State Tax Commission of Missouri
RICHARD & LINDA VANWINKLE,)
)
Complainants,)
)
v.)Appeal Number 09-57027
)
TOM COPELAND, ASSESSOR,)
FRANKLIN COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On February 26, 2010, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) setting aside the assessment by the Franklin County Board of Equalization and setting the true value in money for the property under appeal at $219,440, residential assessed value of $37,050, agricultural assessed value of $2,933.
Complainants timely filed their Application for Review of the Decision.Respondent declined to file a response to the Application for Review
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.[1]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 lay witnesses who testify on the issue of reasonable value, but may believe all or none of the testimony and accept it in part or reject it in part.[2]
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.[3]
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.[4]
The Hearing Officer did not err in his determinations as challenged by Complainant.
Complainants’ Grounds for Review
Mr. Van Winkle puts forth two grounds in support of his Application for Review.First, he was not aware he was required to produce his own appraiser or appraisal at the hearing.Complainant submitted, with the Application for Review, a copy of a portion of a November 9, 2009, appraisal opining a value of $200,000.[5]The second ground is that Respondent’s appraisal has one comparable that sold for $194,000 that is closest in character and location to the subject property.Neither basis for review provides any ground for reversing or modifying the Decision.Neither ground asserts any error on the part of the Hearing Officer in his conduct of the hearing or in the rendering of the Decision.
Appraisal of Christopher D. Rice
A review of the file shows that Mr. Van Winkle was sent the Complaint for Review of Assessment form from the Commission.He was mailed with that the Commission’s pamphlet[6] on how to prepare for a hearing before the Commission.The pamphlet advises taxpayers that an appraisal is a good means to prove value and that the appraiser must be present to testify. Furthermore, the Order[7] setting the case for evidentiary hearing stated the following:
“Each party (the taxpayer and Franklin County) must bring at least two (2) copies of anydocuments which will be introduced into evidence at the evidentiary hearing that willsupport the party’s opinion of value.”
Mr. Van Winkle elected to only bring one exhibit to the hearing.That was not the appraisal that he submitted with the Application for Review.
There is no allegation of error on the part of the Hearing Officer in his conduct of the hearing.Complainant seeks, after failing to make his case in the evidentiary hearing, to get a second bite at the evidentiary apple. The appraisal of Christopher D. Rice, as of November 9, 2009, opines a value of $200,000.That does not support the value for the subject property of $185,105 given by the owner.It rebuts the owner’s opinion of value.
In any case, the Commission’s review of the Decision rests upon the evidence tendered and received into the record and the Hearing Officer’s determination of value based upon the evidentiary record.Our review cannot extend to documents not offered at the evidentiary hearing.The Hearing Officer could not err relative to a document that was never offered into evidence.It is the responsibility of the taxpayer to be prepared to establish his case by substantial and persuasive evidence.The failure to come forward with evidence to prove a party’s case is not an error on the part of the Hearing Officer.Such a failure does not entitle the party at fault to a new hearing.
Complainant’s first point is not well taken.There is no error on the part of the Hearing Officer in the conduct of the hearing to warrant holding a new hearing in the appeal.
Respondent’s Comparable 3
Complainants’ next ground for review relates to the third comparable utilized by Respondent’s appraiser.Mr. Van Winkle asserts this property is closest to the subject in character and distance.What the taxpayer fails to acknowledge in his Application for Review is that Ms. Johnson adjusted this property and concluded an indicated value of $181,300 for the subject.However, there were two other comparable properties presented, which lead Ms. Johnson to conclude a value of $195,000 for the residential portion of the subject property.No allegation of error was presented by the taxpayer against the sales comparison methodology applied by Respondent’s appraiser.The Hearing Officer found none, and the Commission finds no basis upon which it can conclude any errors in this regard.
The Taxpayer seeks a second hearing in order that he may “argue the points with respect to Angela Johnson’s appraisal.”Mr. Van Winkle was given opportunity to cross-examine Ms. Johnson relative to her appraisal.Wanting to now argue about the appraisal does not establish any error on the part of the Hearing Officer in either conducting the hearing or applying the law to the facts establish by this evidentiary record.
Complainant’s second point is not well taken.The Hearing Officer did not err in concluding the true value in money based not just on one sale comparable, but on the concluded value of the appraiser relying on all three sales.
