State Tax Commission of Missouri
MICHAEL HOELSCHER,)
)
Complainant,)
)
v.)Appeal Number 09-52015
)
CHRISTOPHER ESTES, ASSESSOR,)
COLE COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On July 15, 2010, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) setting aside the assessment by the Cole County Board of Equalization and setting the residential assessed value for the property under appeal at $8,230.[1]
Complainant filed his Application for Review on August 6, 2010.
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.[2]
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.[3]
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.[4]
DECISION
Complainant’s Application for Review
On August 6, 2010, Complainant filed with the Commission – Complainant’s Request for Extension of Time – Petition for Review of Appeal Decision and Order and a Letter to the Legal Coordinator of the Commission.On August 9, 2010, Order was issued denying an extension of time to file an Application for Review of the Decision for failure to state good cause for such an extension of time, and taking under advisement Complainant’s Application for Review.On August 10, 2010, a Memorandum was emailed and mailed to Complainant explaining that he had until Monday, August 16, 2010 (postmark date) to file his written statement setting forth the specific law and facts as ground upon which he claimed the decision was erroneous.
Senior Hearing Officer, W. B. Tichenor who issued the August 9th Order and the August 10th Memorandum, had initially been led to believe that the Complainant’s August 6th letter included the basis for his Application for Review, based upon the heading of the letter.However, upon a reading the entirety of the August 6th letter, it was concluded that Complainant was requesting an application form.On August 18th, Complainant emailed to the Commission a copy of the same documents originally filed on August 6th.
The email message of Complainant stated:
“This is a forwarded copy of my Request for an Extension of Time to Properly Complete The Review of the Decision from the STC.I am willing to negotiate a time and Place formal or informal with additional Proof Required before this becomes a complete hassle with many more expense.Please respond if something can be agreed to by all.I have explained to Randy T. the Problesm that my computer has been expieringencing.I will give more details and explanation supported with computer billing to pay for Repairs.”
(spelling and punctuation as per original message)
Request for Extension of Time & Petition for Review of Appeal Decision and Order
The Request for Extension of Time & Petition for Review of Appeal Decision and Order (Request & Petition) filed by Complainant on August 6th and resubmitted on August 18th, related to Discovery directed to Complainant, a petition filed on or about September 18, 2005, a refilling of a Cause of Action in September, 2008, and excessive Discovery Requests of Interrogatories, Requests for Production of Documents and Requests for Admissions.The prayer of this Request & Petition was that an extension of time be granted “… regarding the addition of time of fully comply with the Court Order of Plaintiffs to answer Defendants’ Discovery response and Production of Documents.”Nothing contained in the Request & Petition related in any fashion to the present appeal before the Commission.No order was issued by the Commission in this appeal regarding discovery.Given that the Decision had been issued on July 15, 2010, there were no pending discovery matters.Accordingly, the Hearing Officer properly denied the request for an extension of time.
August 6, 2010, Letter
Complainant’s letter of August 6th set out the Commission Rule on Hearing and Disposition of Appeals and on Mediation of Appeals, general conclusions of law which may appear in various decisions rendered by hearing officers of the Commission, and a portion of a hearing officer decision.[5]There is nothing in the letter which sets forth any alleged error of fact or law in the Decision issued by Hearing Officer Tichenor in the present appeal.
Failure to Comply With Order
The Decision in this appeal specifically provided as follows:
“Application for Review
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, 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. [6]”
Complainant instead of simply submitting to the Commission his Application for Review containing “specific facts or law as grounds upon which it is claimed the decision is erroneous,” elected to file a meaningless Request & Petition which had nothing to do with the present appeal.Complainant’s letter of August 6th, which the Hearing Officer, in error, assumed to contain the Complainant’s assertions as to errors of facts or law, had nothing that related in any form or fashion to the Decision rendered in this case.When informed by the Memorandum of August 10th, that: “Complainant has until and including Monday, August 16, 2010 (postmark date) to file his written statement (application) setting forth the specific facts or law as ground upon which it is claimed the decision is erroneous.”, Complainant simply files two days late the same meaningless documents previously filed.Complainant had ample time to have timely filed his application for review setting forth specific facts or law as ground upon which it is claimed the decision is erroneous.He failed to do so.
Review of Record
Notwithstanding that Complainant failed to present to the Commission any allegation of error in fact or application of the law on the part of the Hearing Officer in rendering his Decision, the Commission has reviewed the evidence and decision in this appeal.A review of the record 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.[7]The Hearing Officer did not err in his determination of value based upon the evidence in the record and the applicable law.
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 Cole 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 September 7, 2010.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jeff W. Schaeperkoetter, Commissioner
DECISION AND ORDER
HOLDING
Decision of the Cole County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $43,300, residential assessed value of $8,230.Complainant appeared pro se.Respondent appeared pro se.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Cole County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Cole County Board of Equalization.A hearing was conducted on May 5, 2010, at the Cole County Annex Building, Jefferson City, Missouri.
2.Assessment.The Assessor appraised the property at $74,300, residential assessed value of $14,120.The Board of Equalization sustained the assessment.
3.Subject Property.The subject property is located at 934 S. Rock Creek Road, Jefferson City, Missouri.The property is identified by parcel number 15-7-25-1-4.The property consists of .92 of an acre lot improved by a story and a half, traditional styled brick home.It was constructed in 1974 and extensively remodeled and updated in the late 1990s.The home has 2,073 square feet above grade, with four bedrooms and 2 baths above grade.There is a full basement with approximately 1,120 square feet of finished recreation room and a three-quarters bath.The home has two fireplaces and a two-car detached garage built in 1991.The home suffers from a mold contamination issue.
4.Complainant’s Evidence.Complainant testified in his own behalf.He stated that the subject property has no value due to the mold contamination which it suffers.The following exhibits were offered into evidence.
|
EXHIBIT |
DESCRIPTION |
DISPOSITION |
|
A |
Letter, dated 12/13/04 to Complainant from Dr. Stricker |
Received |
|
B |
Mold Remediation Protocol |
Received |
|
C |
Appraisal – Bradley Krantz, 7/17/09 |
Obj – Excluded |
Respondent objected to Exhibit C on the ground that the appraiser was not available for cross-examination.Objection was sustained.The exhibit constituted hearsay and without the testimony of the appraiser, foundation could not be laid for its admission and Respondent could not cross-examine as to the content and conclusions reached in the exhibit.
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[8]
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 $0, as proposed.
5.Discrimination Claim Abandoned.Complainant presented no evidence addressing the claim of discrimination in assessment,[9] therefore the claim is deemed abandoned for purposes of this appeal.
6.Respondent’s Evidence.Respondent presented the appraisal report[10] and testimony of Jen Walker,[11] appraiser for Cole County Assessor’s Office.Ms. Walker concluded a fair market value for the subject property, if not impacted by the mold contamination of $174,300 utilizing five sale properties in the sales comparison approach.The properties relied upon by Respondent’s appraiser were comparable. 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.
Ms. Walker made a deduction of $65,800 as the cost for mold remediation to the subject home.She also made a deduction of $54,324 of the cost to repair the home once the mold remediation was completed.This amount was based on an estimate of cost to repair of $65,188.
The appraiser had reduced the cost to repair by $10,864 dollars for an amount of 10% profit and 10% overhead.
7.Hearing Officer Sets Value.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, to be $174,300, if the home did not suffer from the mold condition.A deduction for both the cost of remediation ($65,800) and the cost for repair ($65,188) is required to be taken from this value to arrive at an indicated true value in money.True value in money for the property as of January 1, 2009, is $43,300.[12]See, Hearing Officer Finds Value, infra.
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.[13]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[14]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.[15]Although Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment, Respondent’s evidence met the required standard and rebutted the presumption and provided the basis for the Hearing Officer to conclude the fair market value of the subject property.See, Finding of Fact 7, supra; Hearing Officer Finds Value, infra.
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.[16]True value in money is defined in terms of value in exchange and not value in use.[17]It is the fair market value of the subject property on the valuation date.[18]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.[19]
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.[20]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.[21] Complainant did not present an opinion of fair market value shown to have been derived from any accepted methodology for appraisal of real property.Respondent’s appraiser utilized the sales comparison approach to arrive at a conclusion of the fair market value of the property under appeal.
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]Complainant presented no market data to support the owner’s opinion that the property under appeal had no value as of January 1, 2009.Accordingly, no probative value can be given to the owner’s opinion, as it was not shown to have been based upon proper elements or a proper foundation.
Hearing Officer Finds Value
The subject property, if not contaminated by mold, would have had a fair market value on January 1, 2009, of $174,300.[28]The cost for the remediation of mold contaminants would have been $65,800.[29]The cost for repair after remediation would have been $65,188.[30]Any knowledgeable and prudent purchaser of the property on January 1, 2009, would have deducted the cost of both remediation and repair from the property’s uncontaminated value.
The removal of $10,864 from the repair bid for the items of profit[31] and overhead[32] was not proper.This is part of the cost that the hypothetical purchaser would have had to pay to restore the property to a pre-mold contamination condition.No basis was given for excluding these items from the bid.No evidence was presented to establish that the amount of 10% for each of these two items was not appropriate.An allowance for profit and overhead are clearly allowable expenses that must be included in the cost of repair.[33]
The true value in money for the subject property as it existed on January 1, 2009 is $43,300, residential assessed value of $8,230.[34]See, Finding of Fact 7, supra.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Cole County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $8,230.
Application for Review
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. [35]
Disputed Taxes
The Collector of Cole 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 July 15, 2010.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
[2] 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).
[3] 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).
[4] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[5] The portions of the decision are from the decision rendered in Paul A. Arman, III v. Muehlheausler, STC Appeal No. 04-10005, 3/14/05.
[7] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[9] No evidence was tendered to establish an intentional plan by the Assessor and/or the Board of Equalization to assess the subject property at a ratio greater than 19% of its fair market value or greater than the average/median residential assessment ratio for Cole County for 2009.
[14] 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).
[15] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[16] 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).
[17] 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).
[19] 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.
[20] 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).
[21] 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).
[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).