STATE TAX COMMISSION OF MISSOURI
| ROBERT FISHEL, | ) | |
| ) | ||
| Complainants, | ) | |
| ) | ||
| v. | ) | Appeal No. 15-13632 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Board of Equalization of St. Louis County (BOE) is SET ASIDE. Complainant Robert Fishel (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE. Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) presented substantial and persuasive evidence to establish that the assessed value in money for the subject property for tax years 2015 and 2016 is set at $44,840 residential ($236,000 true market value or TMV).
Complainant appeared pro se.
Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) appeared by Steven Robson, Assistant County Counselor.
Case heard and decided by Senior Hearing Officer Amy S. Westermann.
ISSUE
Complainant appealed on the ground of overvaluation. Respondent initially set the TMV of the subject property, as residential property, at $294,900. The BOE lowered Respondent’s valuation to $240,000. The Commission takes this appeal to determine the TMV of the subject property on January 1, 2015.
The Senior 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 State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on May 12, 2016, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 18J120236. It is further identified as 7320 Lindell, University City, St. Louis County, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of a 2,500 square foot, two-family, two-story home situated near Washington University. (Exhibit I; Exhibit 2) The subject property includes four bedrooms, two bathrooms, an unfinished basement, a two-car detached garage, and two screened porches. (Exhibit 1)
- Assessment. Respondent set a true market value (TMV) on the subject property at $294,900 residential, as of January 1, 2015.
- Board of Equalization. The BOE lowered Respondent’s TMV of the subject property to $240,000.
- Complainant’s Evidence. Complainant testified in his own behalf. Complainant testified that he had purchased the subject property in October 1987 for approximately $91,000. Complainant testified that the subject property was encumbered by a mortgage, but Complainant declined to state the amount owed on the mortgage. Complainant testified that the subject property had not been listed for sale or appraised within the three years preceding the Evidentiary Hearing and that he had not received any offers to purchase the subject property. Complainant testified that he had performed maintenance but no improvements to the subject property between January 2013 and January 2015. Complainant testified that he rented the subject property to students of Washington University. Complainant testified that Respondent’s initial valuation of the subject property was the result of comparing sale prices of single-family homes, which resulted in an erroneous valuation of the subject property. Complainant testified that he questioned Respondent’s valuation methods. Complainant opined that the TMV of the subject property was $185,000 as of January 1, 2015.
Complainant offered as evidence several photographs of the exterior and the interior of the subject property (Exhibit A); the Change of Assessment Notice that Respondent sent to Complainant (Exhibit B); a printed copy of the data related to three of the Assessor’s Comparable Sales that were listed on the Change of Assessment Notice (Exhibit C); photographs, data, and descriptions of the Assessor’s Comparable Sales that were listed on the Change of Assessment Notice (Exhibits D, E, F, G, and H); a copy of the St. Louis County Parcel Map, which had been focused on the general area of the subject property and showing the general area of several comparable multi-family properties (Exhibit I); and a list of multi-family property sales between January 2012 through March 2015 in the general area of (Exhibit K).[1]
Respondent objected to Exhibits C through H on the ground that they were not relevant to establishing Complainant’s opinion of the subject property’s value. Complainant counter argued that the exhibits were relevant to show that Respondent’s valuation of the subject property was flawed because Respondent had compared the subject property, a multi-family home, with single-family homes when reassessing the valuation. The Senior Hearing Officer overruled Respondent’s objections and received Exhibits C through H into the record to be given the weight deemed necessary in light of all of the evidence. Respondent objected to Exhibit K on the ground that it lacked foundation because the individual who prepared it was not present to testify or to be cross-examined. The Senior Hearing Officer sustained the objection and excluded Exhibit K. Respondent did not object to Complainant’s other evidence, which was received into the record.
- Respondent’s Evidence. Respondent offered as evidence the testimony of State Certified Residential Real Estate Appraiser Nancy McGrath (Appraiser) along with the Appraiser’s report (Exhibit 1). The Appraiser opined that the TMV of the subject property as of January 1, 2015, was $236,000. The Appraiser testified that she utilized the sales comparison approach to arrive at her opinion of value. The Appraiser testified that she had chosen four comparables because they were the most recent sales of two-family homes similar to the admittedly unique nature and location of the subject property. Complainant did not object to Respondent’s evidence, which was received into the record.
