David M Trainor v. Judy Harmon, Assessor Monroe County

State Tax Commission of Missouri

 

DAVID M. TRAINOR,	)
	)
Complainant,	)
	)
v.	)	Appeal No.      15-72001
	)
JUDY HARMON, ASSESSOR	)
MONROE COUNTY, MISSOURI,	)
	)
Respondent.	)

 

 

ORDER

AFFIRMING DECISION OF THE HEARING OFFICER

UPON APPLICATION FOR REVIEW

 

On December 22, 2015, Chief Counsel Maureen Monaghan, acting as Hearing Officer (Hearing Officer), entered her Decision and Order (Decision) setting aside the assessment by the Board of Equalization of Monroe County (BOE). The Hearing Officer set the true value in money (TMV) for the subject property as follows:

TYPE	STRUCTURE VALUE	LAND VALUE	TOTAL VALUE	TOTAL ASSESSED
RES	$145,200	$3,500	$148,700	$28,260
AGR	$42,800	$18,600	$61,400	$7,370
COMM	0	0	0	0
VAC	0	0	0	0
TOTALS	$188,000	$22,100	$210,100	$35,630

 

David M. Trainor (Complainant) filed his Application for Review of the Decision. Judy Harmon, Assessor of Monroe County, (Respondent) filed her Response.  Complainant filed his Reply.

CONCLUSIONS OF LAW

Standard of Review

 

A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission. Section 138.432 RSMo Cum. Supp. 2015; 12 CSR 30-3.080(4). The Commission may then summarily allow or deny the request. Section 138.432; 12 CSR 30-3.080(5). The Commission 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 Commission. Section 138.432; 12 CSR 30-3.080(5)(A).

The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. St. Louis County v. State Tax Commission, 515 S.W.2d 446, 450 (Mo. 1974).  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, 515 S.W.2d at 450; Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).  Likewise, the Commission is free to consider all pertinent facts and give them such weight as reasonably the Commission deems them entitled.

The Commission, having reviewed the record and having considered the Decision of the Hearing Officer and the briefs of the parties, enters its Decision. Segments of the Hearing Officer’s Decision have been incorporated into our Decision without further reference.

DECISION

 

Complainant’s Points on Review

            In his Application for Review, Complainant claims that the Hearing Officer erred (1) in making no adjustment to the value of the B44 barn; (2) in the assessment of Complainant’s agricultural land; (3) in the assessment of Complainant’s agricultural buildings; (4) in not setting the assessed values of Complainant’s structures back to the values from 2012; and in not making any change to the cost of Complainant’s garage.

Commission’s Ruling

For the reasons that will now be set forth in response to Complainant’s Points on Review, the Commission finds Complainant’s arguments to be unpersuasive to warrant either a modification or overturning of the Decision.

Factual and Procedural History

            According to the record before us, the subject property is located at 34557 Route D, Santa Fe, Missouri, and is identified by map parcel number 22-4.1-18-0-0-3.  The subject property consists, in part, of a one-acre residential tract improved by a home built in 1985.  The ranch-style residence has a brick exterior; two bedrooms on the main floor; two “full” bathrooms and one “half” bathroom on the main floor; a partially finished basement containing two “full” bathrooms; and a two-car garage in the basement level.  (Exhibit B)  The property also consists, in part, of 81.17 acres valued according to agricultural land productivity values.  The agricultural improvements consist of two sheds and a barn.

Respondent valued the subject property at $232,800 true market value (TMV), $40,160 assessed value as of January 1, 2015.  Respondent valued the residence at $167,900 TMV; valued the one acre classified as residential at $3,500 TMV; valued the structures classified as agricultural at $44,700 TMV; and valued the 81.17 acres classified as agricultural at $18,600 TMV.  The BOE sustained Respondent’s valuation.

At the evidentiary hearing, Complainant challenged the BOE’s valuation of his residence and valuation of the three agricultural improvements. He did not challenge the BOE’s valuation of the land.  Complainant opined that the value of the residential portion of property should be $150,000.  Complainant presented, inter alia, photographs of the residence and outbuildings, a diagram of the residence, newspaper clippings advertising the auctions and sales of properties in the surrounding area, and ledgers purporting to show the costs to construct the outbuildings.  Specifically, Complainant introduced the following into evidence without objection:

EXHIBIT	DESCRIPTION
A	Table 2 – referencing the garage, unfinished
B	Complainant’s diagram of the house
C	Property Record Card 2015
D	Photograph of the residence. It is a ranch style home with two car garage in the basement level.
E	Advertisement of a property in Monroe City which was auctioned on August 8, 2015.
F	Advertisement of a property in Boonville which was auctioned on September 19, 2015.
G	Listings of properties
H	Photographs of Subject property bathrooms
I	Property Record Card
J	Photographs and information related to the buildings classified as agricultural.
K	Photograph of lean-to
L	Diagram of construction of the structure classified as agricultural
M	Cost to Construct Machine Shed
N	Cost to Construct Shop
O	Cost to Construct Barn
P	Cost to Construct Addition
Q	Cost to Construct Addition
R	Advertisements for utility buildings.

