Gloria Strauss v. Zimmerman (SLCO)

February 8th, 2012

State Tax Commission of Missouri





v.) Appeal No.09-10047









Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $1,392,600 residential assessed value of $264,000.

Complainant appeared by Counsel Robert Droney, Gallop, Johnson & Neuman, LC, St. Louis.

Respondent appeared by Associate County Counselor Paula J. Lemerman.

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


Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced 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, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.


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.A hearing was conducted on September 8, 2011, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.

2.Assessment.The Assessor appraised the property at $1,525,600, a residential assessment of $289,860.[1]The Board of Equalization reduced the value of the property to $1,406,900, an assessed value of $267,310.[2]

3.Subject Property.The subject property is located at 12 Warridge Drive, Ladue, Missouri.The property is identified by locator number 20M540041.The property consists of an irregular shaped lot containing 3.12 acres. The property is improved with a single-family residence built in 1981.The home has a total living area of 6,387.It contains eleven rooms, five bedrooms, five full and one half bathrooms.[3]There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2009.

4.Complainant’s Evidence.[4]Complainant testified in her own behalf and gave her opinion of value to be $1,000,000.[5]Complainant presented the appraisal report[6] and testimony of Ernest A. Demba, State Certified General Real Estate Appraiser.[7]Mr. Demba arrived at an opinion of value of $1,076,700, based upon a sales comparison analysis.[8]

Complainant tendered Exhibits D through L as rebuttal exhibits.The exhibits were not received on the grounds they did not go to rebut any facts or data presented in Respondent’s case in chief.[9]

There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010; therefore the assessed value for 2009 remains the assessed value for 2010.[10]

5.Respondent’s Evidence.[11]Respondent presented the appraisal[12] and testimony of Robert Steven Koch, State Certified Residential Real Estate Appraiser.[13]Mr. Koch arrived at an opinion of value of $1,605,000, based upon a sales comparison analysis.[14]Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.See, Evidence of Increase in Value, infra.

Respondent tendered Exhibits 4 through 9 as rebuttal exhibits.Exhibits 4 and 9, and the pictometry contained in Exhibit 6 were received into evidence.Exhibits 5 and the remainder of 6 were not received.Exhibits 7 and 8 were withdrawn.[15]

6.Clear, Convincing and Cogent Evidence.Respondent offered the Appraisal Report and testimony of Mr. Koch to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program.Therefore, Respondent was required to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, for the value of $1,525,600 to be affirmed.See, Respondent’s Burden of Proof – Sustaining Assessor’s Value, infra.

7.Official Notice.At the request of Counsel for Respondent, the Hearing Officer at hearing took official notice of the Commission’s record in Strauss v. Muehlheausler, STC Appeal No. 07-10398; Hearing Officer, Maureen Monaghan, dated 6/5/08.[16]There is nothing contained in the Decision which provides substantial and persuasive evidence to establish the true value in money for the property under appeal as of January 1, 2009.There is nothing in the Decision which rebuts any material fact, opinion or conclusion contained in the appraisal or testimony of Mr. Demba on the issue of fair market value for the subject property as of

January 1, 2009.

8.Concluded Value.The true value in money for the subject property as of

January 1, 2009, was $1,392,600, a residential assessed value of $264,600.See, Hearing Officer Concludes Value, infra.



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.[17]

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.[18]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.[19]In an overvaluation appeal, true value in money for the property being appealed must be 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.[20]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.[21]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.[22] Complainant’s evidence on its own established a prima facie case to rebut the presumption of correct assessment by Board.[23]Respondent’s evidence on its own established a prima facie case to rebut the presumption of correct assessment by the Board.[24]The record provides substantial and persuasive evidence from which the Hearing Officer can conclude the fair market value of the property as of January 1, 2009.

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.[25]True value in money is defined in terms of value in exchange and not value in use.[26]It is the fair market value of the subject property on the valuation date.[27]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.[28]

Both experts valued the property under appeal applying the Standard For Valuation.[29]

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.[30]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.[31] Both appraisers considered all three of the recognized methods for appraising the subject property, and rejected the cost and income approaches.[32]The concluded value presented by each appraiser was developed relying on the comparable sales or market approach.This was the appropriate methodology to be utilized in this valuation.

