State Tax Commission of Missouri
JOHN & ELIZABETH WILMSEN,)
v. ) Appeal No.11-10288
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Complainants did no present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.Respondent did present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board and to establish the true value in money of the subject property to be $1,400,000.
True value in money for the subject property for tax years 2011 and 2012 is set at $1,400,000, residential assessed value of $266,000.
Complainants failed to appear at hearing.
Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
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.
2.Evidentiary Hearing.The Evidentiary Hearing was held on September 13, 2012, at the St. Louis County Government Center, 41 South Central Avenue, Clayton, Missouri.Case called at 2:30 p.m.Complainants did not appear.
3.Subject Property.The subject property is identified by locator number 21M430040.The property is located at 4 Huntleigh Woods Dr., Huntleigh, Missouri.A complete description of the property is provided in Exhibit 1.
5.Complainants’ Evidence.Complainants tendered the following Exhibits:
BOE Decision Letter, dtd 9/23/11
Ladue News, dtd 3/9/12 – Sale 2 Huntleigh Woods
Ladue News, dtd 8/10/12 – Listing 16 Huntleigh Woods
Zestimate dtd 2/29/12 – 3 Huntleigh Woods
Assessor Website Data – 30 Huntleigh Woods
Assessor Website Date – Subject
Complainant’s Narrative Statement
Counsel for Respondent objected to Exhibit D, objection was sustained.Exhibits A through C and Exhibits E through G were received into evidence.See, Complainants’ Exhibits, infra.
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 $1,200,000, as proposed. See, Complainants Failed To Prove Value, infra.
5.Respondent’s Evidence.Respondent presented the Appraisal Report (Exhibit 1) and testimony of Sarah Curran.Exhibit 1 was received into evidence.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2011, to be $1,200,000.See, Respondent Proves Value, infra.
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.
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.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.In an overvaluation appeal, true value in money for the property being appealed 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.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 is not evidence of value.
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.Complainants’ evidence did not meet the required standard to either establish that the Board’s conclusion of value was in error, or to establish the fair market value of their property as of January 1, 2011.See, Complainants Failed To Prove Value, infra.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
The conclusion of value determined by Respondent’s appraiser was made under the Standard For Valuation.Complainants presented no evidence which could be considered as have established a value for the property under appeal under the Standard for Valuation.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.Ms. Curran concluded value for the subject based upon a comparable sales analysis, adjusting for relevant factors of difference.Complainants failed to present a conclusion of value based upon any accepted appraisal methodology.
Opinion Testimony by Appraiser Curran
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.
Ms. Curran is recognized as an expert in the appraisal of residential real estate for purpose of the evidentiary hearing in this appeal.The data underlying the Curran appraisal and her testimony are of the type that appraisers of real estate would rely on in forming their opinions and drawing their conclusions.The data are deemed to be otherwise reliable there being no evidence presented to rebut the facts relied upon by the appraiser.
Complainants Failed To Prove Value
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.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.”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.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.
As will be addressed in detail below, Complainants failed to meet the required standard of proof in this instance.
A review and analysis of the exhibits tendered in this appeal demonstrates the lack of substance and persuasiveness for Complainants’ evidence.
Exhibit A – BOE Decision Letter, dated 9/23/11
The Board Decision Letter provides no evidence that the fair market value of the Complainant’s property was $1,200,000 as proposed on the Complaint for Review of Assessment.To the extent that Complainants offered the document to establish that they had appealed to the Board, it was unnecessary, as it had been filed with the Complaint to establish that the Commission did have jurisdiction to hear the appeal.The only relevant evidence the exhibit provides is that the Board sustained the Assessor’s valuation of $1,581,100.
Exhibits B & C – Ladue News, dated 3/9/12 & 8/10/12
Both exhibits are hearsay, however, since Counsel for Respondent did not object to either newspaper listing, they came into the record.Neither exhibit is substantial and persuasive evidence to establish the true value in money for Complainants’ property to be $1,200,000.The information contained in newspaper advertisements on either recent sales or listings is virtually always to limited for the Hearing Officer to conclude anything definite as to the comparability of any given property to the property to be appraised.
In this instance, the newspaper ads simply show that one property sold in 2012 for $1,557,500 and the other was listed in 2012 for $1,375,000.How this data might relate to a value as of 1/1/11 is unclear.On their face, the exhibits give support to the value of $1,400,000 concluded by Respondent’s appraiser.There is no way in which the Hearing Officer can logically conclude a value of only $1,200,000, as proposed by Complainants based upon these exhibits.Although they came into the record there is no relevance that can be attached to either exhibit.Accordingly, they have no probative value.
Exhibit D – Zestimate dated 2/29/12
Counsel for Respondent objected to Exhibit D on grounds of hearsay, lack of foundation and relevance.The objections were sustained and the exhibit was excluded from evidence.It is maintained in the Commission file, but is not a part of the record for purposes of rendering a decision.
Taxpayers often want to enter into evidence a Zestimate.These products of Internet searches on Zillow have no probative value.First, Zestimates are simply hearsay, for which there is no exception that would permit them to come into evidence.Second, there is no foundation upon which a Zestimate can be received into evidence.As just stated, it does not fall within any hearsay exception.
