State Tax Commission of Missouri
R & R HAEFNER FAMILY PRTNSHP., )
v. ) Appeal No. 11-10991
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED. Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2011 and 2012 is set at $485,600, commercial assessed value of $155,390.
Complainant appeared by Counsel, Mark W. Haefner, Haefner Law, St. Louis, Missouri
Respondent appeared by Associate County Counselor, Paula J. Lemerman
Case decided by Senior Hearing Officer W. B. Tichenor.
Complainant appeals, on the ground of overvaluation and misclassification, the decision of the St. Louis 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, 2011. 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 St. Louis County Board of Equalization.
2. Documents Filed. By Order dated 3/1/13, parties were to file and exchange exhibits and written direct testimony on or before 5/15/13. Complainant filed and exchanged exhibits. Respondent did not file any exhibits or written direct testimony and is precluded from offering any evidence for a case in chief at an evidentiary hearing.
6. Complainant’s Evidence. Complainant offered into evidence the following Exhibits: Exhibit A – Statement of Reason for Appeal; and Exhibit B – Written Direct Testimony of Gregory G. Haefner. Mr. Haefner advocated a value of $414,200 for the subject property.
7. No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.
8. Misclassification Claim Abandoned. No evidence was presented to establish a mixed-use of the property under appeal. Accordingly, Complainant’s claim of Misclassification is deemed to have been abandoned.
9. Decision Upon Documents. The only purpose of having conducted an evidentiary hearing would have been cross-examination of Gregory G. Haefner. Exhibits A and B fail to provide substantial and persuasive evidence to establish the true value in money of the property under appeal. The decision is rendered on the documents provided by Complainant. See, Presumption in Appeal, Complainant Failed To Meet Burden of Proof, and Decision Upon Documents, infra.
10. Presumption of Correct Assessment Not Rebutted. 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, 2011, to be $414,200, as proposed. See, Presumption In Appeal and Complainant Fails To Prove Value, infra.
11. Respondent’s Evidence. Respondent was under no burden of proof in the appeal and therefore elected to present no evidence, but to stand upon the presumption of correct assessment by the Board of Equalization.
CONCLUSIONS OF LAW AND DECISION
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.
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. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. This presumption is a rebuttable rather than a conclusive presumption. It places the burden of going forward with some substantial evidence on the taxpayer – Complainant. The presumption is not evidence of value.
The presumption of correct assessment is rebutted when the taxpayer 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.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. 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.
As will be addressed in detail below, Complainant’s evidence did not satisfy the substantial and persuasive standard, in that it failed to establish that the value set by the Board in its sustaining of the Assessor’s assessment was not in fact the true value in money for the subject property as of 1/1/11. Therefore, the Board presumption stands unrebutted.
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. True value in money is defined in terms of value in exchange and not value in use. It is the fair market value of the subject property on the valuation date. 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.
Complainant’s theory of the case in no way addressed or presented evidence under this Standard.
Weight to be Given Evidence
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. The Hearing Officer as the trier of fact may consider the testimony of a 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 opinion of a witness, who testifies on the issue of value, but may believe all or none of the testimony and accept it in part or reject it in part. In this instance, there is no supporting evidence presented by Complainant to substantiate that the value proffered by its witness of $414,200 was representative of the fair market value of the property as of 1/1/11.
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. 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. Complainant presented no evidence under any of the three recognized approaches to value to establish what the fair market value of the subject property was as of 1/1/11.
Opinion Testimony by Experts
If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto. Neither Exhibit A nor B established Mr. Haefner as an expert in the appraisal of real estate. Therefore, his testimony cannot be accepted as that of an expert in real estate appraisal.
Complainant Failed To Meet 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, 2011. 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.” A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment. The testimony of Complainant’s witness did not rise to the level of substantial and persuasive evidence to establish what a willing buyer and willing seller would have agreed to as the purchase price of the subject property as of 1/1/11.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value. Mr. Haefner as the person in charge of Complainant is permitted to testify as if he were an owner. The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. The opinion of value tendered by Mr. Haefner does not rest upon any elements of market data that would establish the fair market value of the subject property as of 1/1/11. The opinion of value was not established upon a foundation of any sound appraisal practice.
The opinion of value provided by Mr. Haefner was simply derived from taking the Assessor’s 2011 reduced value for the improvements of $107,200 and adding to that the land value of $307,000, set by the assessment for 2009-2010. There was no substantiating evidence to establish that these combined amounts actually represented true value in money for the property as of 1/1/11. Therefore, Mr. Haefner’s opinion of value of $414,200 can be given no probative value by the Hearing Officer.
Decision Upon Documents
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, is to 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. In the present appeal, the holding of an evidentiary hearing is of no benefit. It would serve no useful purpose. The only purpose would be to permit Respondent to cross-examine Mr. Haefner concerning Exhibits A and B. The fatal problem is that Exhibits A and B totally miss the point of the claim of overvaluation in this appeal. In other words, Complainant failed to make a prima facie case. Therefore, there is no need for an evidentiary hearing. The appeal can be decided simply upon the two documents.
Complainant’s Reason for Appeal
From a reading of the testimony of Mr. Haefner (Exhibit B) and the letter dtd 9/17/12 (Exhibit A), the reason for this appeal is that although the appraised value of Complainant’s property decreased from $490,400 in 2010 to $485,600 in 2011, the value of the land was increased from $307,000 to $378,400, with the improvements decreasing from $183,400 to $107,200. Mr. Haefner contends that someone with the Assessor’s office, when made aware of the increase in land value, said the increase from 2010 to 2011 for the land value would be removed. It is further contended that there was a recommendation to the Board that the total appraised value for the property would be set at $414,200, however, the Board failed to find that as the appraised value. Very simply stated, Complainant’s theory of the case is that someone on behalf of the Assessor agreed to the $414,200 amount when the matter was before the Board of Equalization and the Commission should set that value because that is what the Assessor agreed to do.
Defects in Complainant’s Theory
The defects and deficiencies with the Complainant’s case are significant and critical. The most fundamental flaw is that the process before the Commission is a de novo appeal from the Board. There is a presumption of correct assessment by the Board, as has been previously addressed. However, the Commission does not sit to review what may or may not have transpired between a taxpayer and a representative of the Assessor’s staff, a Board Hearing Officer or the Board itself.
The Hearing Officer must weigh the evidence to ascertain if it meets the standard of substantial and persuasive to both rebut the presumption of correct assessment and establish what the fair market value of the property was as of the valuation date, i.e. 1/1/11. The information provided in Exhibits A and B simply does not establish that the Board’s valuation did not represent the fair market value as of the valuation date. The best the documents establish is that Mr. Haefner assumed the existence of some sort of agreement with the Assessor’s office as to a reduction in value of the property. That is a fact (assuming the assumption is in fact, a fact) that is simply irrelevant.
No basis in law has been established by Complainant that the Commission must enforce the alleged agreement. It is well known to the Hearing Officer that when there are settlements of appeals before the Board in St. Louis County a settlement agreement is executed by the Assessor’s office and the taxpayer and signed by the Board. There is no evidence that such was the case in this instance. While there apparently was some type of understanding on the part of Mr. Haefner, it seems what may have occurred between him and the representative of the Assessor’s office was a classic “failure to communicate.” In any case, the events as set out by Complainant does not provided any basis upon which the Hearing Officer can conclude that the Board’s assessment was in error.
The larger defect in Complainant’s case is that it totally ignores any position of establishing the fair market value of the property. The focus on a change in land value is totally misplaced. It matters not what the Assessor’s records may record as to the division between a land value and the value of improvements. The issue is not the value of either individually. The issue is quite simply what would the property have sold for on 1/1/11. Complainant presented no evidence on this point. Accordingly, the only indication of value on the record lies in the Board presumption that the total value of the property as of 1/1/11 was $485,000.
