State Tax Commission of Missouri
RALPH & LEA ANN DOSS, )
v. ) Appeal Number 07-62512
DON DAVIS, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the Jasper County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED. Hearing Officer finds presumption of correct assessment not rebutted. True value in money for the subject property for tax years 2007 & 2008 is set at $271,100, residential assessed value of $51,510.
Complainant Lea Ann Doss appeared in person and by Counsel Daniel D. Whitworth, Joplin, Missouri.
Respondent appeared by Assistant Prosecuting Attorney, Teresa Kenney.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainants appeal, on the ground of overvaluation, the decision of the Jasper County Board of Equalization, which reduced the valuation of the subject property. The Assessor determined an appraised value of $272,580, assessed value of $51,790, as residential property. The Board reduced the value to $271,100, assessed value of $51,510. Complainants presented no opinion of value on the Complaint for Review of Assessment. A hearing was conducted on February 6, 2008, at the Jasper County Courthouse Annex, Carthage, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant testified in her own behalf. Mrs. Doss gave her opinion of value for the property under appeal as $201,000, based upon an appraisal prepared by J. Robert Hunter, Missouri State Certified Residential Appraiser. The following exhibits were received into evidence on behalf of Complainants.
Exhibit A – A comparison between the subject and nine other properties listing information from the Assessor’s Property Record Cards on the properties. The Exhibit included a copy of property record cards, photographs and history of tax payments on the 10 properties.
Exhibit B – Three photographs of the subject property with notes prepared by Mrs. Doss.
Exhibit C – Plat of Heritage Acres.
Exhibit D – Appraisal Report of J. Robert Hunter, with Professional Profile of Mr. Hunter attached.
Mr. Hunter testified as to his appraisal report. He concluded on a value of $201,000 as of February 1, 2008.
Respondent offered into evidence the appraisal report (Exhibit 1) of Ms. Christine Meadows, appraiser for Respondent. The appraiser testified as to her appraisal of the subject property. Exhibit 1 was received into evidence. Exhibit 1 concluded on a value for the subject property of $271,100 based upon a cost analysis.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Jasper County Board of Equalization.
2. The subject property is located at 19280 Gum Road, Joplin, Missouri. The property is identified by parcel number 15-5.0-15-10-001-001.012.
3. There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4. 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 $201,000.
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. 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 County Board of 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 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.
Complainants’ evidence (Exhibit D) to establish a value of $201,000 was not substantial and persuasive, as will be addressed below. Therefore, the presumption of correct assessment was not rebutted.
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 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.
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.
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, 2007. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). 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. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, 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).
The information set forth in Exhibit A is irrelevant to the issue of fair market value of the subject property. The comparison to other properties in the subdivision, none of which were shown by Mrs. Doss to have sold at a time relevant to the tax date of January 1, 2007, was in no way shown to establish a value of $201,000. Furthermore, the opinion of fair market value testified to by Mrs. Doss was not based upon any of the information contained in Exhibit A. The opinion of value tendered by Mrs. Doss was based upon the appraisal of Mr. Hunter.
The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965). Generally, an owner’s opinion based upon an appraisal of the property under appeal will constitute substantial and persuasive evidence to establish value. However, a review of the Hunter appraisal presents sufficient areas of concern to render it unpersuasive.
The “appraisal” consisted of a single photocopy page of a Freddie Mac Form 70 6-93. Use of such a form does not render an appraisal as unsubstantial or unpersuasive. It is not the form, but the information provided on the form and the market data in support of the appraisal approaches which gives validity to the opinion the expert tenders. The deficiencies in the Hunter appraisal are legion.
Hunter Cost Approach
There is no supporting market data relative to either the cost approach or sales comparison approaches and the various calculations and adjustments made by the appraiser. No land value was provided under the cost approach. The Comments on Cost Approach reference See attached building sketch. There is no attached building sketch. Reference is made to See attached addendum for comments regarding the Cost Approach to value. No addendum was attached. The document asserts that the reproduction costs were derived from Marshall & Swift’s Valuation Service and information from local contractors. There is no supporting data relative to what information was derived from local contractors and exactly how that information was used in the cost approach. The conclusion of value under the cost approach was $200,232, but without any land value.
The cost approach does not even come close to what should be in a properly developed cost approach to submission in an appeal before the Commission. 12 CSR 30-3.065(1)(B)3. Due to all of the cited defects the Hunter Cost Approach can be given no probative value. It is insufficient to establish fair market value as of January 1, 2007, for the subject property.
Hunter Sales Comparison Approach
Mr. Hunter relied upon three sales to arrive at a conclusion of fair market value. There is no supporting documentation, photographs, or locator map concerning either the subject or any of the comparables. The report notes: “Analysis of subject on attached addendum. None on sales.” However, no analysis of the subject was attached as an addendum. As noted there was no analysis on the sales, an admission that renders the use of the alleged comparables basically worthless.
