STATE TAX COMMISSION OF MISSOURI
|RICHARD G. HAEFNER & JOAN C. HAEFNER,||)|
|v.||)||Appeal No. 17-10751|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFRIMED. Complainants Richard G. Haefner and Joan C. Haefner (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainants appeared pro se.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by Counsel Steven Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
Complainant appealed on the ground of overvaluation. Respondent initially set the true value in money (TVM) of the subject property, as residential property, at $335,200. The BOE lowered Respondent’s valuation to $280,000. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the STC.
- Evidentiary Hearing. Complainants waived an oral Evidentiary Hearing, and the parties submitted the case for decision based on the documentary evidence and exhibits.
- Identification of Subject Property. The subject property is identified by parcel/locator number 30L230915. It is further identified as 4676 Forest Valley Dr., Mehlville, St. Louis County, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The parties provided little evidence describing the subject property. Therefore, most of the information describing the subject property was obtained from the St. Louis County Real Estate Information database.
The subject property consists of a .95 acre (approximately 41,382 square feet), residential lot improved by a 2,167 square-foot, Cape Cod style, single-family home built in 1984. The home includes four bedrooms; three full bathrooms; one half bathroom; a full unfinished basement; a full finished attic; a two-car attached garage; a porch; three patios; a wood deck; two fireplaces; and a total living area of 3,294 square feet. The exterior of the home consists of masonry and frame construction. The subject property has a construction grade factor of C+ and a condition, desirability, and utility rating of Average. The subject property is located in unincorporated St. Louis County in the Mehlville School District.
- Assessment. Respondent initially valued the subject property at $335,200, as residential, as of January 1, 2017.
- Board of Equalization. The BOE valued the subject property at $280,000, as residential, as of January 1, 2017, thereby lowering Respondent’s valuation.
- Complainant’s Evidence. Complainants opined that the subject property’s TVM was $273,000. To state and to support their opinion of value, Complainants offered the following evidence:
|Exhibit A||Packet containing multiple pages: a letter to STC waiving oral evidentiary hearing and describing reason for appeal; a list providing comparative data for six neighboring properties on the same street as the subject property; and a list providing the 2017 appraised values of 19 properties on the same street as the subject property.
Respondent did not object to Complainants’ exhibit, which was received into the record.
Exhibit A listed and briefly described six comparable properties, all on the same street as the subject property. (Exhibit A) As reported in Exhibit A, the comparable properties had 2017 “assessed” values ranging from $110,000 to $329,500. (Exhibit A) Exhibit A provided little to no information regarding the characteristics of each comparable property, such as lot size, interior living square footage, bedroom and bathroom count, and basement or attic size and finish. On page three of Exhibit A, Complainants described the subject property as having “great visual curb appeal, but it’s 33 year[s] old, same carpet, drapes, cabinets, etc.”
On page four of Exhibit A, Complainants made the following argument:
Our final opinion is the [subject] property on 4676 Forest Valley Dr – Haefner – should [be] assessed at the same amount as our neighbor across the street 4675 F.V.Dr which is $273,000.
On page two of Complainants’ Exhibit A, Complainants described 4676 Forest Valley Drive:
- Mr. and Mrs. Cartee 4675 Forest Valley Dr.
A large full 2story-full brick 3 car garage. 2017 $273,000 2016 $273,000 2015 $273,000 assessed at $7,000 less than Haefner
According to the St. Louis County Real Estate database, the comparable located at 4676 Forest Valley Drive was valued by Respondent at $273,000 and subsequently valued by the BOE at $273,000. The comparable property consists of a .38 acre (approximately 16,553 square feet), residential lot improved by a 1,458 square-foot, two-story, conventional style, single-family home built in 1985. The home includes four bedrooms; two full bathrooms; two half bathrooms; a full unfinished basement; no attic; a three-car attached garage; three porches; one patio; two fireplaces; and a total living area of 3,124 square feet. The exterior of the home consists of masonry and frame construction. The comparable property has a construction grade factor of C+ and a condition, desirability, and utility rating of Average. The comparable property is located in unincorporated St. Louis County in the Mehlville School District. Exhibit A did not establish that the comparable property had been transferred from a willing buyer to a willing seller in a recent, open-market sale. Exhibit A did not make any market-based dollar adjustments for the differences between the comparable property and the subject property.
- Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject property as of January 1, 2017, $280,000, was correct. Respondent offered the following evidence:
|Exhibit 1||BOE Findings and Notice of Decision valuing the subject property at $280,000.
Complainants did not object to Respondent’s exhibit, which was received into the record.
- Presumption of Correct Assessment Not Rebutted. Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.
