State Tax Commission of Missouri
GREG & NATASHA ZVEITEL,)
)
Complainant,)
)
v. ) Appeal No.11-10094
)
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2011 and 2012 is set at $287,800, residential assessed value of $54,680.
Complainant, Greg Zveitel appeared pro se.
Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainants appeal, 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.A hearing was conducted on July 19, 2012, at the St. Louis County Government Center, Clayton, Missouri.
2.Subject Property.The subject property is located at 9143 Robyn Road, Sunset Hills, Missouri.It is identified by locator number 26M220231. The property consists of a 28,675 square foot lot improved by a ranch style, single-family residence built in 1948.[1]
3.Assessment.The Assessor appraised the property at $287,800, a residential assessed value of $54,680.[2]The Board sustained the assessment.[3]
4.Complainant’s Evidence.Complainants offered the following exhibits into evidence:
|
EXHIBIT |
DESCRIPTION |
|
A |
Property Record Card – Subject Property |
|
B |
3 Photographs – Assessor’s sale properties – Original Valuation |
|
C |
Comparison Chart |
|
D |
Plats of Assessor’s 3 sale properties (Exhibit B) |
Exhibits A and B were received into evidence without objection.Exhibits C and D were not received into evidence upon objection.See, Exclusion of Exhibits C & D, infra.
Mr. Zveitel testified on behalf of Complainants at hearing.
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.[4]
Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011, to be $270,000, as proposed in the Complaint for Review of Assessment or $273,758, as proposed at hearing in Complainants’ Offer of Proof.
5.Respondent’s Evidence.The following exhibits were received into evidence on behalf of Respondent.
|
EXHIBIT |
DESCRIPTION |
|
1 |
Appraisal Report – Sharon Kuelker, Residential Appraisal Senior |
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2 |
Building Permit dtd 11/12/04 – Subject |
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3 |
Multi-List Service Data – 2006 Sale of Subject |
Ms. Kuelker testified on behalf of Respondent.Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2009, to be $368,000.However, Respondent’s appraisal was offered and 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.See, Evidence of Increase in Value, infra.Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $287,800.See, Respondent’s Burden of Proof, infra.
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 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.[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 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]Complainants’ evidence failed to rise to the level of substantial and persuasive to rebut the presumption of correct assessment by the Board and to establish the value tendered by Complainants.
Board Presumption and Computer-Assisted Presumption
As just addressed there exists under operation of case law the presumption of correct assessment by the Board of Equalization.As will be addressed below (See, Respondent’s Burden of Proof, infra), 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 Board 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 Board or the original valuation, then it also would be applicable to the Respondent.The computer-assisted presumption only comes into play if the Respondent is seeking to sustain the original assessment and it has not been established that it was not the result of a computer assisted method.
Board Presumption
The Assessor’s original value in this appeal was determined by the Board to be correct.Accordingly, the taxpayer must rebut that presumption in order to prevail.The taxpayer must establish by substantial and persuasive evidence that the value concluded by the Board is in error and what the correct value should be.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,[10] has proven that the Board’s value was in error.The computer-assisted presumption plays no role in this process.
Computer-Assisted Presumption
The computer assisted presumption can only come into play in those instances where the Respondent is seeking to have the Assessor’s original valuation affirmed.If in a given appeal the Respondent is offering evidence that would establish a value less than the original valuation, then the computer-assisted presumption is not applicable to that appeal.Even if the Board has reduced the valuation and the Respondent’s evidence is offered to increase the value, but not to the level of the original valuation, the computer-assisted presumption does not come into play.
In those cases, such as this where the Assessor’s original value has been sustained by the Board, and the Respondent has tendered evidence to support that value, the Hearing Officer then imposes the computer-assisted presumption on Respondent’s evidence.It however, does not negate the fact that the Board presumption remains operative as to evidence which is presented by the taxpayer.The effect of the computer-assisted presumption coming into operation is that the standard of proof for the Respondent is then raised from substantial and persuasive to clear and convincing.
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.[11]True value in money is defined in terms of value in exchange and not value in use.[12]It is the fair market value of the subject property on the valuation date.[13]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.[14]
The record fails to establish that the opinion of value offered by Complainants met the Standard For Valuation.On the other hand, Respondent’s appraiser concluded her value under the Standard For Valuation.[15]
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.[16]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.[17]Complainants failed to present an opinion of fair market value based upon one of the approved appraisal methodologies.Respondent presented a conclusion of value derived from the proper development of the sales comparison approach.
Exclusion of Exhibits C & D
Mr. Zveitel offered into evidence Exhibits C and D.Exhibit C consisted of a comparison chart prepared by Mr. Zveitel which averaged the Assessor’s per square foot value of the improvements on the three properties which had been a part of the original computer-assisted valuation of the property under appeal and then averaged the Assessor’s land values for the three properties.He then applied these per square foot averages to his property and arrived at a value of $273,758.Exhibit D consisted of plat maps of the 3 sale properties to establish how Mr. Zveitel calculated the square footage of the land area of each property.
