Keith & Vickie Kunin v. Brooks (SLCO)

State Tax Commission of Missouri

 

KEITH & VICKIE KUNIN,)

)

Complainants,)

)

v.)Appeal Number 09-12286

)

MICHAEL BROOKS,)

ACTING ASSESSOR,)

ST. LOUIS COUNTY, MISSOURI,)

)

Respondent.)

 

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On July 27, 2010, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) affirming the assessment by the St. Louis County Board of Equalization.

Complainants timely filed their Application for Review.

CONCLUSIONS OF LAW

Standard Upon Review

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but 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.[1]

The Hearing Officer as the trier of fact may consider the testimony of an expert witness or the owner and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts or an owner who testify on the issue of reasonable value, but may believe all or none of the expert’s or owner’s testimony and accept it in part or reject it in part.[2]

The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[3]

DECISION

Complainants’ Application for Review requested another review of their property and hearing based on an appraisal of $39,000 and two recent sales of houses on the same block as the subject for $49,000 and $30,000.The Decision specifically states that: “[A]n application for review … shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.”[4] (Emphasis in original)Complainants state no specific facts or law for which an error in the decision is claimed.Complainants seek to reopen the appeal and introduce new evidence which was not tendered at the hearing.

Apparently, Complainants wish to now offer an appraisal of the property under appeal.The Order[5] setting the evidentiary hearing, advised the parties: If you are presenting an appraisal report as evidence, the appraiser MUST be present to testify and be cross-examined.If the appraiser is not present at the Evidentiary Hearing, the appraisal report cannot be received into evidence.(Emphasis in Original).If the Complainants had an appraisal of the property done prior to the evidentiary hearing it was their responsibility to seek to offer it into evidence.The record shows that no appraisal was offered by Complainants at the evidentiary hearing.Therefore, the Hearing Officer could not have erred on this point, since she was never asked to consider an appraisal prepared on the property at the request of Complainants.If Complainants have obtained an appraisal after the hearing and the issuance of the Decision that is not evidence that could now be considered.The Hearing Officer could not have erred in failing to consider an appraisal that was not even completed at the time of the evidentiary hearing.

Complainants also seek review and a new hearing on the basis of the assertion that “recently two house (sic – houses) on same block sold for $49,000 & $30,000.”This is an attempt to introduce into the record evidence that could not have been considered by the Hearing Officer, since it was apparently not in existence on the date of the hearing.Neither party is permitted to introduce new evidence into the record through the means of the application for review.Upon the conclusion of the evidentiary hearing, both parties had tendered the evidence which they deemed would support their respective positions.The responsibility of the Hearing Officer was to then consider the evidence on the record and properly apply the law to the facts as they had been developed.A party does not get to submit a new case after they have failed to present substantial and persuasive evidence to prove the value asserted.

Complainants have presented no instance of any error of application of law or any error of fact by the Hearing Officer in the rendering of her decision.A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[6]The Hearing Officer did not err in her conclusions and determinations as set forth in the Decision.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.

If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.

SO ORDERED August 30, 2010.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jeff W. Schaeperkoetter, Commissioner

 

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumption of correct assessment not rebutted.

Complainant appeared in person.

Respondent appeared by Associate County Counselor, Paula J. Lemerman.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.

SUMMARY

Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $54,000, assessed value of $10,260, as residential property.The Board of Equalization affirmed the valuation.Complainant proposed a value of $45,000, assessed value of $8,550.A hearing was conducted on July 14, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant’s Evidence

Complainant testified in his own behalf. He testified as to the condition of his home which undergoing several repair projects.He has some water issues.Due to having block foundation, he has a leaking basement.The basement also suffers water damage due to a faulty installation of a drain pipe for a washing machine.He introduced the following Exhibits:

Exhibit	Description	Comments
A	North County Journal dated May 20, 2009 and July 8, 2009	Paper listed sales from St. Louis County records from Dec 2008 and February 2009.The sales ranged from $16,500 to $45,000.A property at 4315 Heath sold for $25,000 in December 2008 and for $45,000 in February 2009.No other information was provided.
B	Photographs of the subject property
	Kitchen	Complainant is updating the kitchen.He has removed a double window.The exterior has been bricked withblocks behind.The blocks are exposed on the interior.
	Hallway	Complainant has removed the plaster walls.He has replaced some of the walls. Other walls have the studs exposed.
	Basement windows	The windows in the basement are at ground or a little below ground level.The windows need replacement due to exposure to the elements.
	Garage	The trim and frame boards on the side are rotting.
	Doorway from basement	The trim, frame and plaster around the frame need to be replaced.

