenders five newspaper articles downloaded from the Internet in support of his contention that the real estate market was in decline as of and prior to January 1, 2007.The five articles are:




Christian Science Monitor


Real Estate Slump Tough on Midwest



Sellers Sings The Blues As Price Drop Sets Record

The Wall Street Journal


Home Prices Decline in Majority of Cities

The Washington Post


Existing-Home Sales Up 0.6%

The Washington Post


Home Prices Fell at Record Pace in October

There is no evidentiary benefit to these hearsay documents, for the purpose of establishing the true value in money of the McArthy property as of January 1, 2007.Irrespective of whether the real estate market in general, at any given time, is stable, on the decline or on an upward trend such information does not establish the value of any given property.The information provided and opinions expressed in the news articles address general areas of the nation.None of the information is specific to the St. Louis Metropolitan area, or more specific that area of St. Louis County where Sunset Hills is located and the subject neighborhood.

Taxpayers often become enamored with what they read in the newspaper concerning property values.Nevertheless such hearsay can be given no probative weight on the issue of what a willing buyer and seller would have agreed to for the sale price of Mr. McArthy’s home on January 1, 2007.The submitted newspaper articles, irrespective of the national recognition of the individual publications, do not provide any statistical data relative to the specific market of the subject neighborhood.A reading of each article reveals not a single reference to hard sales data for the St. Louis Metropolitan area.Although one article references the “Midwest” the specific areas of the Midwest discussed are South Bend, Detroit, and Cleveland.These documents do not constitute a paired sales analysis to establish the need for any time of sale adjustment.To base a determination of fair market value on a collection of newspaper articles would be to rest the decision on value on nothing more than speculation and conjecture.A conclusion of value must be based on more than this.

Exhibit N – Tax Bills on Jefferson County Properties

Mr. McArthy’s next exhibit is a collection of 2005 and 2007 tax bills on eight condominium units in Jefferson County, Missouri.The tax bills show that for five of the properties the assessed values decreased by $300 each and for the remaining three properties the assessed values decreased by $200 each.According to Complainant, these documents were submitted to show that “the real estate market was in decline locally.”[36]

The Exhibit lacks any relevance to the issue of overvaluation.There are a number of serious problems with the use of these documents to even support Mr. McArthy’s attempt to establish a declining real estate market for his property.The foremost problem is that Jefferson County is not in the subject neighborhood.Comparisons of residential properties in another county are essentially devoid of any probative benefit on whether or not a market in another county is declining.

Furthermore, the Jefferson County properties are apparently rental condominiums, since all are owned by Complainant.His attempt to compare apartments with a single family owner occupied residence illustrates a further lack of training and expertise in real estate appraisal.The fact that values were lowered by the Jefferson County Assessor on a group of condo-apartments falls far short of establishing any trend relative to the real estate market for the subject property.Mr. McArthy’s conclusion that the decline in values is attributable to a general market decline is not established by any hard market data.The decline in values can just as easily be attributable to the Assessor having applied a higher depreciation factor, under a mass appraisal costing system, to the condo units due to them being two years older in 2007 than in 2005.

The bottom line is the Exhibit is not relevant to the issue of fair market value for the subject.It fails to establish any market trend for the subject neighborhood.Any conclusion to that effect based on these documents is nothing but conjecture.

Exhibit O – MLS Data Sheets

Complainant next offered the MLS sale sheets on three properties he apparently proposes as comparable sales to demonstrate a “slow down in the St. Louis market area.”[37]The principle is well established that the owner may not support an opinion of value by reference to comparable sales unless the owner qualifies as an expert.[38]In like manner, the use by the owner of sale properties as comparable to the subject to establish market activity is suspect.

Mr. McArthy omitted to establish the location of these properties in relation to the subject.Each of the three properties is approximately 2 – 3 miles from the subject.All are located outside of the subject neighborhood.Even assuming, with finding, that three sales are sufficient to establish a slowdown in the St. Louis market area, such information is devoid of any evidentiary worth as to the issue of the fair market value of the property under appeal.

Summary and Conclusion

Complainant did not meet his burden of proof.There is no evidence in the collection of exhibits presented, or in the narrative statement provided that establishes prima facie that the fair market value of the subject property on January 1, 2007 would have been $125,000.The taxpayer completely missed the mark with an erroneous method for valuation.The argument regarding the general real estate market does not address the issue of what a willing buyer and seller would have agreed to as the purchase price for the property under appeal on January 1, 2007.

Respondent Proves Value

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, 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.[39]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2007, to be $175,000 for Complainant’s property.The adjustments made the Mr. Hannan were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the various differences between the subject and each comparable.

The factor of the location of Mr. McArthy’s home on a busy street was properly acknowledged by Respondent’s appraiser.He deemed three of the sale properties to be located on similar busy streets.The two other sales not on such streets were properly adjusted for this factor.

An adjustment was made for the subject’s view which was considered inferior to each of the sale properties views.Mr. Hannan adjusted to account for the superior construction of the comparables having some brick construction compared to the subject’s vinyl siding.The subject’s inferior (fair) condition was properly recognized and adjustments made to the comparables for this difference.Other individual amenity items were account for by individual adjustments by the appraiser.

The opinions expressed by Mr. McArthy as to his disagreement with Mr. Hannan’s various adjustments are not persuasive.Opinions by the owner do not constitute rebuttal evidence only a difference in opinion.

