State Tax Commission of Missouri
ROBERT M. & CYNTHIA A. LYNCH,)
)
Complainants,)
)
v.)Appeal Number 07-10037
)
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On September 12, 2008, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) setting aside the assessments by the St. Louis County Board of Equalization and set the assessed value of the Complainants’ property for the 2007 and 2008 assessment cycle at $204,611.
Respondent timely filed his Application for Review of the Decision.Complainants timely filed their Response.
CONCLUSIONS OF LAW
AND
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.[1]
Respondent’s Application
Grounds for Review
Respondent set forth three grounds in his Application for Review.The grounds were stated as follows:
1. The Hearing Officer erred in holding that the failure to notify the property owners that an inspection is required prior to an increase in their valuation and their rights regarding physical inspections, the taxpayer is deprived of due process of law.
2. Section 137.115 unconstitutionally invades the authority ofSt. LouisCounty to conduct assessment of real property inSt. LouisCounty in a manner determined bySt. LouisCounty; as such the Hearing Officer’s decision that Complainants had a right under the statute to notice of the opportunity to request an interior inspection was unlawful.
3. The Hearing Officer’s decision to void the 2007 assessment was unlawful, arbitrary and capricious because the decision failed to correct the assessment to one reflecting the true value in money of the Lynches’ property.
No Challenge of Conclusions
Respondent did not challenge the conclusion of the Hearing Officer that Respondent failed to notify Complainants that a physical inspection was required or their rights relating to the physical inspection.[2]Therefore, any challenge to this conclusion is deemed waived and stands admitted.
Respondent did not challenge the conclusion of the Hearing Officer that Respondent failed to meet the burden of compliance with the requirements of Section 137.115, RSMo.[3]
Therefore, any challenge to this conclusion is deemed waived and stands admitted.
Respondent’s Arguments Previously Addressed
Respondent’s Arguments Previously Decided
The three arguments present by Respondent, are only slight variations of the arguments that Respondent made in Baldridge, et al v. Muehlheausler.[4]The positions advanced were not deemed persuasive in Baldridge.They have gained no persuasiveness in their recast language.Respondent has presented no new theory or more persuasive argument to justify the Commission overturning its prior decision.
It will serve no purpose to reiterate the Commission’s previous holding.The reasoning and holding in Baldridge are controlling in this instance.The Commission’s ORDER AFFIRMING HEARING OFFICER DECISION UPON APPLICATION FOR REVIEW in the Baldridge case is incorporated by reference, as if fully set out herein.Respondent’s grounds for review are not well taken.
Notice Due Process
Specifically as to Respondent’s first argument, the reasoning of Complainant’s Response has merit.Irrespective of whether the notice requirement of Section 137.115.11 is a due process right of the property, as found by the Commission, or it is a statutory duty of the assessor, or both, no such notice was given.Section 137.115.11 was not followed.It was violated.Respondent has so admitted.
Constitutionality of Sub-Sections 137.115.11 & .12
The Commission has no authority to pass on the constitutionality of a statute.Therefore, no purpose will be served in addressing the Respondent’s arguments against the constitutionality of Sub-Sections 11 and 12 of 137.115.The responsibility of the Hearing Officer was to apply the statute.There was no duty upon the Hearing Officer to hold the statute to be unconstitutional.Indeed, she possessed no such jurisdiction.The Hearing Officer did not err in applying the statute as enacted by the General Assembly.
Voiding of 2007 Assessment
Section 138.060 provides in relevant part, “…in the event the assessor fails to provide sufficient evidence to establish that the physical inspection was performed in accordance with section 137.115, RSMo, the property owner shall prevail on the appeal as a matter of law.”It was incumbent upon the Hearing Officer once it was determined the dictates of subsections 11 and 12 of section 137.115 has not been followed to set the value asserted by Complainants.The language of the statute needs no interpretation.It is clear on its face, applying the plain and ordinary meaning to the phrase “the property owner shall prevail on the appeal as a matter of law.”
The Complainants set forth the owner’s opinion of fair market value to be $1,076,900, assessed value of $204,611.[5]The Hearing Officer properly set the assessed value to be that asserted by the property owners.The Hearing Officer was required to correct the assessment consistent with the legislative enactment of 138.060.This is what she did.Respondent’s point is not well taken.
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.
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 (30) 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 5, 2008.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
Charles Nordwald, Commissioner
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization is SET ASIDE.The Commission finds the prior assessment value must be applied for the 2007 – 08 assessment cycle.
Complainant Robert Lynch, attorney at law, appears in person.
Respondent appears by counsel, Paula Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
A hearing was conducted on August 7, 2008, at theSt. LouisCountyAdministrationBuilding.
ISSUE
The Commission takes the appeal to determine the true value in money to be set for the 2007 – 08 assessment cycle under the provisions of Sections 137.115 and 138.060, RSMo.
FINDINGS OF FACT
The parties stipulated to the following facts:
1.The subject property is located at206 Topton Way,St. LouisMissouri.
2.The parcel or locator number is 18K240740.
3.The property was inspected on October 20, 2006.
4.A written notice of the inspection was left at the property.
5.The notice included that “St. Louis Co. ordinances allow a homeowner tochoose the type or types of home/property inspection he or she wishes to have.”
6.The notice stated that the purpose of the inspection was for six-year review.
7.A written Change of Assessment Notice dated March 15, 2007 was sent to the Complainant.
8.A written Change of Assessment Notice dated May 30, 2007 was sent to the Complainant.
