James T. & Jennifer Campbell v. Jake Zimmerman, Assessor St. Louis County

June 19th, 2018

STATE TAX COMMISSION OF MISSOURI

 

JAMES T. & JENNIFER H. CAMPBELL, )

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  )  
              Complainant, )  
  )  
v. ) Appeal No. 17-10188
  )

)

 Parcel/Locator No.

25N420211
JAKE ZIMMERMAN,  ASSESSOR, )  
ST. LOUIS COUNTY, MISSOURI,

Respondent

 )

)

  

 

DECISION AND ORDER

 

HOLDING

 

The decision of the St. Louis County Board of Equalization (BOE) is SET ASIDE.  Complainants James T. Campbell (Complainant) and Jennifer H. Campbell presented substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.

Complainant appeared pro se; Jennifer H. Campbell appeared not.

Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Steve Robson.

Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).

ISSUE

Complainant appealed on the ground of overvaluation.[1]  Respondent initially set the true value in money (TVM) of the subject property at $1,188,400, as residential property, as of January 1, 2017.  The BOE valued the subject property at $1,188,400, thereby sustaining Respondent’s valuation.

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 or improvement to the property.  Section 137.115.1 RSMo   The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.

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.
  2. Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on March 28, 2018, at the St. Louis County Government Building, 41 South Central Avenue, Clayton, Missouri.
  3. Identification of Subject Property. The subject property is identified by parcel/locator number 25N420211.  It is further identified as 32 Lemp Road, Kirkwood, St. Louis County, Missouri.  (Complaint; Exhibit 1)
  4. Description of Subject Property. The subject property consists of 2.09 acres improved by a 6,253 square-foot, two-story, single-family home built in 2009.  (Exhibit B)  The subject property includes five bedrooms; five full bathrooms; one half bathroom; three wood-burning fireplaces; one metal fireplace; a full basement; a detached garage; an in-ground pool; three porches; one deck; and one patio.  (Exhibit B)  The exterior consists of stone construction.  (Exhibit B)  The home has a construction grade of B and a condition/desirability/utility rating of average.  (Exhibit B)
  5. Assessment. Respondent set a TVM for the subject property of $1,188,400, residential, as of January 1, 2017.
  6. Board of Equalization. The BOE set a TVM of the subject property at $1,188,400, residential, as of January 1, 2017.
  7. Complainant’s Evidence. Complainant opined that the TVM of the subject property as of January 1, 2017, was $595,634.  To support his opinion of value, Complainant offered as evidence the following exhibits:
Exhibit Description Admitted or Excluded
Exhibit A Property Record Card for subject property obtained from St. Louis County Real Estate Information database showing that the the subject property’s total living area was erroneously reported in 2016 as 8,530 square feet Admitted
Exhibit B Property Record Card for subject property obtained from St. Louis County Real Estate Information database showing that the the subject property’s total living area was reported in 2018 as 6,253 square feet Admitted
Exhibit C Report dated August 14, 2015, from engineer Steven Resnick regarding his observations and professional opinion about cracks in the home’s exterior stone veneer Excluded as hearsay in that Steven Resnick was not present to authenticate report or to be cross examined under oath; Complainant’s testimony of his personal knowledge regarding damage to the home and the need for certain repairs, discussed within the report, admitted to be given weight deemed necessary
Exhibit D Report dated February 12, 2014, from William Tao Associates Vice President, Senior Structural Engineer Mark R. Schell regarding his observations and professional opinion about cracks in the home’s interior drywall and in the mortar of the exterior masonry Excluded as hearsay in that Mark R. Schell was not present to authenticate report or to be cross examined under oath; Complainant’s testimony of his personal knowledge regarding damage to the home and the need for certain repairs, discussed within the report, admitted to be given weight deemed necessary
Exhibit E Bid proposal from Raineri Construction for masonry repairs to the home’s exterior in the amount of $502,380 Excluded as hearsay in that individual who prepared bid proposal was not present to authenticate the bid proposal or to be cross examined under oath; Complainant’s testimony of his personal knowledge regarding damage to the home and the need for certain repairs, discussed within the bid proposal, admitted to be given weight deemed necessary
Exhibits F Bid proposal from RFW Contracting Inc. for masonry repairs to the home’s exterior in the amount of $475,000 Excluded as hearsay in that individual who prepared bid proposal was not present to authenticate the bid proposal or to be cross examined under oath; Complainant’s testimony of his personal knowledge regarding damage to the home and the need for certain repairs, discussed within the bid proposal, admitted to be given weight deemed necessary
Exhibit G Bid proposal from Dangos Builders Group for masonry repairs to the home’s exterior in the amount of $523,095 Excluded as hearsay in that individual who prepared bid proposal was not present to authenticate the bid proposal or to be cross examined under oath; Complainant’s testimony of his personal knowledge regarding damage to the home and the need for certain repairs, discussed within the bid proposal, admitted to be given weight deemed necessary
Exhibit H Property Record Card for neighboring property at 21 Lemp Road, offered to show square footage of pool house was not included in that property’s total living area Admitted
Exhibit I Residential Appraisal Report of Robert Coleman dated August 31, 2017, showing an opinion of value of $590,000 (sales comparsion approach) and $595,634 (cost approach); showing gross living area 5,591 square feet; noting some hairline cracks in exterior stone Excluded as hearsay in that the appraiser was not present to authenticate the report or to be cross examined under oath; Complainant’s testimony of his personal knowledge of any information contained within the report admitted to be given weight deemed necessary
Exhibit J Plot plan for subject property showing site elevation and placement of home on the lot Admitted