Alleged Inaccuracies

Mr. McArthy listed six allegations of inaccuracies in the Hannan appraisal.None of the allegations provide a valid basis for rejecting the appraisal.


Mr. McArthy asserts it is inaccurate to give the age of his home as 56 years, as he asserts a portion of the home was built prior to World War II.[40]This claim is based on hearsay.Complainant admits that the larger portion of his home has been constructed since 1951.[41]Considering the effective age of the house to be 56 years[42] was appropriate for this particular appraisal problem.

Basement Area

The matter of the basement/cellar area has been addressed above.There was no error on the part of Mr. Hannan on this point, given the taxpayer would not permit access for verification of the interior features of the home.

Remodeling in 1998

Mr. Hannan simply noted that the County records indicate some remodeling in 1998.[43]Exhibit I supports the conclusion of Mr. Hannan.Although the construction in 1998 was not an interior remodeling it was new construction to the property.Furthermore, the appraiser’s sales grid shows that he considered the overall condition of the subject (fair) inferior and did not appraise the house has having upgrades in comparison to the sale properties.


Mr. McArthy advises the trees referenced in Mr. Hannan’s appraisal[44] at the back of the property are not part of his lot.There is no indication in the appraisal that any extra value was attributable to this item.Here again, the failure of the taxpayer to arrange for a site inspection by the appraiser may result in the appraiser having to draw conclusions based upon observations that could have been clarified quite simply by the homeowner allowing an on-site inspection.In any event, the mentioning of the trees in the description of the subject lot provides no basis to reject the conclusion of value determined by Mr. Hannan.

Water Seepage

Mr. McArthy admits that Mr. Hannan acknowledged the problem of water seepage in the basement area.However, the homeowner concludes that the appraiser failed to deduct for this factor.A problem such as this is part of the overall condition of a home.Therefore, it is accounted for in the condition adjustment.Mr. Hannan had information as to the problem.Here again, had the taxpayer permitted an interior inspection, he could have given Mr. Hannan the opportunity to view the extent and nature of the water problem in the basement.In the absence of granting access to inspect and view such a condition, the adjustment for condition is considered appropriate to cover the water seepage issue.

Standing Water in Yard

The matter of the drainage problem and the existence of drains in the yard are addressed in Mr. Hannan’s adjustment for the site for the two properties of nearly identical lot size to the subject.The other properties being smaller did not require an additional adjustment, but the appraiser considered those lots equal to the subject given they were smaller but without any drains.

Summary and Conclusion

Exhibit 1 met the standard of substantial and persuasive evidence to rebut the presumption of correct assessment and establish the true value in money for the property to be $175,000 as of January 1, 2007.The assessment must be corrected accordingly.


The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2007 and 2008 is set at $33,250.

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 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, MO65102-0146, 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 appeal is based will result in summary denial. [45]

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 a 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 December 31, 2008.



W. B. Tichenor

Senior Hearing Officer

Certificate of Service

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 31stday of December, 2008, to:Darren McArthy, 9345 Sappington road, St. Louis, MO 63126,Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Philip Muehlheausler, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.


Barbara Heller

Legal Coordinator

[1] Date Received by the Commission.

[2] Exhibit 1 was filed with the Hearing Officer in July.

[3] Exhibit 1; Exhibit F.

[4] Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.


[5] Section 138.431.4 RSMo.

[6] Letter from Complainant, dated 7/30/08.

[7] 12 CSR 30-3.050 (6).

[8] 12 CSR 30-3.050 (7).

[9] Exhibit P, pp. 3 – 6.

[10] 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).


[11] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).


[12] St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).


[13] Hermel, supra.


[14] 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; Exhibit 1, p. 12.


[15] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).


[16] 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. Div. 2 1974).


[17] Hermel, supra.


[18] 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).


[19] See, Cupples-Hesse, supra.


[20] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).


[21] Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).


[22] Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).


[23] See, Standard for Valuation, supra.

[24] Exhibit P, p. 3.

[25] Exhibit 1, p. 2 – Neighborhood.

[26] Exhibit 1, p. 20.

[27] Exhibit 1, p. 2 – Comments on the Improvements.

[28] Exhibit P, p. 4.

[29] See, Vandeven v. Muehlheausler, STC 07-13602 (10/30/08); Steinbach v. Muehlheausler, STC 07-10165 (11/5/08).

[30] Exhibit P, pp. 5-6.

[31] Carmel Energy at 783.


[32] Exhibit 1, pp. 5, 17 & 20.

[33] Exhibit P, p. 6.

[34] Exhibit 1, pp. 3-5, 9.

[35] See, Sales Grid, pp. 3-4; Description of the Sales Comparables, pp. 6-8.

[36] Exhibit P, p. 7.

[37] Exhibit P, p. 8.

[38] State ex rel. Missouri Hwy. and Tr. Comm’n v. McDonald’s Corp., 872 S.W.2d 108, 113 (Mo. App. E.D. 1994); State ex rel. Missouri Hwy. and Tr. Comm’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990).

[39] Hermel, Cupples-Hesse, Brooks, supra.


[40] Exhibit P, pp. 3 & 4.

[41] Exhibit F, Exhibit P, p. 3.

[42] Exhibit 1, p. 6.

[43] Exhibit 1, p. 5.

[44] Exhibit 1, p. 5.

[45] Section 138.432, RSMo.