Magdy Garas v. Muehlheausler (SLCO)

June 3rd, 2009

State Tax Commission of Missouri






v.) Appeal Number 08-10043












Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax years 2007 and 2008 is set at $247,900, residential assessed value of $47,100.Complainant appeared pro se.Respondent appeared by Assistant County Counselor, Paula J. Lemerman.Case heard and decided by Senior Hearing Officer W. B. Tichenor.


The Commission takes this appeal to determine the true value in money for the subject property as the property existed on January 1, 2008, under the economic conditions for

January 1, 2007.


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 $247,900, assessed value of $47,100, as residential property.Complainant proposed in his Complaint for Review of Assessment a value of $193,000, assessed value of $36,670.A hearing was conducted on May 14, 2009, 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.


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.Complainant testified in his own behalf and stated his opinion of value for the subject property as it existed on January 1, 2008, under the economic conditions on January 1, 2007 to be $210,000.This opinion of value was based on the purchase of the subject property in October, 2006 for $193,000, plus renovations from October 2006 to May 2007 that cost $17,000.

3.Mr. Garas offered into evidence Exhibit A.Exhibit A consisted of Multi-Listing Service (MLS) data sheets on nine properties in the subject neighborhood that Complainant believed were representative of the value for his property.Counsel for Respondent objected to Exhibit A on the grounds of lack of foundation as to comparability and condition, and hearsay.Objection was sustained.Exhibit A is maintained in the file of this appeal, but is excluded as evidence for purpose of determining the true value in money of the subject property.See, Admissibility of MLS Data Sheets, infra.

4.Respondent placed into evidence the testimony of Mr. Ross Hackman, Residential Appraiser Senior for St. LouisCounty.The appraiser testified as to his appraisal of the subject property.The Appraisal Report, Exhibit 1, of Mr. Hackman was received into evidence.Mr. Hackman arrived at an opinion of value for the subject property of $252,000 based upon a sales comparison and an income approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of four properties deemed comparable to the subject property.The appraiser also relied upon these sales to develop a gross rent multiplier for his income approach.The following exhibits were also received into evidence on behalf of Respondent.




MLS Data Sheet on the listing of the subject


Certificate of Value on the October 2006 sale of the subject


Certificate of Value on the April 2006 sale of the subject


5.The subject property is located at 846 Pennsylvania Ave., University City, Missouri.The property is identified by parcel number 18J631671.The property consists of a 4,640 square foot (.1065 acre) lot improved by a two-story brick, two-family structure of good quality construction.The house was built in 1920 and appears to be in average condition.The residence has two rental units.Unit 1 contains a gross living area of 1,478 square feet and has six rooms, two bedrooms and one and a half baths.Unit 2 contains a gross living area of 1,488 square feet and has six rooms, two bedrooms and one and a half baths.There is a full unfinished basement and a two car carport.[1]

6.There was evidence of new construction and improvement from October 2006 to early 2007, costing approximately $17,000.[2]However, the evidence was inconclusive as to determine the extent of the renovation or the contributory value of same that was finally completed between January 1, 2007, and later in 2007.Therefore, the Hearing Officer was without a substantial basis to establish that a higher value for the 2008 assessment was warranted.

7.The sales history of the Complainant’s property is[3]:

Sale Deed

Sale Date

Sale Price






Benjamin L. Dodd

Jeanie M. Smith




Jeanie M. Smith by Trustee

Long Beach Mortgage




Long Beach Mortgage

Eighteen Investments Inc.




Eighteen Investments Inc.

Magdy & Mary Garas


8.The Trustee’s Deed sale occurring on April 18, 2006, for $270,329 represented the mortgage existing against the property.[4]

9.The property under appeal was listed for sale during 2007 at an original listing price of $359,900, reduced to $349,900.The property was listed on the market for six months, with the listing expiring on 8/17/07.The building had been renovated and updated when listed.[5]No offers were received by Complainant while the property was on the market.[6]

10.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 the property existed on January 1, 2008, under the economic conditions as of January 1, 2007, to be $193,000 or $210,000, as proposed.

11.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 four properties were located within less than a half mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007 (12/05, 6/06, 11/06 & 12/06).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.

12.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 net adjustments ranged from -1.5 to 3.3%.The adjusted sales prices fell in a range from $237,500 to $267,000.The appraiser calculated an adjusted price per unit, per room and per bedroom for each comparable.The indicated prices per rental unit ranged from $116,250 to $133,500.The indicated per room prices ranged from $19,792 to $23,250.The adjusted prices per bedroom fell in a range from $58,125 to $66,750.[7]

13.The concluded value under the sales comparison approach of $250,000 provided an indicated per unit value of $125,000, a per room value of $20,833 and a per bedroom value of $62,500.