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.[33]The facts and data upon which each appraiser based his opinion of value were of a type reasonably relied upon by experts in the appraisal of residential real property and were otherwise reliable.

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.[34]

Complainant’s Burden of Proof

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.[35]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.”[36]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.[37]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.[38]

The opinion of value of $1,076,700 given by Mr. Demba arrived at through his development of the sales comparison analysis constitutes, on its own without consideration of Respondent’s countervailing evidence, substantial and persuasive evidence to make a prima facie case for that value.

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[39]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[40]In this instance Complainant’s opinion of value of $1,000,000 is an opinion without any foundation.The testimony of Ms. Strauss provides no explanation as to how she arrived at her opinion of $1,000,000.Accordingly, it is not based upon any elements or foundation, but the owner’s own speculation or conjecture.No probative weight can be given to the owner’s opinion of value in this appeal.

Respondent’s Burden of Proof – Sustaining Assessor’s Value

The Respondent 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 sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $1,525,600, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly 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.[41]


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.[42]The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.[43]“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.”[44]

In this case, the Koch appraisal, when weighed against the evidence in opposition, does not “instantly tilt the scales” to establish “an abiding conviction” that the value of $1,525,600 is correct.

Respondent’s Burden of Proof – Rebutting Board’s Valuation

Respondent, when advocating a value different from that determined 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.[45]The opinion of value of $1,605,000 given by Mr. Koch arrived at through his development of the sales comparison analysis, on its own without consideration of Complainant’s countervailing evidence, constitutes substantial and persuasive evidence to make a prima facie case for that value.However, because of Commission rule and Court decision, the appraisal could only be received to sustain the Assessor’s original value, or a lesser value, but not to increase the value above $1,525,600.See, Evidence of Increase in Value, infra.As just concluded – Respondent’s Burden of Proof – Sustaining Assessor’s Value – the appraisal falls short of reaching the clear, convincing and cogent standard to establish the value of $1,525,600.However, it can be considered with the other evidence on the record to conclude the value for the property under appeal.

Hearing Officer Concludes Value

The record presents two separate conclusions of value which are $528,300 apart.The Demba proposed value ($1,076,700) represents an amount that is 76.5% of the Board’s value.The Koch proposed value ($1,605,000) represents an amount that is 114% of the Board’s value.

Comparable Sale Properties

The case provides the sales of the following properties which were used by the appraisers:7 Warridge Drive, 450 S. Warson Road, 9850 Litzsinger Road, 425 Steeplechase, and 9 Warridge Drive.Mr. Demba used the first three properties in his appraisal.Mr. Koch used the first two sales and the 425 Steeplechase sale.The 9 Warridge Drive sale was provided for “informational purposes only.”

9 Warridge

Mr. Koch placed no reliance on the sale of 9 Warridge because of two factors.First, it was more than 500 square feet smaller than the subject.Second the date of sale (5/10) was “far beyond the date of value.”

Living Area Variance

The sale property is just over 1,300 square feet smaller than the subject in living area.However, the appraiser was comfortable in adjusting it at a $70 per square foot factor as he did his other three sales.In point of fact, the subject was larger in living area than each of Mr. Koch’s three sales, however, the 7 Warridge and 450 S. Warson properties fell within the generally accepted standard of 500 square foot variance.The Steeplechase sale was 1,070 square feet smaller than the subject in living area.

The square footage variance, of course, must be noted and addressed.However, that factor does not eliminate the sale from being considered.It must be adjusted for in a manner consistent with that adjustment for the other Koch comparables.That was done.Each of the properties required adjustment for the difference in living area.Mr. Koch adjusted at a rate of $70 per square foot of living area variance.This calculates to a 25% factor of the average per square foot living area sales price of Mr. Koch’s Comparables 1, 2 and 3.

Date of Sale

Comparable 3 sold in June, 2007.Comparable 4 sold in May 2010.The sale date for Comparable 3 was 19 months prior to the 1/1/09 valuation date.Comparable 4 sold 17 months after the 1/1/09 valuation date.Since Comparable 3’s sale date 19 months in advance of the valuation date was deemed to be at a time relevant for purposes of valuing the subject property, there is no sound reason as to why a sale that was two months closer to the valuation date is not also a sale at a time relevant for this appraisal problem.


