State Tax Commission of Missouri
LYLE ODO,)
Complainant,)
vs.) Appeal No. 13-79030
DAVID COX, ASSESSOR,)
PLATTE COUNTY, MISSOURI,)
Respondent.)
DECISION AND ORDER
Decision of the Platte County Board of Equalization lowering the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2013 and 2014 is $315,000, residential assessed value of $59,850.
Complainant appeared as his own counsel and by appraiser, John M. Ecton.
Respondent appeared in person and through his appraiser, Annette Salsbury.
Case heard and decided by Senior Hearing Officer Luann Johnson.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013 and January 1, 2014.Significant in this decision is the weight, if any, to be given to the actual lakefront footage.
SUMMARY
Complainant appeals, on the ground of overvaluation, the decision of the Platte County Board of Equalization, which set aside the Assessor’s original valuation of the subject property of $454,465 and found value to be $400,000.At hearing, Assessor’s appraiser proposed an appraised value of $450,000 (assessed value of $85,500, as residential property).Complainant proposed a value of $315,000 (assessed value of $58,850).A hearing was conducted on December 12, 2013, at the County Administration Building, Platte City, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, determines that a sales comparison approach is the most reasonable way to value the subject property and enters the following Decision and Order.
Complainant’s Evidence
Complainant presented the appraisal report of John M. Ecton, which report was entered into evidence as Complainant’s Exhibit 1.Additionally, Complainant presented the appraisal report of former county employee, Kayte Geldersma, as Complainant’s Exhibit 2.Complainant’s Exhibit 2 was presented to the Board of Equalization but was not relied upon by Respondent in this hearing.
Respondent’s Evidence
Respondent presented the appraisal report of Annette Salsbury, which report was entered into evidence as Respondent’s Exhibit A.Additionally, Respondent presented Exhibit B, which was a lakefront footage valuation calculation; Exhibit C which was a copy of the STC decision dealing with lakefront property in appeal 05-80502; Exhibit D which was a copy of the STC decision dealing with lakefront property in appeal 05-80501; and Exhibit E which was disciplinary proceedings against Mr. Ecton dated November 17, 2009.The nature of the discipline was to place Ecton on a one year probation.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Platte County Board of Equalization.
2.The subject property is located at 7918 Pleasant Ford, Weatherby Lake, Platte County, Missouri.The property is further identified as parcel number 20-5.0-15-100-002-002-000.At the time of hearing, the home was 51 years old.It has two bedrooms and one bath above grade with a gross living area of 1,406 square feet.It has a two car attached garage, a wood deck or porch, one fireplace and a full partially finished basement.It has 150 feet of lake frontage.The property has approximately $25,000 in deferred maintenance and is in overall fair condition.We accept Complainant’s appraiser’s report of condition inasmuch as he had access to the interior of the home while the Respondent’s appraiser did not.
3.There was no evidence of new construction and improvement from January 1, 2013, to January 1, 2014.
4.Complainant’s appraiser presented four proposed comparable sales located less than a mile from the subject property.All comparables were similar in age to the subject property, although two were in better condition.After making adjustments for condition, gross living area, basement finish, number of garages and fireplace count, Complainant’s appraiser found a range of value for the subject property of $293,900 to $327,000.No adjustment was made for difference in the amount of lake front footage enjoyed by the various properties.Mr. Ecton testified that other criteria, such as view and depth of water, were more important than the amount of actual front footage.He determined the proper value for the subject property to be $315,000.
5.Respondent’s appraiser presented four proposed comparable sales located less than one mile from the subject property.Her comparables were similar in age to the subject property.She made adjustments for differences in age, room count, square footage, number of garages, decks and porches, number of fireplaces and basement finish.In addition, she adjusted each home by $20,000 per front foot for the differences to the subject property.After adjustments, her comparables indicated a range of value for the subject property of $398,300 to $595,840.She determined the proper value for the subject property to be $450,000.
6.Ms. Salsbury’s lakefront value calculation was based upon recent sales of vacant lots at various area lakes, mostly outside of Platte County.From these various sales, she determined that lakefront lots were selling for average price of $2,346 per front foot.From this she concluded that the appropriate value, per front foot, at the subject lake was $2,000.She had only one Weatherby Lake comparable lot which sold for $2,627 per front foot.
7.While it is undisputed that lakefront property has more value than first tier property, we do not find that Ms. Salsbury’s $2,000 per front foot adjustment to improved sales is sufficiently supported.There may be other elements, beyond just front footage, at play.For instance, Respondent’s comparable #1 is about the same age and square footage as Respondent’s comparable #3, however comp #3 sold for $53,650 more than comp #1 even though comp #1 had 50 front foot more which, under the County’s logic, should have made it worth $100,000 more than comp #3.(The differences in the other amenities between comp #1 and comp #3 cannot explain more than $10,000 or $15,000 in difference in sales prices had lot sizes been the same.) Therefore, we cannot conclude that a larger lake frontage necessarily results in a higher 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.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.[1]
Official and Judicial Notice
Agencies shall take official notice of all matters of which the courts take judicial notice.[2]
Courts will take judicial notice of their own records in the same cases.[3]In addition, courts may take judicial notice of records in earlier cases when justice requires[4] or when it is necessary for a full understanding of the instant appeal.[5] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[6]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[7]
The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.
The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, 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.[8]
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.[9]It is the fair market value of the subject property on the valuation date.[10]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.[11]
Duty to Investigate
In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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.The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[12]
Weight to be Given Evidence
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.[13]
Trier of Fact
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 he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer 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 accept it in part or reject it in part.[14]
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.[15]
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.[16]
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.[17]The state tax commission cannot ignore a lack of support in the evidence for adjustments made by the expert witnesses in the application of a particular valuation approach.[18]
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.[19]
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.[20]
Respondent’s Burden of Proof
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.[21]
Complainant’s Burden of Proof
In order to prevail, 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, 2009.[22]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.”[23]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[24]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.[25]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[26]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[27]“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[28]
A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[29]
Complainant Presents Substantial and Persuasive Evidence
The Complainant presented substantial and persuasive evidence to support his opinion that the value of his property for tax years 2013 and 2014 should be reduced to $315,000.Respondent’s adjustments for lakefront footage was inconsistent with actual market reaction to difference in front footage of similar properties in the Weatherby Lake area.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for Platte County for the subject tax day is SET ASIDE.The Clerk of Platte County is hereby ORDERED to correct the books to show the assessed value for the subject property, on January 1, 2013 and January 1, 2014 as $59,850.
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing date shown in the Certificate of Service.The application shall contain specific 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 appeal is based will result in summary denial. [xxx]
The Collector of Platte County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 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 this 7th day of February, 2014.
STATE TAX COMMISSION OF MISSOURI
Luann Johnson
Senior Hearing Officer
[3] State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898).
[4] – Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929)nbsp;
[5] State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).
[6] In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).
[7] 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).
[8] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[9] 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).
[11] 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.
[13] 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).
[14] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[15] 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).
[16] 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).
[17] Missouri Pipeline Co. v. Wilmes, 898 S.W. 2d 682, 687 (Mo. App. E.D. 1995).
[18]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).
[19] 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).
[20] 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).
[21] Hermel, Cupples-Hesse, Brooks, supra.
[23] 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).
[26] 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).
[27] 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).