Thomas & Deloise Dowd v. Jake Zimmerman, Assessor St. Louis County

July 31st, 2018

STATE TAX COMMISSION OF MISSOURI

THOMAS R. DOWD & DELOISE T. DOWD,	)
	)
Complainant,	)
	)
v.	)	Appeal No. 17-10750
	) )	Parcel/Locator No. 16M340022
JAKE ZIMMERMAN, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

HOLDING

On July 31, 2018, Senior Hearing Officer Amy Westermann (Hearing Officer) entered her Decision and Order (Decision) affirming the decision of the Board of Equalization of St. Louis County (BOE). Thomas R. Dowd (Complainant) subsequently filed his Application for Review of Hearing Officer’s Decision and Order. Jake Zimmerman, Assessor of St. Louis County (Respondent), filed an Opposition to Complainant’s Application for Review. Complainant filed a Reply.

We AFFIRM the Decision and Order of the Hearing Officer. Segments of the Hearing Officer’s Decision may have been incorporated into our Decision without further reference.

FACTS AND PROCEDURAL HISTORY

The subject property is identified by parcel/locator number 16M340022. It is further identified as 10 Branford Drive, Olivette, St. Louis County, Missouri. The subject property consists of a 20,000 square foot lot improved by a 1,940 square-foot single-family, ranch style home built in 1956. The home includes three bedrooms; two full bathrooms; one half bathroom; patio; and a two-car attached carport. The exterior is brick constsruction. The property includes “mother-in-law” quarters consisting of a 1,320 square-foot attached second residence. One of the bedrooms and one of the full bathrooms is located in those quarters.

Respondent set a true value in money (TVM) on the subject property of $196,500. Complainant appealed to the BOE, which sustained Respondent’s valuation. Complainant appealed to the State Tax Commission (STC) on the issue of overvaluation.

The issue of overvaluation was presented at an evidentiary hearing on May 11, 2018, at the St. Louis County Government Building, 41 South Central Avenue, Clayton, Missouri.

Evidence

Complainant opined that the TVM of the subject property was $120,000- $125,000 as of January 1, 2017. To support his opinion of value, Complainant offered the following exhibits:

Exhibit	Description	Ruling
Exhibit A	Copy of email dated July 2, 2017, from Complainant to undisclosed recipients and entitled “BOE Appeal;” describing needed repairs to lateral sewer lines, electrical system replacement, and other repairs and replacements with an estimated total cost of $56,850	Admitted
Exhibit B	Photos of #14 Branford, next door to subject property, showing state of disrepair	Admitted
Exhibit C	Photo of subject property’s porch; condition in early 2017; drainage from neighboring properties undermines surface	Admitted
Exhibit D	Photos of three properties located south of Olive Street allegedly used by Respondent as comparables for valuing subject property	Objection on ground of relevance in that the exhibit and accompanying testimony assumes facts not in evidence and exhibit does not support Complainant’s opinion of TVM of subject property; objection noted and ruling reserved for Decision and Order; SUSTAINED as to relevance; Exhibit D is hereby Excluded
Exhibits E through Q	Photos depicting various exterior and interior areas and components of subject property in need of repair/replacement	Admitted
Exhibit R	Photos of Grandview Bike Trail at rear of subject property and showing clay and mud on asphalt after rainstorm	Admitted
Exhibit S	Photos depicting auto radiator hose repair to leak in radiant heating copper pipe behind wall in corner of family room; pipe could not be welded due to proximity to bathtub	Admitted
Exhibit T	Letter from Complainant dated March 9, 2017, to neighbors informing them that a house in the subdivision of the subject property was burglarized on February 27, 2017, and the owner’s truck was stolen; informing them of similar occurrences on other streets; warning them to lock doors, windows, and cars and to turn on porch lights at night	Admitted
Exhibit U	Letter from CoCa Properties, LLC, dated June 4, 2016, and offering to purchase the subject property for $118,000 in as-is condition	Excluded as hearsay; author of letter not presented to be cross examined
Exhibit V	Letter for electrical contractor dated June 27, 2016, informing Complainant that upgrading the electrical system of the subject property from a two-wire system to a three-wire system would not be recommended and would be cost prohibitive at between $30,000 to $40,000	Excluded as hearsay; author of letter not presented to be cross examined

