Donald Foerster v. Brooks (SLCO)

State Tax Commission of Missouri

 

DONALD FOERSTER,)

)

Complainant,)

)

v.)Appeal Number 09-10933

)

MICHAEL BROOKS,)

ACTING ASSESSOR,)

ST. LOUIS COUNTY, MISSOURI,)

)

Respondent.)

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On July 26, 2010, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) affirming the assessment by the St. Louis County Board of Equalization.

Complainant timely filed his Application for Review.

CONCLUSIONS OF LAW

Standard Upon Review

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.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[1]

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[2]

The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[3]

DECISION

The issue which Complainant raises in his Application for Review is that the Assessor’s appraised values for four of the sales used in the Respondent’s appraisal report[4] are less than the sale prices used by Mr. Armstrong in his appraisal of the subject property.The appraiser must use the actual sale price, not the appraised value by the Assessor, in order to properly perform the sales comparison approach to value.The appraised values on the sales comparables were generated via a mass appraisal system which does not always recognize and extract the actual sale price of a given property.The sales comparison approach presented in an ad valorem tax appeal before the Commission must be based on the actual sale prices, not on appraised values.Therefore, there was no error in the use of the sales prices versus the appraised values by Mr. Armstrong.

Furthermore, there was no error on the part of the Hearing Officer in placing reliance on Exhibit 1 in her conclusion of value.The appraisal was done in accordance with well accepted guidelines for performing the sales comparison approach.The Hearing Officer was entitled to give appropriate weight to it, irrespective of whether the Assessor’s appraised values for any of the sale properties were less than the individual sale prices.

A review of the record in the present appeal provides 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 arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[5]

ORDER

The Commission upon review of the record and Decision in this appeal, 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 St. Louis County, as well as the collectors of all affected political

subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.

SO ORDERED September 7, 2010.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jeff W. Schaeperkoetter, Commissioner

 

 

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumption of correct assessment not rebutted.

Complainant appeared in person.

Respondent appeared by Associate County Counselor, Paula J. Lemerman.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.

SUMMARY

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 $379,900, assessed value of $72,180, as residential property.The Board of Equalization reduced the valuation to $359,900, assessed value of $68,380.Complainant proposed a value of $321,000, assessed value of $60,990.A hearing was conducted on July 14, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.

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

Complainant’s Evidence

Complainant testified in his own behalf. He introduced the following Exhibits:

Exhibit	Description	Comments
A	Photographs of Events/Parking at Park	Purpose of photos was to demonstrate the amount of traffic and parking issues faced by the subject property
B	Photographs of Events/Parking at Park
C	Photographs of Events/Parking at Park
D	Photos of Cemetery, Creek	Complainant’s opinion was that a cemetery neg. affects his property value
E	Photo of Water Park	Complainant’s opinion that park neg. affects his value
F	Photo of Neighbor’s House and Community Garden	Neighbor’s value was $619,000 in 2007 and $541,000 in 2009; Believes the community garden neg. affects his property value.
G-I	Photos and MLS on neighboring properties	Complainant presented info to show that there were short sales in area
J	Assessors website info on neighboring property	Assessor’s values on neighboring properties decreased
K-M	Photos and MLS on neighboring properties	Complainant presented info to show that there were short sales in area
N	MLS listing on neighboring property	Assessor’s values on neighboring properties decreased
O	MLS listing on neighboring property
P	Photos and MLS on neighboring properties	Complainant presented info to show that there were short sales in area
Q	Assessors website info on neighboring property	Assessor’s values on neighboring properties decreased
R-T	Photos of subject property	Driveway issue – concrete has sunken, damage on porch rails from rot

 

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Kyle Armstrong, Residential Appraiser for St. Louis County. Mr. Armstrong testified as to his appraisal of the subject property.The Appraisal Report (Exhibit 1) of Mr. Armstrong was received into evidence.Mr. Armstrong arrived at an opinion of value for the subject property of $375,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of five properties which he deemed to be comparable to the subject property.

FINDINGS OF FACT

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.The subject property is located at 588 West Monroe, Kirkwood, Missouri.The property is identified by parcel number 24N630642.The property consists of approximately 13,579 square foot lot improved by a colonial, frame single-family residence with a basement and two-car garage. The residence, of approximately 2,634 square feet, has nine rooms including 4 bedrooms, 3.5 baths.

