State Tax Commission of Missouri
| GERALD WALTERS, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | )
) |
Appeal No. 15-15899
Appeal No. 15-15900 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessments made by the Board of Equalization of St. Louis County (BOE) regarding the two properties that are the subject of Appeal No. 15-15899 and Appeal No. 15-15900 are AFFIRMED.[1] Complainant Gerald Walters (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessments by the BOE. Assessed value in money for the subject property in Appeal No. 15-15899 for tax years 2015 and 2016 is set at $110 residential ($600 true market value or TMV). Assessed value in money for the subject property in Appeal No. 15-15900 for tax years 2015 and 2016 is set at $2,980 ($15,700 TMV).
Complainant appeared pro se.
Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) appeared by attorney Steven Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann.
ISSUE
In both cases, Complainant appealed on the ground of overvaluation. Respondent initially set the TMV of the subject property in Appeal No. 15-15899, as residential property, at $600. (Exhibit 1A) Respondent initially set the TMV of the subject property in Appeal No. 15-15900, as residential property, at $15,700. (Exhibit 1B) The BOE sustained Respondent’s valuation. The Commission takes this appeal to determine the TMV of the subject properties on January 1, 2015.
The Senior 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.
- Evidentiary Hearing. The issue of overvaluation for both cases was presented at an evidentiary hearing, which was held on May 5, 2016, at the St. Louis Government Administration Building, 41 South Central Avenue, Clayton, Missouri, 63105.
- Identification of Subject Property. The subject property in Appeal No. 15-15899 is identified by parcel/locator number 17L330058. The subject property in Appeal No. 15-15900 is identified by parcel/locater number 17L310797. The subject properties are further identified by a single street address, 9118 Watsonia Ct., Olivette, Missouri. (Complaint; Exhibit 1A; Exhibit 1B)
- Description of Subject Property. The subject properties are two parcels of land separated by a utility easement and used as Complainant’s residence. The subject property in Appeal No. 15-15900 is improved by a house, which is in poor condition and warrants demolition. (Exhibit A) The parcel of land on which the house sits is irregular in shape. (Exhibit A) The properties are sited at the end of a street that stops at a pasture.
- Assessment. For the subject property in Appeal No. 15-15899, Respondent set a TMV of $600, residential, as of January 1, 2015. (Exhibit 1A) For the subject property in Appeal No. 15-15900, Respondent set a TMV of $15,700, residential, as of January 1, 2015. (Exhibit 1B).
- Board of Equalization. The BOE sustained Respondent’s TMV of the subject properties.
- Complainant’s Evidence. With regard to both appeals, Complainant offered as evidence: a typed letter (Exhibit A); a copy of the real estate tax bills for each property (Exhibit B); and the top half of a sheet of notebook paper that contained a handwritten message (Exhibit C).
Exhibit A contained the summary of a review of the subject properties performed in 2013 by a member of Respondent’s staff in relation to a previous appeal filed by Complainant. Specifically, Exhibit A stated, in relevant part:
The St. Louis County Assessor’s staff (Ross Hackman) has reviewed the land and improvements . . . and determined the highest and best use for the property would be as excess land for an adjoining property.
The improvements are in very poor condition, which would warrant demolition. The lot is irregular in shape, which would hinder its marketability as a “tear down” for new construction purposes. Lower end lot values of this size in the area are in the $100,000 range.
. . .
Considering tear down costs of approximately $5,000, the lot value is $20,000 as it sits.
Exhibit B contained copies of the real estate tax bills for each of the subject properties, which Respondent had sent to Complainant. Exhibit B showed that the taxes owed for the subject property in Appeal No. 15-15899 were $8.35. Exhibit B also showed that the taxes owed for the subject property in Appeal No. 15-15900 were $275.99.
Exhibit C contained a statement written in Complainant’s own hand. Complainant testified that Exhibit C was a verbatim copy of a sign posted in the front window of Complainant’s residence, which had been placed there by the City of Olivette when the house was condemned in 2006. Specifically, Exhibit C stated:
DANGER
THIS STRUCTURE IS DECLARED UNSAFE FOR HUMAN OCCUPANCY OR USE. IT IS UNLAWFUL FOR ANY PERSON TO USE OR OCCUPY THIS BUILDING.
Respondent did not object to Complainant’s exhibits, which were received into the record.
