Joseph and Soad Suleiman v. Jake Zimmerman, Assessor, St. Louis County

STATE TAX COMMISSION OF MISSOURI

JOSEPH AND SOAD SULEIMAN,	)
Complainant,	)	Appeal No. 19-10791
	)
	)	Parcel No. 26P441020
v.	)
	)
JAKE ZIMMERMAN, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
Respondent.	)

 

DECISION AND ORDER

            Joseph and Soad Suleiman (Complainants) appeal the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019, was $85,000, with an assessed value of $16,150.   Complainants claim the property is overvalued and propose a value of $70,000. Complainants did not produce substantial and persuasive evidence establishing overvaluation.  However, Respondent presented substantial and persuasive evidence showing the TVM of the subject property as of January 1, 2019, was $80,000. The BOE’s decision is set aside.[1]

The evidentiary hearing was conducted on November 4, 2020, at the Wainwright State Office Building in the City of St. Louis, Missouri. Complainants appeared pro se and in person. Respondent was represented by counsel Monique Nketah, who attended via WebEx video conference.

FINDINGS OF FACT

1. Subject Property. The subject property is located at 501 Benton Street in Valley Park, Missouri. The parcel/locator number is 26P441020.

The subject property consists of a 6,300 square foot lot and a 1,900 square foot single-family home that has three bedrooms and one full bath. (Ex. 1 at 5.) The subject property is located in an area that floods (Ex. 1 at 7), and “has been under flood,” (Tr. Pt. 1 3:24-4:04).

2. Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $110,200. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $85,000.
3. Complainants’ Evidence. Complainants assert the TVM of the subject property on January 1, 2019, was $70,000. Complainants testified in support of their opinion of value and submitted the following exhibits:

Exhibit	Description	Ruling
A	Appraisal report for the subject property performed by Luther L. Lunn and dated July 14, 2017.	Excluded
B	Bid to install windows, gutters, downspouts, soffit, and fascia on the subject property for a total of $21,725 dated February 18, 2020.	Admitted
C	Five-page printout of listing and one-page sales information for 727 Leonard Ave. Valley Park. The sales information has highlighted a February 19, 2020, sale of the Leonard Ave. property for $67,200.	Admitted
D	One-page printout of assessment information for the subject property.	Admitted
E	Photographs related to nearby cement factory.[2]	Admitted

Respondent made a hearsay objection to Exhibit A, and the objection was sustained.[3]  Respondent made no objection to Exhibits B through E, and Exhibits B through E were received into evidence.

Complainants assert the following general arguments: (1) the house needs the repairs listed in Exhibit B to make it comparable to other houses; (2) Exhibit D shows that the appraised value was set at $48,000 until the value increased to $55,000 in 2018, and increased to $85,000 in 2019; (3) the location of the subject property in a flood area and near a cement factory that creates dust, as shown in Exhibit E, lowers the value; and (4) Exhibit C,  a listing and sales information for 727 Leonard Avenue, shows that such property sold for $67,200 and is in better condition than the subject property.

4. Respondent’s Evidence. Respondent presented the testimony of Steven J. Zahner, a senior appraiser with Respondent, and submitted Exhibit 1, Mr. Zahner’s June 9, 2020, restricted appraisal report for the subject property indicating an opinion of value of $80,000, as of January 1, 2019. Complainants made no objection to Exhibit 1, and Exhibit 1 was received into evidence.

In Exhibit 1, Mr. Zahner utilizes the sales comparison approach to estimate the market value of the subject property from recent sales of three comparable properties. The key property data in Exhibit 1 is as follows:

Address	Subject Property 501 Benton St.	Comparable 1 626 Vest Ave	Comparable 2 601 Leonard Ave.	Comparable 3 712 Benton St.
Proximity to Subject		0.18 miles NE	0.16 miles NE	0.24 miles NE
Sale Price		$67,000, “As Is”	$72,600	$94,500
Date of Sale		10/15/2018	04/07/2017	04/07/2017
Location	Residential/ Flood Area	Residential/ Flood	Residential/ Flood	Residential/ Flood
Site (square feet)	6300	6499	6499	6499
Condition	Fair	Fair-Poor	Fair	Above Average
Room Count/Bedroom/ Bath	6/3/1	7/3/2	7/3/1	7/3/1.1
Gross Living Area (sq. ft.)	1,900	1,420	1,778	1,568
Basement and Finished	Crawl Space	Full Basement	Crawl Space	Full Basement
Rooms Below Grade	None	None	None	None
Garage/Carport	1 Car Garage, 1 Carport	None	None	None
Adjusted Sale Price		$79,500	$80,200	$84,800

The comparable properties are similar to the subject property with respect to location, site, actual age, and design. Comparables 1, 2, and 3 differ from the subject property with respect to condition, room count, gross living area, basement, and garage/carport; gross living area and garage/carport; and condition, room count, gross living area, basement, and garage/carport, respectively. Exhibit 1 indicates that these differences have been adjusted for when determining an opinion of value.

