STATE TAX COMMISSION OF MISSOURI
| RYAN D. CARSON, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal No. 17-10160 |
| ) | ||
| 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 AFFIRMED. Complainant Ryan D. Carson (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the true value in money (TVM) of the subject property as of January 1, 2017.
Complainant appeared pro se.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by Counsel Steven Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
ISSUE
Complainant appealed on the ground of overvaluation. Respondent initially set the (TVM) of the subject property, as residential property, at $345,300. The BOE sustained Respondent’s valuation and set the TVM at $345,300. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes this appeal to determine the (TVM for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.
The 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 August 15, 2018, 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 23O140190. It is further identified as 509 Winding Trail Lane, Des Peres, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of a .2748 acre residential lot improved by a 2,277 square foot, single-family, two-story home built in 1977. (Exhibit D) The home includes four bedrooms; two full bathrooms; two half bathrooms; a full unfinished basement; a two-car attached garage; one fireplace; and a porch and a patio. The exterior consists of aluminum and vinyl finish. The home has a construction quality grade of C+ and a condition/desirability/utility code of average. (Exhibit D)
- Assessment. Respondent set a TMV on the subject property at $345,300 residential, as of January 1, 2017.
- Board of Equalization. The BOE determined the TVM to be $345,300.
- Complainant’s Evidence. Complainant opined that the subject property’s TVM as of January 1, 2017, was $302,300. To support his opinion of value, Complainant offered the following evidence:
| Exhibit | Description | Ruling |
| Exhibit A | Appraisal of trees on the subject property and in the neighborhood | Excluded as hearsay because document prepared by expert not present to testify and to be cross examined |
| Exhibit B[1] | Order and Judgment of trial court | Admitted in part; pages 3 and 4 excluded because not part of court’s judgment |
| Exhibit C | Photographs | Admitted |
| Exhibit D | Assessor’s comparable sales of subject property | Admitted |
| Exhibit E | Assessor’s comparable sales of subject property | Admitted |
| Exhibit F | Satellite map of subject property’s neighborhood showing proximity of subject property and neighborhood properties to power line tower and reductions in valuations of neighboring properties for tax year 2017 | Admitted |
| Exhibit G | Property Record Card (PRC) of subject property from St. Louis County Property Records Database | Admitted |
Complainant testified in his own behalf. Complainant testified that he had purchased the subject property in August 2010. Complainant testified that the purchase price was $280,000, and that the property had been listed with a realtor and publicly advertised. Complainant testified that the subject property was encumbered by a mortgage of approximately $150,000. Complainant testified that the subject property had not been listed for sale or appraised within the three years preceding the Evidentiary Hearing. Complainant testified that he did not know what price he would place on the property if he were to list it for sale and that no offers had been made to purchase the property. Complainant testified that no improvements had been made to the subject property between January 1, 2015, and January 1, 2017.
In conjunction with the presentation of his exhibits, Complainant argued that the subject property’s neighborhood had been involved in litigation against the utility company Ameren Union Electric (Ameren) concerning the removal of trees near power line towers and power lines in the neighborhood. Complainant stated that the trees were “clear cut” in 2015. The trees were located on Ameren’s utility easements, some of which were on the subject property. Prior to the removal of the trees, Ameren performed trimming of the trees at Ameren’s cost. Complainant argued that the complete removal of the trees reduced the value of the subject property. (Exhibit B) Complainant presented evidence of comparable sales used by Respondent, which had lower valuations than the subject property, and argued that the subject property’s value should be lowered. (Exhibits D and E) Complainant presented additional evidence purporting to show that Respondent’s 2017 valuations of other properties near the subject property had been reduced due to the removal of the trees from Ameren’s utility easements. (Exhibits F-G) Complainant essentially argued that the removal of the trees had exposed the view of the power line towers and power lines, which adversely affected the value of those properties and the subject property. (Id.) Exhibit F was comprised of two color-coded maps showing the proximity of the other properties in the neighborhood to both the subject property and to the power line tower. The maps showed the subject property was situated on a cul-de-sac farther from the power line tower than some of the noted neighborhood properties. The maps showed the subject property’s front elevation was turned away from the power line tower. (Exhibit F)
On cross examination, Complainant testified that he is not a certified appraiser.
- Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject property as of January 1, 2017, $345,300, was correct. Respondent offered the following evidence:
| Exhibit | Description | Ruling |
| Exhibit 1 | BOE Findings and Notice of Decision dated September 20, 2017, valuing the subject property at $345,300 | Admitted |
| Exhibit 2A-2H | Location and valuation analysis of six neighborhood properties shown in Complainant’s Exhibit F | Admitted |
| Exhibit 3A-3B | Comparative Market Analysis (CMA) and Multi List Service (MLS) Property Detail Report | Admitted |
Respondent also presented the testimony of Certified Residential Real Estate Appraiser Sharon Kuelker (Ms. Kuelker). Ms. Kuelker testified that she was able to drive onto the subject property’s street to view the power line tower in proximity to the subject property. Ms. Kuelker testified that she did not conduct an interior inspection of the subject property.
