Philip T. Edwards v. Johnson (Cedar)

November 4th, 2010

State Tax Commission of Missouri





v.) Appeal Number 09-49500









Assessment by the Assessor of Cedar County is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $920,000, residential assessed value of $174,800.Complainant appeared in person and by Counsel Charles S. Genisio, Joplin, Missouri.Respondent appeared pro se.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.


Complainant appeals, on the ground of overvaluation, the assessment 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.


1.Jurisdiction.By Order issued January 14, 2010, it was determined that Complainant had standing to prosecute his appeal before the Commission and that the Commission had jurisdiction to hear the case on its merits.[1]A hearing was conducted on September 22, 2010, at the Cedar County Courthouse, Stockton, Missouri.

2.Assessment.The subject property consisting of five tracts of land was appraised by the assessor at a total value of $1,159,500, a total assessed residential value of $220,320.[2]The individual appraised and assessed values on the five tracts of land were as follows:




























3.Subject Property.The subject property is located at Walnut and St. James Streets, El Dorado Springs, Missouri.The property is real property improved with apartments.Collectively the five tracts constitute a single economic unit for purposes of valuation.The property was purchased by Complainant in March, 2008 for $920,000.The property had been on the market for over a year, originally listed at $970,000, reduced to $950,000 before Complainant’s purchase.[3]

4.Complainant’s Evidence.Complainant prefiled the following exhibits, which were received into evidence:




Real Estate Sales Contract – Subject Properties – 1/22/08


Closing Statement – Subject Properties -3/14/08


Loan Statements: 12/31/08 & 12/31/09


Profit & Loss Statement: 2009


Promissory Note: $880,600


Change in Terms Agreement:$770,534.07


Promissory Note: $150,000


Deed of Trust


Written Direct Testimony of Philip T. Edwards

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.[4]

Complainant’s evidence was substantial and persuasive to establish the true value in money as of January 1, 2009, to be $920,000 for the combined tracts.[5]

5.Respondent’s Evidence.Respondent prefiled the following exhibits, which were received into evidence:




Property Record Card & Photographs – Tract 1


Property Record Card & Photograph – Tract 2


Property Record Card & Photograph – Tract 3


Property Record Card & Photograph – Tract 4


Property Record Card – Tract 5

At the evidentiary hearing Respondent tendered into evidence Exhibit 6 – Listing Summary on property at 601 S. Walnut St., Mt. Vernon, Missouri.Counsel for Complainant objected to Exhibit 6.Objection was sustained.[6]Exhibit 6 was not received into evidence. It is maintained in the Commission file only as an offer of proof and does not constitute a basis for determination of value in the appeal.

6.Allocation of Value.The value of the combined five tracts is allocated based upon the percentages of value established by the Assessor’s total and individual appraised values.Tract 1 constituted 82.4% of the Assessor’s total appraised value of the subject.Tract 4 constituted 16.1% of the Assessor’s total appraised value of the subject.The other three tracts combined comprised the remaining 1.5% of total value: Tract 2 – 46.6%, Tract 3 – 42.1%, and Tract 5 – 11.3% of the remaining total.

Applying these percentages to the true value in money for the subject of $920,000, the following true values in money (TVM) and assessed values (AV) are established for the individual tracts.[7]

























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.[8]

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.[9]By statute real and tangible personal property is assessed at set percentages of true value in money.[10] The constitutional mandate is to find the true value in money.In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record.Complainant’s purchase of the property under appeal at a time relevant to the valuation date, as addressed below, constituted substantial and persuasive evidence to satisfy the constitutional basis of assessment.

No Presumption In Present Appeal

In a hearing before the Commission, there is no presumption that the Assessor’s valuation is correct.[11]However, the Complainant still must come forward with substantial and persuasive evidence to prove the value proffered.[12]In Westwood Partnership v. Gogarty,[13] the court of appeals stated:

“There is no longer an automatic presumption regarding the correctness of an assessor’s valuation. Section 138.431.3. This statutory change from the previous situation in which the assessor’s valuation was presumed to be correct does not mean that there is now a presumption in favor of taxpayer. The taxpayer in a Commission tax appeal still bears the burden of proof.”[14]

In Reeves v. Snider,[15] 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.”[16]

An assessment that appraises a property at a value greater than its true value in money is unlawful under the mandate of the constitution.Such an overvaluation is therefore unfair and improper even if it is not shown to be an arbitrary or capricious valuation of the property.The taxpayer must prove the value asserted, however, there is no assessor’s presumption that must be rebutted.When a Complainant has established by substantial and persuasive evidence the value advocated, he has rebutted the correctness of the Assessor’s appraised value, ipso facto.[17]

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.[1] True value in money is defined in terms of value in exchange and not value in use.[2] It is the fair market value of the subject property on the valuation date.[3] 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.


  1. Both parties are well informed and well advised, and both acting in what they consider their own best interests.


  1. A reasonable time is allowed for exposure in the open market.


  1. Payment is made in cash or its equivalent.


  1. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.