Complainant testified in his own behalf. Complainant testified that he had purchased the subject property in 1981 for approximately $80,000. Complainant testified that he had contacted 11 certified appraisers, all of whom refused to appraise the subject property due to the lack of comparables because of the configuration of the residence, which includes an attached mother-in-law quarters. Complainant argued that the residence’s configuration with a mother-in-law quarters made the property undesirable to potential buyers. Complainant testified that the plumbing and electrical systems were original to the subject property and needed to be replaced, which would be difficult given that the residence was situated on top of a concrete slab with no basement. Complainant testified that the front porch of the residence is flooded by water runoff from a neighboring property during and following substantial rainfall. Complainant testified that the subject property borders a public bike trail, which had become a nuisance because bike riders would cut through the yard. Complainant further testified that the presence of the bike trail had degraded the privacy of the subject property and had caused an increase in crime in the neighborhood, all of which adversely affected the TVM of the subject property.

Complainant testified that three real estate companies had looked at the subject property and had estimated the TVM of the subject property to range from $120,000 to $125,000 (in its “as is” condition and with the need for substantial improvements). Complainant testified that his daughters had offered to purchase the subject property for $125,000 and that, as of the date of the Evidentiary Hearing, Complainant and his wife were in the process of completing the sale of the property to their daughters. Complainant testified that his opinion of the subject property’s TVM as of January 1, 2017, was $120,000 to $125,000.

On cross examination, Complainant testified that he had received some inquiries about purchasing the subject property but that potential purchasers “back off” due to the character of the property. Complainant testified that a sale contract had fallen through due to a failed retaining wall. In response to questioning about two signed contracts, one in 2016 and one in 2018, Complainant testified that the contracts did not close because he really was not interested in selling at the amount the buyer thought the property was worth. Complainant testified that he had never received an offer “anywhere close” to $200,000.

CONCLUSIONS OF LAW

Complainant’s Points on Review

Complainant alleged that the Hearing Officer’s Decision is erroneous in that:

Hearing Officer excluded Exhibit V on the grounds of hearsay; and
Respondent’s only evidence supporting their value was the decision of the BOE.

STC’s Ruling

For the reasons that follow, the STC finds Complainant’s arguments to be unpersuasive. The STC, having thoroughly reviewed the whole record and having considered the Hearing Officer’s Decision, the Application for Review of Complainant, Respondent’s response opposing the Application for Review and Complainant’s reply, affirms the Hearing Officer’s decision.

Standard of Review

A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission (STC) may file an application requesting the case be reviewed by the STC. Section 138.432 RSMo Cum. Supp. 2015. 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.

Presumption In Appeal

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978). 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 Board’s valuation is erroneous and what the fair market value should have been placed on the property. Id.

Complainant’s Burden of Proof

The taxpayer in a Commission appeal 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.” 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). Such must be proved by substantial and persuasive evidence. 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).

Complainant alleges error due to Respondent’s only presenting the decision of the BOE as evidence. Respondent specifically advocated that the BOE’s valuations of the subject properties should be affirmed. Respondent did not have the burden of proof in these appeals. However, in an effort to better serve the public, generally, and Complainants, specifically, Respondent could have presented supporting documentation and information to aid Complainants’ and the Hearing Officer’s understanding the basis for the BOE’s determinations.

Although one may desire Respondent to present evidence to explain and establish the basis of the BOE’s determination of TVM, Respondent is under no legal burden to do so. The determination of the BOE is presumed to be correct. In appealing the BOE’s determination of TVM, Complainant carries the burden to establish, through substantial and persuasive evidence, the TVM of the property as of January 1, 2017. Since the Respondent is not advocating a value different from that determined by the BOE, Respondent is not required to enter into the record the basis of determination of the value by the BOE. Respondent relied on the BOE determination of TVM as his only evidence of value and if the presumption is not rebutted, the Respondent carries no burden of presentation of evidence as to valuation of the subject property.

