Thanh Tang v. Jake Zimmerman, Assessor St. Louis County

May 11th, 2018

STATE TAX COMMISSION OF MISSOURI

 

THANH TANG, )  
  )  
              Complainant, )  
  )  
v. )

)

Appeal No. 17-10162 Parcel/Locator No.

24M210331

  )

)

Appeal No. 17-10164 Parcel/Locator No.

24M210340

JAKE ZIMMERMAN,  ASSESSOR, )  
ST. LOUIS COUNTY, MISSOURI,

Respondent

)

)

 

 

DECISION AND ORDER

 

HOLDING

 

The decisions of the St. Louis County Board of Equalization (BOE) are AFFIRMED.  Complainant Thanh Tang (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.

Complainant appeared pro se.

Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Nauman Wadalawala.

Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).

ISSUE

With regard to both of the subject properties, Complainant appealed on the ground of overvaluation.  Respondent initially set the true value in money (TVM) of the subject properties, as residential property, as of January 1, 2017, as set forth in the table, below:

Appeal No. Parcel/Locator No. Respondent’s Valuation
17-10162 24M210331 $79,100
17-10164 24M210340 $86,700

 

The BOE lowered the TVM’s of the subject properties, as residential property, as of January 1, 2017, as set forth in the table, below:

Appeal No. Parcel/Locator No. BOE’s TVM
17-10162 24M210331 $65,800
17-10164 24M210340 $59,400

 

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 2000, as amended.   The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as of 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

  1. Jurisdiction. Jurisdiction over this appeal is proper.  Complainant timely appealed to the State Tax Commission.
  2. Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on February 21, 2018, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
  3. Identification of Subject Property. The subject properties are identified as set forth in the table, below:
Property Parcel/Locator No. Address
Appeal No. 17-10162 24M210331 343 Attucks St., Kirkwood, MO 63122
Appeal No. 17-10164 24M210340 351 Attucks St., Kirkwood, MO 63122

 

(Complaints; Exhibit 1; Exhibit 1)

  1. Description of Subject Property. The parties presented scant evidence describing the characteristics of the subject properties.  The Hearing Officer obtained most of the information in the table, below, from the St. Louis County Real Estate Database:
Appeal No. Parcel/Locator No. Address Description
17-10162 24M210331 343 Attucks St., Kirkwood, MO 63122 Approximately 7,900 square-foot lot; 1,180 square-foot, bungalow-style, single-family home; three bedrooms; one bathroom; built in 1936; full unfinished basement; Grade D+; CDU Average
17-10164 24M210340 351 Attucks St., Kirkwood, MO 63122 Approximately 10,120 square-foot lot; 1,166 square-foot, ranch-style, single-family home; two bedrooms; one bathroom; built in 1952; full unfinished basement; Grade D+; CDU Average

 

  1. Assessment. Respondent valued the subject properties as described in the table on page 2 of this Decision and Order.
  2. Board of Equalization. The BOE lowered Respondent’s valuations of the subject properties as described in the table on page 2 of this Decision and Order.
  3. Complainant’s Evidence. Complainants opined that the TVM of each of the subject properties as of January 1, 2017, was:
Property Parcel/Locator No. Complainant’s Opinion of TVM
Appeal No. 17-10162 24M210331 $45,000
Appeal No. 17-10164 24M210340 $40,000

 

To support his opinion of value, Complainant offered the following exhibits:

Property Parcel/Locator No. Exhibit A Exhibit B
Appeal No. 17-10162 24M210331 Detailed bid from Quality Waterproofing for basement and foundation repair and water management in the amount of $19,031 Sale contract dated 12/12/17 signed by buyer Tim Estepp, Member of Time, LLC, but not signed by Complainant, offering to purchase subject property from Complainant in the amount of $30,000 and containing the following clause: “This is a non-MLS transaction. Unless otherwise stated in writing, no brokerage relationship exists between the parties to this Agreement nor is this Agreement intended to create such.”
Appeal No. 17-10164 24M210340 Detailed bid from Quality Waterproofing for basement and foundation repair and water management in the amount of $7,560 Sale contract dated 12/12/17 signed by buyer Tim Estepp, Member of Time, LLC, but not signed by Complainant, offering to purchase subject property from Complainant in the amount of $30,000 and containing the following clause: “This is a non-MLS transaction. Unless otherwise stated in writing, no brokerage relationship exists between the parties to this Agreement nor is this Agreement intended to create such.”