The property at 9 Warridge is located across the street and just two houses away from the subject.It has significant relevance due to its close proximity to the subject.Providing a sale and making all the necessary adjustments to arrive at an adjusted sales price only to conclude that it is presented “informational purposes only” has no basis in logic.Either the adjusted sale is relevant and probative of value or it is not.It is unclear as to what benefit there was to adding an “informational” comparable to the appraisal.In any event, the evidence is part of the record.It does have probative value and may be considered along with the other evidence in this case.[46]

Comparative Sales Data

The comparative sales data for the five sales were as follows:


Sale Date





Sale Price[49]


3.12 acres




7 Warridge

July 2008

3.01 acres





450 Warson

July 2008

1.81 acres





9850 Litzinger

October 2008

4.52 acres





425 Steeplechase

June 2007

1.364 acres





9 Warridge

May 2010

3.03 acres





*effective age

Appraisal Evidence

Demba Appraisal

To account for the various differences between the subject and each comparable, Complainant’s appraiser applied various adjustments.The net adjustments for 7 Warridge totaled a negative $493,733 or a -29.8% adjustment.This provided an adjusted sales price of $1,161,267.The net adjustments for 450 Warson were -$135,685 or a -9% adjustment.This resulted in an adjusted sales price of $1,364,315.The adjusted sales price for the Litzsinger property was $1,024,574 based upon a net adjustment of -$400,426 or a -28.1% net adjustment.

Mr. Demba weighted the adjusted sales prices to arrive at his final opinion of value.The Warridge sale was allotted 25%, The Warson sale was given a 5% factor and the Litzinger property carried the remaining 70% weight for the conclusion of value at $1,076,700.The conclusion of value equates to a per square foot indicated value of $169 as compared to the range of unadjusted sale prices of $210 – $279 per square foot.

The following was provided as to the basis for the adjustments made by Mr. Demba:

“In summary, each comp was adjusted by $40.00 per incremental square foot difference on the actual living space in the improvements and a $1.50 adjustment per incremental square foot difference on the land area.Rooms and bedrooms were adjusted by $15,000 each.One of the sales had an in-ground pool; based on recent analysis of sales with pools versus without pools, I adjusted downward by $60,000 to account for this difference.A time adjustment downward of 10% per year was made to all the comparable sales as justified in the marketing section.Comps # 1-3 were adjusted downward by $150,000 for the subject having a functionally obsolete floor plan and some obsolete facilities.”

Koch Appraisal

The net adjustments as a percentage of sale price for the four Koch sales were -0.4%, +1.8%, -3.8% and + 9.2% respectively.This resulted in adjusted sales prices for the comparable properties of $1,648,300, $1,527,000, $1,612,100 and $1,419,800.These indicated values calculate to per square foot of living area value for the subject of $258, $239, $252 and $222, respectively.The unadjusted range was from $246 to $319.

The appraiser provided general comments for his sales comparison approach as to the various factors for adjustment.The site adjustment was based on a $60,000 per acre factor.Age was adjusted at a factor of $5,000 per year.The adjustment for bath count was “based on the appraiser’s judgment and knowledge of the area.”The per square foot adjustment was “based on 25% – 30% of the typical package price indicated by the Comparable properties.Differences in basement area was adjusted at $10 per square foot and rounded to the nearest $500.Differences in basement finish were based on $25 per square foot rounded to the nearest $500.Garage differences were adjusted at $50 per square foot.The adjustment for in-ground pool was “based on buyers reactions to this amenity combined with the quality and upgraded features of pools typically found in this area and price range home.

Mr. Koch concluded a value of $1,604,000 based on the adjusted values of his sales 1, 2 and 3, giving no weight to sale 4. The appraiser concluded that “Most weight was placed on Comp 1.”[50]

Appraisal Deficiencies, Defects and Weaknesses

At the conclusion of the evidentiary hearing, the Hearing Officer informed the appraisers that there were going to be some things said in the appraisal relative to how the reports impressed the hearing officer.The appraisers were also advised to not take the discussion that would appear in this decision personally.[51]The Hearing Officer reinforces his warnings at hearing.This is not an exercise in leveling any sort of punishment against either Mr. Demba or Mr. Koch.Neither is it just a matter of the Hearing Officer discussing a list of pet peeves.The matters presently to be addressed are items which the Hearing Officer is persuaded impact in a very significant manner on how valuation evidence can be considered, analyzed and weighed in arriving at a valuation for the property under appeal.These items have, for some time, been of concern to the Hearing Officer as he has reviewed and weighed numerous appraisals on both residential and commercial properties.

