State Tax Commission of Missouri
| EDWARD & NANCY JAYNE, | ) | |
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| Complainant, | ) | |
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| ) | Appeal Numbers 13-11592 | |
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| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
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DECISION AND ORDER
HOLDING
Decision of the County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. Respondent’s appraisal did not meet the requirements of 137.115.1(2)(b) and thus whether such met the burden of clear, convincing and cogent evidence cannot be determined by this Hearing Officer.
True value in money for the subject property for tax years 2013 and 2014 is set at $636,200, residential assessed value of $120,880, the values set by the Board of Equalization.
Complainant appeared pro se.
Respondent appeared by attorney Paula Lemerman
Case heard and decided by Senior Hearing Officer John Treu.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which lowered 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.
FINDINGS OF FACT
- 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.
- Evidentiary Hearing. The Evidentiary Hearing was held on 8/27/2014 at the St. Louis County Administration Building, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel numbers or locator numbers 23L330141. It is further identified as 311 McDonald Place, Webster Groves, St. Louis County, Missouri.(Ex. 1)
- Description of Subject Property. The subject property consists of a 21,400 square foot tract of land improved by a single family, residential two story style home of a condition consistent with well maintained improvements. The quality is consistent with homes meeting or exceeding the requirements of the applicable building codes. The home has 5,354 square feet of gross living area. Amenities include 5 bedrooms, 4 ½ baths, a 2 car oversized detached garage, 3 fireplaces, a 4 season sunroom, cornice and crown moldings, a covered porch and 2 decks. (Ex. 1)
- Complainant’s Evidence. Complainant offered into evidence exhibits, consisting of Exhibits A through D. Exhibit A consisted of correspondence to the State Tax Commission from Complainant Edward Jayne, dated 5/8/2014. Exhibit B consisted of the original attachments to the correspondence of 5/8/2014. Exhibit C consisted of a copy of Complainants Complaint for Review of Assessment and the St. Louis County Notice of Decision on the subject property. Exhibit D consisted of correspondence to the State Tax Commission from Complainant Edward Jayne, dated 5/22/2014. Exhibits A B and D were objected to, the objections were overruled and the exhibits were received into the evidentiary record.. Exhibit C was received into the evidentiary record without objection.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement for either property from January 1, 2013, to January 1, 2014, therefore the assessed values for 2013 remains the assessed values for 2014. Section 137.115.1, RSMo.
- Respondent’s Evidence. Respondent offered into evidence Exhibits 1 through 3. Exhibit 1 consisted of a Residential Appraisal Report of Sharon Kuelker. Exhibit 2 consisted of an Assessors Permit System Record dated 4/10/2006 regarding an addition to the subject property. Exhibit 3 consisted of an Assessors Permit System Record dated 8/30/2007 regarding a deck. Exhibits 1 through 3 were received into the evidentiary record without objection.
- Presumption of Correct Assessment Not Rebutted by Clear, Convincing and Cogent Evidence.
The evidence presented by Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board and to put forth the fair market values of the subject property, as of January 1, 2013. Nevertheless, Respondent did not present clear, convincing and cogent evidence to establish the value of the subject property, as of January 1, 2013. Respondent’s appraisal did not meet the requirements of Section 137.115.1(2)(b). Specifically, all of the three comparables used substantially exceeded the 500 square foot requirement of such statutory section. The comparables exceeded the 500 square foot requirement by 1,132 square feet to 1,279 square feet. The gross differences in square feet between the subject property and the comparables fell between 1,632 square feet and 1,779 square feet.
The statute is clear that: “…[s]uch property shall be within five hundred square feet in size of the disputed property…” (Underline and bold added for emphasis by Hearing Officer). “Shall” is not a discretionary word. Either the standard is met or it is not. It does not matter that the comparables used by the Respondent’s appraiser were all within .22 miles of the subject property and all sold between December of 2011 and April of 2013 or that the comparables resembled the subject property in the number of bedrooms and bathrooms. Of additional note is the fact the subject property was built in 1950. Comparable #2 was built in 1919 and thus did not resemble the subject property in age as required by Section 137.115.1(2)(b).
Respondent’s made a point that the comparables fell with the 1 mile wording in Section 137.115.1(2)(b). However the wording of the 137.115(2)(b) has some flexibility when addressing what the characteristics of proper comparables by stating “[s]uch properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.” Given the nondiscretionary nature of the 500 square foot requirement of such statute, if appropriate comparables could not be located within the 1 mile range, appropriate comparables should have been sought outside the 1 mile range.
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. 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’ 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. 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). 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.
Owner’s Opinion of Value
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. However, once again, 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). Complainant’s opinion of value left this hearing officer in such a situation.
Board Presumption
The Assessor’s original value in this appeal was determined by the Board of Equalization to not 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.
Computer-Assisted Presumption
The computer assisted presumption can only come into play in those instances where the Respondent is seeking to have the Assessor’s original valuation affirmed. If in a given appeal the Respondent is offering evidence that would establish a value less than the original valuation, then the computer-assisted presumption is not applicable to that appeal. Even if the Board has reduced the valuation and the Respondent’s evidence is offered to increase the value, but not to the level of the original valuation, the computer-assisted presumption does not come into play.
If the Board of Equalization sustained the valuation of the Assessor, such does not negate the fact that the Board presumption remains operative as to evidence which is presented by the taxpayer and Respondent. 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. The Board valuation is assumed to be an independent valuation.
Respondent’s Burden of Proof
In charter counties or the City of St. Louis, the Respondent, when wishing to advocate for a valuation equal to the higher of the valuation determined by the assessor or the Board of Equalization has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program. There is a presumption in this appeal that the original valuation, which was lowered by the Board of Equalization, was made by a computer, computer-assisted method or a computer program. There was evidence to rebut the presumption, therefore, in order to sustain the Assessor’s original valuation of the subject property at $682,800, assessed value $129,730, Respondent’s evidence must come within the guidelines established by the legislature and must clearly, convincingly and cogently persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1) The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof. As used in this paragraph, the word comparable means that:
(a) Such sale was closed at a date relevant to the property valuation; and
(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used. Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics. Section 137.115.1(1) & (2).
Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved. It does not mean that there may not be contrary evidence. Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974).The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt. 30 AmJur2d. 345-346, Evidence section 1167. “For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.” Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980). Respondent did not meet this standard.
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 Complainant, Complainant’s husband 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. 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. 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).
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).
The Supreme Court of Missouri has also held that evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time. The actual sale price is a method that may be considered for estimating true value. St. Joe Minerals Corp., supra
ORDER
The assessment by the Board of Equalization for St. Louis County which lowered the valuation for the subject properties as originally determined by the Assessor is AFFIRMED.
The assessed value for the subject property for tax years 2013 and 2014 is set at $120,880.
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
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 this 8th day of September, 2014.
STATE TAX COMMISSION OF MISSOURI
John Treu
Senior Hearing Officer
Delivery or Notice was made via email, fax, or personally on September 8th, 2014 or by mail to the following Individuals of this Decision/Order/Holding
Edward and Nancy Jayne, Complainants, rjayne@heidrick.com
Paula Lemerman, Associate County Counsel, Attorney for Respondent, PLemerman@stlouisco.com
Jake Zimmerman, Assessor, syoutzy@stlouisco.com
Mark Devore, Collector, MDevore@stlouisco.com
Jacklyn Wood
Legal Coordinator