Respondent argued that the BOE’s determination of value of $196,500 was 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).

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).

“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).

Owner’s Opinion of Value

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, 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).

“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.” Carmel Energy at 783. A taxpayer does not meet his burden if evidence on any essential element of his case would require the Commission to speculate or participate in conjecture and/or surmise. See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).

Hearsay

Black’s Law Dictionary[1] defines hearsay as follows: “Traditionally, testimony that is given by a witness who relates not what he or she knows personally, but what others have said, and that is therefore dependent upon the credibility of someone other than the witness. Such testimony is generally inadmissible under the rules of evidence.” McCormick[2] defines the term as; “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” The Courtroom Handbook on Missouri Evidence[3] follows the definition given by the Federal Rules and cited by McCormick. The out of court statement can take the form of either oral or written assertions. Therefore, documents which make assertions of facts are hearsay, just as well, as the speech of another person.

The hearsay rule provides that “no assertion offered as testimony can be received unless it is or has been open to test by cross-examination or an opportunity for cross-examination, except as otherwise provide by the rules of evidence, by court rules or by statute.”[4] The rationale behind the rule is quite simply that out of court hearsay statements are not made under oath and cannot be subject to cross-examination. Accordingly, when various documents, such as but not limited to, Internet, newspaper and magazine articles are offered as exhibits in a hearing before the Commission, unless the document falls within one of the exceptions to the hearsay rule, upon objection such must be excluded.

Complainant offered Exhibit U, letter from CoCa Properties, LLC, dated June 4, 2016, stating that “the most [Complainant] can expect is $118,000 in [the subject property’s] current AS-IS condition.” The author of the letter, George Berkaw, was not present to testify and to be subject to cross-examination; therefore Exhibit U was properly excluded.

Complainant was allowed to testify that he had received some inquiries about purchasing the subject property but that potential purchasers “back off” due to the character of the property. Complainant testified that a sale contract had fallen through due to a failed retaining wall. In response to questioning about two signed contracts, one in 2016 and one in 2018, Complainant testified that the contracts did not close because he really was not interested in selling at the amount the buyer thought the property was worth. Complainant testified that he had never received an offer “anywhere close” to $200,000. Complainant also testified that he and his wife were selling the subject property to their daughter for $125,000.

Summary & Conclusion

The Hearing Officer found that Complainant failed to present substantial and persuasive evidence to establish a TVM of $120,000-$125,000. STC finds that a reasonable mind could have conscientiously reached the same result as the Hearing Officer based on a review of the entire record. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998).

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 STC.

Segments of the Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, have been incorporated without reference, as if set out in full, in this final decision of the STC.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty 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 thirty 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 November 6, 2018.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Victor Callahan, Commissioner

Will Kraus, Commissioner

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this November 6, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

Jacklyn Wood

Legal Coordinator

[1] Black’s Law Dictionary, Seventh Edition (1999), p. 726

[2] McCormick on Evidence, Third Edition, (1984), p. 729 – citing to Federal Rule of Evidence 801.

[3] Missouri Practice, William A. Schroeder – 2012, Principle 800.c, p. 504

[4] Black’s, supra – hearsay rule, p. 726

STATE TAX COMMISSION OF MISSOURI

THOMAS R. DOWD & DELOISE T. DOWD,	)
	)
Complainants,	)
	)
v.	)	Appeal No. 17-10750
	)
JAKE ZIMMERMAN, ASSESSOR	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

DECISION AND ORDER

HOLDING

The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED. Complainants Thomas R. and Deloise T. Dowd did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the true market value of the subject property as of January 1, 2017.

Complainant Thomas R. Dowd (Complainant) appeared pro se; Deloise T. Dowd appeared not.

Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by Counsel Steven Robson.