14.The appraiser also conducted in income approach by analyzing four comparable rental properties.The analysis established that the subject’s rents fell in the range of rents from the comparable properties.The appraiser developed a gross rent multiplier from his sale comparables and applied it to the subject’s rents to arrive at an indicated value of $253,750.[8]

15.Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject as it existed on January 1, 2008, under the economic conditions of January 1, 2007, to be $252,000.However, Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value.Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $247,900, presumed to have been made by a computer, computer-assisted method or a computer program.




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.[9]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[10]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.[11]The evidence presented by Complainant did not meet the required standard to rebut the presumption of correct assessment by the Board.

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.[12]True value in money is defined in terms of value in exchange and not value in use.[13]It is the fair market value of the subject property on the valuation date.[14]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.[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] Complainant did not present a method of valuation which is recognized by the Commission or the Courts to arrive at fair market value of property for ad valorem tax purposes.Mr. Hackman developed his appraisal relying on two approaches to value that are accepted by the appraisal community, as well as the Commission and the Courts.Both the sales comparison and income approaches developed by the appraiser were well documented and supported for the present appraisal problem.



Respondent’s Burden of Proof

The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program.There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $247,900, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.

The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:

(1)The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and


(2) The purchase prices from sales of at least three comparable properties and the address or location thereof.As used in this paragraph, the word comparable means that:


(a)Such sale was closed at a date relevant to the property valuation; and


(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.[18]


Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved.It does not mean that there may not be contrary evidence.[19]The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.[20]“For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”[21]

In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.[22]Mr. Hackman’s appraisal constituted substantial and persuasive evidence of a value of $252,000.However, it could only be received for the purpose of sustaining the Assessor/Board’s valuation of $247,900.For that purpose, the appraisal meets the standard of clear, cogent and convincing as articulated by the case law and statute cited above.

This is a case, as with others coming under the clear and convincing provision of Section 137.115, in which the Assessor’s value, which is not presumed to be correct in this proceeding,[23] is the value the Board has found to be correct.The Assessor’s value is now presumed to be correct in this appeal.This is because it has become the Board’s value.When the taxpayer, as in this case, fails to meet his burden of proof then the Hearing Officer is presented with the situation of the Assessor’s value not presumed to be correct, takes on the Board presumption of being correct, as an operation of case law.

The statute requires the original computer generated value to be supported by clear, cogent and convincing evidence, if it is to be sustained.Therefore, even though the Board’s value (Assessor’s original computer generated value) must be sustained due to the failure of the Complainant to rebut the presumption of correct assessment, it is the practice of the Hearing Officer to weigh the Respondent’s evidence to ascertain whether it constitutes clear and convincing evidence to sustain a computer assisted or generated value.In the present case, the value of $247,900 is presumed correct as the Board’s value, having not been rebutted by substantial and persuasive evidence.Furthermore, it was established by clear and convincing evidence (Exhibit 1) to be reflective of the true value in money as determined by a computer assisted valuation.

Complainant Failed to Meet 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, 2007.[24]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.”[25]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[26]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.[27]The evidence offered by Complainant failed to establish the fair market value of the subject property as the property existed on January 1, 2008, under the economic conditions for

January 1, 2007.

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[28]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[29]In the present appeal, the owner’s opinion of value is based upon the October 2006 purchase price plus costs of renovation and updating. Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.The Missouri Supreme Court has held that the actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property.[30]

However, the facts surrounding the sale of the property in the present case are significantly different than the facts in the St. Joe Mineral Case.The St. Joe transaction had the indicators of market value.The property had been actively marketed over a reasonable amount of time.The sales history and subsequent listing of the subject property raises serious question regarding the October 2006 purchase price being representative of true value in money.

The Garas property sold for $315,000 in August 2005.Within eight months the property was foreclosed with a mortgage amount of $270,329.16 against it.Four months after foreclosure the Mortgagor sold the property for over $90,000 less than the mortgage amount and $135,000 less than the sale price of a year earlier. The purchaser – Eighteen Investments – is known as an entity that buys foreclosed and distressed homes and then “flips” them for a quick profit.[31]There is no evidence to support a conclusion that the value of property similar to the subject in its market area had declined in value within one year by nearly 43%.