Request for a Second Hearing
Complainants’ request for a second hearing is denied.No error on the part of the Hearing Officer has been demonstrated.Complainants failed to present substantial and persuasive evidence to support their opinion of fair market value.Complainants were provided their full due process rights to present evidence in support of their opinion.The failure to do so is the fault of the Complainants, not the Hearing Officer.
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 Franklin 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 May 20, 2010.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
DECISION AND ORDER
HOLDING
Decision of the Franklin County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Hearing Officer finds Complainants did not rebut the presumption of correct assessment by the Board.Respondent’s evidence did rebut the presumption of correct assessment and established value.True value in money for the subject property for tax years 2009 and 2010 is set at $219,440, residential assessed value of $37,050, agricultural assessed value of $2,933.
Complainant, Richard Vanwinkle, appeared pro se.Respondent appeared in person and by County Counselor, Mark Vincent.Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainants appeal, on the ground of overvaluation, the decision of the Franklin 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, 2009.
A hearing was conducted on January 10, 2010, at the Franklin County Government Building, Union, Missouri.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 Franklin County Board of Equalization.
2.Assessment.The Assessor appraised the subject property at $179,010 residential portion, assessed value of $34,012, and $24,440 agricultural portion, assessed value of $2,933, for a total appraised value of $203,450, and total assessed value of $36,945.Complainant’s appeal is on the residential assessment only.The assessment of the agricultural portion of the property is not under appeal.[8]
3.Subject Property.The subject property is located at 5932 Deer Run Lane, Villa Ridge, Missouri.The property is identified by map parcel number 19-4-18-1.600.[9]The property consists of 9.87 acres of which one acre is designated as the residential site.The residential site is improved by a single family structure of average to good quality construction.The home was built in 1994 and appears to be in average condition.The residence has a total of seven rooms, including three bedrooms.There are two baths.The house contains 2,160 square feet of living area.There is a full, unfinished walk-out basement.The residence does not have a garage.
4.No New Construction and Improvement.There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010.The 2009 assessment remains as the assessment for 2010.[10]
5.Complainant’s Evidence.Mr. Vanwinkle testified in his own behalf.He stated his opinion of value for the entire property to be $185,105.He did not provide a separate opinion of value for only the residential portion.The opinion of value was based upon newspaper articles, the economic downturn and housing values in general.
Complainant offered into evidence Exhibit A.Exhibit A consisted of a (1) letter to Complainant from Charles F. Smith, dated July 6, 2009, which addressed the sale of property at 2041 Deloge Estates Drive, Villa Ridge on December 1, 2008; (2) Property Details Report (Realist) on the property; (3) Multi-List Services data sheets on the property; (4) copy of article – Is Your Property Tax Too High? – from Parade magazine, 5/31/09; and (5) copy of Notice of Assessed Value on the subject property for 2009.
Objection was made to parts 1 through 4 of Exhibit A, on the grounds of hearsay and relevance.Objection was sustained and parts 1 through 4 were excluded.Parts 1 through 4 of Exhibit A are maintained in the case filed, but do not constitute evidence on the issue of true value in money of the subject property for purposes of this appeal.See, Ruling on Objection, infra.
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, 2009, to be $185,105, for either the residential portion or the entire property.
6.Respondent’s Evidence.Respondent presented the testimony and appraisal report[11] of Angela J. Johnson, State Certified General Real Estate Appraiser for Franklin County.Ms. Johnson arrived at an opinion of value as of January 1, 2009, of $195,000 for the residential portion of the subject property.The appraiser developed a sales comparison approach to value, relying on three sales to determine the indicated true value in money. The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value.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.
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 residential portion of the subject, as of January 1, 2009, to be $195,000.
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.[12]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[13]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence 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.[14]Complainant failed to present evidence to rebut the presumption in favor of the decision of the Board.Respondent’s evidence was substantial and persuasive to rebut the presumption and establish the true value in money for the residential portion of the property.
Ruling on Objection
The objection to parts 1 through 4 of exhibit was on the grounds of hearsay and relevance.The objection was well taken.Each of these documents was hearsay.Furthermore, none of them were relevant to a determination of the fair market value of the subject property on January 1, 2009.
