Willard & Carol Schnurbusch v. Daniel Franks, Howell County Assessor

STATE TAX COMMISSION OF MISSOURI

 

WILLARD & CAROL SCHNURBUSH,	) )
	)
Complainants	)
	)
v.	)	Appeal No. 17-61502
	)
DANIEL FRANKS, ASSESSOR,	)
HOWELL COUNTY, MISSOURI,	)
	)
Respondent.	)

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

HOLDING

On December 26, 2017, Senior Hearing Officer John Treu (Hearing Officer) entered his Decision and Order (Decision) finding Willard and Carol Schnurbusch (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Howell County Board of Equalization (BOE) and establish a true value in money (TVM) for the subject property of $0.00.   Complainants subsequently filed their Application for Review of Hearing Officer’s Decision.  Daniel Franks, Assessor of Howell County, Missouri (Respondent) thereafter filed his Suggestion’s in Opposition to Complainants’ Application for Review.  Complainants filed their Reply in Support of the Application for Review of the Hearing Officer’s Decision.

The State Tax Commission (STC) affirms 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.

FINDINGS OF FACT

The issue of overvaluation was presented at an evidentiary hearing on December 5, 2017, at the Howell County Courthouse, West Plains, Missouri.

Subject property is identified by parcel or locator number 15-5.0-16-000-000-057.0100.  It is further identified as 1496 State Route BB, West Plains, Howell County, Missouri.  The property is a 25,000 square foot lot improved with a commercial office building currently being used as a residence.  The improvement, constructed in 1996, is 3,200 square feet on two levels.  The upper level has four offices, a reception area, conference room, kitchen and two bathrooms.  The property has central air, gas furnace, wooden deck and porch.

Willard Schnurbusch (Complainant) testified that he has attempted to sell the property for thirteen years.  In 2005, he listed the property for $200,000.  In 2010, he attempted to auction the property.  The property was listed for sale at the time of the hearing for $175,000.  Complainant proposed a TVM for the subject property of $0.00.

Complainant’s proposed TVM of $0.00 was based upon conditions that he believes negatively impact his property.  The subject property is located near an animal shelter.  Complainant contends that the noise and odor from the shelter negatively influences the TVM and Respondent did not consider such factors in determining TVM.

On cross-examination, the Complainant was questioned as to the existence of a meat processing company, gravel company, flooring company near the property.  The zoning for the subject property is a C2 commercial property zoning.

Respondent determined a TVM for the subject property of $89,680 and classified it as residential.  The BOE sustained the valuation as determined by Respondent.  Respondent offered into evidence a check of $20,000 made out to Complainants from the Beard Law Firm, LLC, offering to purchase the subject property.  Complainant rejected the offer.

CONCLUSIONS OF LAW

Complainants’ Points on Review

            Complainants alleged that the Hearing Officer’s Decision is erroneous, arbitrary, capricious, unreasonable, constitutes an abuse of discretion and is contrary to Missouri law in that:

1. Complainants presented competent and persuasive evidence that Respondent’s TVM for the subject property did not consider the negative impact of the location of the animal shelter and the negative impact on TVM is established by the lack of offers to purchase the property;
2. Complainants presented competent and persuasive evidence that proposed TVM of $0.00 is temporary value until such time as the negative impact of the animal shelter is no longer a consideration due to enforcement of the nuisance claim Complainants contend the City of West Plains is not enforcing;
3. Hearing Officer failed to give sufficient weight to the evidence of the animal shelter, its buildings (manufactured homes), noise and odors;
4. Complainants contend that Attorney for Respondent objected to the admissibility of their evidence regarding any possible violations of West Plain City Ordinances by the animal shelter and testimony of City Administrator Thomas Stehn, and the Hearing Officer erred by sustaining the objection;
5. The Hearing Officer erred in considering the $20,000 offer by the Attorney for Respondent to purchase the subject property; and
6. The Hearing Officer erred in considering the offer made by the Attorney for Respondent to purchase the property as it was made almost one year after January 1, 2017.

