State Tax Commission of Missouri
STEVEN & SUSAN KUENZEL)
v.)Appeal(s) Number 07-57013
BILL OVERSCHMIDT, ASSESSOR,)
FRANKLIN COUNTY, MISSOURI,)
DECISION AND ORDER
The decision of the Board of Equalization sustaining the Assessor’s value at $695,510 residential (assessed value $132,147) is SET ASIDE.
The issue in this case is the true market value of the residential real property on January 1, 2007.
The Assessor valued the land and improvement at $695,510 residential.The Board of Equalization sustained the valuation by the Assessor.Complainant appealed and proposed a value at the time of the appeal of $630,000. The evidentiary hearing was held on April 24, 2008, in the Assessor’s Conference Room, Union, Missouri. Hearing Officer Maureen Monaghan presiding.
Complainants appeared in person.Assessor Bill Overschmidt appeared in person and by counsel Steve White.Evidence was heard and the case was taken under advisement.
Complainant offered the following evidence:
Exhibit A:Complainant’s Support for Valuation
Exhibit B:Sold Properties in Washington
Exhibit C:MLS report for properties in Section 1 of Exhibit B
Exhibit D:MLS Standard Report for properties in Section 2 of Exhibit B
Exhibit E:MLS Standard Report for properties in Section 3 of Exhibit C
Exhibit F:Assessor’s Sales Comparison Grid as Modified by Complainant
Exhibit G:MLS Listing Summary for Improved Sale 1
Exhibit H:Life Expectancy Guidelines of Marshall & Swift
Exhibit I:Depreciation for Residential Properties by Marshall & Swift
Testimony of Complainant.
Respondent offered the following exhibits:
Exhibit 1:Appraisal for Subject Property.
Testimony of Donald Dodd, State Certified General Appraiser
All exhibits were admitted into evidence.
FINDINGS OF FACT
1.Jurisdiction is proper.Complainant timely filed their appeal from the decision of the Franklin County Board of Equalization.
2.The subject property is a site of 2 acres improved with a two-story, brick single-family residential structure.The improvement is fourteen years old, very good quality construction and in average condition.The residence has 4,475 square feet of above ground living space, eight rooms including four bedrooms, 4.5 baths, anda three-car attached garage.The structure has a basement with 2,148 square feet of finished space.The property is identified as parcel number 10-7-26.0-0-015-039.930 more commonly known as 106 Montclair Court, Washington, Missouri.
3.Complainant Steve Kuenzel testified that it is his opinion that the property’s true value is $630,000.Complainant testified and submitted MSL reports of comparable properties that sold in the subject’s market.
4.Complainant, using MLS, located fifteen sales of residential properties which sold in the price range of $400,000 to $700,000 between March 31, 2006 and December 10, 2007 in Washington, Missouri.The Complainant narrowed the list to four sales of properties at least ten years old; the sale of the properties occurred between June 1, 2006 and February 9, 2007.The Complainant believed two of the four properties were not comparable to the subject property.The first property he excluded was located at 1 Southpoint and was a 149 years old.It sold for $700,000.The other property is approximately 20 years old and only 3,330 square feet.It sold for $459,000.The Complainant testified that the property located at 80 Hickory Lane was most like his property.The property is 5,000 square feet, 5 bedroom, 4.5 baths and 18 years old.It sold for $625,000 on June 20, 2006.The other property, located on 5th street, is 4,700 square foot residence with five bedrooms and 3.5 baths on 1.5 acres and it sold for $485,000 on February 9, 2007.
5.Respondent’s appraiser testified that his opinion of the property’s true value is $715,000.Appraiser testified and developed a sales comparison approach for the subject property.
6.Respondent’s appraiser used three improved sales that occurred from September 2005 to May 2006.The properties sold from $635,000 to $705,000.The properties ranged in size from 4,326 to 5,103 square feet.The appraiser listed improved sale 2 having a site of 9 acres, improved sale 3 having a site size of 5 acres and the subject property and improved sale 1 having “city lot[s]”.Improved sale 1 was adjacent to the subject property and sold in May of 2006 for $635,000.Improved sales 2 and 3 are 5.5 to 16 miles from the subject property.The appraiser weighted improved sale 1 most heavily.The appraiser made upward adjustments totaling $81,140 for an adjusted sales price of $716,140.
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lang=EN-CA style=’mso-ansi-language:EN-CA’>CONCLUSIONS OF LAW
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 Assessor, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.Section 138.431.4, RSMo.
True Value in Money
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 purchased by one who is desiring 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, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).
Taxpayer has Burden of Proof
In Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003), the court of appeals stated:
There is no longer an automatic presumption regarding the correctness of an assessor’s valuation. Section 138.431.3. This statutory change from the previous situation in which the assessor’s valuation was presumed to be correct does not mean that there is now a presumption in favor of taxpayer. The taxpayer in a Commission tax appeal still bears the burden of proof and must show by a preponderance of the evidence that the property was improperly classified or valued. Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App.1991).
In Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003), the court of appeals described the taxpayer’s burden as follows:
Taxpayers were the moving parties seeking affirmative relief, and as such, they bore the burden of proving the vital elements of their case, i.e., the assessments were “unlawful, unfair, improper, arbitrary or capricious.” Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo.1959); Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. 2003); 84 C.J.S. Taxation §§710, 726.This is true regardless of the existence or non-existence of the challenged presumption. As the Supreme Court of Missouri explained, “even were we to hold that it [the presumption] has been overcome, the burden of proof on the facts and inferences would still remain on petitioner, for it is the moving party seeking affirmative relief.”Cupples, 329 S.W.2d at 702.See also 84 C.J.S. Taxation §710, which states: “Even where there is no presumption in favor of the assessor’s ruling, if no evidence is offered in support of the complaint, the reviewing board is justified in fixing the valuation complained of in the amount assessed by the assessor.”
To prevail, Taxpayers had to “present an opinion of market value and then … present substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on tax day.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002).
Substantial and Persuasive Evidence
Substantial evidence is that evidence which, if true, has probative force upon the issues, i.e., evidence favoring facts which are such that reasonable men may differ as to whether it established them, and from which the Commission can reasonably decide an appeal on the factual issues.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).
Comparable Sales Approach
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.Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.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.Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d, 341, 347-348 (Mo. 2005). (citations omitted).
The Complainant provided MLS information for sales occurring in the subject property’s market area for a period relevant in time for this analysis.The property located at 80 Hickory Lane is comparable to the subject property.The property is 5000 square feet, 5 bedroom, 4.5 baths, 18 years old, and sold for $625,000 on June 20, 2006.
The Complainant also testified regarding the Assessor’s sale grid and made his own adjustments.As to improved sale 1 located adjacent to the subject property, the Complainant testified that he is familiar with the 10 year old improvement and that the property is actually 5,103 square feet not 4,580 square feet as listed by the Assessor’s appraiser.Complainant provided the MLS sales information which set forth the square footage and documented the sale occurring on May 26, 2006 for $635,000.The Complainant made his own adjustments that he said was based upon cost information in Marshall and Swift.The methodology used by the Complainant is not proper appraisal practice. The amount of the adjustment in a sales comparison approach is not based upon its cost rather it is the contributory value the item makes to the total property value.Sales data is used to determine the contributory value of individual items.An owner may not support an opinion of value by reference to comparable sales unless the owner qualifies as an expert.State ex rel. Missouri Hwy. and Tr. Comm’n v. McDonald’s Corp., 872 S.W.2d 108, 113 (Mo. App. E.D. 1994); State ex rel. Missouri Hwy. and Tr. Comm’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990).
Although the Complainant was not qualified to develop a sales comparison approach, the sales he presented and Improved Sale 1 of the Assessor’s Office, are persuasive and substantial evidence as to the fair market value of the property on January 1, 2007.Improved sale 1 is comparable to subject property in location, size, and quality of construction. Further, the property sold at a relevant time, May 26, 2006, for the appraisal of the subject property.
Respondent’s adjustments to the comparable properties needed more explanation and foundation than his statement that the adjustments were based upon his professional opinion.For example, Respondent made upward adjustments of $33,000 for the sites on improved sales 1 and 3.Improved sale 1 was a 0.88 acre lot and improved sale 3 is a 5 acre lot; the hearer of fact might surmise that the adjustment to improved sale 1 is based upon size and the adjustment for sale 3 is for location, but an explanation and market data would provide a basis for the $33,000 adjustment to each of the properties.Also, the Complainant provided proof that improved sale 1 gross living square footage was incorrectly listed as 4,580 when it is actually 5,103.A downward adjustment would be necessary as the subject property is only 4,475 square feet.
Complainant has presented substantial and persuasive evidence tending to demonstrate that his property would sell for no more than $630,000 on January 1, 2007.Two properties were comparable to the subject property.One property, Assessor’s Improved Sale 1 was similar in size, age, and quality as the subject property and was located adjacent to the subject property.That property sold in May 2006 for $635,000.The other property most comparable to the subject property was the Complainant’s comparable property sale located at 80 Hickory Lane.The comparable property had one additional bedroom, was 500 square feet larger than the subject and had siding rather than brick.It sold for $625, 000 in June 2006.The sale substantiates the sale of the comparable property adjacent to the subject property.Complainants have presented substantial and persuasive evidence.
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The assessed valuation for the subject property as determined by the Assessor for Franklin County and sustained by the Board of Equalization for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2007-2008 is set at $119,700.
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, 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 appeal is based will result in summary denial.Section 138.432, RSMo 2000.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Franklin County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED May 5, 2008.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid this 5th day of May, 2008, to:Steven Kuenzel, 200 West Main Street, P.O. Box 228, Washington, MO 63090, Complainant; Mark Vincent, Franklin County Counselor, P.O. Box 439, Union, MO 63084, Attorney for Respondent; Bill Overschmidt, Assessor, 400 E. Locust, Suite 105A, Union, MO 63084; Debbie Door, Clerk, Franklin County Courthouse, 400 E. Locust, Suite 201, Union, MO 63084; Linda Emmons, Collector; Franklin County Courthouse, 400 E. Locust, Suite 103, Union, MO 63084.