Merle Muehring v. Zupan (Marion)

State Tax Commission of Missouri

 

MERLE MUEHRING,)

)

Complainant,)

)

v.)Appeal No.08-69501

)

CARL M. ZUPAN, ASSESSOR,)

MARION COUNTY, MISSOURI,)

)

Respondent.)

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On January 26, 2009, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) affirming the assessment by the Marion County Board of Equalization.

Complainant filed his Application for Review of the Decision.Respondent filed his Response.Complainant filed his Reply.

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.[i]

The Hearing Officer as the trier of fact may consider the testimony of an expert witness or an 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 owners who testify on the issue of reasonable value, but may believe all or none of the testimony and accept it in part or reject it in part.[ii]

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.[iii]

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 her discretion as the trier of fact and concluder of law in this appeal.[iv]

Complainant’s evidence failed to provide market data to establish what the property under appeal would have sold for on January 1, 2007, in a hypothetical sale between a willing buyer and willing seller.For the Hearing Officer to have reduced the Assessor’s value by any given percentage, when there is no market data to demonstrate that such a percentage is reflective of the market applicable to the Complainant’s property would have been an arbitrary and capricious act.The Decision cannot be based on that foundation.Complainant’s deduction of 15% from the Assessor’s value was an arbitrary calculation of value not based on market data relevant to the date of January 1, 2007, or the location of the subject property.

The Hearing Officer did not err in her determinations as challenged by Complainant.

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 Marion 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 March 24, 2009.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jennifer Tidwell, Commissioner

Charles Nordwald, Commissioner

 

 

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Marion County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumptions of correct assessment not rebutted.True value in money for the subject property for tax year 2008 is set at $93,100, assessed value of $17,690.

Complainant appeared pro se.

Respondent appeared in person and by counsel Doug Browne.

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, 2007.

SUMMARY

Complainant appeals, on the ground of overvaluation, the decision of the Marion County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $93,100, assessed value of $17,690 as residential property.

Complainant proposed a value of $79,135, assessed value of $15,036 in his Complaint for Review of Assessment.

A hearing was conducted on November 5, 2008, at the Marion County Courthouse, Hannibal, 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 offered his opinion of value of his property to be $79,135, allowing for a 15% deduction for the subject being in close proximity (less than a half-mile) to a confined animal feeding operation (CAFO), in particular a hog feeding facility.

Complainant offered into evidence Exhibits A-H.Exhibits A-G were received into evidence and maintained by the State Tax Commission in its file. The Hearing Officer ordered the Complainant to maintain Exhibit H.Exhibits A-G consisted of the following documents:

Exhibit H was a container with a sample from the disposal receptacle from the CAFO.

Respondent’s Evidence

Respondent testified he had valued the subject property under the Hunnicutt mass appraisal system which is used inMarionCountyfor the biennial reassessment of all residential property.No deduction or adjustment had been made for the subject property being in close proximity to a hog feeding operation.The Assessor did not feel he had any basis upon which such an adjustment could be made.Respondent offered Exhibit 1, the Property Record Card.Exhibit 1 was admitted into evidence and maintained in the State Tax Commission file.

FINDINGS OF FACT

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

2.The subject property is located at6646 County Road249,Palmyra,Missouri.The property is identified by parcel number 20-013.07.26.0.00.008.00.The property consists of 2.6 acre lot improved by a double wide mobile home on a foundation, with porch and deck, and a pole garage.The property is within approximately ¼ of a mile of a hog confinement feeding facility.

3.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, 2007, to be $79,135.

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 Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.

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

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 is 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 each 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.

Determining Value

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).

Complainant’s Burden of Proof

In Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003), the court of appeals described the taxpayer’s burden as follows:

Taxpayers were the moving parties seeking affirmative relief, and as such, they bore the burden of proving the vital elements of their case, i.e., the assessments were “unlawful, unfair, improper, arbitrary or capricious.” Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo.1959); Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161[8] (Mo. App. 2003); 84 C.J.S. Taxation §§710,726. This is true regardless of the existence or non-existence of the challenged presumption. As the Supreme Court of Missouri explained, “even were we to hold that it [the presumption] has been overcome, the burden of proof on the facts and inferences would still remain on petitioner, for it is the moving party seeking affirmative relief.”Cupples, 329 S.W.2d at 702[16]. See also 84 C.J.S. Taxation §710, which states: “Even where there is no presumption in favor of the assessor’s ruling, if no evidence is offered in support of the complaint, the reviewing board is justified in fixing the valuation complained of in the amount assessed by the assessor.”
To prevail, Taxpayers had to “present an opinion of market value and then … present substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on tax day.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002).

Complainant’s exhibits failed to provide any relevant evidence from which a conclusion of what a willing buyer and seller would agree to as a purchase price on January 1, 2007 could be made. There were only two exhibits which addressed property values at all.Exhibit E purports to be a document from the Linn County Assessor which states “15% ECONOMIC GIVEN TO HOME DUE TO COMMERCIAL HOG OPERATION” “HOG OPERATION NEARBY NO VALUE HOMESITE DUE TO HOG ODOR.”Exhibit C is a print out entitled, The Facts about CAFOs, Local Control, and Health Ordinances.A bullet point in the document states, “According to The University of Missouri, CAFOS can decrease property values up to 50% for neighboring property owners.”The author of the document is unknown as Mr. Muehring, according to his testimony, removed that information as the document stated it should not be reproduced without permission.Based upon these documents, the Complainant argues that the hog operation lessens the value of his property by 15%. Complainant never proves the market value of the property, he simply provides some documents indicating that his property value should be decreased.The owner’s opinion in this instance was not demonstrated to have been based upon proper elements or a proper foundation.Therefore it can be given no probative value.

Summary & Conclusion

The effect of the existence of a CAFO within a quarter mile of property is unknown. It is possible it would lessen the fair market value of the residential property as most would prefer not to reside so close to an operation.However, the value may increase as the property could be purchased for a similar purpose.The Complainant testified that Cargill was interested in purchasing properties in Marion County for such operations.The evidentiary record fails to demonstrate the existence of sufficient sales data from rural areas of Missouri to establish the actual market impact in such circumstances.In other words, it remains a matter of speculation and conjecture until such time as market data is sufficient to demonstrate the economic impact of a CAFO on nearby residential properties.

In the present case, the evidence failed to establish the fair market value of the subject property on January 1, 2007, irrespective of the existence of the CAFO.Complainant failed to meet his burden of proof.The assessment made by the Assessor and sustained by the Board must therefore be affirmed.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forMarionCountyfor the subject tax day is AFFIRMED.

The assessed value for the subject property for tax year 2008 is set at $17,690.

A party 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.

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission.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 Marion 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.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

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 January 26, 2009.

STATE TAX COMMISSION OF MISSOURI

Maureen Monaghan

Hearing Officer