State Tax Commission of Missouri
STANLEY & SANDRA COTLAR,)
v.) Appeal Number 07-10092
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumption of correct assessment not rebutted. True value in money for the subject property for tax years 2007 AND 2008 is set at $336,000, residential assessed value of $63,840.
Complainant, Stanley Cotlar, appeared pro se.
Respondent appeared by Associate County Counselor, Robert Fox.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $336,000, assessed value of $63,840, as residential property.Complainants proposed a value of $285,000, assessed value of $54,150.A hearing was conducted on June 17, 2008, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Mr. Cotlar testified on behalf of Complainants.He stated the owners’ opinion of value to be $285,000.This was based upon the 2005 valuation which the Assessor had placed on the property of $280,000.Mr. Cotlar then added $5,000 to that valuation to arrive at the proffered fair market value.It was the Complainant’s position that the original cost of an individual property in the subject development and the number of times it had sold was reflected in the sales price.No market data was tendered to support the value of $285,000.
Respondent placed into evidence the testimony of Ms. Lela Tulley, Missouri State Certified Residential Real Estate Appraiser.The appraiser testified as to her appraisal of the subject property.The Appraisal Report (Exhibit 1) of Ms. Tulley was received into evidence.Ms. Tulley arrived at an opinion of value for the subject property of $360,000 based upon a sales comparison approach to value.In performing her sales comparison analysis, the appraiser relied upon the sales of three properties which she deemed to be comparable to the subject property.Exhibit 2 was also received into evidence.Exhibit 2 consisted of property record cards and sales data on the three comparable properties relied on by Ms. Tulley.
FINDINGS OF FACT
1.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.
2.The subject property is located at 14733 Whitebrook Drive, Chesterfield, Missouri.The property is identified by parcel number 17R140217.The property consists of a 4,050 square foot site improved by a one-story brick and vinyl-sided, ranch, single-family structure of average quality construction.The house was built in 1997 and appears to be in average condition.The residence has a total of five rooms, which includes one bedroom, one full and one half bath, and contains 1,752 square feet of living area.There is a full basement, with 1,050 square feet of finished area and one full bath.The house has an attached two-car garage. Exhibit 1.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainants’ 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 $285,000.
5.The properties relied upon by Respondent’s appraiser were comparable to the subject for addressing the appraisal problem. The properties were located within essentially a block of the subject on the same street, in the same development.Each sale property sold at a time relevant to the tax date of January 1, 2007, in a range from May to October of 2006.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 appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The net adjustments ranged from -5.8% to -11.3% of sale prices.The adjusted sales prices for the comparables calculated to $368,000, $360,000 and $354,800, respectively.The appraiser concluded on a $360,000 value which calculated to a value per square foot of $205.48 compared with the sales prices per square foot of living area for the comparables of $224.32, $218.32 and $196.27.
7.Respondent’s evidence met the standard of clear, convincing and cogent evidence, under the provisions of Section 137.115, RSMo, to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program. Respondent’s appraisal was accepted only to sustain the original valuation made by the Assessor of $336,000 and not for the purpose of raising the true value in money above that value.
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.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.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.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).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.Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board.Therefore, they cannot prevail in the appeal.
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.St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).It is the fair market value of the subject property on the valuation date.Hermel, supra.
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.
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; Exhibit 1.
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, at 615 (Mo. App. W.D. 2000); Hermel, supra;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. Div. 2 1974). Mr. Cotlar did not present any evidence under any recognized method of valuation.His method of simply adjusting the Assessor’s 2005 value upward by less than 2% is not supported by any market data, nor is it a methodology accepted by the Commission or the Courts for making a determination of value for ad valorem taxation purposes.
Respondent Meets Burden of Proof
The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program.There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $336,000, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1)The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof.As used in this paragraph, the word comparable means that:
(a)Such sale was closed at a date relevant to the property valuation; and
(b)Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.
Section 137.115.1(1) & (2).
Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved.It does not mean that there may not be contrary evidence.Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974).The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.30 AmJur2d. 345-346, Evidence section 1167.“For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).
The appraisal developed by Ms. Tulley constituted clear, cogent and convincing evidence to establish the fair market value for the subject property to be $360,000.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.Section 138.060, RSMo; 12 CSR 30-3.075.Therefore, Exhibit 1 can only be received to support the value of $336,000 and not to increase the true value in money on the property under appeal to $360,000.
Complainants Fail To Meet 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.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. 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.” The taxpayer must prove the fair market value asserted. 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).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).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.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
The owner of property is generally held competent to testify to its reasonable market value.Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Cohen v. Bushmeyer, — S.W.3d —-, 2008 WL 820938 (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).
In the present appeal, Mr. Cotlar’s opinion of value was not based upon any market data or developed by any approach to the appraisal of property recognized by the Commission or the Courts.It lacked the proper elements and foundation to establish fair market value.It could be given no probative weight on the issue of overvaluation.The taxpayer’s theory that valuation is a function of the original purchase price and the number of times a property has been sold was not supported by any evidence from actual sales histories of properties.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forSt. LouisCountyfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $63,840.
Complainants 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.
Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
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 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.If no Application for Review is filed, the Collector is ordered to disburse the disputed taxes in accordance with the assessment set by this Decision and Order.
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 July 8, 2008.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 8thday of July, 2008, to:Stanley Cotlar, 14733 Whitebrook Drive, Chesterfield, MO 63017, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent; Philip A. Muehlheausler, Assessor; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.