 

Respondent presented a copy of the folder containing information related to the valuation of the subject property. During the evidentiary hearing, Respondent reviewed the measurements and information provided by Complainant.  Respondent reviewed and corrected certain calculations.

On December 22, 2015, the Hearing Officer entered her Decision finding that the total TMV of the subject property was $210,100^[1], total assessed value $35,630.  The Hearing Officer found that Complainant had failed to present substantial and persuasive evidence to establish a valuation reflecting the fair market value of the subject property; thus, the issue of improper valuation by the BOE did not need to be addressed.  More specifically, the Hearing Officer made the following findings of fact and conclusions of law regarding the evidence:

• Complainant’s evidence consisting of photographs of the residence and agricultural buildings and ledger sheets showing the cost of construction did not provide a market value for the subject property on January 1, 2015;
• Complainant’s evidence consisting of newspaper clippings and advertisement information concerning utility buildings was hearsay and was not relevant to establishing the true value in money for any of the subject property’s agricultural buildings on January 1, 2015;
• Complainant’s evidence consisting of advertisements of home sales and auctions and photographs of the interior of one of the auctioned homes were hearsay and were not relevant to establishing the fair market value of the residential portion of subject property because such evidence did not demonstrate that adjustments for differences between the subject property and the auctioned properties had been made or that the sales of the auctioned properties were market sales; and
• Complainant’s evidence did not utilize an approved methodology, i.e., the comparable sales approach, the cost approach, or the income approach, to establish the true market value of either the auctioned properties or the subject property.

Analysis

            We have reviewed the whole record in this case and find that the Hearing Officer did not err as Complainant alleged in his application for review.  First, we note that much of Complainant’s evidence was hearsay not subject to an exception and not relevant to establishing true market value of the subject property on January 1, 2015.  Second, the Hearing Officer was not required to make any adjustments with regard to the value of particular agricultural buildings or the agricultural land, to re-set the assessed values of Complainant’s structures back to the values from 2012, or to change the cost of Complainant’s garage because Complainant did not provide substantial and persuasive evidence to establish the true market value of any of these components of the subject property on January 1, 2015.  Third, the Hearing Officer’s Decision, in fact, set aside the BOE’s decision sustaining Respondent’s initial assessment of the subject property and lowered the assessed value of the subject property for tax years 2015 and 2016.  The record indicates that Respondent reviewed Complainant’s documentation and made adjustments to Respondent’s cost approach to establish market value of the residential and agricultural structures for the subject property.

Summary & Conclusion

A review of the record in the present appeal provides ample support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.  A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an erroneous, arbitrary, capricious or unreasonable manner, or that she abused her discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).

The Hearing Officer did not err in her determinations as challenged by Complainant.

ORDER

Upon review of the record and the Decision in this appeal, the Commission finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision 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 Commission.

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 Monroe County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.

 

SO ORDERED this 28^th day of June, 2016.

 

STATE TAX COMMISSION OF MISSOURI

 

Bruce E. Davis, Chairman

 

Victor Callahan, Commissioner

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 28th day of June, 2016, to:

 

Complainant; the Respondent County Assessor and/or Counsel for the Respondent County Assessor; and the County Collector.

 

Jacklyn Wood

Legal Coordinator

 

Contact Information for State Tax Commission:

Missouri State Tax Commission

P.O. Box 146

301 W. High Street, Room 840

Jefferson City, MO 65102

573-751-2414

573-751-1341 FAX

[1] $148,700 for residential property and $61,400 for the agricultural property.  The Decision reduced the improvements of both the agricultural and residential improvements.

State Tax Commission of Missouri

 

 

DAVID M. TRAINOR,	)
	)
Complainant,	)
	)
v.	)	Appeal No.      15-72001
	)
JUDY HARMON, ASSESSOR,	)
MONROE COUNTY, MISSOURI,	)
	)
Respondent.	)

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Monroe County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.  True value in money for the subject property for tax years 2015 and 2016 is set as follows:

TYPE	STRUCT VAL	LAND VAL	TOTAL VAL	TOTAL ASSESS
RES	$145,200	$3,500	$148,700	$28,260
AGR	$42,800	$18,600	$61,400	$7,370
COMM	0	0	0	0
VAC	0	0	0	0
TOTALS	$188,000	$22,100	$210,100	$35,630

 

Complainant appeared pro se.  Respondent appeared not.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Monroe County Board of Equalization, which sustained the valuation of the subject property.  The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2015.  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.  Complainant timely appealed to the State Tax Commission from the decision of the Monroe County Board of Equalization.  A hearing was conducted on December 7, 2015, at the Monroe County Courthouse, Paris, Missouri.