Additionally, Mr. Haefner’s argument that land values did not go up from 2010 to 2011 is not established by any market data in the record. Absent market data to establish the proposition, it is nothing more than speculation and conjecture. Just as important is that it is based upon a false assumption, that is, that the land value on the property as of 2010 actually represented the fair market value of the land. There is no evidence to establish that as a fact. Furthermore, the 2010 value on Complainant’s property was actually set as of 1/1/09 in the two year assessment of real property mandated by statute.
For all of the foregoing reasons, Complainant failed to meet its burden of proof in both parts. First, there was a failure to establish that the Board’s value of $485,600 was in error as the fair market value of the subject property – land and improvements. Secondly, no evidence was presented from credible, acceptable evidence as to what a willing buyer and seller would have agreed to as the fair market value of the property as of January 1, 2011. In the face of these two fatal shortcomings, the Hearing Officer must affirm the assessment made by the Board of Equalization in sustaining the Assessor’s valuation.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2011 and 2012 is set at $155,390.
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.
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 139.031.8, 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 17, 2013.
STATE TAX COMMISSION OF MISSOURI
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 17th day of July, 2013, to: Mark Haefner, 4372 Casa Brazilia Dr., Suite 102, St. Louis, MO 63129, Attorney for Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Mark Devore, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
Barbara Heller, Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
 Neither party provide any description relative to the property under appeal. The Hearing Officer accessed the St. Louis County Assessor’s website to ascertain the basic description of the property.
 BOE Decision, dated 9/23/11 – Attached to Complaint for Review of Assessment; Commercial property is assessed at 32% of its true value in money (appraised value, fair market value) – Section 137.115, RSMo
 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)
Substantial and persuasive evidence is not an extremely high standard of evidentiary proof. It is the lowest of the three standards for evidence (substantial & persuasive, clear and convincing, and beyond a reasonable doubt). It requires a small amount of evidence to cross the threshold to rebut the presumption of correct assessment by the Board. The definitions, relevant to substantial evidence, do not support a position that substantial and persuasive evidence is an extremely or very high standard.
“Substantial evidence: Evidence that a reasonable mind would accept as adequate to support a conclusion; evidence beyond a scintilla.” Black’s Law Dictionary, Seventh Edition, p. 580.
The word scintilla is defined as “1. a spark, 2. a particle; the least trace.” Webster’s New World Dictionary, Second College Edition. Black’s definition at 1347 is “A spark or trace <the standard is that there must be more than a scintilla of evidence>.” There must be more than a spark or trace for evidence to have attained the standard of substantial. Once there is something more than a spark or trace the evidence has reached the level of substantial. Substantial evidence and the term preponderance of the evidence are essentially the same. “Preponderance of the evidence. The greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.” Black’s at 1201. Substantial evidence is that a reasonable mind would accept as adequate to support the conclusion. Preponderance is sufficient to incline a fair and impartial mind to one side of the issue rather than the other, i.e. support the proposed conclusion.
 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).
 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.
 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).
 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).
 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).
 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).
 Section 134 of 31 Am.Jur.2d, Expert and Opinion Evidence, states: “Thus, a corporate officer is competent to testify to the value of property belonging to the corporation, where, by reason of his management of its affairs, his personal knowledge of the property, and his information as to surrounding values, he is qualified in fact.” Section 546(116) of 32 C.J.S. Evidence states: “It has been held that the rule that the owner is qualified applies to corporate as well as individual owners, and that the managing officer of a corporation may testify as to the value of property owned by the corporation.” Krug v. United Disposal, 567 SW2d 133, 135 (Mo. App. E.D., 1978)
A managing officer of a corporation or limited liability company, even though not an expert, is competent to testify as to the value of the company’s property, especially where the officer has knowledge of and experience with other properties in the same general area as the property about which he or she is testifying. Warren Davis Properties v. United Fire & Casualty Co., 4 SW3rd 167, 173 (Mo. App. S.D., 1999)
 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).