In conjunction with Exhibit 2A-2H, Ms. Kuelker testified that the valuations of only two of the six neighborhood properties shown in Complainant’s Exhibit F were reduced by the BOE due to the removal of the trees and the exposed view of the power line towers and power lines. Ms. Kuelker testified that the valuations of four of the six neighborhood properties shown in Complainant’s Exhibit F were reduced by either Respondent’s office or by the BOE for reasons other than the removal of the trees and the exposed view of the power line towers and power lines, primarily for the condition of those four properties. (Exhibit 2A-2H)
Like Complainant’s Exhibit F, Respondent’s Exhibit 2A-2H contained a color-coded map showing the proximity of the six neighborhood properties to the subject property and to the power line tower. (Exhibit 2-B)
According to Exhibit 2A-2H, the neighborhood property located at 532 Winding Trail Lane was described as being situated “directly across the street from high voltage tower where trees were removed by Ameren . . . .” (Exhibit 2-E) In the appeal forms filed with the BOE, the BOE’s hearing officer recommended “no change” in the valuation of the property, but the BOE adjusted the value from $315,800 to $272,100, a reduction of approximately 14%. The neighborhood property located at 12931 Huntercreek Road was described as being situated “catty-corner across street” from the 100-foot-tall power line tower. In the appeal forms filed with the BOE, the homeowner had requested a reduction in the 2017 valuation of his property on the grounds that the property was “only 150 feet from the tower” and had not been updated “in over 12 years.” (Exhibit 2-G) The property located at 12931 Huntercreek Road was initially valued at $349,600 and then reduced to $337,100, a reduction of approximately 3.6%. (Exhibit 2-G)
Exhibit 3A was comprised of a list of 17 properties in the subject property’s neighborhood that had sold January 2016 and June 2017. The sale prices ranged from $290,900 to $490,000. (Exhibit 3A) Exhibit 3B was a MLS Property Detail Report for 12953 Huntercreek Road. When compared to the color-coded maps in Complainant’s Exhibit F, Exhibit 3B showed that 12953 Huntercreek Road was situated on the corner diagonally opposite to the power line tower. Exhibit 3B also showed that 12953 Huntercreek Road had been listed for $389,900 on June 27, 2016, and sold for $377,500 on September 2, 2016. 12953 Huntercreek Road had .372 acre residential lot improved by 2,532 square-foot, two-story home built in 1975; four bedrooms; three full bathrooms; one half bathroom; finished basement; covered porch; deck; patio; and attached garage. (Exhibit 3B)
- Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.
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 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.
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 STC appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, 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 – the BOE presumption. 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 sustained the initial valuation of Respondent, and Complainant is now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies to Complainant.
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).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347. “Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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.
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.
Discussion
Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the true market value of the subject property as of January 1, 2017. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. 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 did not present any evidence utilizing one or more of three generally accepted approaches to valuing real property for ad valorem tax purposes. Complainant’s evidence primarily focused on the removal of trees from the utility easement on the subject property and in the subject property’s neighborhood as the basis for his opinion that the value of the subject property should be reduced from $345,300 to $302,300. However, assuming, arguendo, that the trees generally added to the aesthetic appeal of the subject property, the admissible evidence in this case did not substantially and persuasively establish that the removal of the trees from the easement of the subject property in 2015 negatively affected the TVM of the subject property as of January 1, 2017. Complainant’s evidence implied that, prior to their removal in 2015, the trees had partially obscured the view of the power line tower and the power lines located within the subject property’s neighborhood. Complainant argued that Exhibit F showed that the 2017 initial assessed values of similar properties in the neighborhood had been reduced due to the removal of the trees (and, by extension, the unobstructed view of the power line tower and power lines). However, even though not required to present evidence, Respondent’s evidence rebutted Complainant’s evidence.
According to Respondent’s Exhibit 2A-2H, Exhibit 3A-3B, and the testimony of Ms. Kuelker, the 2017 initial assessed values of only two of the six neighborhood properties noted on Complainant’s Exhibit F were reduced for their proximity to the power line tower. Those two properties were located directly across the street and on the opposite corner diagonally across the street from the tower itself. (Exhibit F; Exhibit 2A-2H) The front elevations of those two properties faced the tower. (Id.) Notably, Exhibit F and Exhibit 2A-2H showed that the subject property was located on a cul-de-sac down the street from the power line tower and oriented so that neither the front elevation nor the back elevation of the home was directly exposed to the tower. Furthermore, Exhibit 2A-2H showed, and Ms. Kuelker testified, that the initial valuation of the neighboring properties located on either side of the subject property had been reduced by Respondent for condition issues and not for their proximity to the power line tower and power lines. Moreover, Respondent’s Exhibit 3A-3B established that the BOE’s valuation of the subject property fell within the range of sale prices of 17 properties in the subject property’s neighborhood. All of the sales listed in Exhibit 3A-3B occurred between January 2016 and June 2017, after the removal of the trees from the utility easement in 2015.
Consequently, based upon the evidence in the record, one cannot reasonably conclude that the removal of trees from the utility easement on the subject property supports a $43,000 reduction in the BOE’s determination of the subject property’s TVM as of January 1, 2017, as proposed by Complainant.
ORDER
The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax years 2017 and 2018 is $65,607 residential ($345,300 TVM).
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 October 23, 2018.
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 23 day of October, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator
[1] Respondent requested the entry of a protective order for Exhibit B but acknowledged that the information contained in Exhibit B is a matter of public record. The request for protective order is hereby denied.