 

2. Assessment. The Assessor appraised the property at $232,800, a total assessed value of $40,160.  The property is classified as residential and agricultural.  The Assessor determined that the structures classified as residential have a true value of $167,900 and the land has a value of $3,500.  The Assessor determined that the structures classified as agricultural have a true value of $44,700 and the land has a value of $18,600.
3. Subject Property. The subject property is located at 34557 Route D, Santa Fe, Missouri.  The property is identified by map parcel number 22-4.1-18-0-0-3.

The property consists, in part, of a one acre residential tract improved by a home built in 1985.  The property also has 81.17 acres that are valued according to agricultural land productivity values.  The agricultural improvements consist of two sheds and a barn.

4. Complainant’s Evidence.  Complainant testified in his own behalf and offered into evidence the following exhibits which were received without objection.

EXHIBIT	DESCRIPTION
A	Table 2 – referencing the garage, unfinished
B	Complainant’s diagram of the house
C	Property Record Card 2015
D	Photograph of the residence.  It is a ranch style home with two car garage in the basement level.
E	Advertisement of a property in Monroe City which was auctioned  on August 8, 2015.
F	Advertisement of a property in Boonville which was auctioned on September 19, 2015.
G	Listings of properties
H	Photographs of Subject property bathrooms
I	Property Record Card
J	Photographs and information related to the buildings classified as agricultural.
K	Photograph of lean-to
L	Diagram of construction of the structure classified as agricultural
M	Cost to Construct Machine Shed
N	Cost to Construct Shop
O	Cost to Construct Barn
P	Cost to Construct Addition
Q	Cost to Construct Addition
R	Advertisements for utility buildings.

 

Complainant testified at hearing to an opinion of value for the residential portion of the property to be $150,000.  Complainant only challenged the value of the three agricultural improvements.  Complainant did not challenge the land value.  Complainant’s testimony included measurements and condition of the property.

5. Respondent’s Evidence. Respondent provided a copy of her folder for the Complainant’s property.  Respondent reviewed the measurements and information provided by the Complainant.  Respondent reviewed and corrected calculations.

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.  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.

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.  The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.  In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

            There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.  This presumption is a rebuttable rather than a conclusive presumption.  It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.  The presumption of correct assessment is rebutted when the taxpayer or Respondent when advocating a value different than the Board’s value 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.  Neither Complainant nor Respondent presented substantial and persuasive evidence to establish that the Board’s assessment was in error.

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.  True value in money is defined in terms of value in exchange and not value in use.  It is the fair market value of the subject property on the valuation date.  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.

 

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.  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.

 

Complainant Fails To Prove Value

 

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2015.  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.”  A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.

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

Exhibits and Testimony

The Complainant has the burden of establishing that the Board of Equalization was incorrect in its valuation and establish the true value of the property as of January 1.  The exhibits received on behalf of Complainant did not provide substantial and persuasive evidence to establish a value for the subject.  Without providing substantial and persuasive evidence of the market value, the issue of the improper valuation need not be addressed.

Photographs and Cost Information:  Photographs of the residence and agricultural buildings which are on Complainant’s land and the ledger sheets from the cost for construction were presented.  Such information does not provide market value for the property on January 1, 2015.

Newspaper Information on Utility Buildings:  The document is hearsay that has no relevant information to establish true value in money for any of the subject’s agricultural

buildings.

Information on Home Sales and Auctions:  The documents are hearsay and have no relevant information to establish the fair market value of the subject’s residential property without market information to make adjustments to adjust for differences in the property and verify the sale was a market sale.  Such information is not recognized as an appropriate methodology to establish the value of a residence.

Conclusion as to Complainant’s Evidence

The first element under the taxpayer’s burden of proof is to provide an opinion of value for the property under appeal.  The Complainant failed to present information under any recognizable approaches.

The Assessor’s office did review the evidence and made adjustments to their cost approach to establish valuation for the subject property.

ORDER

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

The assessed value for the subject property for tax years 2015 is set at

TYPE	STRUCT VAL	LAND VAL	TOTAL VAL	TOTAL ASSESS
RES	$145,200	$3,500	$148,700	$28,260
AGR	$42,800	$18,600	$61,400	$7,370
COMM	0	0	0	0
VAC	0	0	0	0
TOTALS	$188,000	$22,100	$210,100	$35,630

 

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. [1]

Disputed Taxes

The Collector of Monroe 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 December 22, 2015

STATE TAX COMMISSION OF MISSOURI

 

Maureen Monaghan

Hearing Officer

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 22nd day of December, 2015, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.

 

Jacklyn Wood

Legal Coordinator

 

[1] Section 138.432, RSMo.