Fedstar v. Zimmerman (SLCO)

Complainant,               )

v.                                                                       )             Appeal No.05-11078

JAKE ZIMMERMAN, ASSESSOR,                         )

ST. LOUIS COUNTY, MISSOURI,                          )

Respondent.                ) 

DECISION AND ORDER 

HOLDING 

St. Louis County Board of Equalization’s assessment SET ASIDE.On December 26, 2012, Complainant filed a Motion for Summary Judgment.Respondent filed a response to the Motion stating the Motion was not ripe as the parties may still file exhibits as evidence of market value.On June 3, 2013, the parties were to file all exhibits, written direct testimony and any other evidence.Respondent was given until August 9, 2013, to file a response to the Motion for Summary Judgment.

True value in money and assessment ratio for the subject property for tax year(s):

 Complainant represented by counsel Attorney Thomas Campbell.

Respondent represented by Attorney Edward Corrigan.

Case decided by State Tax Commission.

ISSUE

Complainant appeals, on the ground(s) of overvaluation and discrimination, the decision of the County Board of Equalization.  Having considered all of the competent evidence upon the whole record, the following Decision and Order is entered.

FINDINGS OF FACT

1.  Jurisdiction.  Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the County Board of Equalization.

2.  Motion for Summary Judgment.  The Complainant filed a Motion for Summary Judgment on December 26, 2012.No response was filed.

3.  Subject Property.  The subject property is identified by map parcel number: 17U330167 and is further identified as 1 McBride & Son Center, Chesterfield, Missouri.

4.  Valuation and Assessment.  The County Board of Equalization determined the valuation and assessment of the property as:

 5.  2005 Ratio.  The State Tax Commission in West County BMW v. Muehlheausler, STC Number 05-12569, (Decision and Order, 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) found the median of 25% as the commercial ratio assessment.

No evidence was presented suggesting that the Board of Equalization applied anything less than the statutorily required 32% assessment rate to commercial properties when attempting to determine assessed value.Therefore, determining that the actual level of assessment in the county for 2005 was 25% necessarily means that a large portion of the commercial properties within the county were undervalued for tax years 2005 and 2006.The “coefficient of dispersion” (COD) measures uniformity of ratios.The IAAO standards call for a COD of 15% to 20% for commercial property.Ratios not within the standards are grossly excessive.

6.  Complainant, by his Motion for Summary Judgment, accepts the County Board of Equalization’s determination as the true value of the subject property. Complainant submitted the following Exhibit:

Exhibit	Description
A	Board of Equalization Findings and Property Record Card

 7.  County submitted the following Exhibits in support of the Board of Equalization’s value of $3,410,400[1]:

Exhibit	Description
1	Deed dated November 10, 2005
2	Certificate of Value dated November 14, 2005
3	Written Direct Testimony of John Gillick

 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.[2]

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.[3]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.[4]

Summary Judgment

Complainant filed a Motion for Summary Judgment.A summary judgment is appropriate if “there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law.”[5] Complainant submitted the Board of Equalization decision to establish true market value; the Board’s value is presumed to be correct.The State Tax Commission previously determined the average level of assessment for 2005.There is no genuine dispute of material fact.Once a party makes a prima facie showing that there are no genuine issues of material fact and is entitled to judgment as a matter of law, the non-moving party mist set forth specific facts that demonstrate the existence of an outstanding genuine issue of material fact.Pleadings, admissions, and presumptions having established no issues of fact exist, the law entitles the moving party to a favorable judgment.

Presumption In Appeals and True Value

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[6] This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward on the taxpayer – Complainant.

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.[7]

In this case, the Complainant has set forth in their Motion for Summary Judgment that the Board of Equalization’s determination of value is the true value of the subject property and the The Complainant submitted Exhibit A, the determination of valuation by the St. Louis County Board of Equalization of $3,410,400.Respondent did not present any evidence as to the valuation of the property.A certificate of value without the author of said document attestation to its validity and correctness does not establish market value of the property as of January 1, 2005.Further, the Respondent presented such evidence in support of the Board of Equalization’s valuation.

In State ex rel. Ashby Road Partners, LLC v. State Tax Commission of Missouri, 297 S.W.3d 80, 85 (Mo banc 2009), the property owners’ sought a writ of prohibition against a State Tax Commission Order directing them to produce evidence of true value.The State Tax Commission’s position was that “the owners could show true value through several methods, but that, regardless of the method, the true market value of property owners’ properties is relevant and necessary to property owners’ discrimination claims and must be proven.”[8]The property owners’ argument for the writ included that it was “unnecessary to require property owners to prove their properties’ market values.Property owners argued that they do not dispute the assessor’s determination of market value…”

The Court ruled that the properties’ true value is necessary evidence because the commission is not compelled to accept the assessor’s determination of true value of the taxpayer’s property.The Commission however cannot compel the taxpayers to present evidence in any particular form.“Property owners can choose to present the assessor’s values of the properties as their only evidence of the properties’ true market values.The consequence of their choice, as the party with the burden of proof, is that their chosen evidence must persuade the commission that the assessor discriminated against them by assessing their properties at a higher percentage of value in comparison with other similar properties in the taxing area, and if their evidence does not persuade, property owners will lose their claims.”

The Board of Equalization’s determination of value is sustained.

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of their property on January 1, 2005; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction or show that the level of an assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment. [9]

The State Tax Commission previously took up this matter in West County BMW v. Muehlheausler, STC 05-12569.The Commission found that there was no evidence that there was an intentional plan of discrimination by the assessing officials, however, they did find that the level of their assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment.“By requiring that the level of an assessment be so grossly excessive as to be inconsistent with an honest exercise of judgment in cases in which intentional discrimination is not shown, the courts and the Commission refrain from correcting assessments which reflect no more than de minimus errors of judgment on the part of assessors. Such a standard recognizes that ‘[w]hile practical uniformity is the constitutional goal, absolute uniformity is an unattainable ideal’.” [10]  

In this instance, the true value as set by the Board of Equalization is $3,410,400.Neither party disputed the valuation – the Complainant thru his Motion for Summary Judgment consents to the determination and the Respondent did not present evidence as to valuation.It was previously found by the Commission that the average assessment ratio for the county for January 1, 2005, was 25% rather than the statutorily mandated 32%.At 25%, the assessed value for the subject property should have been $852,600.Instead, the assessed value for the subject property, as determined by the Board of Equalization, was $1,091,330, or 32%.The issue is whether the difference between the average assessment level for the county (25%) and the assessment level for the taxpayer’s property (32%) is grossly excessive.

 The IAAO sets standards for Assessment Ratio Studies including the acceptable Coefficient of Dispersion (COD).COD measures the average deviation from the median and expresses it as a percentage of the median ratio.  The lower the COD, the more uniform the assessments within a particular county.IAAO standards call for a COD of 15 percent to 20 percent for commercial properties.

The median level of assessment for St. Louis County for the 2005 assessment cycle is 25% and the Complainant’s assessment for the 2005 assessment cycle is 32%.Since the Complainant’s assessment is not within an acceptable range of variance, more specifically, within an acceptable COD threshold (COD of 15-20%), the Complainant’s assessment can be considered to be so grossly excessive as to be entirely inconsistent with an honest exercise of judgment or inconsistent with a “de minimus error of judgment on the part of assessor” recognizing that absolute uniformity is an unattainable ideal.[11]

ORDER

The assessed valuation for the subject property as determined 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 2005 and 2006 is set at $852,600.

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 Decision.

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

If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, Complainants may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

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 September 3, 2013.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Randy Holman, Commissioner

Victor Callahan, Commissioner