  1. 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.[4]


Complainant Proves Value of $920,000

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.[5] 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.”[6]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[7] 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.[8]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[9] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[10] The owner’s opinion of value was based upon what he had actually paid for the property in an open market transaction. 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.[11] 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.[12]

A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction. Therefore, once a taxpayer has presented evidence of the purchase and purchase price of a property it is presumed this was a market transaction.[13] That is the price paid represents market value for that property as of the date of its purchase.[14] The taxpayer is not burdened with establishing the various elements that are implicit in an arms-length transaction. The burden to rebut the presumption falls to the opposing party who is challenging the sale being proffered. If evidence is not presented that establishes that the transaction was not in fact a market transaction, the presumption in favor of the validity of the sale stands. Therefore, the owner’s opinion was based upon proper elements and a proper


foundation. It possesses probative value for purposes of establishing the fair market value of the property on January 1, 2009.

The only question remaining is whether the date of sale is at a time relevant to the tax date, so that the sale can be considered. In this instance, this closing date less than ten months prior to the valuation date is clearly relevant to establish value. There is no evidence upon which the Hearing Officer can conclude that an upward or downward adjustment to the sale price should be made due to time of sale. It would be mere speculation for any such adjustment to be made upon the evidentiary record. In the absence of such evidence, the actual sale in March, 2008 constitutes substantial and persuasive evidence of the subject property’s value as of

January 1, 2009.

Exclusion of Exhibit 6

            Respondent sought to introduce into evidence a realtor’s listing summary on a property located in Mt. Vernon (Lawrence County) Missouri. Counsel for Complainant objected on the grounds of the document being beyond the scope of the ordered exchange of exhibits and lack of foundation to establish comparability. The objection was sustained at hearing.

By Order issued May 5, 2010, an exchange schedule was set under the provisions of the Commission Rule for Exchange of Exhibits and Prefiled Direct Testimony.[15] In accordance with the exchange schedule set parties were to file with the Commission and exchange all exhibits on or before June 21, 2010, and all written direct testimony on or before July 21, 2010. Respondent filed Exhibits 1 through 4, but did not file any written direct testimony. Respondent’s Exhibit 5 was ordered to be filed and exchange by the hearing officer via Order dtd 9/2/10.

At the evidentiary hearing, Respondent tendered a realtor’s Listing Summary which the Hearing Officer marked as Exhibit 6 only for the purposes of identification. The document is a Multi-List Service web-site document on an apartment property in Mt. Vernon, Missouri. The document shows the listing date for the property to have been 5/26/09, with a selling date of 5/3/10. The document was printed from the Internet on 9/21/10.

The operative rule states: “Any exhibit or written direct testimony which has not previously been exchanged in accordance with this rule will be excluded from admission into evidence at the evidentiary hearing. … This shall not preclude the offering of other exhibits or related testimony which were not available at a time such that they could not have been exchanged on the exchange date.” Exhibit 6 was available prior to the ordered exchange date of 6/21/10, since the property sold on 5/3/10. The offering of the document printed from the Internet the day before the evidentiary hearing runs afoul of the Commission rule. The Hearing Office had no authority, consistent with the rule, to permit the exhibit to come into the record.

Furthermore, Respondent was unable to provide sufficient information that was beyond the face of the document to establish comparability to the subject for purpose of any sales comparison analysis. It is not the responsibility of the Hearing Officer to act as an appraiser and attempt to perform a sales comparison approach based on a single sale on the sparse and unverified information provided on a Listing Summary. MLS documents are hearsay. It is the practice of the Hearing Officer to exclude such documents upon objection.

MLS documents, included in an addendum of an appraisal report of a state licensed or certified appraiser, are admissible into evidence as part of the appraisal. It is recognized that appraisers do rely upon MLS listing and sale sheets as part of their appraisal work, supported by proper verification. Such verified information falls within the category of facts or data upon which an appraiser bases an opinion. They are accepted to be of a type of information reasonably relied upon by appraisal experts in developing a sales comparison approach to value and forming an opinion of value.[16] When MLS sheets are simply offered by themselves apart from an appraisal or not in support of an appraisal, they are not admissible. Exhibit 6 was not offered as part of or in support of an appraisal by Respondent. Accordingly, it was not admissible into the evidentiary record.


The assessed valuations for the subject property as determined by the Assessor for Cedar County for the subject tax day are SET ASIDE.

The assessed value for the subject property for tax years 2009 and 2010 is set at: $174,800.

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 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 application for review is based will result in summary denial. [17]

Disputed Taxes

The Collector of Cedar 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 November 4, 2010.





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 4th day of November, 2010, to: Charles S. Genisio, 702 S. Pearl Ave., Joplin, MO 64801, Attorney for Complainant; Michael Ash, Prosecuting Attorney, 113 South Street, P. O. Box 641, Stockton, MO 65785, Attorney for Respondent; Paul E. Johnson, Assessor, P. O. Box 580, Stockton, MO 65785; Peggy Kenney, Clerk, P.O. Box 126, Stockton, MO 65785; Joan Haines, Collector, P.O. Box 280, Stockton, MO 65785.





Barbara Heller

Legal Coordinator





[1] 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).


[2] 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).


[3] Hermel, supra.


[4] 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.


[5] Hermel, supra.


[6] 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).


[7] See, Cupples-Hesse, supra.


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


[9] 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).


[10] 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).


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


[12] 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).


[13] Phoenix Redevelopment Corporation v. Walker, 812 S.W.2d, 881, 883-4 (Mo. App. W.D. 1991).

[14] See, Standard for Valuation, supra


[15] 12 CSR 30-3.060(1)


[16] Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).


[17] Section 138.432, RSMo.