Information on an individual sale of property from a real estate information service website and a multi-list service do not constitute a proper methodology for the valuation of real property in Missouri.See, Methods of Valuation, infra.What can be gleaned from the documents relating to the property at 2041 Desloge Estates is that it is not a comparable property to the subject.The subject has 2,160 square feet of living area.The Desloge property has 3,658 square feet of living area.This disparity of over 1,500 square feet renders the Desloge property as unsuitable as a comparable to the subject in this instance.
To the extent that Mr. Vanwinkle wished to demonstrate that the property sold for less than the appraised value by the Assessor, that factor is totally irrelevant for establishing fair market value or proving that the assessment on the subject property is in error.The excluded documents show that for the 2007-2008 assessment a true value in money of $419,200 had been placed on the property.The property had been purchased in 2002 for an undisclosed amount.It was foreclosed on in July 2008 at a value of $649,178.The property then was sold by the financial institution that had taken it back in foreclosure in December 2008 for $333,000, assuming that the information in the excluded documents is correct.None of this information is probative to establish value for the subject.None of it establishes that on January 1, 2007 (the valuation date for the $419,200 value shown to be the 2008 assessment), that the assessor’s appraised value was more than, less than or significantly close to market value.
Since none of the information presents any possible data to prove value of the subject as of January 1, 2009, it is irrelevant and therefore was excluded from the record for purposes of finding true value in money.
As to the article – Is Your Property Tax Too High? – the Hearing Officer understands that taxpayers place great stock in such magazine, newspaper and Internet articles.However, for purposes of appeals before the State Tax Commission on any given property, they literally are not worth the paper they are printed on, or the time and energy to read them, let alone copy them.It does not matter who the author of such articles might be, or what assertions and conclusions are put forth, unless the article specifically (a) addresses the property that is under appeal before the Commission, (b) has relevant market data as to sales of homes comparable to the subject which have been properly adjusted for differences, (c) a conclusion of value for the property that is the subject of the appeal, and (d) the author is present to be cross-examined, the article is worthless.It does not constitute evidence of fair market value in the appeal.
The foregoing is provided as a more detailed explanation and clarification as to why as a matter of evidentiary law, the objection to the proffered documents in Exhibit A was sustained and the documents, as a matter of law, had to be excluded.
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.[15]True value in money is defined in terms of value in exchange and not value in use.[16]It is the fair market value of the subject property on the valuation date.[17]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.[18]
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.[19]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.[20] Complainant did not present an opinion of value derived from any of the approved methods for appraisal of property for ad valorem tax purposes.The appraisal of Ms. Johnson developed a conclusion of value relying on the comparable sales approach to value.
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.[21]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.”[22]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[23]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.[24]
An opinion of value without supporting evidence that meets the standard of substantial and persuasive does not meet the required burden of proof for Complainants to prevail.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[25]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[26]A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[27]The opinion of value given by Mr. Vanwinkle based upon his reading of newspaper articles, the general economic downturn and the overall situation with housing values does not constitute an opinion based upon proper elements or a proper foundation.The opinion of value can be given no probative weight.Such an opinion of value leaves the Hearing Officer with nothing but speculation, conjecture and surmise to support the opinion tendered.Such elements cannot provide the basis for a decision on true value in money for real property.
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.[28]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.Adjustments made by the appraiser were appropriate to bring the sale properties in line with the subject.The range of gross adjustments from 14.15% to 22.73% is within the well accepted standard for gross adjustments to generally fall below 25%.The range of net adjustments varied only from a -2.6% to -6.55%.This is a very small percentage of net adjustments and the small range provides credibility to the overall appraisal under the sales comparison approach.
The value of $195,000 calculates to a per square foot of living area value of $90.28.This falls well below the unadjusted per square foot sales prices of the three comparables which ranged from $107.30 to $140.06.The indicated per square foot value provides a check to insure that the concluded value is supported by the general market sales data.Although falling below the lower end of the market range, it is still a strong indicator to substantiate the concluded value.
Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $195,000 for the residential portion of the subject.[29]
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Franklin County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $39,983, residential and agricultural assessment.
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, 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. [30]
The Collector of Franklin 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.
<p class="M
soNormal" style="text-indent: 36.0pt; line-height: 200%; mso-pagination: none%