State Tax Commission of Missouri
ROBERT & DANA McELFRESH,)
)
Complainants,)
)
v.)Appeal Number 07-57037
)
BILL OVERSCHMIDT, ASSESSOR,)
FRANKLIN COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On April 21, 2008, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) affirming the assessment by the Franklin County Board of Equalization.
Complainants timely filed an Application for Review of the Decision.
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.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 lay witnesses and give the testimony 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 experts or of 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.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).
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.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).
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 her discretion as the trier of fact and concluder of law in this appeal.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.2d403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
Complainants’ letter setting forth the Application for Review was essentially an arguing the conclusions reached by the Hearing Officer.Complainants failed to set forth any legal claim or basis as a ground to find the Hearing Officer had abused her discretion or acted in an arbitrary or capricious manner.Complainants failed to meet their burden of proof at the evidentiary hearing.
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.
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 date of the mailing of this Order.
The Collector of Franklin County shall continue to hold the disputed taxes pending an Order from the Commission as to whether a Petition for Judicial Review of the Order has been filed.
SO ORDERED June 18, 2008.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
Charles Nordwald, Commissioner
DECISION AND ORDER
HOLDING
Decision of the Franklin County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED. Hearing Officer finds true value in money for the subject property for tax years 2007 and 2008 to be $113,600, residential, assessed value of $21,584.
Complainants Robert and Dana McElfresh appeared in person.
Respondent appeared in person and by Counsel, Mark Vincent.
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
SUMMARY
Complainants appeal, on the ground of overvaluation, the decision of the Franklin County Board of Equalization, which increased the valuation of the subject property.The Assessor determined an appraised value of $113,600, assessed value of $21,584, as residential property.The Board of Equalization sustained the valuation.Complainants proposed a value of $79,000, assessed value of $15,010.A hearing was conducted on April 11, 2008, at the Assessor’s Conference Room,Union,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainants’ Evidence
Complainant Robert McElfresh testified.
Exhibit A:Summary of Argument for the Appeal
Exhibit B:Photographs of the Billboard as seen from the subject property.
Exhibit C:Collector’s Receipt for 2006 Real Estate of property at 925 Westridge with an assessed valuation of $26,011.
Exhibit D:Collector’s Receipt for 2007 Real Estate of property at 925 Westridge with an assessed valuation of $27,424.
Exhibit E:Photograph of a house.
Exhibit F:Collector’s Receipt for 2006 Real Estate of subject property with an assessed valuation of $17,566.
Exhibit G:Collector’s Receipt for 2007 Real Estate of subject property with an assessed valuation of $21,584.
Respondent’s Evidence
The following exhibits were received into evidence on behalf of the Respondent.
Exhibit 1 – Appraisal of Subject Property
All Exhibits were received into evidence.
State Certified Residential Appraiser, Lori Ruby, testified.
FINDINGS OF FACT
1.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.The subject property is located at 902 Westridge, Pacific,Missouri.The property is identified by parcel number 19-2-09.0-1-000-037.000.The site is approximately .260 acres.The improvement is a hard board lap-sided single family structure of average quality construction built in 1972.It appears to be in normal condition.The improvement is 1,508 square feet of above ground living space with an unfinished basement and a one-car attached garage.The residence has seven rooms, including two bedrooms and two baths.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board.
5.The Respondent’s appraiser developed two approaches and reconciled those approaches to determine the market value of the subject property.
6.Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.
CONCLUSIONS OF LAW
Jurisdiction
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 CountyBoardof 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 that the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.
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.
In Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003), the court of appeals described the taxpayer’s burden as follows:
Taxpayers were the moving parties seeking affirmative relief, and as such, they bore the burden of proving the vital elements of their case, i.e., the assessments were “unlawful, unfair, improper, arbitrary or capricious.” Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo.1959); Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161[8] (Mo. App. 2003); 84 C.J.S. Taxation §§710, 726. This is true regardless of the existence or non-existence of the challenged presumption. As the Supreme Court of Missouri explained, “even were we to hold that it [the presumption] has been overcome, the burden of proof on the facts and inferences would still remain on petitioner, for it is the moving party seeking affirmative relief.”Cupples, 329 S.W.2d at 702[16]. See also 84 C.J.S. Taxation §710, which states: “Even where there is no presumption in favor of the assessor’s ruling, if no evidence is offered in support of the complaint, the reviewing board is justified in fixing the valuation complained of in the amount assessed by the assessor.”
To prevail, Taxpayers had to “present an opinion of market value and then … present substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on tax day.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002).
Substantial and Persuasive Evidence
Substantial evidence is that evidence which, if true, has probative force upon the issues, i.e., evidence favoring facts which are such that reasonable men may differ as to whether it established them, and from which the Commission can reasonably decide an appeal on the factual issues.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).
DISCUSSION
Complainant has failed to present substantial and persuasive evidence tending to demonstrate that his property would sell for no more than $79,000 on January 1, 2007.Likewise, Complainant failed to present any evidence tending to demonstrate that the subject property would have sold for less than $113,600 on the tax day.Values are based upon market conditions.
Complainant testified that he purchased the property in 1972 for $79,000.Each year the Complainant received notice that his property was valued at $79,000 until 2007 when he was notified that his valuation increased to $113,600.Complainant testified that his property has a limited market appeal since a billboard is on the property next to the subject property.He testified that two properties across the street have assessed values of $26,000 and $27,000 (true values of $137,000 and $142,000).
Missouricourts 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. Div. 2 1974).
The Respondent’s appraiser, a State Certified Residential Appraiser, develop two approaches to value: cost and sales comparison.The appraiser first developed the cost approach.For the cost approach, the appraiser first used comparable land sales to determine the market value of the site.The appraiser then determined the cost of the improvements using Marshall and Swift’s Residential Cost Handbook.Depreciation was calculated using the age-life method.The resulting fair market value of the subject property was $135,060.
The appraiser then developed the sales comparison approach.The appraiser located three sales of properties comparable to the subject’s property.Two of the comparables were on the same street as the subject and within ½ block of the subject.The other property, Comparable 2, is approximately three miles from the subject property.Comparable 2 was selected as it, like the subject property, backs up to Interstate 44.The properties closest to the subject were 500 square feet smaller than the subject and had fewer rooms.The appraiser adjusted for size, basement finish, baths, and garage and porch area.The three properties sold for $125,000 to $128,500.The appraiser made gross adjustments up to 22.8% resulting in adjusted prices of $134,500 to $136,200.
The appraiser reconciled the two approaches.The appraiser placed the least weight on the cost approach.The Sales Comparison approach was given the most consideration as the comparable sales reflected what the open market would bear for a similar property.The appraiser opined that the fair market value of the subject property, as of January 1, 2007, was $134,500.This value was used to support the value as sustained by the Board of Equalization.
Although the increase in the valuation is significant, the Hearing Officer is required to find the true market value of the property and affirm decisions by the Board of Equalization if a Complainant fails to present substantial and persuasive evidence.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization forFranklinCountyfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $21,584.
A party 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.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.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.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 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.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 21, 2008.
STATE TAX COMMISSION OFMISSOURI
Maureen Monaghan
Hearing Officer