State Tax Commission of Missouri
WALTER & LOIS SCHULTZ,)
)
Complainants,)
)
v.)Appeal Number 09-57019
)
TOM COPELAND, ASSESSOR,)
FRANKLIN COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On December 22, 2009, Senior Hearing Officer W. B. Tichenor entered his Decision and Order affirming the assessment by the Franklin County Board of Equalization.
Complainants filed their Application for Review of the Decision.
CONCLUSIONS OF LAW
Standard Upon Review
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but 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.[1]
The Hearing Officer as the trier of fact may consider the testimony of an expert witness or owner and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts or owners who testify on the issue of reasonable value, but may believe all or none of the expert’s or owner’s testimony and accept it in part or reject it in part.[2]
The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[3]
DECISION
Complainants’ Points on Review
Complainants raise the following points in their application for review:
1.Assessor’s estimate not comparable and does not constitute proper foundation.
2.Sustaining of objection to comparison to house at 242 St. Andrews Dr.
– Exhibit B.
3.Information from local realtors on market value of subject property did not
support value established by Assessor’s appraisal.
Points Raised Not Sufficient To Overturn Decision
Comparability of Assessor’s Appraisal
Complainants assert that there were many anomalies in the Assessor’s assessment including the use of a sale from July 2007.It is asserted that this property would have sold on January 1, 2009, for $75,000 less than its July 2007 sale.The critical flaw in this position is that no evidence was provided by Complainants at hearing to substantiate this position.More importantly, the Hearing Officer’s Decision neither adopted, nor rejected the appraisal tendered on behalf of the Respondent at hearing.The case was properly decided on the basis of Complainant’s failing to meet their burden of proof.The Hearing Officer properly found that the methodology developed by Complainants did not constitute an appropriate appraisal technique and therefore, no probative weight could be given to the conclusion of value.[4]
As the Hearing Officer correctly determined, the presumption of correct assessment by the Board of Equalization was not rebutted.[5]In accordance with the controlling case law, when the taxpayer fails to rebut the presumption of correct assessment by the presentation of substantial and persuasive evidence to establish the true value in money, the Board’s value must be sustained.
Ruling on Objection to Exhibit B
Complainants’ offering of Exhibit B was timely objected to by Respondent’s Counsel.The Hearing Officer had an obligation to rule on the objection.The Commission finds no error in the Hearing Officer sustaining the objection and excluding Exhibit B.The Hearing Officer’s discussion on this point sufficiently addressed the matter.[6]
Local Realtor Information
No realtor appeared to testify on behalf of Complainants at the evidentiary hearing.The Hearing Officer did not err on this point.Any discussion Complainants may have had with realtors concerning the value of their home on January 1, 2009, either prior to or after the evidentiary hearing, would be plain hearsay.
Conclusion
A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer that Complainants failed to meet their burden of proof and therefore the presumption of correct assessment was not rebutted.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[7]
The Hearing Officer did not err in his determinations as challenged by Complainants.
ORDER
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision 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 Commission.
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 Franklin 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 February 11, 2010.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
DECISION AND ORDER
HOLDING
Decision of the Franklin County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax years 2009 and 2010 is set at $833,000, residential assessed value of $158,270.Complainant, Walter Schultz appeared pro se.Respondent appeared in person and by County Counselor, Mark S. Vincent
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.
SUMMARY
Complainants appeal, on the ground of overvaluation, the decision of the Franklin County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $860,000, assessed value of $163,487, as residential property.The Board reduced the value to $833,000, assessed value of $158,270.Complainants proposed a value of $700,000, assessed value of $133,000.A hearing was conducted on December 3, 2009, at the Franklin County Government Building, Union, Missouri.
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 Franklin County Board of Equalization.
2.Subject Property.The subject property is located at 255 St. Andrews Drive, St. Albans, Missouri.The property is identified by map parcel number 57-8-1-2-3-39.The property consists of a .87 of an acre home site.The lot is improved by a one-story, brick, single-family structure of good quality construction.The house was built in 1995 and appears to be in normal condition for its age.The residence has a total of nine rooms, which includes four bedrooms, four full and one half baths, and contains 3,048 square feet of living area.There is a full basement, which has 1982 square feet of finished living area.The home has an attached three-car garage.[8]
3.No New Construction and Improvements.There was no evidence of new construction and improvement from January 1, 2009, to the date of hearing.Complainants have no plans for any new construction and improvements prior to January 1, 2010.Therefore, in the absence of new construction and improvements during 2009, the value set for tax year 2009 must remain the value for tax year 2010.[9]
4.Complainants’ Evidence.Mr. Schultz testified as to his opinion of value.Mr. Schultz’s opinion of value was based upon his calculations reflected in Exhibit A.Relying on the comparable sales utilized by Respondent’s appraiser, the Complainant calculated the adjusted price per square foot of living area for each of the three comparables and the average.He then calculated that if the value of his property was $700,000, the per square foot price would be $139.17.If the value was calculated to be $750,000 the per square foot price would be $149.11.If the value was calculated to be $800,000 the per square foot price would be $159.05.Exhibit a was received into evidence.
Complainant also offered into evidence Exhibit B – MultiList Listing on property at 242 St. Andrews Drive.Objection was made on the grounds of lack of foundation and hearsay.Objection was sustained.The exhibit is maintained in the Commission file, but is not part of the evidentiary record.
5.Evidence Not Substantial and Persuasive.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 $700,000, as proposed.
6.Respondent’s Evidence.Respondent presented the Appraisal Report – Exhibit 1 – and testimony of Lori Ruby, State Certified Residential Real Estate Appraiser for Franklin County.The appraisal determined a value of $833,000, relying on the sales comparison approach to value.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[10]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[11]The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, 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.[12]Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment.
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.[13]True value in money is defined in terms of value in exchange and not value in use.[14]It is the fair market value of the subject property on the valuation date.[15]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[16]
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.[17]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.[18] Complainants did not present an opinion of fair market value derived from a recognized appraisal methodology.
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.[19]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.”[20]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21]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.[22]
The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]Complainants failed to present evidence to establish that their opinion of value was based upon proper elements and a proper foundation.The method developed by Mr. Schultz of averaging adjusted per square foot values is not recognized as an appropriate appraisal technique for ad valorem tax valuations.Therefore, it can be given no probative weight.
MLS sale and listing sheets are not accepted as an appraisal of any property.The information contained in such documents may be relied upon by experts in performing an appraisal.However, the documents themselves do not have a proper foundation to establish value for other properties, and they constitute rank hearsay.Accordingly, they are not generally admissible, unless as part of a properly prepared appraisal report.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for Franklin County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2009 and 2010 is set at $158,270.
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.The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the appeal is based will result in summary denial. [25]
The Collector of Franklin 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.If no Application for Review is filed, the Collector, as well as the collectors of all affected political subdivisions, shall disburse the taxes 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 December 22, 2009.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
[1] 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).
[2] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992);Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[3] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[7] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[11] 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).
[12] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[13] St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).
[14] Daly v. P. D. George Company, et al, 77 SW3d 645, 649 (Mo.App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 SW2d 376, 380 (Mo.App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[16] 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.
[17] 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).
[18] 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).
[20] 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).
[23] 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).
[24] 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).