State Tax Commission of Missouri
STUART YOAK & JANA PEREAU,)
)
Complainants,)
)
v.) Appeal No.11-10400
)
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2011 and 2012 is set at $479,200, residential assessed value of $91,050.
Complainants appeared pro se.
Respondent appeared by Associate County Counselor, Paula Lemerman.
Case decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
2.Submission on Documents.By Order dated 3/29/12, case was ordered to be submitted upon documents in lieu of an evidentiary hearing barring objection by either party.Neither party objected.The Hearing Officer in accordance with Paragraph 3 of the Order of 3/29/12 has made his evaluation of the exhibits and statement of value and basis tendered by Complainants and, as will be addressed below, has determined the necessary standard of proof has not been met.
3.Subject Property.The subject property is identified by Locator Number 18J520153.The property is located at 7144 Washington Ave., University City, Missouri.
4.Assessment.The Assessor valued the property at $479,200, a residential assessed value of $91,050.The Board sustained the assessment.[1]
5.Complainant’s Evidence.Complainants filed the following exhibits:
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EXHIBITS |
DESCRIPTION |
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A |
Comparison of six properties & Property Record Cards |
|
B |
Recently Sold Houses in University City |
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C |
Recently Sold Comparable Houses in University City |
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D |
Zillow Charts on University City sales |
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E |
Statement of Value and Basis |
There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.[2]
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, 2011, to be $407,900, as proposed.See, Complainants Fail to Prove Value, infra.
6.Respondent’s Evidence.In accordance with the March 29th Order, Respondent was not required to submit exhibits and written direct testimony pending the Hearing Officer’s evaluation and determination as to whether Complainants had submitted a prima facie case.Respondent’s right to file and exchange exhibits and written direct testimony has not been waived and is preserved.In the event that the Commission or a court should determined that the Hearing Officer’s Decision in affirming the Board’s valuation is in error, Respondent would be permitted to present evidence on the issue of the true value in money of the subject property as of January 1, 2011, upon remand to the Hearing Officer or the Commission.
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.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.[3]
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.[4]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[5]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[6]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.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.[7]Complainants’ evidence failed to rebut the presumption of correct assessment and establish fair market value as of January 1, 2011.
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.[8]True value in money is defined in terms of value in exchange and not value in use.[9]It is the fair market value of the subject property on the valuation date.[10]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.[11]
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.[12]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.[13]Complainants did not present a conclusion of value derived from a recognized appraisal methodology.
Complainants Fail to Prove Value
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, 2011.[14]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.”[15]A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[16]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.[17]
Evaluation of Complainants’ Evidence
The owners have presented Exhibit A through E in support of establishing their opinion of value.A review and evaluation of the Exhibits fails to establish an appropriate basis for the opinion of value tendered.
Exhibit A – Comparison of Five Properties
Complainants provide information on five properties located within one-third of a mile of their property which sold during 2009, 2010 and 2011.This list provides basic information relative to the five properties compared to the subject property.Attached to the list are the property records cards from the Assessor’s website for four of the properties and the subject.From the information on the list Complainants calculated what they purport to be an average sale price of $369,083.
The document does not constitute a sales comparison approach that is found in an appraisal of real property.Listing of sales prices and the averaging those does not establish the fair market value of any property. Complainants did not advocate a fair market value of $369,083.The information provided has no relevance to proving value as of 1/1/11 for the subject.
Exhibit B – List of Recently Sold Houses in University City
This exhibit provides a listing of 30 properties which Complainants represent are of comparable size and age to the subject.The document lists sales prices, without any supporting documentation to establish the reliability of the asserted prices.There is no information to establish sale dates.Complainants averaged the sale prices and square footage of homes and lot sizes.They then list the 2009-2010 appraised value established by the Assessor, the subject’s square footage and lot size.