3.There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010.

4.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, 2009, to be $321,000.

5.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The five properties were located within .66 miles from the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009 (in a range from June 2008 to May 2010).The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, and other amenities of comparability.

6.The appraiser made various adjustments to the comparable properties for differences which existed 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 as a percentage of sale price ranged from -10% to -0.1% and gross adjustments ranged from 15.2 % to 33.2%.The adjusted sales prices for the comparables ranged from $372,600 to $384,600.The appraiser concluded the sales comparable property two was most similar to the subject property.Property 1 was on the same street as the subject within .1 miles and therefore suffered from the same concerns the Complainant had for his property -noise from trains and traffic from the park.Mr. Armstrong concluded a value of $375,000 or $142.37 per square foot.The comparables ranged from $151.24 to $173.38 per square foot.

7.Respondent’s appraisal constituted clear and convincing and cogent evidence to affirm the Board’s value.It was accepted only to sustain the assessment made by the Board and not for the purpose of raising the assessment above that value.

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

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

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.Snider, Hermel & Cupples Hesse, supra.As is discussed below, Complainants failed to meet the required standard to rebut the presumption of correct assessment.

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.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).It is the fair market value of the subject property on the valuation date.Hermel, supra.

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.

 

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.

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Complainant’s Burden of Proof

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, 2009.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. 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.” 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).

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

The owner of property is generally held competent to testify to its reasonable market value.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).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Cohen v. Bushmeyer, — S.W.3d —-, 2008 WL 820938 (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).

In this instance, the Complainant stated an opinion of market value of $321,000.Complainant believed that his property should be valued at $321,000 because (1) its proximity to the railroad tracks; (2) its proximity to a park and community garden; (3) the traffic in the area; and (4) because neighboring properties, who have never appealed to the Board, have had their property values decreased.

Complainant testified that due to the location of his property, his property value is $321,000.Complainant testified that his lot is near railroad tracks and therefore the noise from the trains negatively impacted the value.This may be true.However, Complainant presented no market evidence as to the impact of the train noise on the market price or value to his property. The residential appraiser for the County selected sales comparables also affected by the noise or made an adjustment to the comparable properties.

Complainant testified that the congestion and traffic due to events occurring at the nearby park negatively impacted the market value of his property.Once again, the Complainant presented no market evidence and the Respondent’s appraiser accounted for any impact by including properties similarly situated.Contrary to Complainant’s opinion, market evidence may indicate proximity to a public park and gardens may positively impact the value of a property.

Lastly, Complainant claims that his value should be decreased because the Assessor’s market value of neighboring properties has decreased.The determination of the hearing is the market value of the subject property.The decrease in the Assessor’s mass appraisal determination of value of neighboring properties sheds no light on the market value of the subject’s property.Exhibit Q lists properties ranging from values of $203,000 to $541,500.The value placed upon the subject property is within that range.Complainant testified that he believes his property value did not decrease this year because he appeals to the Board of Equalization each year and each year his value is decreased.Complainant did in fact appeal to the Board of Equalization in 2009 and his property value was decreased from $379,900 to $359,900.Each assessment cycle the Assessor must make a determination of market value for that assessment cycle.Arguments such as that presented by the Complainant does not prove the market value of the subject property.

Complainant’s opinion of value is not based upon property elements or a proper foundation.It has no probative weight in arriving at a determination of fair market value.The burden of proof on Complainant has not been met.The presumption of correct assessment by the Board has not been rebutted.

ORDER

The assessed valuation for the subject property as determined by Board of Equalization for St. LouisCountyfor the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2009 and 2010 is set at $68,380.

Complainant may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000. An Application for Review 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 response must be sent to the Attorney for Respondent, Assessor and Collector at the addresses listed below in the certificate of service.

If an application for review of this decision is made to the Commission, the protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission and an order to the Collector to release and disburse the impounded taxes.§139.031.3, RSMo.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes to the appropriate taxing jurisdictions, unless previously done under court order pursuant to Section 139.031, RSMo.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED July 26, 2010.

STATE TAX COMMISSION OFMISSOURI

Maureen Monaghan

Hearing Officer