State Tax Commission of Missouri
GRAHAM OELMAN, )
v. ) Appeal Number 09-10163
MICHAEL BROOKS, )
ACTING ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.
Complainant Graham Oelman did not appear in person but appeared by Counsel Mark Scheer.
Respondent appeared by Associate County Counselor Paula J. Lemerman
Case heard and decided by Hearing Officer Maureen Monaghan.
Complainant appeals, on the grounds of overvaluation and discrimination. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009 and whether there was an intentional plan of assessing officials to assess the property at a value greater than 19% of fair market value or at a greater percentage than the average residential assessment in County.
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 June 23, 2010, at the St. Louis County Government Center, Clayton, Missouri.
3. Subject Property. The subject property is located at 711 Sherwood Drive, Webster Groves, Missouri. The property is identified by locator number 24L540431. The property consists of 27,945 square foot lot improved by a two-story brick and frame, single-family structure. The house was built in 1930 and appears to be in good condition. The residence has a total of ten rooms, with four bedrooms and two and 1/2 baths. The home contains 3,956 square feet of living area. There is a partial basement with 200 square feet of finished space. The property also has a detached two-car garage and a swimming pool.
4. No New Construction and Improvement. There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010. Therefore, the assessed value remains the same for 2010 as that set for 2009.
5. Complainant’s Valuation Evidence. Complainant’s attorney offered Exhibit A (a chart of the Assessor’s 2009 appraised and assessed values for the subject property and properties located at 719 and 703 Sherwood). Exhibit A was admitted into evidence. Complainant’s attorney offered Respondent’s Exhibit 2 (the deeds and certificates of value on the subject property). Respondent stipulated to its admission. Exhibit 2 consists of the following documents:
a. General Warranty Deed dated August 2, 2005. Grantor: Mark Scheer and Mervi Scheer. Grantee: Martha Hefner as trustee of the Elliot Julian Trust dated as of August 1, 2005.
b. Certificate of Value from 2005 signed by Martha Hefner and Mark Scheer stating that the property had been sold for $540,000 cash.
c. General Warranty Deed dated September 4, 2008. Grantor: Martha Hefner as trustee of the Elliot Julian Trust dated as of August 1, 2005. Grantee: Graham Delman.
d. Certificate of Value from 2008 signed by Grant Delman stating that the transaction was between relative or related corporations and that the transaction involved one of a series of deeds. The sale price was not disclosed.
e. A Corrective Trustee’s Deed dated July 2, 2009. The Grantee’s name was corrected from Graham Delman to Graham Oelman.
f. Certificate of Value from 2009 signed by Grant Oelman stating that the transaction was for the purpose of correcting a previously filed deed. The sale price was $575,000.
Mr. Scheer argues that the transaction in 2008 was not between related parties. He stated that he sold the property without a MLS listing in 2005.
6. Respondent’s Valuation Evidence. The Respondent proffered three exhibits. Exhibit 2 was previously discussed. Exhibit 3 is the 2001 MLS listing for the property. The property sold for $699,000. Exhibit 1 is an appraisal report by Timothy Hannan. The properties, relied upon by Respondent’s appraiser in performing his appraisal, were comparable to the subject property for the purpose of arriving at an indicated value. The properties were located within less than a mile of the subject (0.12 to 0.54 miles). Each sale property sold at a time relevant to the tax date of January 1, 2009 (March 2007 to March 2008). The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. The appraiser property adjusted for variances between each sale property and the subject. The gross and net adjustments as a percentage of sale prices were within the recognized and accepted ranges. The adjusted sale prices ranged from $715,600 to $801,200. The appraiser stated that he did not use the sale of the subject property because the certificate of value indicated that the parties were related and that he had sufficient sales in the immediate area to use. The appraiser also testified that the Assessor’s Office value was $625,000. He noted that the property record card for the subject property had listed open porches and on his visual inspection he noted that the areas were enclosed and were enclosed additions on each story. The appraiser also noted that the market values in area the subject property was located had increased in 2008.
Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2009, to be $750,000. However, Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value. Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $625,000.
7. Discrimination Claim. In order to prove discrimination, Complainant needed to demonstrate that his property was being assessed at a higher percentage of market value than a statistically significant number of other properties in the county. The attorney for the Complainant submitted the Assessor’s Office 2009 appraised values and assessed values for two neighboring properties. This exhibit demonstrates that the neighboring properties were assessed at the residential assessment rate of 19%. If we take into consideration the market value of the subject property as determined by the Hearing Officer, the subject property is being assessed at 15.83% and therefore is the beneficiary of discrimination.
CONCLUSIONS OF LAW AND DECISION
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.
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. 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. Complainant failed to meet the required evidentiary standard, therefore the presumption of correct assessment was not rebutted by Complainant.
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. It is the fair market value of the subject property on the valuation date. 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.
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. 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.
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time. The actual sale price is a method that may be considered for estimating true value. The transfer of the subject property in 2008 was at a time relevant to the assessment date of
January 1, 2009. However, the Certificate of Value indicates on its face that the transaction was between related parties. The attorney for Complainant argues that the parties were not related.
Sale of one property, even if it is the subject property, does not necessarily indicate the market value for the subject property on the valuation date. The transaction needs to be reviewed and considered along with properties similarly situated. The Respondent’s appraiser included properties within ½ mile of the subject property and one property was on the same street, located within .12 miles of the subject property. By reviewing all properties, the appraised value for the subject property may be determined.
Respondent’s appraiser concluded a fair market value relying on the development of the sales comparison approach to value. The sales comparison methodology generally will provide the best appraisal approach for valuing single family, owner occupied properties.
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, 2009. 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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. 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.
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. The evidence presented by the Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the fair market value of the property under appeal, as of January 1, 2009, to be $750,000. However, under the Commission rule just cited and Supreme Court decision the assessed value cannot be increased above $118,750 in this particular appeal.
In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2009; 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. Evidence of value and assessments of two properties does not prove discrimination. Substantial evidence must show that all other property in the same class, generally, is actually undervalued.
Complainants have the burden to prove the level of assessment for the subject property in 2009. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.
Complainants must then prove the average level of assessment for residential property in St. Louis County for 2009. This is done by (a) independently determining the market value of a representative sample of residential properties in St. Louis County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in St. Louis County must demonstrate a disparity that is grossly excessive.
Complainant’s presentation of the 2009 Assessor’s Office appraised value and assessed value of two properties and the subject properties fails to meet the required burden of proof.
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 AFFIRMED.
The assessed value for the subject property for tax years 2009 and 2010 is set at $118,750.
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 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.
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 a 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 July 2, 2010.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2nd day of July, 2010, to: Graham Oelman, 711 Sherwood Drive, Webster Groves, MO 63119, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, Acting Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
 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).
 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.
 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).
 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).