STATE TAX COMMISSION OF MISSOURI
|v.||)||Appeal No. 15-15948|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessment made by the Board of Equalization of St. Louis County (BOE) is SET ASIDE. Complainant Tom Weiss (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE. Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) presented substantial and persuasive evidence to establish that the assessed value in money for the subject property for tax years 2015 and 2016 should be set at $24,890 residential ($131,000 true market value or TMV).
Complainant appeared pro se.
Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) appeared by Steven Robson, Assistant County Counselor.
Case heard and decided by Senior Hearing Officer Amy S. Westermann.
Complainant appealed on the ground of overvaluation. Respondent initially set the TMV of the subject property, as residential property, at $142,600. The BOE lowered Respondent’s valuation to $134,000. The Commission takes this appeal to determine the TMV of the subject property on January 1, 2015.
The Senior 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 June 16, 2016, 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 23S340493. It is further identified as 233 Warner Court, Ballwin, St. Louis County, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of a 1,593 square foot, single family, ranch-style home built in 1959 and situated on a 14,880 square foot residential lot. (Exhibit 1) The subject property includes three bedrooms, one bathroom, and is built on a concrete slab foundation. The subject property utilizes a gas furnace and water heater and has central air conditioning. The subject property also includes a two car garage, a patio, and one fireplace. The exterior consists of aluminum and vinyl. (Exhibit 1)
- Assessment. Respondent set a true market value (TMV) on the subject property at $142,600 residential, as of January 1, 2015.
- Board of Equalization. The BOE lowered Respondent’s TMV of the subject property to $134,000.
- Complainant’s Evidence. Complainant testified in his own behalf. Complainant testified that he had purchased the subject property on November 12, 2014, for approximately $90,000 to 95,000. Complainant testified that the subject property was encumbered by a mortgage of approximately $62,000. Complainant testified that the subject property had not been listed for sale between the time he purchased it in 2014 and the date of the Evidentiary Hearing. Complainant testified that he had not received any offers to purchase the subject property. Complainant testified that the house had significant structural damage to the slab foundation of the house, of which he was unaware when he purchased the subject property. Complainant testified that the concrete slab was broken into pieces, causing the foundation of the house to shift. Complainant testified that he had obtained estimates from various companies that would replace the concrete slab for between approximately $13,000 and $20,000. (Exhibit A) Complainant testified that he had contacted a realtor from Coldwell Banker to sell the subject property after he learned that the foundation would need extensive repair. Complainant testified that the realtor had conducted a market analysis and had valued the property at approximately $95,000. Complainant testified that the realtor had said Complainant would not even be able to recover the money he had paid for the subject property after paying the realtor’s commission, so Complainant decided not to list the property for sale. Complainant testified that similar properties in the area near the subject property and in better condition than the subject property had sold for less than what he had paid for the subject property. On cross examination, Complainant testified that he had purchased the subject property from the federal government’s Department of Housing and Urban Development. Also on cross examination Complainant testified that the sale had been a government sale and that the seller had paid all of the closing costs. Complainant opined that the TMV of the subject property was $90,000 to 95,000 as of January 1, 2015.
Complainant offered as evidence an invoice from Mirowski Construction for “foundation repair/labor and materials, garage, dining room, and [unreadable] in middle kitchen $12,580” (Exhibit A); an estimate for non-specific repairs to the subject property added to repairs for another property (Exhibit B); and residential detail descriptions retrieved from the MARIS Matrix for the subject property and several comparable properties (Exhibit C). All of Complainant’s comparable properties were situated in the Parkway School District while the subject property is situated in the Rockwood School District. (Exhibit C)
Respondent objected to Exhibit B on the ground that it lacked foundation and did not specifically show that the estimate was for repairs to the subject property. The Senior Hearing Officer sustained the objection and excluded Exhibit B from evidence. Respondent objected to Exhibit C to the extent that it contained listings for three comparable properties that did not include the sales prices for those particular listings. The Senior Hearing Officer sustained the objection and excluded those three listings but received the remainder of Exhibit C into the record. Respondent did not object to Complainant’s other evidence, which was received into the record.
- Respondent’s Evidence. Respondent offered as evidence the testimony of State Certified Residential Real Estate Appraiser Mark Stuart (Appraiser) along with the Appraiser’s report (Exhibit 1). Respondent also offered the certificate of value (COV) for the subject property. (Exhibit 2)
The Appraiser opined that the TMV of the subject property as of January 1, 2015, was $131,000. The Appraiser testified that he utilized the sales comparison approach to arrive at his opinion of value. The Appraiser testified that he had chosen three comparables located within one-quarter of a mile from the subject property and in the same neighborhood as the subject property. (Exhibit 1)
Complainant did not object to Respondent’s evidence, which was received into the record.