Time of Sale Adjustments

Demba:Adjusted -10% per year or .8333 per month.This was based on the average home sale price in St. Louis County and City reportedly had dropped nearly 10% from 2007 into 2008.[52]

Koch:Adjusted -2% per annum or .167% per month.This was based on an average overview of 11 sales and re-sales in the subject neighborhood.The sales all occurred during 2006, 2007 or 2008.The resales occurred during 2008, 2009 or 2010.The sale prices ranged from $370,000 to $2,090,000.The resale prices ranged from $365,000 to $2,150,000.[53]

Both methodologies for making a time of sale adjustment find some basis in logic.The average home sale price for St. Louis County and St. Louis City during 2007 and 2008 and the average of 11 resales in the subject neighborhood both rest upon market data.The weakness in the Demba technique is that it appears to be too generic and paints with too broad a brush.The subject is a property that by Mr. Demba’s own admission and appraisal would expect to sell on January 1, 2009, in a range above $1,000,000.[54]His time of adjustment factor not being narrowed to address home sale prices for $1,000,000+ homes took in properties that would not be in the same sales range as what would be expected for the subject.There is no underlying data for the Hearing Officer to review on his own to ascertain the persuasiveness of the general conclusion that the appraiser presented.The underlying data that produced the -10% should have been presented in a more detailed method than the general statement that was provided.

The Koch methodology rests upon a too limited and narrow footing.Exhibit 3 only provides resale data on 4 properties that Mr. Koch relied upon that were in a sales range above $1,000,000.The remaining 7 properties provided in the Koch study fell in a resale range from only $365,000 to $894,950.While at first blush, looking only within the subject neighborhood appears quite reasonable, this appraisal problem requires a more creative view for market data.Sale and resale information on a larger group of properties in the million plus price arena was needed.

According to Mr. Demba, during the time period from January 1, 2006, through December 31, 2008, there were 269 sales in St. Louis County reported on the MLS between $1,000,000 to $1,499,999.[55]Both appraisers would have been well served to research the sales and any resales for properties in a range from $1,000,000 to at least $1,500,000, if not $1,750,000.This would have provided a basis for evaluating any million dollar home resales,

plus establishing a general trend as to the change in home prices on a per unit basis (per square foot of living area sales prices).

The Hearing Officer is persuaded that a time of sale adjustment was appropriate in that both appraisers are in agreement on that point.However, as to whether a -2%, a -10% or some factor in between is most representative of the market for the subject property, the Hearing Officer simply cannot conclude.What the Hearing Officer can concluded is that both appraisers could have and should have done better research and analysis to arrive at a time adjustment factor.

Site Adjustments

Demba:Adjustment of $1.50 per square foot variance, or $65,340 per acre.

Koch:Adjustment of $60,000 per acre of variance, or $1.38 per square foot.

The adjustment made by each appraiser fall in a fairly narrow range.However, in the case of the Demba adjustment support for the $1.50 factor is totally lacking.There is nothing establishing how the appraiser arrived at this factor.With regard to the Koch adjustment, the appraiser asserted that “Typical vacant lots in the subject’s neighborhood can sell between $300,000 and $400,000+ per acre.”

In both instances, the Hearing Officer is provided no substantiating evidence from which he can conclude that either the $1.50 or $1.38 factor would be appropriate.Mr. Koch also rounded his site adjustment to the nearest $5,000.No explanation was provided as to what supports such a large rounding factor.A simple round to the nearest $100 would be appropriate, assuming that the appraiser wanted to keep his total adjustments in a nice round $100 factor.The Hearing Officer actually has no problem with simply rounding to the nearest $10 on any adjustment.An appraiser can always perform a final rounding for the conclusion of value based upon the separate indicated values concluded and there round to the nearest $100.

