Kathleen Gerhardt v. Zimmerman (SLCO)

State Tax Commission of Missouri

 

KATHLEEN GERHARDT,)

)

Complainant,)

)

v.) Appeal No.11-10398

)

JAKE ZIMMERMAN,ASSESSOR,)

ST. LOUIS COUNTY, MISSOURI,)

)

Respondent.)

 

DECISION AND ORDER

 

HOLDING

 

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. Respondent presented substantial and persuasive evidence to rebut the presumption of correct assessment and to establish the true value in money of the subject property as of January 1, 2011.

True value in money for the subject property for tax years 2011 and 2012 is set at $378,000, residential assessed value of $71,820.

Complainant appeared pro se.

Respondent appeared by Associate County Counselor, Paula J. Lemerman.

Case decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the St. Louis 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, 2011.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

1.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 was held on November 28, 2012.

2.Subject Property.The subject property is identified by locator number 18K530902.It is located at 8161 Gannon Avenue, University City, Missouri.A complete description of the property can be found in Exhibit 1.[1]

4.Assessment.The Assessor appraised the property at $388,000, a residential assessed value of $73,720.The Board sustained the assessment.[2]

5.Complainant’s Evidence.Complainant offered into evidence the following exhibits:

 

No objection was made to Exhibit A, it was received into evidence.Objection was made as to Exhibits B through G.Objections sustained as to Exhibits B through F, and said Exhibits were not received into evidence.They are maintained in the file, but are not part of the record for making a determination of the fair market value of the property under appeal.Exhibit G was received into evidence, subject to ruling on Exhibits B through F.See, Complainant’s Exhibits, infra.

Complainant testified on her own behalf and offered her opinion of value for the subject property as of 1/1/11 to be $311,000.

There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.[3]

Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board.

6.Respondent’s Evidence.Respondent filed and exchanged Exhibit 1 – Appraisal Report of Terry Kraus,[4] opining a fair market value as of 1/1/11 for the subject property of $378,000.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2011, to be $378,000.

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.[5]

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.[6]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.[7]In an overvaluation appeal, true value in money for the property being appealed determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[8]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.The presumption is not evidence of value.

Taxpayer Fails to Rebut Presumption

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.[9]Complainant failed to present any evidence to rebut the presumption of correct assessment, let alone to prove the fair market value of the property as of 1/1/11.

Respondent Rebuts Presumption & Proves Value

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence to rebut the Board presumption and to prove the value advocated.[10]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,[11] proves that the Board’s value was in error.The appraisal report of Mr. Kraus met the evidentiary standard to rebut the presumption and prove value.

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.[12]True value in money is defined in terms of value in exchange and not value in use.[13]It is the fair market value of the subject property on the valuation date.[14]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:

1.Buyer and seller are typically motivated.

 

2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

3.A reasonable time is allowed for exposure in the open market.

 

4.Payment is made in cash or its equivalent.

 

5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

6.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.[15]

 

Respondent’s Appraiser concluded value under the Standard For Valuation.[16]

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.[17]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.[18]Complainant failed to present an opinion of value that was derived and concluded from any recognized appraisal methodology.Respondent’s appraiser developed the comparable sales approach to conclude his opinion of value.

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[19]

Mr. Kraus possesses the requisite knowledge, skill, experience, training, or education, to testify as an expert on the valuation of the subject property.[20]The data upon which the appraiser

relied was of a type reasonably relied upon by experts in the field of residential real estate appraisal in forming opinions of value.The data is deemed to be otherwise reliable.

Complainant Fails To Prove Value

In order to prevail, Complainant 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, 2011.[21]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.”[22]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.

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[23]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.[24]

Complainant’s Exhibits

Exhibit A:The documents contained in this Exhibit fail to provide and basis upon which the Hearing Officer can conclude a value of $311,000 for the subject property.

Exhibits B – F:These Exhibits were objected to on the grounds of hearsay and lack of foundation.The objections were sustained.The Exhibits were excluded from the evidentiary record.

Documents obtained from the Zillow website are hearsay and provide no foundation as to the person who provided the information, their credentials to establish any expertise in the appraisal of real estate.Zestimates do not constitute any recognized appraisal methodology.The purpose of the Zillow estimates and information is not to proffer or even support an opinion of value for Complainant’s property.Zillow documents are simply not relevant to establishing the value of any given property on any given date.

Exhibit G:Objection was made to the portions of this document which referenced information contained in Exhibits B – F, on the grounds of hearsay and lack of foundation.Since those objections had been sustained to Exhibits B through F, Exhibit G was only received subject to those rulings.In other words, Exhibit G was received to demonstrate the owner’s basis for value.However, no probative weight can be given to the conclusions, assertions, and opinions expressed in the document by the owner based upon information from Exhibits B through F.

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[25]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[26]In this instance, there is no substantiating market evidence to support the owner’s opinion of value.The opinion of value of $311,000 was based on Exhibits B through F.Those Exhibits having been excluded, there was no foundation for the opinion of Ms. Gerhardt.Accordingly, the owner’s opinion does not rest upon either proper elements or a proper foundation. It can be given no probative weight.

Respondent Proves Value

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.[27]The Kraus appraisal report satisfied the evidentiary standard and established the fair market value of Complainant’s property as of 1/1/11 to be $378,000.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained 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 2011 and 2012 is set at $71,820.

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, MO65102-0146, 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. [28]

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 December 19, 2012.

STATE TAX COMMISSION OFMISSOURI

 

 

_____________________________________

W. B. Tichenor

Senior Hearing Officer

 

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 19^thday of December, 2012, to:Kathleen Gerhardt, 8161 Gannon Ave., University City, MO 63130, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, 41 South Central Avenue, Clayton, MO 63105; Stacy Bailey, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.

 

 

 

___________________________

Barbara Heller

Legal Coordinator

 

 

 

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax