State Tax Commission of Missouri
MICHAEL & VICKI MORANZ,)
)
Complainants,)
)
v.)Appeal Number 09-10039
)
MICHAEL BROOKS,)
ACTING ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On July 2, 2010, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) setting aside the assessment by the St. Louis County Board of Equalization and reducing the appraised value of the property under appeal from $274,100 to $250,000, an assessed residential value of $47,500.[1]
Complainants timely filed their Application for Review.[2]
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.[3]
The Hearing Officer as the trier of fact may consider the testimony of an expert or lay 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 or the owner who testify on the issue of reasonable value, but may believe all or none of the expert’s or owner’s testimony and accept it in part or reject it in part.[4]
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.[5]
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 his discretion as the trier of fact and concluder of law in this appeal.[6]
The information contained in the Application for Review relative to an offer of settlement is irrelevant and presents no basis for overturning the Decision.The other points presented are all in the nature of criticism of the appraisal presented on behalf of Respondent.Irrespective of the owner’s opinion of alleged deficiencies in the appraisal report, Complainants failed to meet their burden of proof.The taxpayer must present substantial and persuasive evidence to prove the value asserted.When this burden of proof is not met the Hearing Officer cannot find value as testified to by an owner.Such was the case in this instance.The Hearing Officer correctly found that Complainant’s evidence failed to meet the required burden of proof to establish the value proposed.
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 St. Louis 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 August 9, 2010.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jeff W. Schaeperkoetter, Commissioner
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization reducing 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 $250,000, residential assessed value of $47,500.Complainant, Michael Moranz, appeared pro se.Respondent appeared by Associate County Counselor Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced 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.Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.Evidentiary hearing was held on June 15, 2010, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property at $277,900, residential assessment of $52,800.The Board of Equalization reduced the value to $274,100, residential assessment of $52,080.
3.Subject Property.The subject property is located at 1123 Rolling Glen Lane, Ballwin, Missouri.The property is identified by parcel number 22T630594.The property consists of 18,173 square foot, more or less, lot improved by a two-story vinyl and brick-sided frame constructed house with full basement, a two-car attached garage, open front stoop, paved walkway, and a paved driveway leading to the rear entry garage.The improvements are considered to be of average quality construction.The house was built in 1972 and appears to be in overall average physical condition for the age of the house.There are some exterior condition issues.[7]The residence has a total of eight rooms above grade, with four bedrooms, two full and one half bath, and contains 2,648 square feet of living area.The full basement is approximately 1,276 square feet and has approximately 580 square feet of finished area.[8]
4.Complainant’s Evidence.Mr. Moranz testified on behalf of Complainants.He stated his opinion of value as of January 1, 2009, to be $215,000 based on the 2005 Board of Equalization value placed on the property.The following exhibits were offered into evidence by the taxpayer:
|
EXHIBIT |
DESCRIPTION |
DISPOSITION |
|
A |
2005-07 & 09 BOE Appeal History |
Obj. – Excluded |
|
B |
Locator Map |
Received |
|
C |
2009 – Change Notice |
Received |
|
D |
Roofing Bid |
Obj. – Received |
|
E |
Photos of Subject and comp sales used for mass appraisal |
Received |
None of the exhibits or the testimony of Mr. Moranz provided a basis to establish the true value in money of the subject property as of January 1, 2009, based on any recognized method for the appraisal of real property for ad valorem tax purposes.Complainants’ 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 $215,000, as proposed.There was no evidence of new construction and improvement during 2009, therefore, the assessed value for 2009 remains the same for 2010.[9]
5.Respondent’s Evidence.Respondent presented the testimony and appraisal report of Arthur Froeckmann, Missouri State Certified Residential Real Estate Appraiser.The properties relied upon by Respondent’s appraiser, in performing his appraisal, were comparable to the subject property for the purpose of making a determination of value of the subject property.The sale properties were located within .17 of a mile to 1.34 of a mile from the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.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.The appraiser made appropriate adjustments to account for the differences between the subject and each comparable.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 $250,000.
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.[10]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[11]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof 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.[12]Complainants failed to rebut the presumption of correct assessment by the Board.Respondent presented substantial and persuasive evidence to rebut the presumption and establish the fair market value of the property as of January 1, 2009.
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.[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]
Respondent’s appraiser concluded the fair market value of the subject relying on this Standard.[16]
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.[17]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.[18]Complainants did not present an opinion of value for their property based upon a recognized appraisal methodology.Respondent’s appraiser make a determination of the true value in money for the subject property based upon the comparable sales approach.
Complainants’ Burden of Proof
In order to prevail, Complainants 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.[19]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.”[20]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21]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.[22]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]Mr. Moranz’s opinion of value was based upon the 2005 determination of value by the Board of Equalization.The 2005 valuation by the Board does not establish value for 2009.The owner’s opinion of value is not based upon proper elements or a proper foundation.Therefore, it has no probative weight for this appeal.The taxpayers failed to meet their burden of proof to present substantial and persuasive evidence to establish that the fair market value of the property under appeal was $215,000 as of January 1, 2009.
Mr. Moranz testified as to the noise factor fromClayton Roadthat impacts the subject.He also felt that the mansard roof on the subject was a detracting feature.Whatever impact these factors might have on the value of the taxpayers’ home, neither was sufficiently quantified, by Mr. Moranz to establish that the valuation by the Board did not adequately account for each of these factors.Respondent’s appraiser properly recognized the noise factor and adjusted each comparable for this factor.There was no evidence to establish that Mr. Froeckmann erred in his appraisal with regard to the factor of the mansard roof.
Respondent Proves Value
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.[25]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $250,000 for the subject property.Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
The adjustments made the Mr. Froeckmann were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the various differences between the subject and each comparable.The appraisal by Mr. Froeckmann constituted substantial and persuasive evidence to rebut the presumption of correct assessment and establish the true value in money as of January 1, 2009 for the property under appeal to be $250,000.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization forSt. LouisCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $47,500.
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 for this Decision.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, 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. [26]
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 a 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 2, 2010.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
[1] Reduction in the value of the subject property was based upon the appraisal report presented on behalf of Respondent.
[3] 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).
[4] 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).
[5] 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).
[6] 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).
[7] Fair condition items: garage roof condition due to roof leaks, second floor shingle siding deterioration, upper-chimney loose/missing tuck pointing.Exhibit 1, Page 1 of 3.
[11] 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).
[12] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[13] 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).
[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.
[17] 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).
[18] 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).
[20] 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).
[23] 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).
[24] 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).