  

Complainant testified on his own behalf.  Complainant testified that he had purchased the subject property in 2003 for $285,000.  The home was constructed in 2009.  Complainant testified that the subject property had been listed with a realtor and had been publicly advertised.  Complainant testified that the subject property is encumbered by a line of credit worth approximately $250,000.  Complainant testified that the subject property had not been listed for sale in the three years preceding the Evidentiary Hearing and that no offers to purchase the property had been made.  Complainant testified that he did not know what asking price he would place on the subject property if he were to list it for sale because he was not planning to sell it.  Complainant testified that the subject property had been appraised within the three years preceding the Evidentiary Hearing in the amount of $595,634.  Complainant testified that no improvements had been made to the subject property between January 1, 2015, and January 1, 2017.  Complainant opined that the TVM of the subject property as of January 1, 2017, was $595,634.

Complainant testified that Respondent’s records of the subject property erroneously attributed 720 additional square feet of living area to the home when that amount of square feet was actually a detached accessory structure used for pool storage.  Complainant testified that he believed the actual square footage of the home to be 5,533 square feet.  Complainant testified that a neighboring property, 21 Lemp Road, has a similar “set up” but that Respondent’s records of the neighboring property described the pool house differently from the subject property.  (Exhibit H)  Complainant testified that the home had sustained damage in the form of “racking,” which caused cracking in the exterior stone.  Complainant testified that the “racking” occurred when Interstate 270 was widened and explosives were used during the highway construction.  Complainant testified that he wanted the market value of the subject property to be reduced by the cost of the repairs needed, $475,000 to $523,000.

With regard to the appraisal that had been performed on the subject property, Complainant testified that he had walked the subject property with the appraiser and had watched him take measurements of the home.  Complainant testified that Respondent had verified the appraiser’s measurements.  Complainant testified that the square footage of the pool house had been excluded from the appraiser’s measurements of the home.

On cross examination, Complainant testified that he had not wanted Respondent’s appraiser to go inside the home but that he was willing to have Respondent’s appraiser to go inside the pool house.  Complainant testified that there was no kitchenette inside the pool house that might cause it to be included in the total amount of square feet for the home.  Complainant testified that he was in fear of living in the house due to seismic activity and the possibility of a wall falling down.  Complainant testified that two engineers and one architect had viewed the cracks in the stone exterior of the home.  Complainant testified that they all said the damage was caused by “racking” of the stone and that it needs to be repaired.  Complainant testified that the explosions which caused the damage had occurred in approximately 2014 and that he was still deciding how to move forward on any potential claims for the damage.

Complainant also presented the expert testimony of architect Killian Smith (the Architect).  The Architect testified that he is a graduate of the University of Illinois with a Master of Science degree in architecture.  The Architect testified that he is registered in eight or nine states, including Missouri and Illinois.  The Architect testified that he had been in business for 25 years at the time of the Evidentiary Hearing.  The Architect testified that he holds national certifications and is a member of a group of architects and certified engineers known as SAVE.  The Architect testified that his training for SAVE enabled him to examine structures and understand damage caused by tornadoes, earthquakes, and other disasters.  The Architect testified that he was familiar with building codes in Kirkwood, the location of the subject property.