In summary, Complainants contend that the TVM of the subject property as of January 1, 2017, is $0.00.  The TVM is temporary based upon the negative impact of the proximity of the animal shelter.  The TVM would be more than $0.00 if the shelter was not located next to the subject property and the City of West Plains enforced their ordinances.

Respondent’s Response to Complainants’ Points on Review

            In his response opposing Complainants’ Application for Review, Respondent argues that the Hearing Officer did not err because Complainants did not produce evidence of TVM under any recognized approach to determining TVM.  Further, Complainants’ proposed value of $0.00 is contradicted by their listing of the property for $175,000 and refusing an offer of $20,000.

Standard of Review

A party subject to a Decision and Order of a Hearing Officer with the STC may file an application requesting the case be reviewed by the STC.  Section 138.432 RSMo Cum. Supp. 2015; 12 CSR 30-3.080(4).  The STC may then summarily allow or deny the request.  Section 138.432; 12 CSR 30-3.080(5).  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; 12 CSR 30-3.080(5)(A).

STC’s Ruling

For the reasons that follow, the STC finds Complainants’ 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 Complainants’, Respondent’s response opposing the Application for Review, and Complainants’ Reply, concludes that the Hearing Officer’s Decision was correct and proper.

 

DECISION

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 TVM 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.

The 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).  TVM 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).  TVM 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, TVM is the fair market value of the subject property on the valuation date.  Hermel, Inc., 564 S.W.2d at 897.

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

A presumption exists that the assessed value fixed by the BOE is correct.  Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895.  “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348.  Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion.  Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).  Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact.  Cupples Hesse Corp., 329 S.W.2d at 702.  The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.   Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).

There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC appeal still bears the burden of proof.  The taxpayer is the moving party seeking affirmative relief.   Therefore, the complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”  Westwood Partnership, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).

Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land.  Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992).  “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.”  Carmel Energy, Inc., 827 S.W.2d at 783

In this case, Complainant testified that the TVM of the subject property was $0.00 as of January 1, 2017.

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.  The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.  St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

The Hearing Officer, as the trier of fact, may consider the testimony of an expert witness and give it as much weight and credit as deemed necessary when viewed in connection with all other circumstances.  Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991).  The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part.  Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).

Neither Complainant nor Respondent presented expert testimony.  Complainant was not recognized as an expert in the field of real estate appraisal.

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the STC.  It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.   See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).  Missouri courts have approved the comparable sales or market approach, the cost approach, and the income approach as recognized methods of arriving at fair market value.   St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. 1974).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).  “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof  Corp., 789 S.W.2d at 869.  “The method used depends on several variables inherent in the highest and best use of the property in question.”  Snider, 156 S.W.3d at 347.

“Each method uses its own unique factors to calculate the property’s true value in money.”  Id.  “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.  Id. at 348.  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. (quotation omitted).  “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.”  Id.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated.

 

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.

 

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

            Subject property is located in the proximity of an animal shelter.  Complainants contend the location of the animal shelter violates the West Plains Code and negatively influences the value of the property. Complainants have been involved in litigation with the City of West Plains alleging the animal shelter located adjacent to the subject property violates the city codes due to its use of mobile homes and the fact that it is operating an animal shelter.  Complainants contend both the structures and the activity violate the City codes.  Complainants propose that the TVM is $150,000 without the existence of the animal shelter; Complainants contend that the TVM is $0.00 due to the existence of the shelter.

The evidence established that Complainants purchased the property in 1995 for $15,000.  Complainants constructed the improvements as an office building but use it as a residence. Complainants have attempted to sell the property for thirteen years.  The property is currently listed for $175,000.  Complainants testified that no one has offered to purchase the property.

Complainants provided no evidence other than their testimony that the animal shelter negatively impacts the TVM.  Complainants provided no objective evidence, such as an appraisal, to establish that the property’s TVM as of January 1, 2017 was $0.00.

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. “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.  The Complainants bear the burden of proof.

Complainants failed to present any recognized approach to value.  Complainants failed to present substantial and persuasive evidence to establish a TVM of the subject property as of January 1, 2017.

