State Tax Commission of Missouri
|HERBERT & MARY RUNNELS,||)|
|)||Appeal Number 13-11767|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
Decision of the County Board of Equalization affirming the assessment made by the Assessor is AFFIRMED. Complainants did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. Nevertheless, Respondent, although under no obligation to do so, presented substantial and persuasive evidence to affirm the Board of Equalization valuation.
True value in money for the subject property for tax years 2013 and 2014 is set at $312,300, residential assessed value of $59,330.
Complainant Herbert Runnels appeared pro se.
Respondent appeared by attorney Paula Lemerman
Case heard and decided by Senior Hearing Officer John Treu.
Complainant appeals, on the ground of overvaluation the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property, set by the Assessor. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction and improvement to the property. Section 137.115.1 RSMo
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing was held on 8/13/2014 at the St. Louis County Administration Building, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 20R130397. It is further identified as 14914 Royalbrook Dr., Chesterfield, St. Louis County, Missouri.(Ex. 1)
- Description of Subject Property. The subject property consists of a 13,320 square foot tract of land improved by a single family, residential two story style home of a condition consistent with well maintained improvements. The quality is consistent with homes featuring economy of construction and basic functionality. The home has 2,628 square feet of gross living area. Amenities include an oversized two car attached garage, an enclosed porch, four bedrooms, two and a half baths, and a fireplace. The finished portion of the basement consists of approximately 600 square feet. The exterior is brick and vinyl siding. (Ex. 1)
- Assessment. The Assessor appraised the property at $312,300. The Board of Equalization sustained the appraisal of the property at $312,300. (Ex. 1)
- Complainants Evidence. Complainants offered into evidence Exhibits A through F. Exhibit A consisted of what Complainant, viewed as more comparable homes in the neighborhood and what Complainant viewed as the most comparable home. Exhibit B consisted of further documents regarding such most comparable home. Exhibit C consisted of St. Louis County records on comparable purportedly used by the Board of Equalization, of which only one was used by Respondent’s appraisal in his appraisal presented at the evidentiary hearing. Exhibit D consisted of a list of homes in the same location listed for sale at the time of the appeal. Exhibit E consisted of the Complainants estimate of assessed value of the subject property. Exhibit F consisted of Complainants proposed written testimony about the fairness of the value placed on the subject property. Exhibits A through E were objected to, objection was overruled and the exhibits were received into the evidentiary record. Exhibit F was received into the evidentiary record without objection.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2013, to January 1, 2014, therefore the assessed value for 2013 remains the assessed value for 2014. Section 137.115.1, RSMo.
- Respondent’s Evidence. Respondent offered into evidence Exhibit 1 – Appraisal Report dated 6/6/2014 with an Effective Date of 1/1/2013 – Mark Stuart – Missouri State Certified Residential Real Estate Appraiser Exhibit 1 was objected to on the ground that it was not received by him by the June 17, 2014 exchange date set forth in the Order of April 1, 2014. However, Complainant produced no evidence of a failure to mail such exhibit by the requisite date, such as the postmark on the applicable mailing. Objection was overruled and the exhibit was received into the evidentiary record. Such appraisal came to a valuation of the subject property, as of January 1, 2013 of $315,000.
- Presumption of Correct Assessment Not Rebutted. Complainant’s 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, 2013, to be $ 312,300, as proposed. All the sales comparables fell within .33 miles of the subject property. The square footage difference between the subject property and the sales comparables fell in a range of forty to five hundred sixty-six square feet. Respondent presented substantial and persuasive evidence to allow a valuation of the subject property as of January 1, 2013. (Ex. 1).
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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. 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). 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. 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. The presumption is not evidence of value. 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. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra. 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. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
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, 2013. Hermel, supra. 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.” 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). 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. Complaint who appeared did not meet the burden of proof imposed upon complainants.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value. 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). The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. 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).
“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.” Carmel Energy at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.” See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980). In this case, taxpayer’s evidence was not substantial and persuasive. Presentation of what Complaint viewed as comparables, without presenting evidence of appropriate adjustments for the differences in the alleged comparables to the subject property left this Hearing Officer, “in the nebulous twilight of speculation, conjecture and surmise.” Id.
Board Presumption and Computer-Assisted Presumption
There exists a 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, then it also would be applicable to the Respondent. The computer-assisted presumption only comes into play if the Board of Equalization lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and it has not been shown that the Assessor’s valuation was not the result of a computer assisted method.
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. 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). True value in money is defined in terms of value in exchange and not value in use. 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).
It is the fair market value of the subject property on the valuation date. Hermel, supra.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- 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 financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction. 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.
The principle of relevance is a critical evidentiary factor that must be considered when testimony and documents are tendered for admission into an evidentiary record. For facts, information or opinions to be relevant they must be connected in a logical manner and tend to prove or disprove a matter that is at issue in the proceeding. Black’s, supra – relevant, p. 1293. McCormick explains that “There are two components to relevant evidence: materiality and probative value. Materiality looks to the relation between the propositions for which the evidence is offered and the issues of the case. If the evidence is offered to help prove a proposition which is not a matter in issue, the evidence is immaterial. . . . The second aspect of relevance is probative value, the tendency of evidence to establish the proposition that it is offered to prove.” McCormick, supra – p. 541. Evidence, that tends to prove or disprove a fact that is at issue or of consequence, is relevant. Missouri Practice, supra – p. 95.
In appeals on the value of property, the issue is what a willing buyer and seller would have agreed to as the purchase price on the applicable valuation date. The issue is not what real estate price trends in general may have been or any given period of time. The issue is specific to the property that is under appeal. Therefore, general statements, claims, conclusions and opinions as to what the “market for homes” has or hasn’t done do not meet the factors of materiality and probative value and are accordingly irrelevant. The fact that some report provides general information on home values is addressing a matter that is not at issue in an appeal. Such information is not material. Furthermore, such general data does not tend to prove what the property under appeal was worth on the given valuation date. For example, a report that home prices in the nation, region or certain metropolitan area over a four or five year period decreased by a certain average percentage provides no factual information as to the price or value of any given home. In other words, such information is not probative on the issue of value. It does nothing to prove that a given property is worth one amount or another.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo. The Hearing Officer during the evidentiary hearing made inquiry of Complainant and Respondent’s appraiser.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
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. 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).
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission. It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987);and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).
The Supreme Court of Missouri has also held that 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. St. Joe Minerals Corp., supra
Respondent Proves Value
Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences. The adjustments made by the appraiser were consistent with generally accepted guidelines for the appraisal of property of the subject’s type. The adjustments properly accounted for the various differences between the subject and each comparable.
Respondent’s evidence was substantial and persuasive to establish a valuation of the subject property as of January 1, 2013. All the sales comparables occurred within a date relevant to the valuation. All the sales comparables fell within .33 miles of the subject property. The square footage difference between the subject property and the sales comparables fell in a range of forty to five hundred sixty-six square feet.
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 2013 and 2014 is set at $59,330.
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
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 this 2nd day of September, 2014.
STATE TAX COMMISSION OF MISSOURI
Senior Hearing Officer
Certificate of Service
Delivery or Notice was made via email, fax, or personally on September 2nd, 2014 or by mail to the following Individuals of this Decision/Order/Holding
Herbert and Mary Runnels, 17914 Royalbrook Dr., Chesterfield, MO 63017, Complainants
Paula Lemerman, Associate County Counsel, Attorney for Respondent, PLemerman@stlouisco.com
Jake Zimmerman, Assessor, email@example.com
Mark Devore, Collector, MDevore@stlouisco.com
Genevieve Frank, Clerk, firstname.lastname@example.org