 

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Craig Masterson, Residential Appraiser for St. Louis County. Mr. Masterson testified as to his appraisal of the subject property.The Appraisal Report (Exhibit 1) of Mr. Masterson was received into evidence.Mr. Masterson arrived at an opinion of value for the subject property of $65,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property.

FINDINGS OF FACT

1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.

2.The subject property is located at 8925 Trefore, Berkely, Missouri.The property is identified by parcel number 13K511621.The property consists of approximately 5,000 square foot lot improved by a ranch-style single-family residence with a basement and basement level garage. The residence, of approximately 1,080 square feet, has five rooms including 3 bedrooms, 1 bath.The property suffers from water leakage in the basement due to a concrete block foundation and a poorly installed drain.The Complainant is also doing repairs within the interior including removing and replacing plaster walls in the hall and removal of a window in the kitchen.The Complainant also needs to replace a portion of the frame at the garage door and a door to the basement.

3.There was no evidence of new construction and improvement from January 1, 2009 to January 1, 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 $45,000.

5.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The three properties were located within .22 miles from the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009 (in a range from March 2007 to December 2008). Two of the properties were foreclosure sales.The appraiser’s review of the market for the subject property indicated that median sale price in 2007 was $80,000 and in 2008 was $61,000.The median sale price for “as-is” sale was $61,000.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, and other amenities of comparability.

6.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.No adjustments were needed for the size of the lot, location, or size of the improvement.Negative adjustments were made for the date of sale since it is a declining market.A positive adjustment was made for the foreclosure sales. The remaining adjustments were positive adjustments as the comparables did not have garages or porches. All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The net adjustments as a percentage of sale price ranged from -10.1% to 7.8% and gross adjustments ranged from 14.4% to 23.4%.The adjusted sales prices for the comparables ranged from $62,100 to $67,900.The comparables selling price ranged from $53.85 per square foot to $72.74 per square foot.The appraiser’s opinion of value equaled $60.18 per square foot.

7.Respondent’s appraisal constituted clear and convincing and cogent evidence to affirm the Board’s value.It was accepted only to sustain the assessment made by the Board and not for the purpose of raising the assessment above that value.

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.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

The presumption 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.Snider, Hermel & Cupples Hesse, supra.As is discussed below, Complainants failed to meet the required standard to rebut the presumption of correct assessment.

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).It is the fair market value of the subject property on the valuation date.Hermel, supra.

Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition 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.

 

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; Exhibit 1.

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.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).Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Complainants’ Burden of Proof

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.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. 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.” 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 evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

The owner of property is generally held competent to testify to its reasonable market value.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).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Cohen v. Bushmeyer, — S.W.3d —-, 2008 WL 820938 (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).

In this instance, the Complainant stated an opinion of market value of $45,000.Complainant believed that his property should be valued at $45,000 because of listings of sales in the area and for the repairs that needed to be completed in the subject property.Complainant presented listing in the paper for 4 sales (3 properties) within his zip code.The sales ranged from $16,500 to $45,000.One property sold in December 2008 for $25,000 and sold again in February 2009 for $45,000. No information was provided on the sales and it is unknown if they are comparable land and improvements.

Complainant also felt his property should be valued at $45,000 due to the repairs that needed to be completed.The appraiser for the County did inspect the interior of his property.The Complainant argued that the appraiser did not review the interior of the comparable properties even though the appraiser reviewed the MLS listings and comments.The appraiser did include two foreclosure properties in his appraisal.Foreclosure properties are usually sold “as-is”.The appraisers opinion of value for the subject property was $65,000.If the positive adjustment for the foreclosure of $5,000 is removed and the adjusted values were reconciled, the valuation may still exceed the $54,000 valuation sustained by the Board.

Complainant’s opinion of value is not based upon property elements or a proper foundation.It was not based upon market evidence. It has no probative weight in arriving at a determination of fair market value.The burden of proof on Complainant has not been met.The presumption of correct assessment by the Board has not been rebutted.

ORDER

The assessed valuation for the subject property as determined by Board of Equalization for St. LouisCountyfor the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2009 and 2010 is set at $10,260.

Complainants may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000. An Application for Review 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 response must be sent to the Attorney for Respondent, Assessor and Collector at the addresses listed below in the certificate of service.

If an application for review of this decision is made to the Commission, the protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission and an order to the Collector to release and disburse the impounded taxes.§139.031.3 RSMo.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes to the appropriate taxing jurisdictions, unless previously done under court order pursuant to section 139.031 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 July 27, 2010.

STATE TAX COMMISSION OFMISSOURI

Maureen Monaghan

Hearing Officer