An adjustment for the site size was, of course, warranted.That is not the issue.The problem is that there is no market data presented or a reasoned analysis from such data to establish an appropriate per square foot adjustment that should be made for site variance.Based on what was the presented in both the Demba and Koch appraisals, the two site adjustment factors constitute little more than speculation on this adjustment in the mind of the Hearing Officer.

Age Adjustments

Demba:No adjustment for age difference.Comp 1 same age as subject.Comps 2 and 3 six and 9 years older than subject respectively.

Koch:Adjusted Comps 2 and 3 based upon a $5,000 per year difference in either actual or effective age.

Apparently, Mr. Demba did not find that homes that were six and nine years older than the subject would command a variance in the market due to this difference.No discussion or rational from market data was provided to support this conclusion.Mr. Koch on the other hand, without any supporting market data utilized his $5,000 per year adjustment.

Here again, the Hearing Officer has no market basis as to whether or not the market would have recognized an age difference as between the subject and any of the comparable properties.The weakness is that neither appraiser provided any rational for how they addressed this factor.An explanation with something more than no adjustment was warranted or a $5,000 per year adjustment was warranted would have made for stronger appraisals.Some basis in how the market for $1,000,000+ homes at a time relevant to January 2009 would also have provided a better work product for both Mr. Demba and Mr. Koch.

Room, Bedroom & Bath Adjustments

Demba:Adjusted for rooms and bedrooms at a factor of $15,000 each.Appears to have adjusted for bathrooms at a factor of $2,000 each,[56] but did not specifically state that in his appraisal.

Koch:No adjustment for rooms and bedrooms.Did adjust for bathrooms apparently at a $5,000 factor irrespective of whether the variance was for a half or a full bath.

The Hearing Officer does not find that a room adjustment is called for in most residential appraisals.An adjustment to address a variance in number of bedrooms has validity.Likewise, the difference in number of full and half baths between the property being appraised and comparables requires an adjustment.However, when one is appraising a 6,000 +/- square foot home and has comparables of relevant living area, the adjustment to account for the living area variance will generally capture any difference in total room count.

The issue once again becomes how does the appraiser conclude the dollar adjustment for either the bedroom or bath difference?Some market support should be provided, otherwise, it appears that the adjustment for these elements has simply been conjured out of thin air or the appraiser’s imagination.Neither of which have much probative weight.Specifically, in this instance, even assuming that a per room adjustment was warranted by Mr. Demba, there is no support for the amount concluded of $15,000 per room.The Hearing Officer does not disagree with Mr. Koch that an adjustment for baths is appropriate; however, the amount for the

adjustment is somewhat a matter of conjecture on this record.The Hearing Officer also wonders as to why an adjustment to Comp 3 for its two additional bedrooms was not warranted.

Living Area Adjustment

Demba:Adjusted based on $40 per square foot of variance.

Koch:Adjusted based on $70 per square foot of variance.

Mr. Demba provided no explanation in his appraisal as to the basis for his $40 factor.Mr. Koch only advised the adjustment was based on 25% to 30% of the typical package price indicated by the comparable properties.In point of fact, the $70 factor calculates to 25% of the average per square foot sales price of Mr. Koch’s three comparables.The $40 Demba factor calculates to 16% of the average per square foot sales price of the Demba comparables.

The position on this factor presented by Mr. Demba, in his testimony at hearing, is that the adjustment is not made based upon average sale price, but on the incremental or the marginal value, the difference of the marginal.[57]No further explanation was provided and the appraisal report is void of any discussion, explanation, analysis or calculation as to how Mr. Demba concluded that the marginal utility[58] of the living area square foot variance should be $40.Given that the $40 factor is presented without any substantiating data, it raises serious question as to the applicability of the factor for the appraisal of the subject.In like manner, there being no explanation or basis as to why the $70 factor would be appropriate, it is in a similar position to the Demba adjustment factor.

The Hearing Officer has been informed time and again in appeal after appeal that when adjusting for living area a factor of between 25% – 30% of the average unadjusted sales price of the comparable is appropriate.This is the first time the marginal utility adjustment has been presented.However, the Hearing Officer has yet to have any appraiser present in an appraisal report or testimony an explanation as to why a factor of 25% – 30% of average sales prices has validity.It is clearly understood that when there is a variance in the living area between the subject house and comparables a dollar adjustment is to be made.The issue is what is the underlying basis that supports a given adjustment?Simply relying on that is how it is always done, or that is the way it is taught, is less than satisfactory for the Hearing Officer when an appeal is presented.