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

ISSUE

Complainant appealed on the ground of overvaluation. Respondent initially set the true value in money (TVM) of the subject property, as residential property, at $196,500. The BOE sustained Respondent’s valuation. 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 The State Tax Commission (STC) takes this appeal to determine the true value in money for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on 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

Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission.
Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on May 11, 2018, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
Identification of Subject Property. The subject property is identified by parcel/locator number 16M340022. It is further identified as 10 Branford Dr., Olivette, Missouri. (Complaint; Exhibit 1)
Description of Subject Property. The subject property consists of a 20,000 square foot residential lot improved by a 1,940 square foot, single-family, ranch-style home built in 1956. (Appeal No. 15-15837 STC Decision and Order, September 20, 2016) The subject property includes a total of three bedrooms; two full bathrooms and one half bathroom; a two-car attached carport; one fireplace; and a patio. The exterior consists of brick construction. (Appeal No. 15-15837 STC Decision and Order, September 20, 2016) The subject property also includes a 1,320 square foot, attached, second residence or “mother-in-law quarters.” (Appeal No. 15-15837 STC Decision and Order, September 20, 2016) One of the bedrooms and one of the full bathrooms is located in the mother-in-law quarters. (Appeal No. 15-15837 STC Decision and Order, September 20, 2016
Assessment. Respondent set a TVM on the subject property at $196,500 residential, as of January 1, 2017.
Board of Equalization. The BOE sustained Respondent’s TVM of the subject property.
Complainant’s Evidence. Complainant opined that the subject property’s TVM as of January 1, 2017, was between $120,000 and $125,000. To support his opinion of value, Complainant offered the following evidence:

Exhibit	Description	Ruling
Exhibit A	Copy of email dated July 2, 2017, from Complainant to undisclosed recipients and entitled “BOE Appeal;” describing needed repairs to lateral sewer lines, electrical system replacement, and other repairs and replacements with an estimated total cost of $56,850	Admitted
Exhibit B	Photos of #14 Branford, next door to subject property, showing state of disrepair	Admitted
Exhibit C	Photo of subject property’s porch; condition in early 2017; drainage from neighboring properties undermines surface	Admitted
Exhibit D	Photos of three properties located south of Olive Street allegedly used by Respondent as comparables for valuing subject property	Objection on ground of relevance in that the exhibit and accompanying testimony assumes facts not in evidence and exhibit does not support Complainant’s opinion of TVM of subject property; objection noted and ruling reserved for Decision and Order; SUSTAINED as to relevance; Exhibit D is hereby Excluded
Exhibits E through Q	Photos depicting various exterior and interior areas and components of subject property in need of repair/replacement	Admitted
Exhibit R	Photos of Grandview Bike Trail at rear of subject property and showing clay and mud on asphalt after rainstorm	Admitted
Exhibit S	Photos depicting auto radiator hose repair to leak in radiant heating copper pipe behind wall in corner of family room; pipe could not be welded due to proximity to bathtub	Admitted
Exhibit T	Letter from Complainant dated March 9, 2017, to neighbors informing them that a house in the subdivision of the subject property was burglarized on February 27, 2017, and the owner’s truck was stolen; informing them of similar occurrences on other streets; warning them to lock doors, windows, and cars and to turn on porch lights at night	Admitted
Exhibit U	Letter from CoCa Properties, LLC, dated June 4, 2016, and offering to purchase the subject property for $118,000 in as-is condition	Excluded as hearsay; author of letter not presented to be cross examined
Exhibit V	Letter for electrical contractor dated June 27, 2016, informing Complainant that upgrading the electrical system of the subject property from a two-wire system to a three-wire system would not be recommended and would be cost prohibitive at between $30,000 to $40,000	Excluded as hearsay; author of letter not presented to be cross examined