The foundation to establish the data set forth in the exhibit is not provided.Complainants are not established by education, training and experience to be considered as experts in the appraisal of real property or to conclude what constitutes a comparable property.When a taxpayer desires to utilize some innovative and creative method for the valuation of real property, the taxpayer has the burden to establish that the method which they have devised has been recognized and accepted for the appraisal of real property.No such showing was made on this record for Complainant’s averaging technique.The averaging of sales prices is a faulty procedure and is not recognized or accepted for appraisal of property before the Commission.[18]Accordingly, the Exhibit has no relevance on the issue of the fair market value of the subject as of 1/1/11.
The Exhibit provides no substantial and persuasive evidence to rebut the presumption of correct assessment and establish a value of $407,900 for the subject, as advocated by the taxpayers.
Exhibit C – List of Recently Sold Houses in University City
This Exhibit lists 12 of the properties from Exhibit B.Complainants utilize their averaging technique once again to conclude an average value of the 12 properties of $310,000.The same evidentiary problems addressed relative to Exhibit B are present with this document also.The average of values does not constitute substantial and persuasive evidence to rebut the presumption of correct assessment.The average value concluded certainly does not support the opinion of value of $407,900 proposed by the owners.
Exhibit D – Zillow Charts
This Exhibit is hearsay.Trends for the various categories contained in the charts have no probative value on the issue of what a willing buyer and seller would have paid for Complainants’ property on January 1, 2011.It is irrelevant as to what the trend for a particular item may or may not be.No probative weight can be given to the Exhibit.
Exhibit E – Complainants’ Statement of Value and Basis
This Exhibit constitutes the testimony of Complainants.Complainant’s are of the opinion that the value placed on the property by the Assessor for the 2009-10 assessment was correct and should be maintained as the value for 2011.Complainants argue that an increase in value from the 2009-10 value is unwarranted because property values have been falling locally and nationally.
The flaw in Complainants argument is that they assume without establishing by any evidence that the value of $407,900 was correct as of January 1, 2009.It may or may not have been.In any case, what property values may have been doing on a local or nation basis does not establish fair market value for any property.Since Complainants concluded they would tender the opinion of value of $407,900, they had the burden to present substantial and persuasive evidence to establish that to be what a willing buyer and seller would have agreed to as the purchase price on 1/1/11.The evidence fails to establish that their opinion of value is correct.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[19]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[20]In the present instances, as evaluated above, none of the evidence presented by Complainants is probative on the issue of overvaluation to establish that the opinion of value of $407,900 is correct.As discussed and concluded, the information contained in exhibits A through D is irrelevant.Sales data only becomes relevant when presented in the record in conjunction with an appraisal of the property under appeal.Simply presenting the raw sales data, unadjusted in accordance with recognized appraisal practice is not probative on the issue of fair market value.In other words, the conclusion that the value set by the Assessor for 2009 is also the value as of 1/1/11 is not grounded upon proper elements and a proper foundation.Accordingly, the owners’ opinion is without any probative value.
A taxpayer does not meet the burden of proof, if evidence on any essential element of the case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[21]Complainant’s presented no evidence to establish their opinion of value of $407,900. They simply borrowed it from the 2009 Assessor’s valuation.There is no presumption the Assessor’s 2009 valuation was correct.[22]There is nothing in Complainant’s evidence from which it can be reasonably concluded that amount represents the fair market value of the property on 1/1/11.Complainants’ conclusion of value is only based on speculation, conjecture and surmise.The presumption of correct assessment by the Board having not been rebutted must be affirmed.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2011 and 2012 is set at $91,050.
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, 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 application for review is based will result in summary denial. [23]
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 June 13, 2012.
STATE TAX COMMISSION OF MISSOURI
_____________________________________
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 13th day of June, 2012, to:Stuart Yoak, 1208 E. Skylark Court, Bloomington, IN 47401, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
___________________________
Barbara Heller
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
[1] BOE Decision Letter, dated 9/23/11; Residential property is assessed at 19% of its true value in money (appraised value, fair market value).137.115.5 RSMo
[6] 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)
[7] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[8] 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).
[9] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[11] 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.
[12] 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).
[13] 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).
[15] 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).
[18] Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers (1982), p.159.
[19] 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).
[20] 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).