Basement Adjustments

Demba:Adjustment to Comp 1, but no rational or explanation as to the basis for the adjustment.

Koch:Adjustment for area based on $10 per square foot and $25 per square foot of finished area, both figures rounded to the nearest $500.No rational as to how the $10 per square foot factor was developed.The $25 factor was based on the quality of finish typically found in homes similar to the subject.

The Hearing Officer can only conclude that the Demba adjustment to Comp 1 is simply his conjecture based on his “experience,” since there is no analysis for the -$30,000 adjustment made for this item.As to the Koch adjustments, the conclusion must be likewise, an “experience” adjustment, since there was no supporting data concerning how the appraiser was knowledgeable of or informed as to the quality of typical finish in similar homes.This is especially true with regard to the three comparables, Mr. Koch used, since he was not able to do an interior inspection of any of these houses.

Fireplace Adjustments

Demba:Adjusted $3,000 per fireplace variance, no explanation.

Koch:Adjusted $5,000 per fireplace variance based on buyers reactions to the amenity along with the appraiser’s judgment and knowledge of the area.

Neither appraiser gave any analysis to support the conclusion for the fireplace adjustment.Both adjustments were “experience” adjustments.

Garage Adjustments

Demba:Adjusted $2,000 per parking space, no explanation.

Koch: Adjusted at $50 per square foot of difference, no explanation.

The adjustments represent “experience” adjustments.

Pool Adjustment

Demba:Adjusted -$60,000, based on recent analysis of sales with pools versus without pools.

Koch:Adjusted -$25,000, based on buyers reactions to this amenity combined with the quality and upgraded features of pools typically found in this area and price range home.

It would appear that both appraisers had conducted some type of study or survey to support their adjustments for the adjustment, however, neither felt it important to provide some more detail as to what was contained in that research.When was the study or survey performed? What was the source of the information on sales of homes with and without a pool?How many recent sales were analyzed?How was the adjustment factor calculated based upon the sales utilized?Something more than the explanations given would have greatly strengthened the probative weight of the appraisal on for this adjustment.

Functional Utility

Demba:Adjusted two comparables at a -$175,000 and one sale at -$50,000.

Koch:No adjustment, considered the subject and all comparables to have average functional utility.

The issue of functional utility can best be addressed by an appraiser putting on his cost approach hat and asking, “If the house was going to be replaced new, would it be built upon its existing floor plan and design?The answer in this instance is “no.”In January 2009, an owner constructing a 6,400 square foot residence on the subject site would not do so using the floor plan and design that in fact existed on January 1, 2009.

The subject is burdened by functional obsolescence.Of course, the house continues and will continue to “function” as a residence.However, the floor plan and design is not what the market would support in 2009.Mr. Demba’s appraisal provides his detailed narrative as to his view of the functional obsolescence of the house.[59]The floor plan would not be a positive factor for a purchaser, but would in fact be detrimental.

Mr. Koch failed to account for any functional obsolescence.Mr. Demba failed to provide any analysis as to how he arrived at his -$175,000 and -$50,000 adjustments.The explanation that was provided[60] relying on a tear down sale of a neighboring property provides no information from which the Hearing Officer can deduce how the Mr. Demba was able to conclude the dollar amounts that he did for this adjustment.An adjustment for functional obsolescence was warranted, as to the amount for any given comparable that is not firmly established.

Summary & Conclusion on Appraisal Weaknesses

In fairness to Mr. Demba and Mr. Koch, the Hearing Officer could have performed a similar exercise in any number of other residential appeals on appraisals presented by different appraisers in appeals from other counties.However, for purposes of illustration of the problems the Hearing Officer sees from case to case, this particular appeal provided appropriate appraisal examples to be addressed as was done in the foregoing discussion.

A significant number and amount of adjustments made by each appraiser have to be considered to be as adjustments based upon experience and general knowledge more than adjustments derived from specific market data applicable to the present appraisal problem.The Hearing Officer recognizes that each appraiser always brings a certain level of personal knowledge and experience to bear when appraising property.The problem arises when the appraisal has the appearance of being more based upon experience than market data.