 

Respondent did not object to Complainant’s exhibits, all of which were admitted into the record. In conjunction with the presentation of his exhibits, with regard to Appeal No. 17-10162, Complainant testified that he had purchased the property in 2014 for between $40,000 and $42,000.  Complainant testified that the subject property had been listed with a realtor who had contacted Complainant about the property.  Complainant testified that the subject property was not encumbered by a mortgage.  Complaint testified that he had not listed the subject property for sale but that he had received offers from potential buyers to purchase the property, the highest such offer being $40,000.  Complainant testified that he had received a written offer from Time, LLC, (Exhibit B) in the amount of $30,000 to purchase the property.  Complainant testified that the offer was subsequently withdrawn based on the crime rate in the area.  Complainant also testified that he did not accept the offer because the offer was too low.  Complainant testified that he would have accepted an offer for between $40,000 and $45,000.  Complainant testified that the property had not been appraised in the three years preceding the evidentiary hearing.  Complainant testified that he had not made any improvements to the subject property between January 1, 2015, and January 1, 2017, but that he had made repairs to a clogged sink and had painted and repaired damaged interior walls.  Complainant testified that he had witnessed two SWAT teams at a “drug house” in the neighborhood, where someone had been shot.  Complainant testified that the neighborhood consists of nearly all rental properties, empty lots, and apartment complexes.

On cross examination, Complainant testified that he is not an appraiser or a contractor and that Respondent was not able to perform an interior inspection of the subject property.  In rebuttal, Complainant testified that he would have allowed Respondent to perform an interior inspection of the subject property but that the tenants of the subject property do not trust any government officials and did not want Respondent inside.  Complainant further testified that the subject property should not be compared with updated properties but should be compared with as-is properties to determine its TVM.

In conjunction with the presentation of his exhibits, with regard to Appeal No. 17-10164, Complainant testified that he had purchased the property in 2011 for $36,000.  Complainant testified that a real estate agent had presented the subject property to Complainant and that it had been an “as/is” HUD sale.  Complainant testified that the subject property was not encumbered by a mortgage.  Complaint testified that he had not listed the subject property for sale but, if he did list it for sale, he would price it at $40,000.  Complainant testified that he had received a written offer from Time, LLC, (Exhibit B) in the amount of $30,000 to purchase the property.  Complainant testified that he did not accept the offer.  Complainant testified that the subject property had not been appraised in the three years preceding the evidentiary hearing.  Complainant testified that he had not made any improvements to the subject property between January 1, 2015, and January 1, 2017.  Complainant testified that the condition of the basement should be considered in the determination of its TVM.  Complainant testified that at times there had been as much as 10 inches of water in the basement and mold.  Complainant testified that the grading around the foundation of the house was shallow and that sewage must be pumped up and out of the basement.

Complainant argued that the mass appraisal system does not take into account the subject properties’ “as-is” nature and that the value of the properties should be based upon what people are willing to pay for the property and what was actually offered.

With regard to both appeals, Complainant also presented the testimony of Darrell Mallory (Mallory).  Mallory testified that he resides in the home of the subject property in Appeal No. 17-10164.  Mallory testified that he sees police in the neighborhood patrolling at least ten times per day.  Mallory testified that he had witnessed incidents in the neighborhood involving the SWAT team and drug activity.  Mallory also testified regarding the home of the subject property in Appeal No. 17-10162 even though he does not reside in that home.  Mallory testified that the tenants of the home of the subject property in Appeal No. 17-10162 refused an interior inspection of the home because of a fear that the government would find a way to evict the tenants.  Mallory testified that the basement in the home of the subject property in Appeal No. 17-10162 floods.  Mallory testified that Complainant has had a plumber attempt to fix the problem, but the flooding is due to the construction of the house.  Mallory testified that the home of the subject property in Appeal No. 17-10162 has not been updated.

