State Tax Commission of Missouri
DENNIS & CHRISTINE MATTEUZZI,)
)
Complainants,)
)
v. ) Appeal No.11-10320
)
JAKE ZIMMERMAN,ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.Respondent presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization and prove the true value in money as of January 1, 2011, for the subject property to be $1,195,900.
True value in money for the subject property for tax years 2011 and 2012 is set at $1,195,900, residential assessed value of $227,220.
Complainant Dennis Matteuzzi appeared pro se.
Respondent appeared by Associated County Counselor, Paula J. Lemerman
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis 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, 2011.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 St. Louis County Board of Equalization.
2.Evidentiary Hearing.The Evidentiary Hearing was held on September 25, 2012, at the St. Louis County Government Center, 41 South Central Avenue, Clayton, Missouri.
3.Subject Property.The subject property is identified by locator number 19J430196.The property is located at 14 Carrswold Dr., Clayton, Missouri.A complete description of the property is provided in Exhibit 1.[1]
4.Assessment.The Assessor appraised the subject at a market value of $1,271,100, a residential assessed value of $241,510.The Board sustained the assessment.[2]
5.Complainants’ Evidence.Complainants prefiled the following exhibits:
|
EXHIBIT |
DESCRIPTION |
|
A |
Photographs & Assessor’s Website Property Information – 9 Brentmore Park |
|
B |
MultiList Data Sheet &Assessor’s Website Property Information – 18 Carrswold Dr. |
|
C |
Assessor’s Website Property Information – 15 Carrswold Dr. |
|
D |
Photograph & Assessor’s Website Property Information – Subject |
|
E |
MultiList Data Sheet &Assessor’s Website Property Information – 24 Carrswold Dr. |
|
F |
Assessor’s Website Property Information – 9 Brentmore Park |
|
G |
Photograph & Assessor’s Website Property Information – 38 Brentmore Park |
|
H |
Photograph & Assessor’s Website Property Information – 39 Brentmore Park |
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I |
Photograph & Assessor’s Website Property Information – 23 Brentmore Park |
Mr. Matteuzzi testified on behalf of Complainants and stated the owners’ opinion of value to be: $825,000.Mr. Matteuzzi was not established by education, training and experience to be an expert in the field of appraisal of residential property in St. Louis County, Missouri.
Objection was made to the portions of Exhibits B and E which contained MultiList Service(MLS) data sheets.Objections was sustained, the MLS data sheets in Exhibits B and E were excluded from evidence.See, Complainants’ Exhibits, infra.
There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.[3]
Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board.
6.Respondent’s Evidence. Respondent submitted the Appraisal Report (Exhibit 1), which was received into evidence, and the testimony of appraiser, Ross Hackman.[4]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, 2011, to be $1,195,900.
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.[5]
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.[6]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.[7]In an overvaluation appeal, true value in money for the property being appealed 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.[8]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 is not evidence of value.
The presumption of correct assessment is rebutted when the taxpayer 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.[9]Complainants failed to present substantial and persuasive evidence to establish that the Board’s valuation was erroneous or what the fair market value should have been as of 1/1/11.
Respondent did present substantial and persuasive evidence that established that the Board’s valuation was erroneous and that the fair market value of the property under appeal was $1,195,900 on 1/1/11.
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.[10]True value in money is defined in terms of value in exchange and not value in use.[11]It is the fair market value of the subject property on the valuation date.[12]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.[13]
Mr. Hackman concluded value for the subject under the Standard For Valuation.[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] Complainants did not present an opinion of value based upon any recognized appraisal methodology.Respondent’s appraiser concluded value by developing the sales comparison approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.The Hearing Officer concludes that the appropriate method of valuation in this appeal is the sales comparison approach.
Opinion Testimony by Experts
If 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 on that subject, by knowledge, skill, experience, training, or education, may testify thereto.The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[17]
Mr. Hackman possessed the education, training and experience to testify as an expert on the appraisal of the subject property.[18]The data utilized by the appraiser in his appraisal was of a type reasonably relied upon by experts in the appraisal of residential real property in St. Louis County, Missouri.The data was deemed to be otherwise reliable by the appraiser and is so concluded to be by the Hearing Officer.
Complainants’ Burden of Proof
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, 2011.[19]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.”[20]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.[21]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.[22]
Complainants’ Exhibits
Complainants presented the following Exhibits, along with the testimony of Mr. Matteuzzi, as their case in chief.Each of the exhibits contain a photograph or photographs of the cited property and the Assessor’s website information on each property.Those documents in each exhibit were received into evidence.Exhibit A and F were duplicate exhibits.Exhibit D was a photograph and the website data on the subject.In addition, Exhibit B and E contained MultiList Service data sheets on these two properties.Counsel for Respondent objected to these documents in Exhibits B and E.The objection was on the ground of hearsay.The objection was sustained and the MLS data sheets in Exhibits B and E were excluded from evidence.
MLS Data Sheets
Information from realtors is the type of data reasonably relied upon by experts in the appraisal of residential real estate. Often appraisers will utilize MLS sheets to verify various items concerning properties which are being used as comparables.Appraisers are permitted to make use of such documents in forming performing their appraisals and forming their opinions of value.However, a non-expert, such as an owner is not permitted to have such documents admitted into evidence, because he is not an expert appraising the property.[23]Accordingly, the data sheets are simply hearsay and upon timely objections, as was made in this instance, they are excluded from the evidentiary record.