The underlying foundations for given adjustments in these appraisal reports do not generally rest upon analysis of market data.In instance after instance, the Hearing Officer is left without any objective information from which he can ascertain if the appraiser’s analysis of purported market factors has probative worth.An example being site adjustments which provide no data as to how either appraiser arrived at his adjustment factor.

From the foregoing, it might be concluded that both appraisals failed to carry the day and so the Hearing Officer must simply default to the Board presumption.Notwithstanding the detailed discussion given above, that is not the case.As previously concluded, each appraisal on its own establishes prima facie that the Board presumption as to the Board value being correct is rebutted.The only remaining issue is what then is the value to be concluded?

Conclusion of Value

Mr. Demba concluded his value of $1,076,700 by weighting the adjusted sales prices for his three comparables.The Demba weighting resulted in a value of $1,075,732 rounded to $1,076,700.[61]The Hearing Officer is unable to ascertain how $1,075,732 rounds to $1,076,700.The appropriate rounding to the nearest $100 would be the amount of $1,075,700.

Mr. Koch concluded his value of $1,605,000 by placing most weight on his comparable 1.This concluded value is $43,300 below the adjusted sales price for Comp 1.It is $7,100 below the adjusted sales price for Comp 3.It is $78,000 above the adjusted sales price for Comp 2.The concluded value is only $8,200 or .005% above the average of the three sales.

The experts have presented the following range of seven indicate values for five different properties: $1,024,574, $1,161,267, $1,364,315, $1,419,800, $1,527,000, $1,612,100 and $1,648,300.The mean indicated value is $1,393,908.The median indicated value is $1,419,800.The mean and median of the two expert opinions calculates to $1,340,850.

The Hearing Officer declines to conclude value based upon making adjustments to the sales presented that differ from those made by each appraiser, as that tends to be an exercise in appraising the property, as opposed to weighing the evidence to arrive at a determination of value.

The indicated values are weighted and contributory values are calculated, as follows:


Adjusted Sale Price

Weight Factor

Contributory Value

7 Warridge




7 Warridge




450 Warson




450 Warson




9850 Litzsinger




425 Steeplechase




9 Warridge








The true value in money for the subject property as of January 1, 2009, is $1,392,600, a residential assessed value of $264,600.

Evidence of Increase in Value

In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.[62]Under the Commission rule just cited and Supreme Court decision[63] the assessed value cannot be increased above $289,860 in this particular appeal.


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 2009 and 2010 is set at $264,600.

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.The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.Said application may be addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or may be submitted in electronic format (WORD or pdf document) by attachment to an email addressed to:, 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. [64]

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 February 8, 2012.



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 8thday of February, 2012, to:Robert Droney, 101 South Hanley Road, Suite 1600, St. Louis, MO 63105, Attorney for Complainant; Paula Lemerman Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Jake Zimmerman, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, 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


573-751-1341 Fax

[1] Residential property is assessed at 19% of its appraised value (true value in money, fair market value).

Section 137.115.5, RSMo

[2] Complaint for Review of Assessment; BOE Decision Letter

[3] Exhibit A – Description of Improvements, pp. 16 – 17; Exhibit 1 – Description of the Improvements – Subject Property, Addendum, p. 2 of 6.For a full description of the improvements see the sections of the respective appraisal reports just cited.

[4] Exhibits identified in the record at TR 3:1 – 12

[5] Exhibit C – Written Direct Testimony of Gloria Strauss; Testimony at Hearing – TR. 75 – 81

[6] Exhibit A – Summary Appraisal Report

[7] Exhibit B – Written Direct Testimony of Ernest A. Demba; Testimony at Hearing – TR 4 – 74

[8] Exhibit A – Sales Comparison Approach, pp. 33 – 46

[9] TR 103:25 – 106:19

[10] Section 137.115.1, RSMo.

[11] Exhibits identified in the record at TR 3:13 – 22

[12] Exhibit 1 – Residential Appraisal Report.Exhibit 3 – Time of Sale Adjustment Data was received as an addendum to Exhibit 1.TR 83:19 – 87:10

[13] Exhibit 2 – Written Direct Testimony of Robert Steven Koch; Testimony at Hearing – TR 82 – 101

[14] Exhibit 1, Page 2 of 2

[15] TR 106:20 – TR 112:18

[16] TR 16:24 – 17:24.The Commission may take official notice, etc. ….

