Maryland Properties, LLC v. Jake Zimmerman, Assessor, St. Louis County

STATE TAX COMMISSION OF MISSOURI

MARYLAND PROPERTIES, LLC,	)
Complainant,	)	Appeal No. 19-10583
	)
v.	)	Parcel No. 17K631482
	)
JAKE ZIMMERMAN, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
Respondent.	)

 

DECISION AND ORDER 

            Maryland Properties LLC (Complainant) appeals 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 $83,800, with an assessed value of $15,930.   Complainant claims the property is overvalued and proposes a value of $25,000. Complainant 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 $78,000. The BOE’s decision is set aside.[1]

The evidentiary hearing was conducted on December 10. 2020, via WebEx. Complainant was represented by counsel Robert Devereux.   Respondent was represented by counsel Monique Nketah.

FINDINGS OF FACT

1. Subject Property. The subject property is located at 1330 Eastover Ave. in St. Louis, Missouri. The parcel/locator number is 17K631482.

The subject property consists of a .103 acre lot and a 1,309 square foot single-family home that has three bedrooms, two full baths, and an additional full bath in the finished basement. (Ex. 1 at 1.) Complainant purchased the subject property for $8,500 in August of 2013. (Ex. 1 at 1.)

2. Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $83,800. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $83,800.
3. Complainant’s Evidence. Complainant asserts the TVM of the subject property as of January 1, 2019, was $25,000. Mr. Devereux, the managing member of Complainant and a licensed real estate broker, testified in support of Complainant’s opinion of value. Complainant also called Adam Luesse, a senior appraiser for Respondent, to testify and submitted the following exhibits:

Exhibit	Description	Ruling
A	Three-page printout of MARIS Matrix information for 1218 Westover Ave., St. Louis. Missouri 63130 indicating sold price of $25,000 and sold date of November 8, 2016.	Admitted
B	Three page printout of MARIS Matrix information for 1225 Eastover Ave., St. Louis, Missouri 63130 indicating sold price of $14,900 and sold date of March 26, 2019.	Admitted
C	Three-page printout of MARIS Matrix information for 1337 Mount Olive Ave., St. Louis, Missouri 63130 indicating sold price of $11,200 and sold date of April 1, 2019.	Admitted
D	Three-page printout of MARIS Matrix information for 1239 Fairview Ave., St. Louis, Missouri 63130 indicating sold price of $11,000 and sold date of April 9, 2018.	Admitted

Respondent did not object to any of the exhibits, and Exhibits A through D were received into evidence. Complainant asserts that Respondent has acted “excessively and inappropriately” in valuing the subject property, and that Exhibits A through D demonstrate the TVM of the subject property. (Tr. 4:06-5:13.)

4. Respondent’s Evidence. Respondent presented the testimony of Mr. Zahner, and submitted Exhibit 1, Mr. Zahner’s November 6, 2020, restricted appraisal report for the subject property indicating a $78,000 opinion of value as of January 1, 2019.

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

Address	Subject Property 1330 Eastover Ave.	Comparable 1 1330 Fairview Ave.	Comparable 2 7632 Wayne Ave.	Comparable 3 1306 Mount Olive Ave.	Comparable 4             1458 North and South	Comparable 5                       1301 Mendell Dr.
Proximity to Subject		0.1 mi	0.3 mi	0.1 mi	0.3 mi	0.2 mi
Sale Price		$56,000	$73,000	$75,000	$88,500	$89,900
Date of Sale		3/30/2018	9/7/2017	9/21/2018	1/25/2018	1/5/2017
Location	Residential	Residential	Residential	Residential	Residential	Residential
Site (acre)	0.1030	0.138	0.176	0.121	0.167	0.14
Condition	Average	Fair	Average	Average+	Average +	Good
Room Count/ Bedroom/ Bath	7/3/2F	8/3/2F	6/3/1F	5/3/1F	6/3/2F	7/3/1F1H
Gross Living Area (sq. ft.)	1,309	1,416	1,115	1,272	1,325	1,398
Basement and Finished	Full Basement	Full Basement	Full Basement	Full Basement	Full Basement	Full Basement
Rooms Below Grade	Finished w/Full Bath	Finished	Finished	Unfinished	Finished	Finished
Garage/ Carport	None	Carport	Detached Garage	None	None	None
Porches/Patio/Deck	Front Porch	Front Porch	Front Porch	None	Front Porch	None
Adjusted Sale Price		$66,200	$78,400	$81,000	$86,000	$88,400

The comparable properties are similar to the subject property with respect to location, quality, and basement. Comparables 1, 2, 3, 4, and 5 differ from the subject property with respect to condition, gross living area, rooms below grade, and garage/carport; room count, gross living area, rooms below grade, and garage/carport; condition, room count, rooms below grade, and porches/patio/deck; condition, and rooms below grade; and condition, room count, rooms below grade, and porches/patio/deck, respectively.  Exhibit 1 indicates that these differences have been adjusted for determining an opinion of value.

5. Value. The TVM of the subject property on January 1, 2019, was $78,000.

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. Complainant Did Not Prove Overvaluation. Complainant did not produce substantial and persuasive evidence in support of his $25,000 opinion of value. Although Complainant presented Exhibits A, B, C, and D, the evidence establishes that these proposed comparable sales should not be utilized under the sales comparison approach to analyze the subject property. Such approach “uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.” Snider, 156 S.W.3d at 347-8 (emphasis added). Mr. Luesse persuasively testified that the sale listed in Exhibit A was “not an arms-length sale,” and that the property was relisted for $80,000; the sale listed in Exhibit B was a short sale that eliminates the typical buyer; the sale listed in Exhibit C was not an arms-length transaction, and the property was relisted for $124,000 in 2019, and sold off market for $60,000 in 2020; and the sale listed in Exhibit D was an investor-type of sale.[2] (Tr. 53:20-57:30.)

No evidence was offered in support of the BOE decision. Instead, Respondent presented substantial and persuasive evidence rebutting the BOE’s valuation of the subject property and establishing that $78,000, which is lower than the BOE’s valuation, is the TVM of the subject property as of January 1, 2019. Mr. Luesse’s testimony and Exhibit 1 show that the sales comparison approach was developed using comparable sales within one-half mile of the subject property and that adjustments to the five comparables were made.  Mr. Luesse’s opinion of value, $78,000, falls within the range of the adjusted sales price of the comparables, $66,200 to $88,400.

CONCLUSION AND ORDER

The BOE decision is set aside.  The TVM of the subject property as of January 1, 2019, was $78,000, with an assessed value of $14,820.[3]

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

[2] Mr. Luesse also persuasively testified as to other issues with some of these proposed comparable sales, including differences between the property listed in the exhibit and the subject property.

[3] 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.