When a taxpayer desires to utilize some innovative and creative method for the valuation of real property, the taxpayer has the burden to establish that the method which they have devised has been recognized and accepted for the appraisal of real property.No such showing was made on this record for Complainant’s averaging technique.The averaging of sales prices is a faulty procedure and is not recognized or accepted for appraisal of property before the Commission.[18]
Mr. Zveitel relied upon three sales which had apparently been selected by the Assessor’s mass appraisal valuation system.Then instead of relying on the actual sale prices of the properties, the Complainant used the Assessor’s appraised values to ascertain per square foot values for the home and the land of the three sale properties.No foundation was established that this methodology has ever been recognized by the courts of Missouri, nor the Commission.The method has not been so accepted.The average unadjusted per square foot sale prices of the three properties calculates to $114.54.Applying that figure to the subject property’s square footage of living area produces an indicated value of just over $312,200, effectively rebutting an indicated value of $270,000 or $273,758.
Counsel for Respondent objected to Exhibit C on the grounds of the valuation methodology not being a recognized method of real estate appraisal.The objection was sustained.Exhibit C was excluded from evidence.Because Exhibit D was attached to and a part of the calculations used in exhibit C it was also excluded.Exhibit C and D and the testimony related thereto were only received as an offer of proof on behalf of Complainants, but not as evidence upon which a determination of value could be based.The exhibits are maintained in the Commission file, but are not a part of the evidentiary record for purposes of finding the fair market value of the property.
Complainants’ Burden of Proof
In order to prevail, Complainants 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.[19]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.”[20]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.[21]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.[22]As has previously been indicated and will be further addressed below Complainants failed to meet the required burden of proof to rebut the presumption of correct assessment and establish the fair market value of their property.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]In this instance, Mr. Zveitel’s opinion of value was based upon his averaging methodology.As discussed above, the supporting evidence for this opinion was excluded from the evidentiary record and is given no weight.The opinions of value of $270,000 or $273,758 are based upon improper elements and an improper foundation.The owner’s opinion is without probative value.
Exhibits A and B, although not objected to, have no relevance to establish the true value in money of the Complainants’ property as of January 1, 2011.There is no evidence on the record, other than the owner’s unsupported testimony as to the opinion of value.An unsupported owner’s opinion does not constitute substantial and persuasive evidence.A determination of value cannot be founded upon that opinion alone.Accordingly, the Board presumption stands and the Board’s value must be affirmed.
Respondent’s Burden of Proof
The Respondent, if seeking to sustain his original value on residential property which has been made by a computer, computer-assisted method or a computer program, 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 that valuation.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 $287,800, 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.[25]
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.[26]The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.[27]“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.”[28]
Respondent presented the appraisal report of Sharon Kuelker.The appraisal relying on the sales comparison approach was done in accordance with generally accepted appraisal techniques, as required by the statute.Ms. Kuelker’s opinion of value was based on the sales of three properties that were comparable to the subject.The properties sold in a range of dates from October 2010 to December 2011.This range of dates is relevant to a valuation of the property as of January 1, 2011.All of the sales were within less than a mile of the subject, specifically within a range from .45 to .55 of a mile.Each of the properties was within 500 square feet of living area of the subject.Each of the properties resembled the disputed property in age, floor plan, number of rooms, and other relevant characteristics.The appraiser made appropriate adjustments for difference in factors and amenities that would impact on a determination of the fair market value of the property as of January 1, 2012.The Kuelker appraisal met the required standard of clear, cogent and convincing evidence to sustain the Assessor’s original valuation.The Hearing Officer’s mind was left with an abiding conviction that the evidence is true and that the subject property’s true value in money as of January 1, 2011, was at least $287,800.The indicated values obtained from the sales comparison approach were $358,500, $373,700 and $366,400.The appraiser concluded a value of $368,000.
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.[29]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 $368,000.However, under the Commission rule just cited and Supreme Court decision[30] the assessed value cannot be increased above $54,680 in this particular appeal.
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 AFFIRMED.
The assessed value for the subject property for tax years 2011 and 2012 is set at $54,680.
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 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. [31]
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 July 31, 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 31st day of July, 2012, to:Greg Zveitel, 9143 Robyn Rd., Sunset Hills, MO 63127, 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; 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
573-751-2414
573-751-1341 Fax
[1] A complete description of the subject property is found in Exhibit 1 – Addendum, Page 1 of 4 – Description of the Improvements-Subject Property.
[8] 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)
[9] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[11] 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).
[12] 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).
[14] 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.
[15] Exhibit 1 – DEFINITION OF “TRUE VALUE IN MONEY” AS SET FORTH BY THE STATE OF MISSOURI, page 4 of 4
[16] 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).
[17] 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).
[18] Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers (1982), p.159.
[20] 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).
[23] 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).
[24] 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).
[30] 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)