Eric Kuhlmann v. Jake Zimmerman, Assessor, St. Louis County, Missouri

STATE TAX COMMISSION OF MISSOURI

ERIC KUHLMANN,	)	Appeal No. 21-10106
	)	Parcel/locator No: 21W630183
	)
Complainant(s),	)
	)
v.	)
	)
JAKE ZIMMERMAN, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
Respondent.	)

ORDER AFFIRMING HEARING OFFICER DECISION UPON APPLICATION FOR REVIEW

HOLDING

On June 3, 2022, State Tax Commission (STC) Senior Hearing Officer Benjamin Slawson (Hearing Officer) entered a Decision and Order (Decision) affirming the St. Louis County Board of Equalization’s (BOE) assessment of the subject property as of January 1, 2021.  Eric Kuhlmann (Complainant) timely filed an Application for Review of the Decision and Order of the Hearing Officer.  Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) timely filed a Response.

We AFFIRM the Decision of the Hearing Officer. Segments of the Hearing Officer’s Decision may have been incorporated into our Order without further reference.

FINDINGS OF FACT AND PROCEDURAL HISTORY

The subject property is identified by Parcel Locator No. 21W630183. The subject property is further identified as being located at 17880 Westhampton Woods Dr., Wildwood, Missouri.  The subject property is residential property consisting of a 0.53 acre lot that includes a 2,456 square-foot single family ranch-style home, with three bedrooms and three bathrooms.  The home was built in 2001.  Complainant purchased the subject property in 2013 for $385,000.     

Respondent assessed the subject property as residential property as of January 1, 2021, with a true value in money (TVM) of $512,400.[1]  Complainant appealed Respondent’s assessment to the BOE, and the BOE determined the TVM of the subject property as of January 1, 2021, was $468,300, thereby reducing Respondent’s valuation by $44,100 or approximately 8.5%.

Complainant timely filed an appeal of the BOE’s assessment to the STC.  The appeal proceeded to an Evidentiary Hearing in which both parties presented evidence.  The Hearing Officer subsequently issued the Decision finding that Complainant had not presented substantial and persuasive evidence to rebut the BOE’s valuation and to place a different value on the subject property.  The Decision found that the TVM of the subject property as of January 1, 2021, was $468,300.

Complainant timely filed an application for review.  The STC thereafter issued its Order allowing the application for review and granting Respondent time to file a response.  Respondent timely filed his response.

CONCLUSIONS OF LAW

Complainant’s Points on Review

Complainant does not specifically allege that the Hearing Officer’s Decision was erroneous; rather, Complainant argues that the subject property was not valued the same as “two nearly identical properties,” which had valuations “much less than” the subject property.

Standard of Review

A party subject to a Decision and Order of a hearing officer of the STC may file an application requesting the case be reviewed by the STC.  Section 138.432.  The STC may then summarily allow or deny the request.  Section 138.432.  The STC may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the STC.  Section 138.432.    

Commission’s Ruling

For the reasons that follow, the Commission finds Complainant’s arguments to be unpersuasive.  The Commission, having thoroughly reviewed the whole record and having considered the Hearing Officer’s Decision, the application for review of Complainant, and the response of Respondent, affirms the Hearing Officer’s decision.

The taxpayer in a STC appeal bears the burden of proof. The taxpayer is the moving party seeking affirmative relief.  Therefore, Complainant bears the burden of proving by substantial and persuasive evidence 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. W.D. 1991).  Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).  Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact.  Cupples Hesse Corp., 329 S.W.2d at 702.  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 Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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 comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.”  Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 347-48 (Mo. banc 2005).  The comparable sales approach is typically used to value residential property.  The comparable sales approach requires data from sales, not estimates or listings.

Complainant presented Exhibits A and B.  Each exhibit consisted of a Zillow estimate and information obtained from the St. Louis County Real Estate Database for properties that Complainant stated were neighboring properties.  The exhibits showed that the Zillow estimates for Complainant’s comparable properties ranged from $464,700 to $473,800.  The exhibits further showed that the comparable properties were “off market.”  The exhibits did not show whether the comparable properties had sold close in time to the taxation date, January 1, 2021.  The information obtained from the St. Louis County Real Estate Databased showed that the comparable properties had been valued at $389,900 and $389,500, respectively, for assessment purposes in 2021.  The information obtained from the St. Louis County Real Estate Database further showed that the comparable properties were six years older and five years older, respectively, than the subject property; had two bathrooms while the subject property had three bathrooms; and had residential lots consisting of slightly less than a half-acre of land while the subject property had a lot consisting of slightly more than a half-acre of land.  (Exhibits A and B).  The exhibits did not make any market-based adjustments to the comparable properties to account for these or any other similarities and differences with the subject property that would allow one to conclude that the BOE had overvalued the subject property.  Although Complainant argues that the comparable properties were “nearly identical” to the subject property and their values justified a reduction in the value placed on the subject property, Complainant’s own evidence demonstrated that the differences between the comparable properties and the subject property could have accounted for the difference in values placed on the properties.  No appraisal report or appraisal evidence using a court-approved approach to valuing property, such as the comparable sales approach, was introduced into evidence to support Complainant’s opinion regarding the subject property’s value.

