State Tax Commission of Missouri
RICHARD & LISA HARNACKER,)
)
Complainants)
)
v.)Appeal Number 09-10467
)
MICHAEL BROOKS,)
ACTING ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On July 15, 2010, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) setting aside the assessment by the St. Louis County Board of Equalization and setting true value in money for 2009 and 2010 at $302,000, residential assessed value of $57,380.
Complainants timely filed their Application for Review of the Decision.Respondent timely filed his Response.
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 witness or the owner and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of expertsor an owner who testify on the issue of reasonable value, but may believe all or none of the expert’sor owner’s 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
Exhibits Not Tendered at Hearing
Complainants filed their Application for Review with seven exhibits.Exhibit 1 was a copy of the Decision.Exhibits 2 through 7 were not offered at the evidentiary hearing.[4]By Order issued April 21, 2010, the appeal was set for evidentiary hearing.That Order also instructed both parties on the procedure regarding any exhibits to be offered at the evidentiary hearing.Specifically the Order stated:
Exhibits at Hearing
Each party (the taxpayer and St. Louis County) must bring at least two (2) copies of any documents which will be introduced into evidence at the evidentiary hearing that will support the party’s opinion of value.One copy is for the Commission’s record; the other copy is for the opposing party.Exhibits filed with and retained by the Commission should be no larger than 8½ by 11 inches, although for purposes of demonstration at the hearing, the parties may use larger copies of the submitted exhibits.Exhibits which consist of photographs shall be affixed to or copied on 8½ by 11 inch paper, and each photograph shall be identified in a brief statement or phrase on the face of the exhibit.More than one photograph may be placed on one page, if space so permits to identify each photograph.If you are presenting an appraisal report as evidence, the appraiser MUST be present to testify and be cross-examined.If the appraiser is not present at the Evidentiary Hearing, the appraisal report cannot be received into evidence.”Emphasis in original.
At the opening of the evidentiary hearing, the Hearing Officer inquired of Mr. Harnacker relative to any evidence on the issue of valuation.Mr. Harnacker referenced having “presented evidence in the past” and informed the Hearing Officer he just wanted to go through the appraisal being tendered on behalf of Respondent.The Hearing Officer specifically asked “Do you have any evidence regarding the valuation of your property?”To which the taxpayer responded, “No, I did not obtain an appraisal.”Mr. Harnacker then stated, “I’ve submitted two items prior to this, and really, I just need to go through his appraisal.”[5]
Mr. Harnacker did not comply with the Commission Order and present to the Hearing Officer at the evidentiary hearing two copies of the documents identified as Exhibits 2 through 7 with the Application for Review.The Complainant references some documents he provided on March 4th at his prehearing conference on the appeal.[6]However, any such documents were provided to the appraiser for the county who met with the taxpayer.The Order setting the Prehearing Conference stated; “Information and documentation on the issue of fair market value of your property should be presented to the representative of the Assessor’s Office at the Prehearing Conference.The Hearing Officer will not be hearing testimony or taking evidence of value at the Prehearing Conference.”[7] Emphasis in original.
Documents presented at the Prehearing Conference to the Assessor’s representative are not part of the evidentiary record in an appeal.Documents do not become exhibits in the evidentiary record until tendered at the evidentiary hearing.
The documents marked by Mr. Harnacker as Exhibits 2 through 7 were not offered as exhibits at the evidentiary hearing.They are not part of the evidentiary record.
Grounds Presented in Application for Review
Complainants’ Application for Review is based upon essentially two grounds.First, that Complainants were “… denied due process as the Hearing Officer, Maureen Monaghan, did not allow me to submit evidence in support of my valuation.”The second ground raises questions relative to the appraisal submitted by Respondent’s appraiser, Gerald D. Keeven, Jr.
Denial of Due Process
The first ground asserted – denial of due process has been addressed in substantial part above. Mr. Harnacker’s asserts in the Application for Review that: “Numerous sales data was presented and it was denied by the Hearing Officer.In fact, Ms. Monaghan states that no evidence was presented at the hearing and this is simply false[8].”This is simply not borne out by the evidentiary record.At no time during the evidentiary hearing did Mr. Harnacker seek to introduce any exhibits into the record.[9]Each of the individual claims made in the Application for Review with reference to the documents marked as “exhibits” 3 through 7 and Complainants being denied due process are unfounded.
The Hearing Officer did not err in her Finding of Fact 4 – “Complainant presented no evidence at the hearing.”The only evidence presented was the appraisal report and testimony of Respondent’s appraiser – Gerald Keeven, Jr.Complainant failed to offer any exhibits to support his opinion of value of $276,000.
Complainant was not denied due process.He elected to not offer any exhibits at the evidentiary hearing.There was no error on the part of the Hearing Officer.