Eighteen Investments sold the property two months later for a $13,000 profit, but still at a price approximately 39% below the sale only 14 months prior and at only 71% of the mortgage value.Then after only $17,000 of updating and renovation, Complainant listed the property approximately four months after purchase for $359,900, later reduced to $349,900.Notwithstanding that no offers were made on the property while it was listed in 2007, the cumulative impact of the foregoing is that sound reasoning will not support a conclusion that the sale price of $193,000 was representative of a transaction for a property adequately and properly exposed to the market.The weight of this evidence is not sufficient to conclude that the purchase price of $193,000 established the outer limit of the value of the subject property as of the sale date or January 1, 2007.Accordingly, the owner’s opinion based on the October 2006 sale is not based on proper elements and a proper foundation.It can be given no probative weight.

Admissibility of MLS Data Sheets

Taxpayer’s Data Sheets – Exhibit A

In the present appeal, the taxpayer offered into evidence a group of nine MLS data sheets.Counsel for Respondent objected on the grounds of hearsay and lack of foundation.The MLS sheets did not have sale dates or sale prices.On the critical comparability element of square footage of living area, only two of the nine properties fell within 500 square feet or less of the subject’s size.The remaining seven properties ranged from 548 to 950 square feet smaller in size than the subject.On this element alone, the comparability of the proffered properties would be drawn into serious question.

The objection was sustained and the MLS data sheets were excluded from evidence.The offering of such documents in an evidentiary hearing before the Commission by the taxpayer will generally be met with an objection which will most usually be sustained.An owner does not have standing as an expert in appraisal in most cases presented to the Commission.Therefore, data obtained from MLS documents is not generally admissible.

The owner, presenting MLS data, desires to have the MLS information on the record. However, without the benefit of an appraisal expert taking that data and developing a sales comparison approach to value the raw data does not establish an opinion or even a substantial and persuasive indicator of fair market value.The Hearing Officer cannot take such information and step into the role of an appraiser and develop an opinion of value for the taxpayer based upon the tendered sales information.Unless the owner has sufficient education, training and experience in the appraisal of real property, he or she will not have the requisite foundation to develop a credible appraisal of the property under appeal.[32]

Respondent’s Data Sheet – Exhibit 2

Respondent offered into evidence the MLS data sheet on the listing of the subject property.This exhibit was received into evidence.The exhibit was used in cross examination of Complainant on the point which was raised in the Hearing Officer’s preliminary questioning of Mr. Garas relative to whether the property had been listed for sale since his purchase in October 2006.

The taxpayer testified the property had been listed for sale, but no offers had been made during the six months it was listed.He was uncertain as to what the exact listing price had been when questioned by the Hearing Officer.The use of the MLS information by Respondent’s Counsel to cross-examine the owner and verify the information regarding the listing prices was appropriate.It was then proper to receive the exhibit to insure preservation of the record.The document was neither offered, nor received for the purpose of seeking to establish the true value in money as of January 1, 2007.


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 AFFIRMED.

The assessed value for the subject property for tax year 2008 is set at $47,100.

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.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. [33]

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 June 3, 2009.





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 June, 2009, to:Magdy Garas, 7147 Delmar Boulevard, St. Louis, MO 63130,Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Philip A. Muehlheausler, 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




[1] Exhibit 1.


[2] Testimony of Complainant; Exhibit 1.


[3] Exhibit 1, Addendum, p. 1 of 6 – Prior Sales Comments.


[4] Exhibit 4.


[5] Exhibit 2.


[6] Testimony of Complainant.


[7] Exhibit 1, Sales Comparison Grid.


[8] Exhibit 1, Rental Comparable Grid and Sales Comparison Grid – Income Approach.


[9] Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.


[10] 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).


[11] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).


[12] 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).


[13] 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] Hermel, supra.


[15] 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).


[18] Section 137.115.1(1) & (2).


[19] Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974).


[20] 30 AmJur2d. 345-346, Evidence section 1167.


[21] Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).


[22] Section 138.060, RSMo; 12 CSR 30-3.075.


[23] There shall be no presumption that the assessor’s valuation is correct. Section 138.431.3, RSMo.


[24] Hermel, supra.


[25] 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] See, Cupples-Hesse, supra.


[27] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).


[28] 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).


[29] 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).


[30] St. Joe Minerals Corp., supra.


[31] Testimony of Ross Hackman.


[32] See, Steinbach v. Muehlheausler (St. Louis County), 07-10165; Decision, 11/5/08; Order Affirming Decision, 2/11/09.


[33] Section 138.432, RSMo.