Complainant testified in his own behalf. Complainant testified that he had purchased the subject property in 1981 for approximately $80,000. Complainant testified that the subject property was not encumbered by a mortgage. Complainant testified that the subject property had not been listed for sale or appraised within the three years preceding the Evidentiary Hearing. Complainant testified that he had contacted 11 certified appraisers, all of whom refused to appraise the subject property due to the lack of comparables because of the configuration of the residence, which includes an attached mother-in-law quarters. Complainant testified that the mother-in-law quarters could not be used as a rental due to restrictions set by local ordinance. Complainant argued that the residence’s configuration with a mother-in-law quarters made the property undesirable to potential buyers. Complainant testified that the plumbing and electrical systems were original to the subject property and needed to be replaced, which would be difficult given that the residence was situated on top of a concrete slab with no basement. Complainant testified that the front porch of the residence is flooded by water runoff from a neighboring property during and following substantial rainfall. Complainant testified that the subject property borders a public bike trail, which had become a nuisance because bike riders would cut through the yard. Complainant further testified that the presence of the bike trail had degraded the privacy of the subject property and had caused an increase in crime in the neighborhood, all of which adversely affected the TVM of the subject property. Complainant testified that his daughters had offered to purchase the subject property for $125,000 and that, as of the date of the Evidentiary Hearing, Complainant and his wife were in the process of completing the sale of the property to their daughters.

Complainant testified that the residence contained two distinct units, each with kitchens, living/dining combination rooms, one bathroom, and a shared family room. Complainant testified that the larger side of the residence contained two bedrooms and the smaller side contained one bedroom. Complainant testified that three real estate companies had looked at the subject property and had estimated the TVM of the subject property to range from $120,000 to $125,000 (in its “as is” condition and with the need for substantial improvements). Complainant testified that his opinion of the subject property’s TVM as of January 1, 2017, was $120,000 to $125,000.

Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject property as of January 1, 2017, $196,500, was correct. Respondent offered the following evidence:

Exhibit	Description	Ruling
Exhibit 1	BOE Findings and Notice of Decision dated September 20, 2017, valuing the subject property at $196,500	Admitted

Complainant objected to Respondent’s exhibit on the ground that the exhibit was unfair in that it assumes Respondent’s comparables were correct. Hearing no legal objection, the Hearing Officer overruled the objection, and Respondent’s exhibit was received into the record.

Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.

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, including the application of any abatement. 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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6) RSMo. Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898).

Additionally, courts may take judicial notice of records in earlier cases when justice requires or when it is necessary for a full understanding of the instant appeal. Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929); State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).

Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts. In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).

Complainant appealed the 2015 assessment of the subject property. The previous appeal involved basically the same facts as the instant appeal. Therefore, the STC takes judicial notice of the Decision and Order related to the 2015 assessment of the subject property.

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 Commission, 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 hearing, the Senior Hearing Officer inquired of 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.

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 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.” 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 Commission “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 Board of Equalization, 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, Cupples-Hesse, Brooks, supra.

Weight to be Given Evidence

Board Presumption and Computer-Assisted Presumption

There exists a presumption of correct assessment by the BOE – the BOE presumption. In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways.

The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then it also would be applicable to the Respondent.

The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer assisted method. The BOE’s valuation is assumed to be an independent valuation.

In the present appeal, the BOE sustained the initial valuation of Respondent, and Complainant is now seeking to change the assessment; therefore, the BOE presumption applies to Complainant.

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:

Buyer and seller are typically motivated.

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

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

Payment is made in cash or its equivalent.

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

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

Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the true market value of the subject property as of January 1, 2017. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id.

First, Complainant did not use any of the court approved methods of valuation to arrive at an opinion of TVM. Complainant testified that he had contacted appraisers who declined to perform an appraisal based on a lack of sales of comparable properties and due to the existence of the mother-in-law quarters. Although Complainant testified that his daughters were purchasing the subject property for $125,000, such evidence indicates a sale between family members and not a market-based arm’s length transaction. Second, the evidence concerning the condition of the property was incomplete in that it did not establish the depreciated value of the subject property in the first instance and did not include admissible evidence of replacement and repair costs to establish how the condition of the property affected its TVM as of January 1, 2017. Consequently, the evidence does not adequately support an opinion that the TVM of the subject property as of January 1, 2017, was between $120,000 and $125,000.

ORDER

The true market valuation for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property is $37,335 residential ($196,500 TVM), as of January 1, 2017.

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, 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 July 31, 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 31st day of July, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

Jacklyn Wood

Legal Coordinator

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Thomas & Deloise Dowd v. Jake Zimmerman, Assessor St. Louis County

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