State Tax Commission of Missouri
|DONALD & MARY HART,||)|
|v.||)||Appeal # 14-32500|
|SCOTT SHIPMAN, ASSESSOR||)|
|ST. CHARLES CO., MISSOURI||)|
DECISION AND ORDER
Decision of the County Board of Equalization sustaining the true market value made by the Assessor is AFFIRMED. As set forth more fully below, although this Hearing Officer found Complainants to be extremely credible, Complainants did not meet their burden of proof, such being the presentation of substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. Additionally, Respondent presented substantial and persuasive evidence, via an appraisal report, to support the assessment by the Board of Equalization. Such appraisal report proffered a true value of $115,000, $13,707 above the value set by the Assessor and Affirmed by the St. Charles County Board of Equalization.
True value in money for the subject property for tax year 2014 is set at $101,293, residential assessed value of $19,245.
Complainants appeared pro se.
Respondent appeared by attorney Amanda Jennings.
Case heard and decided by Senior Hearing Officer John Treu.
Complainant appeals, on the ground of overvaluation, the decision of the St. Charles 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, 2013. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction and improvement to the property. Section 137.115.1 RSMo
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order. The Hearing Officer gave all documents and testimony such weight and consideration as he deemed just, proper and relevant, within the bounds of the evidentiary standards set forth in Missouri.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Charles County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing was held on January 14, 2015 at St. Charles County Administration Building), St. Charles, Missouri.
- 3. Order Setting Evidentiary Hearing. The Order Setting this appeal for Evidentiary Hearing specifically stated: “[y]ou are requested to make every effort to be prepared to present your case at this time.”
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 3-0133-0127-00-0045. It is further identified as 512 Caulks Hill Road, St. Charles (city), St. Charles County, Missouri. (Complainants’ Complaint, Ex. A, Ex. 1 & Ex. 2)
- Description of Subject Property. The subject property consists of a .64 acre tract of land improved by a single family, residential two story style home of average quality, fair location, with 2075 square feet of living area. Amenities include four bedrooms, two and a half bathrooms, a deck, patio and porch and a two car garage. (Ex. 2)
- Sale of Subject. The subject property was purchased by Complainant in September or October of 1996 for $117,500. (Complainants testimony)
- Assessment. The Assessor appraised the property as residential, at $101,293. The Board of Equalization sustained such valuation. (Complainants’ Complaint)
- Complainant’s Evidence. Complainant offered into evidence Exhibit A, which consisted of Appraisal relating to parcel 24 on Cauks Hill Road, St. Charles County, MO [dated October 21, 2010], a letter from a Title Company [dated June 26, 2009], a General Warranty Deed [dated November 15, 2010], a Missouri Supreme Court case, an Appraisal letter [dated November 10, 2010], an “Appraisal Review and Approval of Just Compensation” [dated November 10, 2010] and a “Consent Judgment, Order and Decree”, signed by Complainants. All and/or portions of Exhibit A were objected to on the basis of hearsay, relevance and lack of foundation. Exhibit A was received into the evidentiary record to be given such weight and consideration, as appropriate, by the Hearing Officer
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2013, to January 1, 2014, therefore the assessed value for 2013 remains the assessed value for 2014. Section 137.115.1, RSMo.
- Title Issue. At some time during a road project, prior to the time period the subject of this appeal, a title issue arose regarding the ownership of Complainants’ front yard and a small portion of the land (1 foot according to testimony) which Complainants home sat upon. Such title issue was ultimately resolved in 2014. (Ex. A, Ex. 1 & Ex. 2)
- Respondent’s Evidence. Respondent offered into evidence Exhibit 1- A full copy of a “Consent Judgment, Order and Decree”, executed by all pertinent parties and signed by a judge on December 11, 2014. Respondent also offered Exhibit 2 – Appraisal Report with an Effective Date of January 1, 2013 – (Thomas P. Babb, Missouri State Certified General Appraiser). Although page 2 of such appraisal report states the “Date of Appraisal” as “January 1, 2013”, the appraisers testimony evidenced such appraisal was only recently performed. Exhibits 1 & 2 were received into evidence without objection.
- Presumption of Correct Assessment Not Rebutted. 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, 2013, to be $0.00, as proposed. See, Presumption In Appeal, infra.
Respondent’s evidence was substantial and persuasive to establish the value of the subject, as of January 1, 2013, to be $115,000. However, Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value. Respondent met the standard of substantial and persuasive evidence in this appeal to sustain the original valuation of $101,293.
CONCLUSIONS OF LAW AND DECISION
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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Basis of Assessment
The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of 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). 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. When some substantial evidence is produced by the Complainant, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption. United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) and cases therein cited. 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. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra. 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). Complainants did not meet their burden of proof.
This Hearing Officer found both Complainants to have high credibility as to the stress, grief, anguish, turmoil and frustration they faced regarding the subject property. Both Complainants demeanor supports this conclusion. Complainants’ testimony was additionally credible that the situation surrounding the title issue, regarding the subject property, during all pertinent times relevant to this appeal, would have a negative impact on the value of the subject property. Nevertheless, such testimony did not provide this Hearing Officer with any quantifiable and credible evidence of the actual value of the subject property on January 1, 2013, such being the quintessential question in this appeal. As set forth below, even if this Hearing Officer where to give all of Complainants’ exhibits full evidentiary value, this Hearing Officer would have to resort to conjecture and speculation, which would be improper, to translate Complainants’ testimony and exhibits into a true value of the subject property as of January 1, 2013. Despite Complainants high credibility and the obvious impact upon their lives arising from the title issue, their testimony did not provide substantial and persuasive evidence of what the true market value of the home was on January 1, 2013. They did not provide any substantial and persuasive evidence of what a willing buyer would have paid for the subject property, with the pending title issue and the circumstances surrounding such.