- Respondent’s Evidence. With regard to Appeal No. 15-15899, Respondent offered as evidence Exhibit 1A, the Notice of Decision from the BOE, which sustained Respondent’s valuation of $600. (Exhibit 1A) With regard to Appeal No. 15-15900, Respondent offered as evidence Exhibit 1B, the Notice of Decision from the BOE, which sustained Respondent’s valuation of $15,700. (Exhibit 1B)
Complainant did not object to Respondent’s evidence, which was received into the record.
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, including the application of any abatement. The Senior 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.
Weight to be Given Evidence
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).
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and is bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. 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). See also, 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).
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.” Westwood Partnership, 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).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. “[W]here 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.” Id. 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. E.D. 1980).
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE. In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways. The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then it also would be applicable to the Respondent. The computer-assisted presumption only comes into play if the BOE 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 BOE’s valuation is assumed to be an independent valuation.
In the present appeal, the BOE sustained the valuation of Respondent; therefore, the computer-assisted presumption does not come into play in the present appeal.
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, 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).
Discussion
In the present appeals based upon overvaluation, Complainant failed to present substantial and persuasive evidence to rebut the presumption of true market value advocated by Respondent.
First, Complainant did not utilize a recognized approach to valuing the properties, i.e., the sales comparison approach, the cost approach, or the income approach.
Second, Complainant’s testimony did not compel a conclusion that the properties were worth $0. Although Complainant testified that he believed the subject properties had no monetary value, Complainant testified that he had received an offer to purchase the properties for $100,000 less than a year prior to the evidentiary hearing. Complainant further testified that he did not accept the offer because he did not intend to ever sell the properties and because he believed a deal would not come to fruition given that the offeror did not know about the utility easement separating the two parcels. Complainant testified that his evidence indicating the house needed to be torn down supported his opinion that the properties were worth $0, but Complainant testified that he had no plan to demolish the house. Notably, Complainant did not present any photographs or estimates for repair.
Third, Exhibit A and Exhibit C constituted hearsay. “Normally, hearsay evidence cannot be considered competent and substantial evidence to support an administrative agency’s decision.” Housing Authority of the City of St. Charles, Mo. v. Board of Adjustment of the City of St. Charles, Mo., 941 S.W.2d 725, 727 (Mo. App. E.D. 1997), citing Hacienda Enterprises No. 2, Inc. v. Smarr, 841 S.W.2d 807, 811 (Mo. App. E.D.1992). However, hearsay evidence admitted without objection may be utilized as substantial and competent evidence to support the finding of an agency if it has probative value. Section 536.070(8) RSMo 2000, as amended; Housing Authority, 941 S.W.2d at 727 (emphasis added).
Here, Exhibit A purported to show that the highest and best use of the properties would be as excess land for an adjoining property and that the “as is” value of the properties was $20,000 in 2013. (Exhibit A) Exhibit C purported to show that the house had been condemned. (Exhibit C) Both exhibits constituted hearsay evidence given that they were written documents introduced to prove the truth of the matters asserted therein while the individuals who made the documents were not present to testify and could not be cross examined concerning the contents of the exhibits. Even though Respondent did not object to this hearsay evidence, Exhibit A and Exhibit C still cannot be utilized as substantial and competent evidence to support Complainant’s opinion of value because the exhibits were not probative in that they did not tend to prove the TMV of the of the properties as of January 1, 2015. Exhibit A related to an alleged review of the properties for a tax appeal in 2013. Exhibit C related to a prohibition on human use or habitation of the house because it had been condemned.
Consequently, although Complainant presented evidence to support his opinion of the subject property’s TMV, it is neither substantial nor persuasive because, if relied upon, the fact finder would be required to resort to speculation to conclude the TMV of the subject properties on January 1, 2015, should be $0.
ORDER
The true market valuation for the subject properties as determined by Respondent for the subject tax day and sustained by the BOE is AFFIRMED.
The assessed value for the subject property in Appeal No. 15-15899 for tax years 2015 and 2016 is set at $110 residential ($600 true market value or TMV). The assessed value for the subject property in Appeal No. 15-15900 for tax years 2015 and 2016 is set at $2,980 ($15,700 TMV).
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 June 13, 2016.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed or sent by U.S. Mail on this 13 day of June, 2016 to:
Gerald Walters, Complainant, 9118 Watsonia Ct., Olivette, Missouri 63132
Steven Robson, St. Louis County Associate County Counselor, SRobson@stlouisco.com
Jake Zimmerman, St. Louis County Assessor, syoutzy@stlouisco.com, rkoch@stlouisco.com
Jacklyn Wood
Legal Coordinator
[1] Appeal No. 15-15899 and Appeal No. 15-15900 have been consolidated for purpose of efficiency in administration and decision making.