The parties stipulated to the admission of the following exhibits:
Exhibit A:Change of Assessment Notice dated March 15, 2007
Exhibit B:Property Record Card
Exhibit C:Inspection Notification dated October 20, 2006
Exhibit D:Change of Assessment Notice dated May 30, 2007
Exhibit 1:Letter to Mr. Gamble from Randy Turley, State Tax Commission, dated July 13, 2007
The Respondent offered Exhibit 2: Assessment Systems Informal Conference documenting a meeting between the parties on April 20, 2007.The Complainant initially objected to the document on the grounds of relevancy.The Respondent stated that the document was being offered to show contact with the Complainant after the Written Change of Assessment Notice dated March 15, 2007.Complainant had no objection if the Exhibit was only considered for that purpose. Hearing Officer admitted Exhibit 2 for the purpose of evidence as to contact between the parties after March 15, 2007.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.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.
Grounds for Appeal
The property under appeal is a subclass (1) property (residential) under Section 4(b), Article X, Mo. Constitution.The Complainants stated on the Complaint for Review of Assessment that the Assessor failed to comply with the physical inspection requirement of Sections 137.115.10 and 137.115.11 RSMo.The Complainant argues that (1) no physical inspection was made prior to the increase in assessment and (2) no notice of a physical inspection and an owner’s rights relating to the inspection was received by the Complainants.
Section 137.115.10, RSMo – Requirement of Physical Inspection
Section 137.115.10, RSMo, 2006 Cum. Supp. (A.L. 2002 H.B. 1150, et al) establishes that: “Before the assessor may increase the assessed valuation of any parcel of subclass (1) real property by more than fifteen percent since the last assessment, excluding increases due to new construction or improvements, the assessor shall conduct a physical inspection of such property.”
Complainant argues that an inspection as required by Section 137.115, RSMo must occur during the period an assessor is permitted to value property: January 1 of the odd year to May 15 of the odd year.(Sections 137.080 and 137.335, RSMo – section 137.335 was amended by Senate Bill 711 during the 2008 legislative session.)
St. Louis County Assessor’s Office, in complying with their assessment plan, inspects every residential parcel in the county at least one time in a six year period.This inspection is referred to as the “six-year review” inspection.St. LouisCountyconducted an exterior inspection of the property on October 20, 2006 as part of the six-year review.An inspection on October 20, 2006, is within a relevant time period of the valuation date of January 1, 2007.Further,St. LouisCountyis the largest assessment jurisdiction in the State ofMissouri.Over a quarter of a million residential parcels required inspection before the 2007 assessment could be completed.The purpose of Section 137.115, RSMo is to insure that the taxpayer’s property is inspected before an increase of over 15% may be finalized.An inspection on October 20, 2006, fulfills the inspection purpose of the statute.
Section 137.115.11, RSMo – Notice Regarding Physical Inspection
Section 137.115.11, RSMo, 2006 Cum. Supp. (A.L. 2002 H.B. 1150, et al) requires in those instances where a physical inspection is required under 137.115.10 (more than 15% increase in residential assessed value since last assessment), the assessor is required to (1) notify the property owner in writing of the fact of the physical inspection being required, and (2) provide the owner with clear written notice of the owner’s rights relating to the physical inspection.
Complainant received a written notice of Change of Assessment dated March 15, 2007.The notice set forth that the prior appraised value was $1,076,900 and the current appraised value is $1,490,100.The increase in the appraised value is 38.37%, thereby triggering the inspection and notice requirements in Section 137.115 RSMo. Complainant argues that the notice should state that the increase is over 15%Respondent is in compliance with the notice by providing the prior and current appraised value and does not have to set forth the percentage of increase in the valuation.
Although the Change of Assessment dated March 15, 2007, provided Complainants notice that their appraised value increased by more than 15%, it did not notify the Complainants that a physical inspection was required or their rights relating to the physical inspection.
Respondent argues that when they inspected the property on October 20, 2006, they provided the Complainants with a written notice that the inspection occurred and the notice included that the homeowner may request an additional exterior and/or interior property inspection.
The Respondent’s notice did state that that an additional inspection may be requested. However, a taxpayer receiving notice that an inspection occurred for the purpose of a six year review and a taxpayer receiving notice that an inspection is necessary for an increase in their valuation over 15% would have different considerations when determining if they would request an additional exterior and/or interior inspection.By failing to notify the property owners that an inspection is required prior to an increase in their valuation and their rights regarding physical inspections, the taxpayer is deprived of due process.
Section 138.060, RSMo – Assessor’s Burden of Proof on Physical Inspection
Section 138.060, RSMo, 2006 Cum. Supp. (A.L. 2002 H.B. 1150, et al) provides in relevant part, that in St. Louis County, “… in the event a physical inspection of the subject property is required by subsection 10 of Section 137.115, RSMo, the assessor shall have the burden to establish the manner in which the physical inspection was performed and shall have the burden to prove that the physical inspection was performed in accordance with Section 137.115, RSMo.….”
The Respondent failed to meet their burden that they complied with the requirements of Section 137.115 RSMo.
The assessed valuation by the Board of Equalization forSt. LouisCountyfor subject property is SET ASIDE.The assessed value for the property for tax years 2007 and 2008 is $204,611.
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.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 and an order to the Collector to release and disburse the impounded taxes.§139.031.3, RSMo.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 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.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 September 12, 2008.
STATE TAX COMMISSION OFMISSOURI
Maureen Monaghan
Hearing Officer