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, including the application of any abatement. The Senior 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.
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).
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).
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE. 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 lowered the initial valuation of Respondent, but Respondent is not seeking to sustain the original assessment; therefore, the computer-assisted presumption is not applicable in the present appeal.
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).
Although Complainant presented evidence to support his opinion of the subject property’s TMV, that evidence is neither substantial nor persuasive because, if relied upon, the fact finder would be required to resort to speculation to conclude the TMV of the subject property on January 1, 2015, should be $90,000 to $95,000.
First, Complainant’s evidence was not substantial to support his opinion as to value in this appeal before the Commission. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Complainant’s opinion that the subject property had a value of $90,000 to $95,000 was not supported by any of the three recognized approaches to value. Complainant testified that he had the property analyzed by a realtor after he purchased it and was informed that he would not even recover the $90,000 to $95,000 he had paid for the subject property. However, this testimony constituted hearsay absent a report and supporting testimony or an affidavit from the realtor who conducted the analysis to provide sufficient indicia of reliability.
Second, Complainant’s evidence was not persuasive to support his opinion as to value. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id. Complainant’s Exhibit A, which purported to show that repairs to the concrete slab foundation of the house would be cost prohibitive, simply showed a non-specific estimate of labor and material in the amount of $12,580. (Exhibit 1) Complainant did not testify or present other evidence establishing that the value of the subject property would not increase after such hypothetical repairs were to be made. Given this limited evidence, it is unknown whether the repairs to the foundation would add value to the house. Additionally, Complainant argued that the valuation of the subject property should be reduced from the BOE’s determination of value because his comparables showed that other properties in better condition than the subject property had sold for lower prices than the subject property. However, Complainant’s comparables were not sufficiently similar to the subject property to draw the conclusion that the value of the subject property should be reduced. Exhibit C indicated that the subject property is in the Rockwood School District, but the comparables were located in the Parkway School District. (Exhibit C) Exhibit C indicated that the subject property contained 1,593 square feet, but the comparables ranged between 750 square feet and 1,084 square feet. (Exhibit C) Exhibit C indicated that the subject property had an updated kitchen with granite countertops and newer cabinetry and appliances, but the comparables did not boast such amenities. (Exhibit C) Significantly, some of the comparables were described as “short sales” and others were described as “investment opportunities” that needed work. (Exhibit C) In short, Exhibit C did not calculate any market based adjustments for specific similarities and differences between the comparables and the subject property to persuade the trier of fact that the subject property should be valued at between $90,000 and $95,000. Furthermore, on cross examination, Complainant acknowledged that his signature appeared on the Certificate of Value for the subject property, which had been filed with the St. Louis County Recorder of Deeds following Complainant’s purchase of the subject property. (Exhibit 2) The Certificate of Value stated that the total paid for the subject property in November 2014 was $98,199. (Exhibit 2)
On the contrary, Respondent presented substantial and persuasive evidence to rebut the presumption of correct valuation by the BOE. In arriving at an opinion of value, the Appraiser considered all three approaches to value the subject property: the cost approach, the income approach, and the sales comparison approach. The Appraiser ultimately utilized the sales comparison approach because the other two approaches were inapplicable. The Appraiser analyzed three comparable sales from the subject property’s neighborhood. (Exhibit 1) The sale prices of the comparables ranged from $109,000 to $130,000. The comparables all were concrete slab foundation, ranch-style homes built in the same year as the subject property. The comparables contained between 1,008 square feet and 1,392 square feet, and the Appraiser made an upward adjustment to each of the comparables to account for the subject property’s additional square footage. All three of the comparables were of the same condition as the subject property. The Appraiser made additional market-based adjustments to the comparables for garages, number of bathrooms, and fireplaces. (Exhibit 1) The adjusted sale prices of the comparables ranged from $125,700 to $134,400. Placing equal weight on all four of the comparables, the Appraiser opined that the subject property had a TMV of $131,000 as of January 1, 2015. (Exhibit 1)
From this substantial and persuasive evidence, it is reasonable to find and conclude that Respondent rebutted the presumption of correct valuation by the BOE and that the TMV of the subject property on January 1, 2015, was $131,000.
The true market valuation for the subject property as determined by the BOE is SET ASIDE.
The assessed value for the subject property for tax years 2015 and 2016 is set at $24,890 residential ($131,000 TMV).
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
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 August 2, 2016.
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 2nd day of August, 2016, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.