The Hearing Officer correctly found that the comparable sales approach is typically used to value residential property, that the evidence presented did not utilize the comparable sales approach to value the subject property, and that no evidence had been presented to establish that Complainant is an appraiser or has appraisal training and experience in order to make value comparisons between properties.  The Hearing Officer concluded:

Complainant did not produce substantial and persuasive evidence showing that the subject property was overvalued based on comparable sales data.  Therefore, Complainant’s evidence does not provide the necessary foundation and elements to support his overvaluation claim.

We agree with the Hearing Officer’s findings and conclusions.

ORDER

The Decision of the Hearing Officer is AFFIRMED.  Segments of the Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, may have been 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 within 30 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.

If no judicial review is made within 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 presently in an escrow account in accord with the decision on the underlying assessment in this appeal.

SO ORDERED August 26, 2022.

STATE TAX COMMISSION OF MISSOURI

Gary Romine, Chairman

Victor Callahan, Commissioner

Debbi McGinnis, Commissioner

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on August 26, 2022, to: Complainant(s) and/or Counsel for Complainant(s), Respondent and/or Counsel for Respondent and County Collector.

Noah Shepard

Legal Coordinator

[1] Missouri operates on a two-year reassessment cycle for valuing real property. See Section 137.115.1 RSMo. Absent new construction or improvements to a parcel of real property, the assessed value as of January 1 of the odd year remains the assessed value as of January 1 of the following even year. Id. All statutory references are to RSMo. 2000, as amended, unless otherwise indicated.

STATE TAX COMMISSION OF MISSOURI

ERIC KUHLMANN,	)	Appeal No. 21-10106
	)	Parcel/locator No: 21W630183
	)
Complainant(s),	)
	)
v.	)
	)
JAKE ZIMMERMAN, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
Respondent.	)

 

DECISION AND ORDER AMENDED NUNC PRO TUNC[1]

Eric Kuhlmann (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2021, was $468,300.  Complainant alleges overvaluation and asserted during the hearing that the TVM was $385,500.^[2]  Complainant did not produce substantial and persuasive evidence of overvaluation.  The BOE decision is affirmed.  The TVM of the subject property on January 1, 2021, was $468,300.

The evidentiary hearing was held on March 31, 2022, via Webex.  Complainant appeared pro se.  Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, was represented by counsel, Tim Bowe.

FINDINGS OF FACT

1. The Subject Property. The subject residential real property is located at 17880 Westhampton Woods Dr., Wildwood, Missouri.  The subject property consists of a 0.53 acre lot that includes a 2,456 square-foot single family ranch-style home, with three bedrooms and three bathrooms.  The home was built in 2001.  Complainant purchased the subject property in 2013 for $385,000.
2. Assessment and Valuation. The BOE determined the TVM of the subject property as of January 1, 2021, was $468,300.  The BOE decision indicates this value represents a reduction from Respondent’s appraised value of $512,400.
3. Complainant’s Evidence. Complainant introduced Exhibit A and Exhibit B.  Respondent did not object to either Exhibit.   Exhibits A and B were admitted into evidence.

Exhibit A consists of printout information from Zillow.com and the St. Louis County Real Estate Information website concerning the property located at 1352 Westhampton Woods Ct., Wildwood, MO 63005, which Complainant believes is comparable to the subject property.  Exhibit A shows that the property consists of a 0.46 acre lot with a ranch-style 2,410 square foot home that was built in 1996.  Exhibit A states that the house has three bedrooms and two bathrooms, and that the property had an appraised value of $389,900 as of January 1, 2021.  Exhibit A does not contain any sales data for the property.