5. Value. The TVM of the subject property on January 1, 2019, was $80,000.

CONCLUSIONS OF LAW

1. Assessment and Valuation. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year.  Section 137.115.5(1)(a).  “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.”  Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted).  The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.”  Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).   Determining the TVM is a factual issue for the STC.  Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.”  Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).

            “For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider, 156 S.W.3d at 346.  The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach.  Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).  The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.”  Snider, 156 S.W.3d at 348.  “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 347-48 (internal quotation omitted).  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. at 348.

2. Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015).  The finder of fact in an administrative hearing determines the credibility and weight of expert testimony.  Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012).  “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020).   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.
3. Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct.  Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020).  The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous” and must prove “the value that should have been placed on the property.”  Id.  “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.”  Savage, 722 S.W.2d at 77 (internal quotation omitted).  Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.”  Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).        
4. Complainants Did Not Prove Overvaluation. The presumption of correct valuation by the BOE was rebutted because both parties presented evidence in support of values lower than the BOE’s $85,000 value. However, Complainants did not persuasively establish that their proposed value, $70,000, was the TVM of the subject property as of January 1, 2019. Exhibit B, a base bid for $21,725 to replace windows, gutters, downspouts, soffit and fascia, and related evidence do not persuasively show that this work would need to be completed to make the subject property comparable to the comparables listed in Exhibit 1. Further, the condition of the subject property was considered by Respondent’s appraiser, who assigned a “Fair” condition to the subject property in Exhibit 1 and made adjustments to comparables with different conditions. Although Exhibit D illustrates that the appraised value of the subject property increased from $55,000 for the 2018 tax year to $85,000 for the 2019 tax year, this does not persuasively establish that Complainants’ proposed value, $70,000, is the correct TVM as of January 1, 2019. Additionally, no evidence persuasively shows that the location of the subject property in a flood area and near a cement factory that creates dust, alone or in combination with other evidence, reduces the TVM of the subject property to $70,000.  In Exhibit 1, no adjustments were made for location because all three comparables’ locations are characterized as “Residential/Flood.”  (Ex. 1 at 5.)  Therefore, the subject property’s location in a flood area was considered by Respondent’s appraiser when he chose comparables also located in flood areas. As to the location of the subject property near a cement factory, neither the necessity for nor the amount of any downward adjustment was persuasively established by Complainants.  As to the $67,200 sale of the property referenced in Exhibit D, the evidence persuasively establishes that, contrary to Complainants’ assertion, the property located at 727 Leonard Avenue is not in better condition than the subject property. Mr. Zahner testified that such sale was a foreclosure, and the home was “not a livable house.” (Tr. Pt. 2 14:24-15:27.)

Respondent produced substantial and persuasive evidence establishing that the TVM of the subject property was $80,000 as of January 1, 2019.  Exhibit 1 and Mr. Zahner’s supporting testimony persuasively establish that the TVM of the subject property is $80,000 based on three comparable sales located within one-half mile of the subject property. (Ex. 1 at 5.) This opinion of value, $80,000, which is less than the $85,000 BOE value, falls within the range of the adjusted sale prices of the comparable sales, $79,500 to $84,800.

CONCLUSION AND ORDER

The BOE decision is set aside.  The TVM of the subject property as of January 1, 2019, was $80,000.[4]

Application for Review

            A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov.  A copy of the application must be sent to each person 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.

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.

 

SO ORDERED November 19, 2021.

 

Laura A. Storck-Elam

Senior Hearing Officer

State Tax Commission

 

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 19, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

 

Elaina Mejia

Legal Coordinator

 

 

 

[1] Complainants timely filed a complaint for review of assessment.  The State Tax Commission (STC) has authority to hear and decide Complainants’ appeal.   Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000.  All statutory citations are to RSMo 2000, as amended.

[2] By a November 12, 2020, order, Complainants were notified that the scanned copies of the photographs made the day of the evidentiary hearing were unusable and were given the opportunity to submit copies by email or mail on or before November 20, 2020. Complainants did not submit copies of the photographs for this appeal. Other than two photographs that are corrupted, the photographs are not included in the record. The inclusion of the photographs for consideration would not have changed the decision.

[3] Exhibit A is inadmissible hearsay because the author of the appraisal was not present at the hearing to be cross-examined. “Hearsay is an out-of-court statement offered for the truth of the matter asserted.” State v. McFadden, 391 S.W.3d 408, 431 (Mo. banc 2013). “Hearsay evidence is objectionable because the person who makes the statement offered is not under oath and is not subject to cross-examination.” Saint Louis Univ. v. Geary, 321 S.W.3d 282, 291 (Mo. banc 2009).  However, Section 536.070(7) provides that “Evidence to which an objection is sustained shall, at the request of the party seeking to introduce the same, or at the instance of the agency, nevertheless be heard and preserved in the record, together with any cross-examination with respect thereto and any rebuttal thereof, unless it is wholly irrelevant, repetitious, privileged, or unduly long.”

[4] Missouri operates on a two-year reassessment cycle for valuing real property.  See Section 137.115.1.  Absent new construction or improvements to a parcel of real property, the assessed value as of January 1 of the odd year remains the assessed value as of January 1 of the following even year.  Id.