Summary & Conclusion

A review of the record in the present appeal provides ample support for the determinations made by the Hearing Officer.  A reasonable mind could have conscientiously reached the same result based on a full review of the entire record. The STC finds no basis to support a determination that the Hearing Officer acted in an erroneous, arbitrary, capricious, or unreasonable manner, or that he abused his discretion as the trier of fact and concluder of law in this appeal.  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).

The Hearing Officer did not err in his determinations as challenged by Complainants.

 

ORDER

The Decision of the Hearing Officer is AFFIRMED.  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  Howell 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 April 3, 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 3rd day of April, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

Jacklyn Wood

Legal Coordinator

 

 

STATE TAX COMMISSION OF MISSOURI

 

WILLARD & CAROL SCHNURBUSCH	)
	)
Complainant	)
	)
v.	)	Appeal No. 17-61502
	)	15-5.0-16-000-000-057.0100
DANIEL FRANKS,  ASSESSOR	)
HOWELL COUNTY, MISSOURI,	)
	)
Respondent	)

 

DECISION AND ORDER

 

HOLDING

 

Decision of the County Board of Equalization (BOE) of Howell County is AFFIRMED.  Willard and Carol Schnurbusch (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.

True value in money (TVM) for the subject property for tax year 2017 is set at $89,680, residential classification.

Complainants appeared pro se.

Daniel Franks, the Assessor of Howell County, Missouri (Respondent) appeared personally and by attorney Lyndell Beard.

Case heard and decided by Senior Hearing Officer John Treu.

ISSUE

Complainants appeal on the ground of overvaluation, the decision of the Howell County BOE, which set a TVM of $89,680, residential classification.  Complainants assert that the subject property has a TVM of $0.00.  The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as of January 1, 2017.  The TVM as of January 1 of the odd numbered year remains the TVM as of January 1 of the following even numbered year unless there is new construction and improvement to the property.  Section 137.115.1 RSMo

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.  Complainants timely appealed to the STC from the decision of the Howell County BOE.
2. Evidentiary Hearing. The Evidentiary Hearing was held on December 5, 2017, at the Howell County Courthouse, West Plains, Missouri.
3. Identification of Subject Property. The subject property is identified by map parcel number or locator number 15-5.0-16-000-000-057.0100.  It is further identified as 1496 State Route BB, West Plains, Howell County, Missouri. (Complaint for Review of Assessment)
4. Description of Subject Property. The subject property consists of a tract of land of approximately 25,000 square feet, improved by a commercial type office building utilized by Complainants as a residence.  The improvement consists of 3,200 square feet on two levels.  The upper level consists of 1,600 square feet, which includes four total office rooms, a reception area, a conference room, a kitchen area and two bathrooms.  Amenities include central air, high efficiency gas furnace, a 9’ x 40’ wooden deck and a 6’ x 40’ porch.  (Ex. C and Testimony)
5. Attempted Sale of Subject. Complainants have attempted to sell the subject property for thirteen years.  In July 31, 2005, Complainants listed the subject property for $200,000.  In 2010, Complainants attempted to sell the subject property at an auction.  No bids were offered.  The subject property is currently listed by Complainants for $175,000.  (Ex. A, B, C and Testimony).
6. Assessment. The Assessor set a TVM of $89,680.  The BOE set a TVM of $89,680.
7. Complainants’ Evidence. Complainants offered into evidence the following:

Exhibit	Description
A	History of Attempts to Sell Subject Property
B	Advertisements, Listing Contract and Invoice
C	Auction Advertisement
D	STC Decision and Order 15-30729
E	STC Decision and Order 17-44000
F	Internet Article Regarding Property in San Francisco
G	Maps
H	Portions of West Plains Code
I	West Plains Code, Section 10-47 (purportedly now Section 6-52)
J	Aerial Photographs
K	Portion of Article
L	Third Amended Petition with Supplements
M	Various Photographs of Surrounding Structures
N	Various Photographs of Animal Shelter Sign, Loose Dog, For Sale Sign, Other
O	Photographs of Complainants’ Other Property (Not  Subject Property)

 

Exhibits A, B, C, G, H, I, J and N were received into evidence without objection.  Respondent objected to Exhibits D, E, F, K, L, M and O.  Exhibits F and O were excluded from the evidentiary record as irrelevant.  Exhibits D, E, K, L and M were received into the evidentiary record to be given such weight, if any, the Hearing Officer deemed appropriate.