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, including the application of any abatement. The Senior 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. 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 true value in money 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.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, 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.
During the hearing, the Senior Hearing Officer inquired of Complainant and of the Appraiser.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation 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.
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. 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.” Westwood Partnership, 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. W.D. 1991).
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 Commission “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).
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE. In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways. 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 it also would be applicable to the Respondent. The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer assisted method. The BOE’s valuation is assumed to be an independent valuation.
In the present appeal, the BOE lowered the initial valuation of Respondent, but Respondent is not seeking to sustain the original assessment; therefore, the computer-assisted presumption is not applicable in the present appeal.
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. 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).
Discussion
Although Complainant presented evidence to support his opinion of the subject property’s TMV, that evidence is neither substantial nor persuasive because, if relied upon, the fact finder would be required to resort to speculation to conclude the TMV of the subject property on January 1, 2015, should be $185,000.
First, Complainant’s evidence was not substantial to support his opinion as to value in this appeal before the Commission. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Complainant’s opinion that the subject property had a value of $185,000 was not supported by any of the three recognized approaches to value. Complainant testified that no appraisal of the subject property had been performed within the three years prior to the evidentiary hearing. Complainant testified that he was not an appraiser or expert in the appraisal of residential property. Complainant presented photographs and data for several comparable properties relied upon by Respondent to make his initial valuation of the subject property, Exhibits C through H. Complainant argued that those comparables were invalid because the subject property is a two-family home while the comparables were single-family homes. These exhibits were not relevant in the instant appeal because it is presumed that the BOE considered Complainant’s argument when Complainant appealed to the BOE given that the BOE thereafter substantially lowered Respondent’s initial valuation of the subject property.
Second, Complainant’s evidence was not persuasive to support his opinion as to value. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id. Complainant argued that the valuation of the subject property should be reduced from the BOE’s determination of value because, in part, it was difficult to find comparables for the subject property and because the sales Complainant had found indicated lower sale prices. Complainant presented Exhibit I, which consisted of a parcel map that included some basic data concerning sales of two-family homes within one mile of the subject property but outside of the subject property’s immediate neighborhood and farther away from Washington University than the subject neighborhood. Exhibit K indicated that Complainant’s comparables were located in University City; contained between 2,150 square feet and 2,760 square feet; and had sale prices ranging from $110,099 and $130,000. Complainant testified that the sales occurred between January 2012 and March 2015. However, this evidence did not include any market based adjustments for specific similarities and differences between the comparables and the subject property to persuade the trier of fact that the subject property should be valued at $185,000.
On the contrary, Respondent presented substantial and persuasive evidence to rebut the presumption of correct valuation by the BOE. In arriving at an opinion of value, the Appraiser considered all three approaches to value the subject property: the cost approach, the income approach, and the sales comparison approach. The Appraiser ultimately utilized the sales comparison approach because the other two approaches were inapplicable. The Appraiser analyzed four comparable sales from the nearest competing neighborhoods, some in University City and some in nearby Richmond Heights. The sale prices of the comparables ranged from $230,000 to $259,500. The comparables contained between 2,270 square feet and 2,700 square feet. The subject property contains 2,500 square feet. The comparables had been built between 1927 and 1955. The subject property had been built in 1930. All of the comparables were two-family homes. The subject property is a two-family home. Three of the four comparables were of the same condition as the subject property. One of the comparables had been renovated following its sale in January 2014, so the Appraiser applied a $20,000 downward adjustment to that comparable. The Appraiser then made market-based adjustments to the comparables for square footage, garages, number of bathrooms, and porches. (Exhibit 1) The adjusted sale prices of the comparables ranged from $224,000 to $252,100. Placing equal weight on all four of the comparables, the Appraiser opined that the subject property had a TMV of $236,000.
From this substantial and persuasive evidence, it is reasonable to find and conclude that Respondent rebutted the presumption of correct valuation by the BOE and that the TMV of the subject property on January 1, 2015, was $236,000.
ORDER
The true market valuation for the subject property as determined by the BOE is SET ASIDE.
The assessed value for the subject property for tax years 2015 and 2016 is set at $44,840 residential ($236,000 TMV).
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, 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
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 August 2, 2016.
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 2nd day of August, 2016, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator
[1] Complainant offered Exhibit J but then immediately withdrew it.