[17] Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.


[18] Article X, Sections 4(a) and 4(b), Mo. Const. of 1945

[19] Section 137.115.5, RSMo

[20] 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)


[21] 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.

[22] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)


[23] Exhibits A & B

[24] Exhibits 1, 2 & 3

[25] St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).


[26] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).

[27] Hermel, supra.


[28] Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.


[29] Exhibit A, pp. 9 – 10: Definition of Market Value;Exhibit 1, Appraiser’s Certification page: Definition of “True Value in Money” as set forth by the state of Missouri.

[30] 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).


[31] 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).


[32] Exhibit A – Valuation, pp. 33 & 46;Exhibit 1 – Summary, p. 2 of 2

[33] Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).


[34] 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).


[35] Hermel, supra.


[36] 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).


[37] See, Cupples-Hesse, supra.


[38] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).


[39] 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).


[40] 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).


[41] Section 137.115.1(1) & (2).


[42] Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974).


[43] 30 AmJur2d. 345-346, Evidence section 1167.


[44] Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).


[45] Hermel, Cupples-Hesse, Brooks, supra.


[46] Section 536.070 (8) RSMo

[47] Living Area Square Footage

[48] Rooms/Bedrooms/Bathrooms-Full/ Bathrooms-Half

[49] Sale Price/Sale Price Per Square Foot Living Area

[50] Exhibit 1, Comments on the Sales Comparison Approach – Addendum Page 5 of 6

[51] See, TR 112:21 – 114:16

[52] Exhibit A, p. 28

[53] Exhibit 1 – Addendum Page 4 of 6; Exhibit 3

[54] Exhibit A, p. 30

[55] Exhibit A, p. 30

[56] Exhibit A, pp. 40 & 43 – Sales Adjustment Grid

[57] TR 27:19 – 28:4

[58] Marginal Utility – At any given point of consumption, the addition to total utility by the last unit of a good.In general, the greater the number of items, the less the marginal utility; that is, the greater the amount of an item or product, the less the value of each item comprising the amount.Marginal Utility School – A school of economic thought developed primarily through the writings of Karl Menger, W. S. Jevons and Leon Walras who explained the relationship between desirability and price by reference to the marginal utility concept; that is, the added amount of satisfaction from an additional unit of a good.Real Estate Appraisal Terminology, Revised Edition, Society of Real Estate Appraisers, 1984, p. 159. See also, The Dictionary of Real Estate Appraisal, Third Edition, Appraisal Institute, 1993, p. 219.

[59] Exhibit A, Description of Improvements, pp, 16 – 17; Condition, pp. 17 – 19; Comments on Sales Comparison Analysis, p. 45; See also, Exhibit B, Q & A 22, pp. 4 – 5; Exhibit C, Q & A 12, p. 3

[60] Exhibit A, p. 45, paragraph beginning, “I believe the downward adjustment … .”

[61] Exhibit A, p. 45.

[62] Section 138.060, RSMo; 12 CSR 30-3.075.


[63] The Supreme Court of Missouri has interpreted Section 138.060.The Court stated:

“Section 138.060 prohibits an assessor from advocating for or presenting evidence advocating for a higher ‘valuation’ than the ‘value’ finally determined by the assessor. … . Because the legislature uses the singular terms ‘valuation’ and ‘value’ in the statute, however, it clearly was not referring to both true market value and assessed value.While the assessor establishes both true market value and assessed value, which are necessary components of a taxpayer’s assessment, as noted previously, the assessed value is the figure that is multiplied against the actual tax rate to determine the amount of tax a property owner is required to pay.The assessed value is the ‘value that is finally determined’ by the assessor for the assessment period and is the value that limits the assessor’s advocacy and evidence.Section 138.060.By restricting the assessor from advocating for a higher assessed valuation than that finally determined by the assessor for the relevant assessment period, the legislature prevents an assessor from putting a taxpayer at risk of being penalized with a higher assessment for challenging an assessor’s prior determination of the value of the taxpayer’s property.”State ex rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 S.W.3d 80, 87-88 (Mo 8/4/09)

[64] Section 138.432, RSMo.