Complainants assert that the TVM of the subject property is negatively impacted by the existence of an animal shelter located 60 feet from the subject property.  Complainants contend that the animal shelter houses over 100 animals, both dogs and cats, and emits odors from exhaust fans facing the subject property.  Complainants also contend the dogs produce excessive barking noise.  Finally, Complainants contend the aforementioned activities violate West Plains, Missouri, Code.

8. Respondent’s Evidence. Respondent offered into evidence Exhibit 1 which consisted of a check from the Beard Law Firm, LLC, in the amount of $20,000, presented at the Evidentiary Hearing to Complainants as an offer to purchase the subject property.  Exhibit 1 was received into evidence without objection.
9. Presumption of Correct Assessment Not Rebutted. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE and establish the TVM, as of January 1, 2017, to be $0.00, as proposed by Complainants.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The STC has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.  The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.  Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo. 

Basis of Assessment

            The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.  Article X, Sections 4(a) and 4(b), Mo. Const. of 1945.   The constitutional mandate is to find the TVM for the property under appeal.  By statute real and tangible personal property are assessed at set percentages of TVM. Section 137.115.5, RSMo – residential property at 19% of TVM; commercial property at 32% of TVM and agricultural property at 12% of TVM.

Presumption In Appeal

There is a presumption of validity, good faith and correctness of assessment by the County BOE.  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).   This presumption is a rebuttable rather than a conclusive presumption.  It places the burden of going forward with some substantial evidence on the taxpayer – Complainants.  The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s TVM is erroneous and what the TVM should have been placed on the property. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra.   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).

Complainants’ Burden of Proof

In order to prevail, Complainants must present an opinion of TVM and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2017.  Hermel, supra.   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, in the present appeal, Complainants bear 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).  A valuation which does not reflect the TVM of the property under appeal is an unlawful, unfair and improper assessment.

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its TVM.   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 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. 1980).

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its TVM 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.  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).    TVM is defined in terms of value in exchange and not value in use.  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).

It is the TVM of the subject property on the valuation date. Hermel, supra.

TVM is the most probable price in terms of money which a property should bring in a 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.  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.

 

Investigation by Hearing Officer

In order to investigate appeals filed with the STC, the Hearing Officer may inquire of the owners of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, sub-classification or assessment of the property.  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. Section 138.430.2, RSMo.  The Hearing Officer made inquiry of Complainants during the evidentiary hearing.

Weight to be Given Evidence

            The Hearing Officer is not bound by any single formula, rule or method in determining TVM, 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.  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).

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).

Complainants Fail to Prove TVM

Complainants contend the subject property’s proximity to an animal shelter negatively impacts the TVM of the subject property.  Even assuming Complainants contentions of a negative impact on the TVM of the subject property due to the animal shelter, Complainants presented no evidence utilizing any accepted method of appraisal to support their proposed TVM of $0.00. Complainants did not provide substantial and persuasive evidence that the BOE determination of TVM did not consider any impact of the animal shelter or establish the TVM of the subject property and the monetary impact of any purported nuisance on the subject property’s TVM.  Consequently, Complainant failed to meet their burden of proof.

The Hearing Officer is persuaded that the subject property has some TVM above $0.00.  The subject property is currently listed by Complainants for $175,000.  Furthermore, Complainants were presented with a check for $20,000 to purchase the subject property during the Evidentiary Hearing, but refused to sell the subject property for such amount.

ORDER

The assessed valuation for the subject property as determined by the BOE for Howell County, Missouri, for the subject tax day, is AFFIRMED.

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 Howell 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 this 26th day of December, 2017.

STATE TAX COMMISSION OF MISSOURI

John Treu

Senior Hearing Officer

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 26th day of December, 2017, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

AssessorHowell@centurytel.net; Collector; Willard & Carol Schnurbusch, 6522 County Road 2570, West Plains, MO 65775

 

Jacklyn Wood

Legal Coordinator