With regard to the various reports and cost estimates for the damage to the stone exterior of Complainant’s home, the Architect testified that they were consistent with what the Architect had viewed and based on his experience as a member of SAVE.  The Architect testified that preparing cost bids for projects is “something architects do.”  The Architect testified that the damage was not due to the home settling but was due to a seismic event.  The Architect further testified that the pool house is not connected to the home but is an accessory structure that should not be included as square footage of the home.  The Architect testified that he did not know if the pool house contained a kitchen but that the pool house does not qualify as living quarters under Kirkwood’s building codes.

On cross examination, the Architect acknowledged that he had not made a written report of the damage to the home.  The Architect testified that he had testified in court on previous occasions and had prepared reports.  The Architect testified that he could offer an expert opinion based on his review of the reports and bids of others (excluded Exhibits C, D, E, F, G) because he had reviewed them for accuracy.  The Architect testified that he had known Complainant for 10 years prior to the Evidentiary Hearing and that Complainant was a previous client.  The Architect testified that he had recommended cordoning off the damaged areas of the home’s exterior because the stone could fall in heavy wind.  The Architect testified that the home was a wood framed structure with a brick and stone veneer attached to the studs by anchors.  The Architect testified that he believed the anchors had failed due to the seismic activity but that one could not be certain of the damage unless all of the brick and stone veneer were removed first, which contributed to the high cost of the estimates for repair.

  1. Respondent’s Evidence. Respondent advocated that the BOE’s valuation of $1,188,400 should be affirmed.  To support Respondent’s position, Respondent offered as evidence the following exhibits:
Exhibit 1 BOE Findings and Notice of Decision Admitted

 

  1. Presumption of Correct Assessment Rebutted – TVM Established. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.  The substantial and persuasive evidence established the TVM of the subject property as of January 1, 2017, was $713,400.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The STC has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement.  The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, 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 property and tangible personal property are assessed at set percentages of true value in money:  residential property at 19%; commercial property at 32%; and agricultural property at 12%.  Section 137.115.5 RSMo (2000) as amended.

Investigation by Hearing Officer

In order to investigate appeals filed with the STC, 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.  Section 138.430.2 RSMo (2000) as amended.  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.  Id.

Board Presumption and Computer-Assisted Presumption

There exists a presumption of correct assessment by the BOE – the BOE presumption.  In charter counties or the City of St. Louis, 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 BOE 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 BOE, then it also would be applicable to the Respondent.

The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor/Respondent and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer-assisted method.  The BOE’s valuation is assumed to be an independent valuation.

In the present appeal, Complainant seeks to lower the BOE’s valuation while Respondent seeks to uphold the BOE’s valuation; therefore, the BOE presumption applies to Complainant.  The computer-assisted presumption does not apply in this case.

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 – the 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).

The Complainant’s Burden of Proof

A presumption exists that the assessed value fixed by the BOE is correct.  Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895.  “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.”  Cohen, 251 S.W.3d at 348.  Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion.  Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).  Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact.  Cupples Hesse Corp., 329 S.W.2d at 702.  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).

There is no presumption that the taxpayer’s opinion is correct.  Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land.  Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992).  “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.”  Carmel Energy, Inc., 827 S.W.2d at 783.  A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “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. E.D. 1980).

To obtain a reduction in assessed value based upon an alleged overvaluation, the complainant must prove the true value in money of the subject property on the subject tax day.  Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).  True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so.  Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974).  True value in money is defined in terms of value in exchange and not in terms of value in use.  Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973).  In sum, true value in money is the fair market value of the subject property on the valuation date.  Hermel, Inc., 564 S.W.2d at 897.

“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.”  Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993).  “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.”  Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).

In order to prevail, the 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, 2017.  Hermel, supra.  There is no presumption that the complainant’s opinion is correct.  The taxpayer in an STC appeal still bears the burden of proof because 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 true market value of the property under appeal is an unlawful, unfair, and improper assessment.

Respondent’s Burden of Proof

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the BOE, 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.  Hermel, Inc., 564 S.W.2d at 895; Cupples-Hesse, 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.

Here, Respondent advocated that the BOE’s valuation should be affirmed.

