State Tax Commission of Missouri
ROGER & DIANE KELLY,)
v.) Appeal Number 08-79005
LISA POPE, ASSESSOR,)
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On November 21, 2008, Senior Hearing Officer Luann Johnson entered her Decision and Order (Decision) affirming the assessment by the Platte County Board of Equalization.
Complainants timely filed their Application for Review of the Decision.Respondent timely filed her Response.
CONCLUSIONS OF LAW
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
Complainants’ letter setting forth the Application for Review addressed a number of disagreements and contentions with the appraisal report submitted by Respondent at the evidentiary hearing.However, the single challenge to the Decision was, in effect, that the Hearing Officer erred in receiving into evidence Exhibit 1 – Appraisal Report of Allen Hickman.The Commission finds no basis to conclude as a matter of law that the receiving into evidence of Exhibit 1 was in error.No basis for exclusion of Exhibit 1 was presented at hearing.The Hearing Officer acted properly within the exercise of her discretion in receiving the Hickman appraisal report into evidence.
Notwithstanding what the Hickman appraisal report may or may not have established, the controlling fact is Complainants filed to prove either the fair market value of the subject property as of January 1, 2007, or discrimination.The Hearing Officer correctly so found in the Decision. Failure to meet their burden of proof on either of the two issues raise by the Complaint for Review of Assessment required the Hearing Officer, as a matter of law, to affirm the assessment as made by the Board.
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 Platte 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 February 11, 2009.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
Charles Nordwald, Commissioner
DECISION AND ORDER
Decision of the Platte County Board of Equalization setting value at $235,000 (assessed value $44,650) is AFFIRMED.Hearing Officer finds Complainants did not rebut the presumption of correct assessment by the Board. True value in money for the subject property for tax year 2008 is set at $235,000, residential assessed value of $44,650.
Complainant appeared pro se.
Respondent appeared by pro se.
Case heard and decided by Senior Hearing Officer Luann Johnson.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2008.Complainants also assert that they have been discriminated against inasmuch as they are being assessed at a higher percentage of market value than their neighbors.
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Platte County Board of Equalization, which set an appraised value of $235,000 (assessed value of $44,650, as residential property).Complainant proposed a value of $207,000 (assessed value of $39,330).A hearing was conducted on October 28, 2008, at thePlatteCountyAdministrationBuilding,Platte City,Missouri.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Exhibit A, 1997 Appraisal Report
Exhibit B, Printout of Assessor’s Records for15950 Kevin Circle
Exhibit C, Printout ofAssessor’s Records for7660 Buckwood Drive
Exhibit D, Printout of Assessor’s Records for7625 Buckwood Drive
Exhibit E, Miscellaneous documents
Exhibit 1, Appraisal Report for Subject Property
Respondent placed into evidence the testimony of Mr. Allen Hickman, appraiser forPlatteCounty.The appraiser testified as to his appraisal of the subject property.The Appraisal Report, Exhibit 1, of Mr.Hickman was received into evidence.Mr. Hickman arrived at an opinion of value for the subject property of $235,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of three properties deemed comparable to the subject property.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Platte County Board of Equalization.
2.The subject property is located at15955 Alan Circle,Smithville,Missouri.The property is identified by parcel number 12-7.0-25-000-000-013-000.The property consists of a1.97 acre lot improved by a one and one-half-story, single-family structure of average quality construction.The house was built in 1985 and appears to be in good condition.The residence has a total of 8 rooms, which includes 4 bedrooms, 3 baths, and contains 2,600 square feet of living area.There is a full unfinished basement and an attached two-car garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2008.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2007, to be $207,000, as proposed.Complainant presented evidence demonstrating that three properties in his immediate subdivision were valued lower than the subject property.Comparable 1 was a 2366 square foot home at15950 Kevin Circle,Smithville,Missouriwhich was valued by the Assessor at $210,027.Comparable 2 was a 2,424 square foot home at7660 Buckwood Drive,Smithville,Missouriwhich was valued by the Assessor at $204,712.Comparable 3 was a 1,911 square foot home at7625 Buckwood Drive,Smithville,Missouri, valued by the Assessor at $218,540.Inasmuch as there are differences between the subject property and Complainant’s comparables which require adjustment for impact on market value.And, inasmuch as Complainant did not, and is not qualified to, calculate market reaction to these differences, Complainant’s comparables cannot establish market value for the subject property.Complainant’s evidence is not substantial and persuasive to rebut the presumption in favor of the Board of Equalization or to establish discriminatory treatment.
5.The properties relied upon by Respondent’s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. Theproperties were located within 7 miles of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.
6.The comparables were described as follows:
Comparable 1 (13365 Prairie Creek Road, Platte City, Missouri) sold in 2007 for $220,000.This property consists of a 3.44 acre lot improved by a one and one half-story single-family structure of average quality construction.The house was 20 years old and appears to be in good condition.The residence has a total of 8 rooms, which includes 4 bedrooms, 3 baths, and contains 2,368 square feet of living area.There is a full unfinished basement.There is a built in two-car garage.
Comparable 2 (17605 371 Highway, Platte City, Missouri) sold in 2008 for $250,000.This property consists of a 5 acre lot improved by a one and one half-story single-family structure of average quality construction.The house was 14 years old and appears to be in good condition.The residence has a total of 6 rooms, which includes 3 bedrooms, 2.2 baths, and contains 1,908 square feet of living area.There is a full finished basement.There is a built in two-car garage.
Comparable 3 (4000 Cochran Road, Smithville, Missouri) sold in 2007 for $220,000.This property consists of a 1 acre lot improved by a one and one half-story single-family structure of average quality construction.The house was 30 years old and appears to be in good condition.The residence has a total of 3 rooms, which includes 4 bedrooms, 2 baths, and contains 1,951 square feet of living area.There is a full unfinished basement.There is an attached two-car garage.
7.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.
8.The net adjustments for Comparable 1 amounted to $3,150 or 1.43% of the sales price.The net adjustments for Comparable 2 amounted to $6,900 or 2.76% of the sales price.The net adjustments for Comparable 3 amounted to $19,900 or 9.05% of the sales price.
9.The adjusted sales prices for the comparables calculated to $223,150, $243,100 and $239,900, respectively.The appraiser concluded on a $235,000 value which calculated to a value per square foot of $90.38 compared with the sales prices per square foot of living area for the comparables of $92.91, $131.03 and $112.76. The comparison of the value per square foot provides a validation check for the appraisal, to demonstrate that the indicated value is consistent with the market for properties such as the subject.
10.Respondent’s evidence was substantial and persuasive to sustain the value determined by the Platte County Board of Equalization.
CONCLUSIONS OF LAW AND DECISION
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.
Official and Judicial Notice
Courts will take judicial notice of their own records in the same cases.In addition, courts may take judicial notice of records in earlier cases when justice requires or when it is necessary for a full understanding of the instant appeal. Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.
Presumptions In Appeals
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.
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.It is the fair market value of the subject property on the valuation date.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.
Duty to Investigate
In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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.The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.
Weight to be Given Evidence
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.
Trier of Fact
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 he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.
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.
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 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.
Respondent’s Burden of Proof
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.
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.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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”
Sale of Subject
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.The actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property.
In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2007; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction.Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive.No other methodology is sufficient to establish discrimination.
Complainant Fails To Prove Discrimination
Where there is a claim of discrimination based upon a lack of valuation consistency, Complainants have the burden to prove the level of assessment for the subject property in 2007. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.
Complainants must then prove the average level of assessment for residential property inPlatteCountyfor 2007.This is done by (a) independently determining the market value of a representative sample of residential properties in Platte County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in PlatteCountymust demonstrate a disparity that is grossly excessive.
Complainants’ discrimination claim fails because they failed to establish the market value of their property.Without establishing their market value, they cannot establish their assessment ratio.Without establishing their ratio, they cannot establish that they are being assessed at a higher percentage of market value that any other property.
However, even if Complainants had established their market value, their discrimination claim would still fail because they have not demonstrated that a statistically significant number of other residential properties withinPlatteCountyare being assessed at a lower ratio of market value than their property.Complainants’ claim of discrimination is based upon three propertiesin their neighborhood which were valued less than Complainants’ property.
Because Complainants have failed to establish the market value of their property and have failed to establish that they are being assessed at a higher percentage of market value than a statistically significant number of other properties inPlatteCounty, they have failed to establish discrimination.
Respondent Proves Value
Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2008, to be $235,000.Respondent’s appraiser developed an 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. Hickman 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 net adjustments to the sale properties fell within a very narrow range from 1.43% to 9.05%.Even the gross adjustments were in a very acceptable range from 8.11% to 17.80%.
The assessed valuation for the subject property as determined by the Board of Equalization forPlatteCountyfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year2008 is $44,650.
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.
The Collector of Platte County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 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 November 21, 2008.
STATE TAX COMMISSION OFMISSOURI
Senior Hearing Officer
 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).
 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).
 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.
 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).
 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).
 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).
 Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
 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).
 Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).