State Tax Commission of Missouri
JUDITH & POLK STONE,)
)
Complainants,)
)
v.) Appeal Number 09-10038
)
MICHAEL BROOKS, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $254,000, residential assessed value of $48,260.Complainants appeared pro se.Respondent appeared by Associate County Counselor Paula Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation and discrimination, 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 (1) the true value in money for the subject property on January 1, 2009; and (2) whether there was an intentional plan by the assessing officials to assess the property under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2009 residential assessment ratio for St. Louis
County.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.A hearing was conducted on August 10, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property under appeal at a value of $263,000, a residential assessed value of $49,970.The Board reduced the value to $254,700, a residential appraised value of $48,390.[1]
3.Subject Property.The subject property is located at 2403 Peaceful Court, Wildwood, Missouri.The property is identified by locator number 23U130711.The property consists of an 11,310 square foot lot.The land is improved by a one and a half story single-family residence built in 1989.The above grade living area is 2,509 square feet.There is a full unfinished basement.The exterior is brick and vinyl.The home has a patio, a large tiered deck and a two-car attached garage.The residence has eight rooms, three bedrooms, two full and one have bathrooms.The structure is in average condition and the quality of materials and workmanship is average, consistent with surrounding properties.[2]
4.Complainant’s Evidence.Mr. Stone testified on behalf of Complainants.He stated the owner’s opinion of the fair market value of the property on January 1, 2009, to be $245,000.This opinion of value was based on Mr. Wellman selecting three sales on May 19, 2010, at the prehearing that supported a value of $245,000.[3]The following exhibit was offered into evidence by Complainants:Exhibit A – page 1 of a Fannie Mae Desktop Underwriter Qualitative Analysis Appraisal Report and a photographs of the subject and the home at 167 Cherry Hills Meadows.Objection was made to the exhibit on the grounds of hearsay, lack of foundation and relevance.Objection was sustained.Exhibit A and the testimony related thereto are maintained in the Commission file as an offer of proof.It is excluded from the evidentiary record for the purpose of rendering a decision on the fair market value of the subject.
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[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, 2009, to be $245,000, as proposed.
No evidence was presented that addressed the claim of discrimination.The ground of discrimination is deemed abandoned in the appeal.
5.Respondent’s Evidence.Respondent offered the appraisal report[5] and testimony of Ms. Sarah Curran, Missouri State Certified Residential Real Estate Appraiser.Exhibit 1 was received into evidence.Ms. Curran developed the sales comparison approach and concluded the fair market value as of January 1, 2009, to be $254,000.The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value of the subject property.The properties were located within less than three quarters of a mile from the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.
The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The percentage of adjustment, both net and gross fell within a narrow range, providing verification as to the comparability of each sale property.The percentage adjustments fell with the generally recognized and accepted standards recognized in the appraisal profession.
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, 2009, to be $254,000, residential assessed value of $48,260.[6]
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
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.[7]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[8]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 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.[9]Complainants’ evidence did not reach the level of substantial and persuasive to rebut the presumption in favor of the Board’s assessment.Respondent’s evidence rebutted the presumption and established the value of the property under appeal as of January 1, 2009, to be $245,000.[10]
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.[11]True value in money is defined in terms of value in exchange and not value in use.[12]It is the fair market value of the subject property on the valuation date.[13]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.
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.[14]
Respondent’s appraiser concluded value under the Standard for Valuation.[15]
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.[16]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.[17] Complainants did not present an opinion of value derived from any of the recognized and accepted appraisal methodologies.Respondent’s appraiser concluded a value relying on the sales comparison approach.Accordingly, no probative weight can be accorded the opinion tendered by Complainants.Substantial weight is to be given to the conclusion of value of Ms. Curran.
Complainants Fail To Prove Value of $245,000
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, 2009.[18]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.”[19]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[20]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.[21]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[22]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[23]
Mr. Stone was under the impression from the prehearing conference conversation with Mr. Wellman that what he needed to present in the evidentiary hearing was a copy of the Fannie Mae Appraisal Report[24] (Report) listing three sale properties.Mr. Stone obtained the addresses and sales prices on the three properties listed on the Report.He felt that these supported his opinion of value of $245,000.What Complainants really needed to present to establish the value of their property was an actual appraisal report, not just the incomplete first page of a three page document.Simply listing addresses, sales prices, sales dates and other information does not constitute an appraisal.No foundation was laid to establish that Mr. Stone was qualified by education, training and experience as an appraiser.Accordingly, the Report provides no support for the owner’s opinion of value.
There is no market data, properly adjusted, to constitute a sales comparison analysis to support the owners’ opinion of value.The record fails to establish that the opinion of value was based upon proper elements and a proper foundation.Therefore, no probative weight can be given to the owners’ opinion.Complainants filed to meet their burden of proof and rebut the presumption of correct assessment by the Board and to establish the value proposed of $245,000.
Respondent Proves Value of $254,000
Respondent, when advocating a value different from that determined by the 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.[25]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $254,000 for the subject.Ms. Curran 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 appraiser properly adjusted the sales prices of the comparables to account for the differences in various factors and amenities between the subject and each comparable, to arrive at her conclusion of value.
ORDER
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 assessed value for the subject property for tax years 2009 and 2010 is set at $48,260.
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.
Failure to state specific facts or law upon which the appeal is based will result in summary denial. [26]
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 September 3, 2010.
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 3rdday of September, 2010, to:Polk Stone, 2403 Peaceful Ct., Wildwood, MO 63011, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Michael Brooks, Acting 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
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
573-751-2414
573-751-1341 Fax
[3] Mr. Wellman was an appraiser from the Respondent’s staff who met with the Stones during the prehearing conference.
[8] 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)
[9] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[10] The Hearing Officer recognizes that the value concluded by Respondent’s appraiser is de minimusly smaller than the value set by the Board: $245,000 versus $245,700, and could just as easily have been received to simply sustain the Board’s value.However, to be consistent with decisions issued in numerous appeals, the Hearing Officer is not inclined to round off the work of the appraiser to the value set by the Board, but rather to simply make the small reduction in value.
[11] 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).
[12] 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).
[14] 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.
[16] 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).
[17] 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).
[19] 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).
[22] 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).
[23] 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).