Challenges to the Keeven Appraisal
The second ground presented by Mr. Harnacker in his Application for Review relates to certain challenges to the Respondent’s appraisal.The challenges are all based upon documents which Mr. Harnacker never offered at the evidentiary hearing.Therefore, there was no error on the part of the Hearing Officer relative to any of the Complainant’s assertions as to alleged defects in the Keeven appraisal.There is no based in law or fact from the evidentiary record to overturn the Findings of Fact[10] and Conclusions of Law[11] made by the Hearing Officer with regard to the appraisal and the issue of valuation in this appeal.
Conclusion
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 her discretion as the trier of fact and concluder of law in this appeal.[12]The Hearing Officer did not err in her determinations as challenged by Complainants.
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 St. Louis 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 November 3, 2010.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jeff W. Schaeperkoetter, Commissioner
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $302,000, residential assessed value of $57,380.Complainant Richard Harnacker appeared pro se.Respondent appeared by Associate County Counselor Paula J. Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
The Assessor determined a valuation of the property of $311,600; $59,205 assessed valuation as residential.Complainant appealed to the Board of Equalization who sustained the valuation.The Complainant appealed to the State Tax Commission, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
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.A hearing was conducted on July 1, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property at $311,600, residential assessed value of $59,205.The Board of Equalization sustained that assessment.
3.Subject Property.The subject property is located at 717 Highland Glen Dr, Ballwin, Missouri.The property is identified by locator number 25S620913.The property consists of a 13,494 square foot lot improved by a 2 story brick and vinyl sided, single-family structure of average quality construction.The house was built in 1989 and appears to be in average condition.The residence has eight rooms, with four bedrooms, two full baths, one half bath and contains 2,544 square feet of living area.There is a full basement, with 924 square feet of finished area and an attached two-car garage.
4.Complainant’s Evidence.Complainant presented no evidence at the hearing.
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[13]
5.Respondent’s Evidence.Respondent presented the appraisal report[14] and testimony of Gerald Keeven, Jr., Missouri Certified Residential Real Estate appraiser, to establish the fair market value for the subject as of January 1, 2009, to be $302,000.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The three properties were located within .19 miles of the subject.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, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.The appraiser properly adjusted the comparable for differences existing between the subject and the comparable to provide an indicated value for the subject.Adjustments were made for the time of sale and condition.The certified appraiser made adjustments after completing a paired sales analysis on condition and reviewing the market prices for that subdivision.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 subject, as of January 1, 2009, to be $302,000.
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.[15]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[16] 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.[17]The taxpayer presented no evidence and therefore failed to meet his burden of proof of substantial and persuasive evidence.Respondent, on the other hand, presented substantial and persuasive evidence that rebutted the presumption and established the true value in money for the property under appeal as of January 1, 2009.
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.[18]True value in money is defined in terms of value in exchange and not value in use.[19]It is the fair market value of the subject property on the valuation date.[20]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.[21]
Respondent’s appraiser made a determination of value under the Standard for Valuation.[22]
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.[23]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.[24]Complainant did not present an opinion of value derived from any accepted appraisal methodology or upon any evidence.Respondent’s appraiser concluded his opinion of value based upon the sales comparison approach.
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, 2009.[25]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.”[26]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[27]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.[28]
Since the Complainant failed to present any evidence, he failed to rebut the presumption and failed to meet his burden of proof.If the hearing concluded after the Complainant announced that he would not be presenting evidence, the valuation would remain at $311,600.However, the Assessor determined that they wished to present their appraisal evidence which established a value lower than originally established.
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.[29]Exhibit 1 and the testimony of Respondent’s expert presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $302,000 for the subject.Mr. Keeven developed his 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.The adjustments made the Mr. Keeven were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the various differences between the subject and each comparable.The adjustments were made using paired sales analysis to adjust for condition.The comparable homes were of similar age as the subject but had been updated.The subject home had not had updates or typical maintenance such as replacement of floor coverings, etc.The appraiser testified that he reviewed market sales in the area to review the market price differences for condition issues.The appraiser also made an adjustment for time of sale.The appraiser reviewed market sales to determine that a negative 3% per annum adjustment was warranted for that particular market area.
ORDER
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 SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $57,380.
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, 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]
Disputed Taxes
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 15, 2010.
STATE TAX COMMISSION OFMISSOURI
Maureen Monaghan
Hearing Officer
[1] 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).
[2] 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).
[3] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[11] DECISION: Presumptions in Appeals, pp. 3 – 4; Complainant Failed To Meet Burden of Proof, pp. 5 – 6; Respondent Proves Value, pp. 6 – 7
[12] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[16] 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).
[17] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[18] 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).
[19] 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).
[21] 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.
[23] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
[24] 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).
[26] 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).