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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 deemed necessary when viewed in connection with all other circumstances.  Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991).  The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part.  Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).

Opinion Testimony by Experts

            An expert’s opinion must be founded upon substantial information, not mere conjecture or speculation, and there must be a rational basis for the opinion. Missouri Pipeline Co. v. Wilmes, 898 S.W. 2d 682, 687 (Mo. App. E.D. 1995).  The STC cannot ignore a lack of support in the evidence for adjustments made by the expert witnesses in the application of a particular valuation approach. Drey v. State Tax Commission, 345 S.W. 2d 228, 234-236 (Mo. 1961), Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 348 (Mo. 2005).

            The testimony of an expert is to be considered like any other testimony, is to be tried by the same test, and receives just so much weight and credit as the trier of fact may deem it entitled to when viewed in connection with all other circumstances.  The Hearing Officer, as the trier of fact, has the authority to weigh the evidence and 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 may accept it in part or reject it in part.  Beardsley v. Beardsley, 819 S.W. 2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W. 2d 605, 607 (Mo. 1981); Scanlon v. Kansas City, 28 S.W. 2d 84, 95 (Mo. 1930).

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.

Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. banc 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).

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the STC.  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, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; 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. 1974).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).  “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof  Corp., 789 S.W.2d at 869.  “The method used depends on several variables inherent in the highest and best use of the property in question.”  Snider, 156 S.W.3d at 347.

“Each method uses its own unique factors to calculate the property’s true value in money.”  Id.  “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.  Id. at 348.  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. (quotation omitted).  “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.”  Id.

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.

 

  1. Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

  1. A reasonable time is allowed for exposure in the open market.

 

  1. Payment is made in cash or its equivalent.

 

  1. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

  1. 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.

Discussion

            In this case, Complainants’ evidence was substantial and persuasive to rebut the presumption of correct assessment by the BOE.  Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion.  Cupples Hesse Corp., 329 S.W.2d at 702.  Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion.  Id.

Notably, Complainant did not present admissible evidence using one or more of the three court-approved approaches to valuing property to support his opinion that the TVM of the subject property was $595,634 as of January 1, 2017.  However, both Complainant and Complainant’s expert witness, the Architect, credibly testified regarding the damage to the exterior of the home, which reduced its TVM as of January 1, 2017.  This substantial evidence produced by Complainant, “however slight”, caused the presumption of correct assessment to disappear; thus, the Hearing Officer, as trier of facts, receives the issue of overvaluation free of the presumption.

In particular, Complainant testified that the value of the subject property should be reduced by the costs to repair the damage to the home’s exterior, $475,000 to $523,000.  The Architect testified that he had reviewed engineering reports and bid proposals for repairing the damage for accuracy and had examined the cracks in the home’s stone exterior.  The Architect credibly testified that the damage was not due to settling but to a seismic event.  The Architect credibly testified that the high cost of the estimates for repairs was attributable to the fact that the entire stone façade must be removed from the structure in order to evaluate the damage before it can be repaired, obviously requiring extensive labor, equipment, and materials.  Moreover, the damage was not merely a cosmetic defect – the Architect credibly testified that the stone could fall from the structure in a heavy wind.  From this evidence, the fact finder is persuaded that the subject property might have had a TVM of $1,188,400 absent the damage to the home’s stone façade.  However, given that Complainant testified that the cost to repair the damage was equal to roughly 40% to 44% of the BOE’s determination of TVM, it is logical to conclude that such value should have been reduced by at least the minimum cost for the repair – $475,000.

ORDER

The TMV for the subject property as determined by the BOE is SET ASIDE.  The assessed value for the subject property for tax year 2017 is set at $135,546 residential ($713,400 TVM).

Application for Review

A party may file with the STC 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

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 June 19, 2018.

STATE TAX COMMISSION OF MISSOURI

Amy S. Westermann

Senior Hearing Officer

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 19th day of June, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

Jacklyn Wood

Legal Coordinator

 

[1] A second Complaint for Review form for the subject property was filed with the STC by an attorney on behalf of Complainant.  Prior to the evidentiary hearing, in email correspondence between the Hearing Officer, Complainant, counsel for Respondent, and the attorney, Complainant stated that he would be proceeding only with regard to the claim of overvaluation asserted in the Complaint for Review associated with Appeal No. 17-10188.