Furthermore, there is no evidence to establish how the value given on a Zestimate was concluded.Short of establishing the person or persons who determined the value, their expertise in appraisal of residential real property, the methodology utilized to arrive at the indicated value and presenting the individual who concluded the indicated value at the evidentiary hearing to be subject to cross-examination, there is no foundation to received a Zestimate into evidence.
Finally, the document lacks relevance for establishing the true value in money of the Complainant’s property as of 1/1/11.A Zestimate does not qualify as an appraisal methodology recognized and accepted by any court decision in Missouri.Zestimates are not recognized and accepted as “appraisals” by the Commission.The exhibit is little more than a statement of a value by an unknown person, based upon an unknown methodology.It provides no correlation to determining value for the subject property.
Exhibits E & F – Assessor’s Website Data – 30 Huntleigh Woods Dr & Subject
Mr. Wilmsen in his narrative statement (Exhibit G) notes that this property had a “2012 property tax of $1,250,000, while my home has a 2012 property tax rate of $1,581,000.”To be correct, this property had a true value in money, or appraised value in 2012 and 2011 of $1,250,000.The exhibit does not cite what the actual real estate property tax on the property was or what the property tax on the subject was.
Irrespective of that, a comparison of one property’s assessment to another property’s assessment doesn’t prove the fair market value of either property.It only establishes that the Assessor valued the properties at the given appraised values shown on the documents.Comparing assessments is not recognized as an appropriate appraisal methodology in appeals before the Commission or by the Courts of Missouri.Quite simply, there is no relevance to what one property was assessed at by the Assessor in comparison to any other property.
Exhibit G – Complainant’s Narrative Statement
Finally, Mr. Wilmsen provides his opinion of value to be $1,200,000 in this exhibit.Although he briefly identifies each of the other exhibits, there is nothing from which the Hearing Officer can conclude a value of $1,200,000 based upon those documents.The taxpayer provides no rational or explanation as to how providing documents that give the value for the subject to be $1,581,000, the value of a property sold in 2012 at $1,557,500, the value of a property listed in 2012 for $1,375,000, the value of a property as appraised by the Assessor to be $1,240,000, and the fact that in 2008 a verbal offer was made for Complainants’ property of $1,100,000 supports an opinion of value of $1,200,000.The narrative statement is not probative on the issue of the true value in money of the subject property as of 1/1/11.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.In this case, Mr. Wilmsen filed his narrative statement, with his exhibits in support of his opinion of value of $1,200,000.As has been addressed above none of the exhibits provide the proper elements or a proper foundation for the appraisal of the taxpayers’ property.Therefore, Mr. Wilmsen’s opinion is without any probative value.
Respondent Proves Value
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, 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.This burden of proof was met by Exhibit 1 and the testimony of Appraiser Curran.Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2011, to be $1,400,000 for the subject.
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.Ms. Curran properly concluded that the subject improvements did not provide any contributory value and that the highest and best use of the property would be as a tear-down sale, i.e. demolish the house for construction of a new home.The sales data on tear-down sales were substantial and persuasive to establish the fair market value of the subject land.The adjustments made the Ms. Curran were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the differences in site values and the cost for the demolition between the subject and each comparable.
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 SET ASIDE.
The assessed value for the subject property for tax years 2011 and 2012 is set at $266,000.
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, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending 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 October 3, 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 3rd day of October, 2012, to:John Wilmsen, 4 Huntleigh Woods, St. Louis, MO 63131, 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; Eugene Leung, Director of Revenue, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
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
 Exhibit 1: Addendum Page 1 of 4 – ASSESSMENT INFORMATION AND TAX DATA; Residential real estate is assessed at 19% of its appraised value (true value in money, fair market value) – Section 137.115.5, RSMo
 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)
 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).
 Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.
 St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).
 Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 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).
 Exhibit 1 – Professional Qualifications.Ms. Curran has been recognized as an expert in the appraisal of residential properties in St. Louis County in prior appeals before the State Tax Commission.
 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).
Substantial and persuasive evidence is not an extremely high standard of evidentiary proof.It is the lowest of the three standards for evidence (substantial & persuasive, clear and convincing, and beyond a reasonable doubt).It requires a small amount of evidence to cross the threshold to rebut the presumption of correct assessment by the Board.The definitions, relevant to substantial evidence, do not support a position that substantial and persuasive evidence is an extremely or very high standard.
“Substantial evidence: Evidence that a reasonable mind would accept as adequate to support a conclusion; evidence beyond a scintilla.”Black’s Law Dictionary, Seventh Edition, p. 580.
The word scintilla is defined as “1. a spark,2. a particle; the least trace.” Webster’s New World Dictionary, Second College Edition.Black’s definition at 1347 is “A spark or trace <the standard is that there must be more than a scintilla of evidence>.”There must be more than a spark or trace for evidence to have attained the standard of substantial.Once there is something more than a spark or trace the evidence has reached the level of substantial.Substantial evidence and the term preponderance of the evidence are essentially the same.“Preponderance of the evidence.The greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”Black’s at 1201.Substantial evidence is that a reasonable mind would accept as adequate to support the conclusion.Preponderance is sufficient to incline a fair and impartial mind to one side of the issue rather than the other, i.e. support the proposed conclusion.
 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).