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, 2013. Hermel, supra. Respondent, Scott Shipman, had no obligation to present any evidence. 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).
Owner’s Opinion of Value and Other Valuation Evidence
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, 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).
“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.” Carmel Energy at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.” See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).
Complainants’ evidence leaves the Commission is such nebulous position. There is no question in this Hearing Officers judgment that the value of the subject property was negatively impacted by the title issue pending at all times pertinent to the subject property. Nevertheless, Complainants’ contention of a $0 valuation is not persuasive. Notwithstanding the title issue, the remaining land and the Complainants indisputable ownership interest in the home itself, most certainly had some value. Respondent’s appraisal evidence assigned a negative adjustment of $65,000 to all comparable sales for the title issue. The testimony of Complainants was that it cost them $7,100 to clear up the title issue, including attorney fees. Thus, the negative adjustment exceeded Complainants cost to cure the title issue by $57,900. However, the remainder struggles and problems addressed above, which Complainants had to contend with, and which any potential buyer would have had to contend with would most certainly seem to depress the market value of the subject property beyond the $7,100 out of pocket costs. The problem remains, Complainants did not quantify the dollar effect on the subject property.
The Assessor’s original value in this appeal was determined by the Board to be correct. Accordingly, the taxpayer must rebut that presumption in order to prevail. The taxpayer must establish by substantial and persuasive evidence that the value concluded by the Board is in error and what the correct value should be. The burden, of course, is discharged by simply establishing the fair market value of the property as of the valuation date, since once fair market value is established it, a fortiori, proves that the Board’s value was in error. The computer-assisted presumption plays no role in this process.
The computer assisted presumption does not come into play in this appeal because the Board of Equalization affirmed the Assessors valuation. The computer-assisted presumption only comes into play if the Board of Equalization lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and it has not been shown that the Assessor’s valuation was not the result of a computer assisted method. If the Board of Equalization sustained the valuation of the Assessor, the computer assisted presumption does not come into play, as the Boards valuation, is an independent valuation.
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). True value in money is defined in terms of value in exchange and not value in use. 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).
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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.
Black’s Law Dictionary, Seventh Edition (1999), p. 726, defines hearsay as follows: “Traditionally, testimony that is given by a witness who relates not what he or she knows personally, but what others have said, and that is therefore dependent upon the credibility of someone other than the witness. Such testimony is generally inadmissible under the rules of evidence.” McCormick on Evidence, Third Edition, (1984), p. 729, defines the term as; “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” The Courtroom Handbook on Missouri Evidence Missouri Practice, William A. Schroeder – 2012, Principle 800.c, p. 504,
follows the definition given by the Federal Rules and cited by McCormick. The out of court statement can take the form of either oral or written assertions. Therefore, documents which make assertions of facts are hearsay, just as well, as the speech of another person.
The hearsay rule provides that “no assertion offered as testimony can be received unless it is or has been open to test by cross-examination or an opportunity for cross-examination, except as otherwise provide by the rules of evidence, by court rules or by statute.” Black’s, supra – hearsay rule, p. 726. The rationale behind the rule is quite simply that out of court hearsay statements are not made under oath and cannot be subject to cross-examination. Accordingly, when various documents, such as but not limited to, Internet, newspaper and magazine articles are offered as exhibits in a hearing before the Commission, unless the document falls within one of the exceptions to the hearsay rule, upon objection such must be excluded.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo. The Hearing Officer during the evidentiary hearing made inquiry of Complainants and Respondent’s appraiser.
Weight to be Given Evidence
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. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances, but is not bound by the opinions of experts who testify on the issue of reasonable value, and may believe all or none of the expert’s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
Evidence of Increase in Value
In any case in charter counties or St. Louis City where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal. Section 138.060, RSMo; 12 CSR 30-3.075. The evidence presented by the Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the fair market value of the property under appeal, as of January 1, 2013, to be $115,000. However, under the Commission rule just cited and Supreme Court decision the assessed value cannot be increased above $101,293 in this particular appeal. State ex rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 S.W.3d 80, 87-88 (Mo 8/4/09).
Respondent Proves Value
Respondent presented substantial and persuasive evidence to support the fair market value as of January 1, 2013, to be $101,293 for the subject property. 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 sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
The adjustments made by the appraiser 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, including a $65,000 downward adjustment for the title issue.
The true market valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2014 is set at $19,245.
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
The Collector of St. Charles County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED January 23, 2015.
STATE TAX COMMISSION OF MISSOURI
John J. Treu
Senior Hearing Officer
Delivery or Notice was made via mail, email, fax, or personally on January 23, 2015 to the following Individuals of this Order
Donald & Mary Hart, Complainants, email@example.com
Amanda Jennings, Attorney for Respondent, firstname.lastname@example.org
Scott Shipman, Assessor, email@example.com
Steve Riney, SRiney@sccmo.org