Robert & Harriet Smith v. Zimmerman (SLCO)

 

ROBERT & HARRIET SMITH,)

)

Complainants,)

)

v.) Appeal Number 09-14457

)

JAKE ZIMMERMAN, ASSESSOR,)

ST. LOUIS COUNTY,MISSOURI,)

)

Respondent.)

 

 

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 $501,400, residential assessed value of $95,270.Complainants appeared by Counsel, Patrick W. Keefe, Ellisville, Missouri.Respondent appeared by Associate County Counselor Paula J. Lemerman.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainants appeal, on the ground of overvaluation and discrimination,[1] the decision of the St. Louis 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.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.Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.A hearing was conducted on February 23, 2011, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.

2.Assessment.The Assessor appraised the property at $520,000, a residential assessment of $98,800.[2]The Board sustained the assessment.[3]

3.Subject Property.The subject property is located at 18 Clerbrook Lane, Ladue, Missouri.The property is identified by locator number 19M441193. The property consists of a 1.56 acre lot.It is improved with a two-story, single-family residence built in 1966.The home has a gross living area of 2,651[4] or 2,760[5].There are nine rooms, five bedrooms, two full and one half bathrooms.There is a full unfinished basement and a two care side entry garage.[6]

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.[7]

4.Complainant’s Evidence.Complainant tendered the following exhibits which were received into evidence:

 

Mr. Emmenegger developed the sales comparison approach to arrive at a conclusion of value of $465,000, an indicated per square foot value of $175.41.He relied upon seven sales and a pending sale to support his opinion of value.A summary of the sales utilized by the appraiser is as follows:

*Sale used in Respondent’s Appraisal; + – Value Concluded by Complainant’s Appraiser

6.Respondent’s Evidence.Respondent tendered the following exhibits which were received into evidence:

 

Mr. Koch developed the sales comparison approach to arrive at a conclusion of value of $580,000, an indicated per square foot value of $210.15.[8]He relied upon three sales to support his opinion of value.A summary of the sales and listing utilized by the appraiser is as follows:

*Sale used in Complainant’s Appraisal; + – Value Concluded by Respondent’s Appraiser

7.Evidence of Increase in Value.In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.[9]Under the Commission rule just cited and Supreme Court decision,[10] the assessed value cannot be increased above $98,800 in this particular appeal.Therefore, evidence presented by the Respondent can only be considered in support of sustaining the fair market value of $520,000, not to increase the value to $580,000.

8.True Value in Money.The true value in money for the subject property as of January 1, 2009, is $501,400, a residential assessed value of $95,270.See, Hearing Officer Finds Value – Conclusion of Value, infra.

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.[11]

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.[12]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[13]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[14]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.The presumption of correct assessment is rebutted when the taxpayer 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.[15]Upon presentation of the Complainant’s evidence[16] the presumption in this appeal disappeared.The case is decided free of the presumption.The Respondent’s evidence[17] likewise rebutted the presumption that the Board had correctly valued Complainants’ property.

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]

 

Both appraisers arrived at their conclusion of value for the property under appeal relying on the Standard for Valuation.[22]

Hearing Officer Finds Value

The case provides the Hearing Officer with adequate sales data from Complainant’s and Respondent’s appraisers to make a determination of the indicated fair market value of Complainant’s property as of January 1, 2009.Each appraisal standing on its own, without the other appraisal being placed in the scales, provided sufficient weight (substantial and persuasive evidence) to tilt the scales in the affirmative for a given opinion of value.Taken as a whole, the Emmenegger and Koch appraisals provide substantial and persuasive evidence upon which the conclusion of value can be made.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]

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.[25]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.[26] Both appraisers developed and concluded value under the sales comparison approach to value.This is generally recognized as the most appropriate and most reliable methodology for appraising single family owner occupied residences.

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.The prefiled written testimony and testimony given under cross and redirect examinations were of assistance to the Hearing Officer in better understanding the appraisal reports and in reaching a conclusion of the fair market value of the Complainants’ property.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[27]The facts and data relied upon by each appraiser were of a type reasonably relied upon by appraisal experts in arriving at a conclusion of value.The facts and data utilized by each appraiser were of sufficient reliability for development of the individual appraisals.

Sale Comparables To Conclude Value

Mr. Emmenegger’s eight comparables are appropriate for consideration in arriving at a conclusion of value.Mr. Koch’s three sales are also appropriate for the present appraisal problem. Therefore, all ten[28] sales comps will be used to find value.

Recalculation of Emmenegger Gross Living Area Adjustments

 

For the sake of consistency, the gross living area for the subject will be adjusted to the County record figure of 2,760 for purposes of recalculating the adjustment for gross living area made by Complainants’ appraiser.Mr. Emmenegger used a $40 per square foot adjustment.Mr. Hackman use $55 per square foot for his adjustment.The Hearing Officer has no basis upon which he can in good faith and sound logic select one rate of adjustment over the other.Nor is the Hearing Officer persuaded that he has any basis to simply average the two amounts and apply a per square foot adjustment of $47.50 to both the Emmenegger and Koch comparables.For purposes of recalculating the adjustment to Complainants’ comparables the $40 per square foot amount will be used.Relying on the foregoing, the change in the adjustments for gross living area for the eight comparables would be as follows:

 

 

No other changes to the adjustments made by Mr. Emmenegger are warranted.This results in the universe of adjusted sales prices for consideration to determine value to be as shown in the following chart:

 

Conclusion of Value

To conclude value, a base weight is given to all 11 adjusted sales prices.Additional weight is given to Mr. Emmenegger’s Comparables 1, 3 and 5; likewise additional weight is given to all three of Mr. Koch’s adjusted sales prices.This provides an indicated value of $501,412, rounded to $501,400.This would equate to a per square foot value of $181.67.

On the per square foot basis, the value of $181.67 lies slightly above both the median and average of the adjusted values.It is within 7% and 3% of those two factors.The $181.67 value falls within .61 cents of the unadjusted median and is a variance of less than 1% of the average unadjusted sale price per square foot.The indicated value on the per square foot basis is 73% of the highest value of the universe of comparables and 47% above the lowest value of the comparable universe.The indicated value places the Complainant’s property in the middle of the market values presented from the sales utilized by the two appraisers.

The Hearing Officer is persuaded that the Emmenegger conclusion of value is in the lower range of what the subject property could have been expected to have sold for on January 1, 2009.That is not to say that the hypothetical buyer and seller would not have concluded a purchase price of $465,000.On the other hand, Mr. Koch’s determination of a value of $580,000 represents the upper limit of what the property would have commanded on the valuation date.It may well have been that a hypothetical buyer would have offered such an amount and the hypothetical seller would have accepted it.

The fair market value of the subject as of January 1, 2009, was $501,400.

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 $95,270.

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 application for review 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.If no Application for Review is filed with the Commission within thirty days of the mailing date set forth in the Certificate of Service, the Collector, 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.

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 27, 2011.

STATE TAX COMMISSION OFMISSOURI

 

 

_____________________________________

W. B. Tichenor

Senior Hearing Officer

w.b.tichenor@stc.mo.gov

 

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 27^thday of April, 2011, to:Patrick Keefe, 122 Clarkson Executive Park, Ellisville, MO 63021, Attorney for Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Jake Zimmerman, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.

 

 

___________________________

Barbara Heller

Legal Coordinator

Barbara.Heller@stc.mo.gov

 

 

 

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax