STATE TAX COMMISSION OF MISSOURI
| STEVE STRANGHOENER | ) | Appeal No. 19-10311 |
| ) | Parcel No. 12N340106 | |
| Complainant, | ) | |
| ) | ||
| v. | ) | |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR | ) | |
| ST LOUIS COUNTY, MISSOURI | ) | |
| ) | ||
| Respondent. | ) |
ORDER AFFIRMING
HEARING OFFICER DECISION UPON APPLICATION FOR REVIEW
HOLDING
On May 7, 2021, Senior Hearing Officer Erica M. Gage (Hearing Officer) entered a Decision and Order (Decision) affirming the decision of the Board of Equalization of St. Louis County (BOE). Steve Stranghoener (Complainant) subsequently filed an Application for Review of the Decision and Order of the Hearing Officer.
We AFFIRM the Decision and Order of the Hearing Officer. Segments of the Hearing Officer’s Decision and Order may have been incorporated into our Decision and Order without further reference.
FINDINGS OF FACT AND PROCEDURAL HISTORY
The subject property is identified by Parcel Locator No. 12N340106. The subject property is further identified as being located at 11426 Old St. Charles Rd. in Bridgeton, Missouri. The subject property consists of a residential parcel of real property situated within the city of Bridgeton, Missouri.
Jake Zimmerman, Assessor of St. Louis County (Respondent) assessed the subject property at $523,900. Complainant appealed to the BOE, which affirmed Respondent’s assessed valuation. Complainant timely appealed to the State Tax Commission (STC) alleging that the subject property was overvalued. The parties waived their opportunity for an evidentiary hearing, submitting the appeal on the record. Complainant presented evidence in the form of exhibits. Respondent presented written direct testimony and exhibits. The Hearing Officer issued the Decision and Order on May 7, 2021, setting aside the BOE decision as Respondent introduced substantial and persuasive evidence that the true value in money (TVM) of the subject property as of January 1, 2019, was $450,000.
Complainant timely filed an application for review. The STC thereafter issued its Order allowing the Application for Review and granting Respondent time to file a response. Respondent timely filed his response.
CONCLUSIONS OF LAW
Complainants’ Point on Review
Complainant alleged the Hearing Officer erred by finding that Complainant did not produce substantial and persuasive evidence to establish that Respondent overvalued the subject property.
Standard of Review
A party subject to a Decision and Order of a hearing officer of the STC may file an application requesting the case be reviewed by the STC. Section 138.432[1]. The STC may then summarily allow or deny the request. Section 138.432. The STC may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the STC. Section 138.432.
Commission’s Ruling
For the reasons that follow, the Commission finds Complainant’s arguments to be unpersuasive. The Commission, having thoroughly reviewed the whole record and having considered the Hearing Officer’s Decision and the Application for Review of Complainant, affirms the Hearing Officer’s decision.
There is a presumption of validity, good faith and correctness of assessment by the BOE. 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). This presumption is a rebuttable rather than a conclusive presumption. The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the BOE’s valuation is erroneous and what fair market value should have been placed on the property. Id.
The taxpayer in a STC appeal bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, Complainant bears the burden of proving by substantial and persuasive evidence the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary, or capricious.” 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. W.D. 1991). 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).
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the BOE, 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. See Cohen v. Bushmeyer, 251 S.W.3d 345 (Mo. App. E.D. 2008).
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).
Complainant argues that the valuation of the subject property is mistaken as “comps for my home should come from Bridgeton” and not the surrounding cities. (Application for Review) The Hearing Officer found that Complainant presented no evidence of appraisal or of a market-based analysis, i.e., substantial and persuasive evidence, to rebut the BOE’s valuation and to establish that Complainant’s opinion of the value of the subject property was correct. The record supports the Hearing Officer’s finding.
The taxpayer in a STC appeal bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, in this appeal, the Complainant had the burden of proving that the BOE’s valuation was erroneous and of establishing what should be the value of the subject property. However, where Respondent argues a valuation lower than the BOE’s valuation, Respondent likewise must show through substantial and persuasive evidence that the BOE’s valuation was incorrect and that Respondent’s opinion of value is correct. In this appeal, Respondent presented such substantial and persuasive evidence to rebut the presumption of correctness and to establish value, specifically an appraisal performed by a licensed appraiser in which the subject property was compared to other similar properties and market-based adjustments to values were made. The Hearing Officer did not err in setting aside BOE decision and finding that Respondent produced substantial and persuasive evidence to rebut the BOE presumption and to establish his opinion of the TVM of the subject property was correct.
ORDER
The Decision of the Hearing Officer 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 30 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 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 July 30, 2021.
STATE TAX COMMISSION OF MISSOURI
Gary Romine, Chairman
Victor Callahan, Commissioner
Will Kraus, Commissioner
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on July 30, 2021, to: Complainant(s) and/or Counsel for Complainant(s); County Assessor and/or Counsel for Respondent; County Collector; and County Clerk.
Elaina Mejia
Legal Coordinator
STATE TAX COMMISSION OF MISSOURI
| STEVE STRANGHOENER | ) | Appeal No. 19-10311 |
| ) | Parcel No. 12N340106 | |
| Complainant, | ) | |
| ) | ||
| v. | ) | |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR | ) | |
| ST LOUIS COUNTY, MISSOURI | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
Steve Stranghoener (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the fair market value of the subject property on January 1, 2019, was $523,900. Complainant claims the property is overvalued and proposes a value of $355,279. Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE decision, however, is set aside as Respondent introduced substantial and persuasive evidence that the true value in money (TVM) of the subject property as of January 1, 2019, was $450,000.[2] The parties waived their opportunity for an evidentiary hearing and agreed to submit the appeals on the record.²
Complainant, pro se, and Respondent, represented by Counsel Monique McNutt, each submitted their respective evidence for appeal on the record.
FINDINGS OF FACT
- Subject Property. The subject property is located at 11426 Old St Charles Rd. in Bridgeton, Missouri. The parcel/locator number is 12N340106.
The subject property consists of a 0.3673 acre lot and a 4,070 square foot single family home. The home has 5 bedrooms and 4 full and 1 half bathrooms. Complainant purchased the subject property in 2011 for $540,000.
- Assessment and Valuation. Respondent assessed the subject property as residential property and determined the appraised value on January 1, 2019, was $523,900. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $523,900.
- Complainant’s Evidence. Complainant’s written direct testimony indicated that the TVM of the subject property on January 1, 2019, was $355,279. Complainant’s testimony indicates that the Respondent’s comparable homes were not proper and submitted his own list of comparable home sales. Complainant testified he is a negotiator and did not testify that he was a licensed appraiser or a person possessing appraisal training. Complainant submitted the following exhibits:
| Exhibit | Description | Ruling |
| A | ST. LOUIS COUNTY COMPS VS COMPLAINANT’S COMPS AND CRIME STATISTICS | Admitted |
| B | PICTURES OF HOMES NEAR COMPLAINANT’S HOME | Admitted |
| C | BRIDGETON POLICE REPORT REGARDING BREAK-IN AT COMPLAINANT’S HOME ON 11/30/19 | Admitted |
| D | ASSESSMENT HISTORY SHOWING ACTUAL VALUES FOR COMPLAINANT’S HOME THAT WERE AGREED TO BY COMPLAINANT AND ST. LOUIS COUNTY | Admitted |
| E | RECENT COMPS REFELCTING MARKET CONSISTENCY DURING COVID-19 HIATUS | Admitted |
| F | BRIDGETON NEIGHBORHOOD CRIME UPDATE | Admitted |
| G | KUBAER REGRESSION ANALYSIS USING ACTUAL HISTORY TO PROJECT 2019 VALUE | Admitted |
- Respondent’s Evidence. Respondent submitted two Exhibits, which are admitted into the record. Exhibit 2 is the written direct testimony of appraiser Adam Luesse, who testified to his appraisal report in which he concludes the TVM of the subject property on January 1, 2019 was $450,000. Mr. Luesse has about two years of experience in appraising residential property. Exhibit 1 is a restricted appraisal report prepared by Respondent’s staff appraiser, Adam Luesse. In Exhibit 1, Mr. Luesse utilized both the cost approach and the sales comparison approach to estimate the January 1, 2019, market value of the subject property. Mr. Luesse’s direct testimony concluded the sales comparison approach was the best indicator of value and therefore, the market value was $450,000. Mr. Luesse’s comparable sales approach utilized two similar properties located within one mile of the subject property and four similar properties within approximately three-and-a-half miles of the subject property and all within the Pattonville School District. Mr. Luesse adjusted the sale prices of the comparable properties to account for differences with the subject property. The comparable properties are similar to the subject property with respect to school district, overall usage (single family residential), and size. The comparable properties differ from the subject property with respect to age as most homes were newer or much older.
The key property data in Exhibit 1 are as follows:
| Address | Subject Property | 3347 Tuscany Hills Ct. | 3254 Bridgeport Pl. | 11101 Fairborough Ct | 1508 Beckham Ridge Ct | 1597 Beckham Ridge Ct | 1524 Beckham Ridge Ct |
| Style | 2 story | 2 story | 1.5 story | 1 story | 2 story | 2 story | 2 story |
| SqFt | 4,070 | 3,290 | 3,012 | 3,155 | 3,717 | 3,620 | 4,104 |
| Beds | 5 | 5 | 5 | 4 | 4 | 4 | 4 |
| Baths | 4.5 | 3.5 | 2.5 | 3.5 | 3.5 | 3.5 | 3.5 |
| TVM | $450,000 | $413,000 | $451,000 | $470,555 | $449,000 | $475,000 | $441,000 |
- Value. The TVM of the subject property on January 1, 2019 was $450,000.
CONCLUSIONS OF LAW
- Assessment and Valuation
Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is 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. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. For this reason, the comparable sales approach is typically used to value residential property. “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 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
- Evidence
The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff
Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). 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. 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
The BOE’s valuation is presumptively correct. Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider, 156 S.W.3d at 346. The taxpayer’s evidence must be both “substantial and persuasive.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”). A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “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. 1980).
- Complainant Did Not Prove Overvaluation. Complainant estimated the subject property should have been $355,279 due to location, run-down homes in his neighborhood, and rising crime rates. Most of Complainant’s Exhibits (A, B, C, E, F and G) focus on these arguments. This evidence is unpersuasive because it is not backed by any market analysis or proper appraisal. See Cohen, 251 S.W.3d at 349 (holding a landowner’s opinion of value lacks probative value when there is “no other evidence as to what he based his opinion on or how he arrived at his opinion of [value]”). There was no appraisal of the subject property submitted by Complainant. Complainant did submit evidence of recent home sales within a 5 miles radius; however, overall the sales data includes 8 homes, 7 of which are smaller in square footage and although the sales price is listed and is relevant evidence, those prices were not adjusted to become comparable to the subject property. One of Complainant’s comparable sales was also listed by Mr. Luesse in Exhibit 1; however, the data submitted by Complainant for that comparable home was not adjusted to correspond with the subject property. Therefore, all of the comparable home data and analysis submitted in Complainants Exhibit(s) is both speculative and incomplete (see Exhibits A, B, E and G).
Exhibit D is unpersuasive of TVM for the subject property as it is simply a listing of prior years’ agreements between Complainant and the Assessor. It does not take into account the current market or actual evidence of value; rather it is a list of the property owner’s opinion on past value, which is generally held to be not persuasive and substantial evidence of TVM. See Shelby Cty. R-IV Sch. Dist. v. Herman, 392 S.W.2d 609, 613 (Mo. 1965) (while a property owner’s opinion of value is generally admissible, the opinion “is without probative value where it is shown to have been based upon improper elements or an improper foundation”).
Although Complainant’s evidence is unpersuasive, Respondent’s Exhibit 1 is substantial and persuasive evidence showing the TVM of the subject property on January 1, 2019, was $450,000. Exhibit 1 utilizes the comparable sales approach to estimate that the value of the subject property on January 1, 2019, was $450,000. (Ex. 1 at 2). Exhibit 1 demonstrates there is an active market for six similar single-family homes in the subject property’s neighborhood and there is sufficient data to make a comparative analysis. See Snider, 156 S.W.3d at 348 (noting the comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis”). Mr. Luesse credibly testified in his written direct testimony the comparable sales approach was the best valuation approach for the subject property. The comparable sales approach utilized in Exhibit 1 is an appropriate valuation method and constitutes substantial and persuasive evidence to value the subject property at $450,000. See Snider, 156 S.W.3d at 341, 347.
CONCLUSION AND ORDER
The BOE decision is set aside. The TVM of the subject property as of January 1, 2019, was $450,000.
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 detailed grounds upon which it is claimed the
decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
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.
SO ORDERED May 7, 2021.
STATE TAX COMMISSION OF MISSOURI
Erica M. Gage
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on May 7th, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina McKee
Legal Coordinator
[1] All statutory citations are to RSMo. 2000, as amended, unless indicated otherwise.
[2] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
² Section 138.431.5 provides the “hearing officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying, or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.”