Exhibit B consists of printout information from Zillow.com and the St. Louis County Real Estate Information website concerning the property located at 1408 Wellington View Ln., Chesterfield, MO 63005, which Complainant believes is comparable to the subject property. Exhibit B shows that the property consists of a 0.44 acre lot with a ranch-style 2,453 square foot home built in 1995.  Exhibit B states that the house has four bedrooms and two bathrooms, and that the property had an appraised value of $389,500 as of January 1, 2021.  Exhibit B does not contain any sales data for the property.

Complainant testified the subject property is similar to those contained in Exhibits A and B and stated that it should be appraised at a similar true value in money (TVM) as those properties.

4. Respondent’s Evidence. Respondent introduced Exhibit 1, the BOE’s October 29, 2021 Decision Letter.  Complainant did not object.  Exhibit 1 was admitted into evidence.
5. Value. The TVM of the subject property as of January 1, 2021, was $468,300.

CONCLUSIONS OF LAW

1. Assessment and Valuation. Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is 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.  Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year.  Section 137.115.5(1)(a).  The TVM is “the fair market value of the property on the valuation date[.]”  Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted).  The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.”  Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).  “True value in money is defined in terms of value in exchange not value in use.”  Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020) (internal quotation omitted).  “Determining the true value in money is an issue of fact for the STC.”  Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach.  Id. at 346-48.  The STC has wide discretion in selecting the appropriate valuation method but “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.”  Id., at 348.

The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.”  Snider, 156 S.W.3d at 348.  For this reason, the comparable sales approach is typically used to value residential property.  “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.”  Id. at 347-48 (internal quotation omitted).  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. at 348.

2. Evidence. “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977). The hearing officer is the finder of fact and determines the credibility and weight of the evidence.   Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015).  “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020).   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.”  Section 138.430.2. 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. Id.
3. Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued.  Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003).  The BOE’s valuation is presumptively correct. Tibbs, 599 S.W.3d at 7.  The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.”  Id. (internal quotation omitted).  The taxpayer also must prove “the value that should have been placed on the property.” Id.           “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.”  Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted).  Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.”  Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
4. Complainant Did Not Produce Substantial and Persuasive Evidence of Overvaluation.

Complainant testified he believed that the subject property should be appraised at the same value as properties that he found to be similar, namely those contained in Exhibits A and B.  However, Complainant offered no substantial and persuasive evidence that these homes had sold recently, or at what price they sold for.  Additionally, Complainant did not make any market-based adjustments to the comparable properties in Exhibits A and B to account for any differences between them and the subject property.  There was no evidence establishing that Complainant is an appraiser or has appraisal training and experience in order to make value comparisons between properties.

The comparable sales approach is typically used to value residential properties improved with a single-family home.  “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.”  Snider, 156 S.W.3d at 347-48 (internal quotation omitted).

While a property owner’s opinion of value is generally admissible, the opinion lacks “probative value where it is shown to have been based upon improper elements or an improper foundation.”  Shelby Cty. R-IV Sch. Dist. v. Herman, 392 S.W.2d 609, 613 (Mo. 1965); see also Cohen v. Bushmeyer, 251 S.W.3d 345, 349 (Mo. App. W.D. 2008) (noting a property owner’s opinion of value loses probative value when it rests on an improper foundation).  The comparable sales approach requires sales.  Snider, 156 S.W.3d at 347-48.  Complainant did not produce substantial and persuasive evidence showing that the subject property was overvalued based on comparable sales data.  Therefore, Complainant’s evidence does not provide the necessary foundation and elements to support his overvaluation claim.   Because the STC “cannot base its decision on opinion evidence that fails to consider information that should have been considered” under a recognized approach to value, Snider, 156 S.W.3d at 348, the BOE decision is affirmed.

CONCLUSION AND ORDER

The BOE decision is affirmed. The TVM of the subject property as of January 1, 2021, was $468,300, with an assessed value of $88,977.

Application for Review

A party may file an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision.  The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov.  A copy of the application must be sent to each person 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.

Disputed Taxes

The Collector of St. Louis County, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.

SO ORDERED June 3, 2022.

Benjamin C. Slawson

Senior Hearing Officer
State Tax Commission

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on June 3, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

Amy S. Westermann
Chief Counsel

[1] This Decision and Order is amended nunc pro tunc to correct a scrivener’s error in the case caption identifying the appeal number. This Decision and Order and its date of issue remains otherwise unchanged.

[2] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal.  Mo. Const. art. X, sec. 14; Section 138.430.1, RSMo 2000.  All statutory citations are to RSMo 2000, as amended.