Comparable 1 was a November 2003 sale. This is somewhat dated, but based upon Mr. Hunter’s analysis this sale as adjusted supports a value of $250,905, not $201,000. However, there was no adjustment for lot size of this comparable which was 1.12 acres smaller than the subject. However, for Comparable 1, which was also 1.12 acres smaller than the subject and it was adjusted a +$1,000. Such inconsistencies raise red flags as to the validity of the conclusion of value reached under the approach.
Under the category of “Quality of Construction” the appraiser shows the subject as being Vinyl/Brk (vinyl and brick). The three comps are shown as Vin-Br, Vin/Br and All Bk. These descriptions are not the quality of construction. Such descriptions properly are part of the Design. The age of the subject, according to Mr. Hunter, is 3 years. However, no ages are given for any of the comparable sales and no documentation was included with the appraisal sheet regarding this item.
For Mr. Hunter’s Comparable 2 a net positive adjustment was made of $450 to arrive at an indicated value of $190,450, from the original sale price of $190,000. No explanation is found in the appraisal as to the basis for the +$450 adjustment. The appraisal sheet shows a +$1,000 adjustment for site, a -$3450 adjustment for gross living area and -$6100 adjustment for basement finish. These adjustments provide a net -$8550 adjustment which would provide an indicated value for the subject of only $181,450.
There is no explanation for reconciling the three indicated values calculated by Mr. Hunter of $250,905, $190,450 and $200,780 to arrive at a value of $201,000. The sale with the smallest actual net adjustment would be sale 1 with an indicated value of $250,905. This also would be the sale with the smallest percentage adjustment from the sale price, less than 1%. Therefore, under generally accepted appraisal practice, this should have been the comparable upon which most if not all weight should be placed. However, the Hearing Officer is left with only surmise as to how Mr. Hunter arrived at his value of $201,000.
Summary and Conclusion
Without supporting documentation, of which Exhibit D has none, the exhibit fails as an “appraisal” upon which a decision can be based. The Uniform Residential Appraisal Report provided by Mr. Hunter (Exhibit D) falls so far short of the general standards which the Commission expects from a state certified appraiser (12 CSR 30-3.065(1)(B)(2) & (3)) as to render it of no probative value. Exhibit D has all the markings of nothing more than a hastily constructed worksheet put together at the last minute.
“The facts upon which an expert’s opinion is based, like the facts sufficient to support a verdict, must measure up to the legal requirements of substantiality and probative force; the question of whether such opinion is based on and supported by sufficient facts or evidence to sustain the same is a question of law for the court.” Robinson v. Empiregas Inc. of Hartville, 906 S.W.2d 829 (Mo. App. S.D. 1995).
An expert’s opinion must be founded upon substantial information, not mere conjecture or speculation, and there must be a rational basis for the opinion. Missouri Pipeline Co. v. Wilmes, 898 S.W.2d 682, 687 (Mo. App. E.D. 1995). The facts upon which an expert’s opinion is based, like the facts sufficient to support a verdict, must measure up to the legal requirements of substantiality and probative force; the question of whether such opinion is based on and supported by sufficient facts or evidence to sustain the same is a question of law for the court. Robinson v. Empiregas Inc. of Hartville, 906 S.W.2d 829 (S.D. 1995).
The Hearing Officer cannot ignore a lack of support in the evidence for calculations and adjustments made by the expert witnesses in the application of a particular valuation approach. Drey v. State Tax Commission, 345 S.W.2d 228, 234-236 (Mo. 1961); Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 348 (Mo. 2005). A taxpayer does not meet their burden if evidence on any essential element of his case leaves the Hearing Officer “in the nebulous twilight of speculation, conjecture and surmise.” See, Rossman v. G.G.C. Corp. Of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980). Complainants’ opinion of value is based upon Exhibit D. Exhibit D fails to provide the proper elements and foundation to establish a fair market value of $201,000. Therefore, no weight can be given to the opinion tendered by Complainants.
Complainants having failed to meet their burden of proof, there is no need to review the evidence presented on behalf of Respondent.
The assessed valuation for the subject property as determined by the Board of Equalization for Jasper County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $51,510.
Complainant 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 and an order to the Collector to release and disburse the impounded taxes. §139.031.3, RSMo. 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 Jasper 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.
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 February 26, 2008.
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 26th day of February, 2008, to: Lea Ann Doss, 19280 Gum Road, Joplin, MO 64801, Complainant; Dean Dankelson, Prosecuting Attorney, 601 Pearl, Room 100, Joplin, MO 64801, Attorney for Respondent; Donald Davis, Assessor, 302 S. Main Street, Carthage, MO 64836; Bonnie Earl, Clerk; Stephen Holt, Collector, Jasper County Courthouse, Carthage, MO 64836.