CONCLUSIONS OF LAW AND DECISION
The STC has jurisdiction to hear this appeal and to correct any assessment that is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying, or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the TVM for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Issuance of Decision Absent Evidentiary Hearing
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying, or reversing the determination of the BOE, correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2).
The parties agreed to submit the appeal upon the record. The filing of exhibits and evidence establishes the basis upon which opportunity for an evidentiary hearing can be held. The Complainants have the burden to present substantial and persuasive evidence. The Hearing Officer considered all of the exhibits and evidence and then proceeded to ascertain if said exhibits and evidence met the standard of substantial and persuasive evidence to establish the TVM of the subject property.
Investigation by Hearing Officer
In order to investigate appeals filed with the STC, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2 RSMo (2000) as amended. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.
In this case, the parties agreed to submit the case on the exhibits and evidence they would have presented at an evidentiary hearing. Accordingly, the Hearing Officer’s decision is based upon the exhibits and evidence submitted, all of which were received into the record without objection.
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE – the BOE presumption. The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption.
In the present appeal, the BOE lowered the initial valuation of Respondent, and Complainant is now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies.
The Complainant’s Burden of Proof
To obtain a reduction in assessed value based upon an alleged overvaluation, the complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
In order to prevail, the 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, 2017. Hermel, supra. There is no presumption that the complainants’ opinion is correct. The taxpayer in an STC appeal still bears the burden of proof because the taxpayer is the moving party seeking affirmative relief. Therefore, the complainants’ bear the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary, or capricious.” 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). A valuation which does not reflect the true market value of the property under appeal is an unlawful, unfair, and improper assessment.
Presumption in Appeal
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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).
There is no presumption that the taxpayer’s opinion is correct. Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “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. E.D. 1980).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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. 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).
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 deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
In this appeal, no expert witness testified, and no evidence prepared by an expert witness was submitted.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the STC. It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). 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. 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347.
“Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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’ evidence was neither substantial nor persuasive to rebut the presumption of correct assessment by the BOE. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id.
Exhibit A did not provide evidence that can be considered relevant, adequate, and reasonable to support a conclusion that the subject property’s TVM was $273,000 as of January 1, 2017. Exhibit A did not provide evidence that compels the conclusion that, more likely than not, a TVM of $273,000 as of January 1, 2017, is the correct conclusion. Exhibit A did not formally utilize any of the three generally accepted approaches to valuing property for purposes of tax assessment. Although Exhibit A attempted to compare properties on the same street as the subject property, Exhibit A did not make appropriate comparisons based on evidence of sales reasonably related in time and distance and involve property comparable in character.
Specifically, in Exhibit A, Complainants’ opined that the TVM of the subject property should be the “same amount as our neighbor across the street [the comparable property] which is $273,000.” However, Exhibit A did not establish that the comparable property had been transferred from a willing buyer to a willing seller in a recent, open-market sale. In fact, according to the St. Louis County Real Estate database, the most recent transaction involving the comparable property was in March 2012 for $0 and was described as an “unverified” transaction. Furthermore, even if the comparable property had represented a recent, valid sale, Exhibit A did not show any market-based dollar adjustments for the differences in characteristics between the comparable property and the subject property. The comparable property was comprised of a lot with roughly two-thirds less square footage than the subject property. The style and details of the comparable property, a conventional two-story home (1,458 square feet of ground floor area and 3,214 square feet of total living area), was different than the subject property, a Cape-Cod style home (2,167 square feet of ground floor area and 3,294 square feet of total living area). Consequently, based on the evidence presented, the fact finder would be forced to speculate in order to conclude that the subject property’s TVM was the same as the appraised value of the comparable property.
The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax year 2017 is set at $53,200 residential ($280,000 TVM).
Application for Review
A party may file with the STC an application for review of this decision within 30 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. Section 138.432, RSMo
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 April 10, 2018.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 10th day of April, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
 Complainants filed their Complaint for Review with the STC. In the section “Grounds for Appeal,” Complainants placed an “X” next to the ground “Overvaluation” and an “X” next to the ground “Discrimination” followed by a question mark. Although Complainants submitted a list of properties in the same neighborhood as the subject property along with their appraised values as reported by the St. Louis County Real Property database, Complainants did not submit a ratio study that established the common level of assessment of residential property in St. Louis County for 2017. To prove a claim of discrimination, a complainant must establish the true value in money of the subject property and that the subject property was either intentionally assessed at a ratio higher than the common level of assessment of similar properties in the same subclass or assessed at a ratio that was grossly excessive when compared to the common level of assessment of similar properties in the same subclass. Given that Complainants did not submit any such evidence related to discrimination, the claim of discrimination is deemed waived.