Respondent objected to Mallory’s testimony as it related to both subject properties on relevance grounds, specifically arguing that Mallory did not reside in the subject property in Appeal No. 17-10162.  The Hearing Officer overruled the objection and admitted Mallory’s testimony into the record to be given the weight deemed necessary in light of all of the evidence.

  1. Respondent’s Evidence. Respondent advocated affirming the BOE’s determination of TVM.  To support his opinion of value, Respondent offered the following exhibits:
Property Parcel/Locator No. Exhibit 1
Appeal No. 17-10162 24M210331 BOE Findings and Notice of Decision
Appeal No. 17-10164 24M210340 BOE Findings and Notice of Decision

 

Complainant did not object to Respondent’s exhibits, which were admitted into the record.

  1. Presumption of Correct Assessment Not Rebutted – True Value in Money Not Established. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the TVM of the subject properties to be $45,000 and $40,000, respectively, as of January 1, 2017.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The STC 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 BOE, 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 STC, 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.

During the Evidentiary Hearing, the Hearing Officer inquired of Complainant and of Mallory.

Board Presumption and Computer-Assisted Presumption

            There exists a presumption of correct assessment by the BOE – the BOE presumption.  The BOE presumption requires the taxpayer to substantial and persuasive present evidence to rebut it.  If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption.  The BOE’s valuation is assumed to be an independent valuation.

In the present appeals, the BOE lowered the initial valuation of Respondent, and Complainant is now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies to Complainant.

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.

“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.”  Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993).  “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.”  Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).

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, the 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 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. E.D. 1980).

Respondent’s Burden of Proof

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.  Hermel, Inc., 564 S.W.2d at 895; Cupples-Hesse, 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.

In each of these cases, Respondent argued that the BOE’s determinations of value were correct and should be affirmed.

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).

Neither Complainant nor Respondent presented any expert testimony.

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:

  1. Buyer and seller are typically motivated.

 

  1. Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

  1. A reasonable time is allowed for exposure in the open market.

 

  1. Payment is made in cash or its equivalent.

 

  1. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

  1. 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

            In this case, Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.    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.

First, 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 argued that the TVM of the subject properties should reflect what potential buyers offered for the properties.  Complainant testified that he had been offered $40,000 for one of the subject properties but that he had rejected the offer.  Complainant presented evidence of written offers of $30,000, one for each of the subject properties, from an investor who subsequently withdrew the offers.  However, the evidence established that Complainant did not accept the offers from the investor because he believed they were too low.  This evidence contradicts Complainant’s testimony that he is willing to “dump” the properties because he cannot sell them for the value determined by the BOE.  Second, although Complainant presented the bids for waterproofing the basements in each of the homes, Complainant’s evidence did not establish how the cost of waterproofing the basements or the lack of waterproofing the basements affected the TVM of the subject properties as of January 1, 2017.  Notably, based on the testimony at the evidentiary hearing, the BOE reduced the TVM of the homes by $13,300 and $27,300, respectively, after considering Complainant’s arguments regarding the as-is nature of the homes and the problems with water in the basements.    

ORDER

The TVM for the subject property as determined by the BOE is AFFIRMED as set forth in the table below:

Appeal No. Parcel/Locator No. BOE’s TVM Assessed Value (19% of TVM)
17-10162 24M210331 $65,800 $12,502
17-10164 24M210340 $59,400 $11,286

 

Application for Review

A party may file with the STC 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 May 11, 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 11th day of May, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

Jacklyn Wood

Legal Coordinator