State Tax Commission of Missouri
JAMES & ROBERTA DEUTSCH,)
v.) Appeal Number 07-10086
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax years 2007 and 2008 to be $491,300, assessed value of $93,350.
Complainant James Deutsch appeared in person.
Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.
Case heard and decided by Hearing Officer Maureen Monaghan.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
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 Assessor determined an appraised value of $491,300, assessed value of $93,350, as residential property.The Board reduced the value to $400,500, assessed value of $76,100.Complainant proposed a value of $330,000 on the Complaint for Review of Assessment.
A hearing was conducted on May 22, 2008, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record and the briefs of the parties, enters the following Decision and Order.
Mr. Deutsch testified in his own behalf.He is the owner of the property and a realtor.He has not made any improvements to the property from January 1, 2007, to January 1, 2008. He believes that his property is outdated; for example, his home has eight foot ceilings which are not as desirable as the taller ceiling heights in newer homes.He testified that he believed his property was worth $330,000.
The Complainant offered two exhibits.Complainant’s Exhibit A is information from the Assessor’s website on property located at335 Ladue Lake Drive.The Complainant offered the exhibit to show the assessment of that property which is located in his subdivision.The attorney for the Assessor objected to the exhibit on the grounds of relevance as the property had not sold within a relevant time period, the document contained no sales information, and the assessed value of another property is not relevant as to the market value of the subject property as of January 1, 2007.The objections were sustained.
Complainant offered Exhibit B.Exhibit B is information from the Assessor’s website on property located at12527 Ladue Lake Court, a property near the subject property.The information includes sales information for the property.The house sold in July, 2004 for $352,500 and in April 2006 for $565,000.The Complainant testified that the owners raised the ceiling height in the property between the sales in 2004 and 2006.The Respondent objected to the exhibit.The objection was overruled.
Respondent placed into evidence the testimony of Ms. Lela Tulley, State Certified Residential Real Estate Appraiser forSt. LouisCounty.The appraiser testified as to her appraisal of the subject property.The Appraisal Report, Exhibit 1, of Ms. Tulley was received into evidence.Ms. Tulley arrived at an opinion of value for the subject property of $515,000 based upon a sales comparison approach to value.In performing her sales comparison analysis, the appraiser relied upon the sales of four properties she deemed to be comparable to the subject property.
FINDINGS OF FACT
1.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.
2.The subject property is located at 12522 Falling Leaves Court, Creve Coeur,Missouri.The property is identified by locator number 18P640411.The property consists of 0.84 acres.The lot is improved by a ranch-style, single-family residence built in 1976 and appears to be in average condition.The residence has a total of nine rooms, which includes four bedrooms, two full baths, two half baths and contains 3,016 square feet of living area.There is a basement with 2,200 square feet of finished space and an attached two-car, rear-entry garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2007.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.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, 2007, to be $330,000, as proposed in the Complaint for Review of Assessment and as testified to at the evidentiary hearing.
5.The properties relied upon by Respondent’s appraiser in performing her appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The four properties were located within less than a mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007.The sale properties were similar to the subject in location, age, size, and condition.
6.Respondent’s evidence constituted clear and convincing evidence to establish the fair market value of the subject property to be at least $491,300 as originally determined by the Assessor.Respondent’s evidence was only received for the purpose of sustaining the original assessment and not for increasing it above the value established by the Assessor.
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.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.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.Section 138.431.4, RSMo.
Presumptions in Appeals
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).
The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.
The Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 348-349 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.The Respondent when advocating a value greater than the value set by the Board must also present substantial and persuasive evidence to rebut the Board presumption and establish fair market value.In this instance Respondent has rebutted the Board presumption and presented clear and convincing evidence that the true value in money of Complainant’s property on January 1, 2007, was at least $491,300.
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.Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974).The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.30 AmJur2d. 345-346, Evidence section 1167.“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.”Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).
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.Section 138.060, RSMo; 12 CSR 30-3.075.The value determined by Ms. Tulley, absent the restriction of 12 CSR 30-3.075 would have been sufficient to have set the true value in money on the Deutsch property at $515,000.However, under the mandate of the rule, the Tulley value was only received for the purpose of sustaining the Assessor’s original value, which was higher than the Board’s value.Exhibit 1 was not received as advocating an increase in value above that determined by the Assessor.
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).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 is 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 each 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.
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.
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, 2007.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).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).See also, 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).
Mr. Deutsch failed to meet the required standard in the present appeal.The sum and substance of Complainant’s evidence on the issue of fair market value was only Mr. Deutsch’s opinion of value, and although he testified that he is a realtor, he did not present information regarding sales of similar properties.He presented evidence of a sale of one house in the subdivision, however, without a sales comparison analysis, sales price of the comparable provides no indication of the value of the subject property.
The owner of property is generally held competent to testify to its reasonable market value. 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.Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).An opinion of value based upon comparing assessment of one property to another is not recognized by the Commission, the courts or the appraisal industry as a valid method to establish fair market value.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).
Summary and Conclusion
Complainant failed to prove fair market value of the subject property.Respondent’s evidence was clear and convincing to affirm the Assessor’s original valuation of the subject property.The Board’s valuation has been rebutted and value for the property must be set at $491,300 as originally determined by the Assessor.
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 original valuation as determined by the Assessor is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $93,350.
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 June 2, 2008.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2ndday of June, 2008, to:James Deutsch, 2522 Falling Leaves Court, Creve Coeur, MO 63141, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip A. Muehlheausler, 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