Assessor’s Information – No Probative Weight
Turning to the remainder of the documents in Complainant’s exhibits, there is no probative weight that can be given to these documents to establish a value of $825,000 as proposed by Mr. Matteuzzi.From his testimony, it is clear that he did not perform a sales comparison approach to arrive at his opinion of value.The taxpayer is not an expert as to the comparability of the properties referenced in the exhibits.Some of the properties did not have recent sales, so those properties were only being compared based on appraised values by the Assessor as opposed to actual sales data.Comparing assessments of properties is not a recognized appraisal methodology.For those properties which did have information as to a sale at a time relevant to a valuation date of 1/1/11 there were no adjustments for differences existing between the sale property and the subject.None of the Exhibits individually or collectively provide any evidence from which a value for the subject property can be logically concluded.Accordingly, Complainants’ exhibits are of no evidentiary value, they can be given no probative weight.In the final analysis, irrespective of their admission into evidence, the Assessor’s Website documents are not relevant to the valuation issue in this appeal.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[24]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[25]Mr. Matteuzzi’s opinion of value was based upon his study of acreage, square footage and street view of the properties shown in his Exhibits A, B, C, E, F, G, H and I.The rational for the taxpayer’s opinion of value as testified to at hearing of $825,000 was essentially if the properties identified in the Exhibits sold for the stated values, then the subject isn’t worth the value the Assessor and Board determined, i.e. $1,271,100.There is nothing in the testimony or the Complainant’s exhibits that establishes from any recognized appraisal methodology the value of $825,000 for the subject.The owner’s opinion was not established to have been based on proper elements or a proper foundation.The Hearing Officer is left with nothing but mere speculation as to the actual methodology that Mr. Matteuzzi employed to conclude his opinion of value.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.”[26]
Summary and Conclusion
No probative weight can be given to the owner’s opinion of value.Complainants failed to rebut the presumption of correct assessment by the Board and failed to prove the fair market value of the subject as of 1/1/11.
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.[27]Respondent met this burden of proof to establish a fair market value of the subject as of January 1, 2011, to be $1,195,900.
Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.
The adjustments made the Mr. Hackman 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.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained 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 2011 and 2012 is set at $227,220.
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.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, 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 application for review is based will result in summary denial. [28]
Disputed Taxes
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED October 3, 2012.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
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 3rdday of October, 2012, to:Dennis Matteuzzi, 14 Carrswold, Clayton, MO 63105, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, 41 South Central Avenue, Clayton, MO 63105; Eugene Leung, Director of Revenue, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
___________________________
Barbara Heller
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
[2] BOE Decision Letter, dated 9/23/11, filed with Complaint for Review of Assessment; Exhibit 1, Addendum Page 1 of 4 – Assessment Information and Tax Data.Residential property is assessed at 19% of fair market value (true value in money, appraised value) – Section 137.115.5, RSMo
[4] Mr. Hackman was recognized at hearing as an expert witness.Mr. Hackman by his education, training and experience is an expert in the appraisal of residential real property in St. Louis County, Missouri.See, Exhibit 1 – Professional Qualifications.
[8] 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)
[9] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[10] 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).
[11] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[13] 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.
[14] Exhibit 1, Page 4 of 4 – Definition of Value – Market Value; DEFINITION OF “TRUE VALUE IN MONEY” AS SET FORTH BY THE STATE OF MISSOURI
[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] Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
[20] 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).
[21] See, Cupples-Hesse, supra.
Substantial and persuasive evidence is not an extremely high standard of evidentiary proof.It is the lowest of the three standards for evidence (substantial & persuasive, clear and convincing, and beyond a reasonable doubt).It requires a small amount of evidence to cross the threshold to rebut the presumption of correct assessment by the Board.The definitions, relevant to substantial evidence, do not support a position that substantial and persuasive evidence is an extremely or very high standard.
“Substantial evidence: Evidence that a reasonable mind would accept as adequate to support a conclusion; evidence beyond a scintilla.”Black’s Law Dictionary, Seventh Edition, p. 580.
The word scintilla is defined as “1. a spark,2. a particle; the least trace.” Webster’s New World Dictionary, Second College Edition.Black’s definition at 1347 is “A spark or trace <the standard is that there must be more than a scintilla of evidence>.”There must be more than a spark or trace for evidence to have attained the standard of substantial.Once there is something more than a spark or trace the evidence has reached the level of substantial.Substantial evidence and the term preponderance of the evidence are essentially the same.“Preponderance of the evidence.The greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”Black’s at 1201.Substantial evidence is that a reasonable mind would accept as adequate to support the conclusion.Preponderance is sufficient to incline a fair and impartial mind to one side of the issue rather than the other, i.e. support the proposed conclusion.
[23] Mr. Matteuzzi’s testimony at hearing was essentially a recitation of information taken from the MLS sheets for Exhibits B and E.Since those documents had been excluded from evidence, his testimony relying on such information was hearsay upon hearsay and can be given no probative weight in this case.
[24] 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).
[25] 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).