State Tax Commission of Missouri
THOMAS AND DIANE MARTIN,)
v.) Appeal Number 10-10006
JAKE ZIMMERMAN, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax year 2010 is set at $595,000, residential assessed value of $113,050.Complainant Thomas Martin appeared pro se.Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
Complainants appeal, 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, 2009.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.A hearing was conducted on May 3, 2011, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
3.Subject Property.The subject property is located at 30 Ridgetop Dr., Richmond Heights, Missouri.The property is identified by locator number 19K140069.The property consists of a 12,781 square foot lot improved with a two story brick, single family residence built in 1926.The gross living area is 2,486 square feet.The house has a full basement.The residence has a total of seven rooms, three bedrooms, two full and one half bathrooms.
4.Complainant’s Evidence.Mr. Martin testified in his own behalf.He stated his opinion of value to be $500,000.Complainant offered into evidence Exhibits A, B, C, D and E.Exhibit B was received, the other exhibits were excluded.See, Complainants’ Exhibits – Rulings on Objections, infra.There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.
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, 2009, to be $500,000, as proposed.
5.Respondent’s Evidence.Respondent offered into evidence Exhibit 1 – Appraisal Report of Robert Steven Koch, State Certified Residential Real Estate Appraiser and Exhibit 2 – Time of Sale Adjustment Grid.Both exhibits were received into evidence.Mr. Koch testified in support of his appraisal of the property.Mr. Koch concluded a value of $595,000 relying on a sales comparison approach to value.
The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within less than a third of a mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.
The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.
Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, to be $595,000, assessed residential value of $113,050.
CONCLUSIONS OF LAW AND DECISION
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.
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.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.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.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.Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment and establish the true value in money of the property under appeal as of January 1, 2009.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.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.
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.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. Complainant presented no evidence to establish true value in money under any recognized approach to value.Respondent’s evidence concluded value relying on the sales comparison approach.This approach to value is generally recognized to be the most appropriate methodology to be utilized when appraising an owner occupied residential property.
Complainants’ Burden of Proof
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, 2009.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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Mr. Martin’s opinion of value was based upon his having been an investor in real estate and his knowledge of cost for repairs.Neither basis provides sufficient qualification to establish the owner in this instance to be an expert in the appraisal of real property.There was no market data presented under any recognized appraisal methodology to support the owner’s opinion of value of $500,000.There was no substantiating evidence to establish that the opinion presented was based upon proper elements or a proper foundation.Accordingly, the owner’s opinion can be afforded no probative weight in this appeal.
Complainants’ Exhibits – Rulings on Objections
Counsel for Respondent objected to Complainants’ Exhibits A, C, D and E.The objections were sustained at hearing.The Exhibits are maintained in the Commission file only as offers of proof and not as evidence in the record of this appeal.
Exhibit A – Multi-List Service (MLS) Data Sheets
This exhibit consisted of MLS data sheets on the three comparable properties used in Mr. Koch’s appraisal.MLS data sheets, although a source of information for the appraiser, are nevertheless a hearsay document.The documents as tendered by the owner were not established to be relevant to support a value of $500,000.Mr. Martin was not established to be an expert in appraisal of real estate and accordingly could not utilize such documents to “appraiser” the property under appeal.
Exhibit C – Email – Plumbing Replacement
This document consisted of an email in June, 2011 in which Mr. Martin inquires as to a cost for plumbing updating.The document has no probative value to support the owner’s opinion of the fair market value of the subject property as it existed on January 1, 2009.The individual providing an answer to Mr. Martin’s inquiry was not available to testify and lay any foundation to support his response.
Exhibit D – Window and Door Estimate 4/26/11
This document was a proposal for a complete window and door renovation.While this is a detailed bid and in various instances bids for damage repairs are received into evidence to address a specific condition factor, this did not fall into that category.The information contained in the estimate as to a cost for a total renovation in April, 2011 has no probative value to
establish what a willing buyer and seller would have agreed to as the purchase price for the subject property on January 1, 2009.
Exhibit E – Tuck Pointing Estimate 4/15/11
The final excluded document is a repair estimate for tuck pointing to the subject.As with Exhibit D the document does not move forward the inquiry as to the true value in money of the Complainants’ property on January 1, 2009.
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.The appraisal report of Mr. Koch met the required burden of proof to rebut the presumption of correct assessment and establish the fair market value for the subject property as of January 1, 2009, to be $595,000.
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 SET ASIDE.
The assessed value for the subject property for tax year 2010 is set at $113,050.
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.
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.If no Application for Review is filed with the Commission within thirty days of the mailing date set forth in the Certificate of Service, the Collector, 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.
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 16, 2011.
STATE TAX COMMISSION OFMISSOURI
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 16thday of June, 2011, to:Thomas Martin, 9904 Clayton Road, Suite 129, St. Louis, MO 63124, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Jake Zimmerman,Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
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
 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).
 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).
 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.
 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).
 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).
 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).
 The email read:“Bill, I am trying to appealmy real estate taxes based on my house needing some updates.The house is 85 years old and has mostly original galvanized steel plumbing.It also has two stacks that need to be replaced.It is a 2500 sf two story with plaster walls.I am estimating the cost to replace all plumbing including the stacks and plaster repair to be about $40,000.Do you think I’m in the ball park?”The reply was:“Having just done this – yes.”