State Tax Commission of Missouri
WILLIAM MAY, JR.,)
v.)Appeal Number 07-20209
ED BUSHMEYER, ASSESSOR,)
ST. LOUIS CITY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis City Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED.Hearing Officer finds true value in money for the subject property for tax years 2007 and 2008 to be $70,684, assessed value of $13,430.
Complainant appeared in person.
Respondent appeared by Counsel, Carl W. Yates, III, Associate County Counselor.
Case heard and decided by Hearing Officer Maureen Monaghan.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis City Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $70,684, assessed value of $13,430, as residential property.The Board of Equalization sustained the value.Complainant proposed a value of $54,000, assessed value of $10,260.A hearing was conducted on January 29, 2008, at theSt. LouisCity Hall,St. Louis,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
The following exhibits were offered into evidence on behalf of the Complainant.
Exhibit A – Closing Statement on the Subject Property
Exhibit B – MLS listings
Exhibit A was received into evidence.Respondent objected to Exhibit B as hearsay, irrelevant and lack of foundation.Objections sustained.
Testimony of William May, Jr.
The following exhibits were offered into evidence on behalf of the Respondent.
Exhibit 1 –Appraisal of Subject Property
All Exhibits were received into evidence.
Testimony of Linda Bohnenkamp.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis City Board of Equalization.
2.The subject property is located at 4116Pennsylvania,St. Louis,Missouri.The property is identified by parcel number 2627-00-0070-0.The property consists of a lot measuring 25 feet by 124 feet 6 inches. The lot is improved by a two-story brick structure that was once a two family flat but has been converted to a single-family structure.The house was built in 1927 and appears to be in average condition.The residence has 1,786 square feet of living area.
3.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board.
4.The properties relied upon by Respondent’s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within seven blocks of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007.The sale properties were similar to the subject.The appraiser properly adjusted for differences between the subject and each sale property.The adjustments made were appropriate for the present appraisal problem.
CONCLUSIONS OF LAW
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.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.Section 138.431.4, RSMo.
Board of Equalization Presumption
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.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).
Presumption on Assessor’s Value
The Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d. 341, 348-349 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Rebutting of Presumption of Correct Assessment
The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.
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.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).It is the fair market value of the subject property on the valuation date.Hermel, supra.
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 is 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 each 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; Exhibit 1, pp. 3-4.
Opinion Testimony by Experts
If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.
The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
Respondent’s Burden of Proof
The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property that is made by a computer, computer-assisted method or a computer program.There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $70,684, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1)The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2)The purchase prices from sales of at least three comparable properties and the address or location thereof.As used in this paragraph, the word comparable means that:
(a)Such sale was closed at a date relevant to the property valuation; and
(b)Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.
Section 137.115.1(1) & (2).
Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved.It does not mean that there may not be contrary evidence.Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974). The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.30 AmJur2d. 345-346, Evidence section 1167.“For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).
Assessor’s Opinion of Value
The Assessor presented the testimony of Linda Bohnenkamp, a real property appraiser at the St. Louis Assessor’s Office.Ms. Bohnenkamp presented an appraisal of the subject property.Ms. Bohnenkamp used the sales comparison approach as it is the most indicative of buyers and sellers in the market place.Ms. Bohnenkamp performed two analysis; one comparing sales of two family residences converted to single-family residences and one comparing sales of two family flats.Ms. Bohnenkamp relied primarily on her sales comparison of converted residences.She found three sales within seven blocks of the subject property.The properties sold from between $71,900 and $85,000.The appraiser did not make any adjustments.The Complainant questioned the appraiser as to not making adjustments due to the date of the sales (May 2005 to August 2006), age of the properties (82-117 years), and square footage (1,800 to 2,036).The Complainant did not present market evidence for the adjustments.After all adjustments were made, a final value of $77,000 was determined.
The properties relied upon by Respondent’s appraiser in performing her appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property.The adjustments made were appropriate for the present appraisal problem.
The appraisal report meets the standard of clear, convincing and cogent evidence as required by the statute to sustain the assessor’s original value.
Complainant’s Burden of Proof
In order to prevail, Complainant 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, 2007.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).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).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).
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value. 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.Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
Complainant proposed a value of $54,000 for the subject property which he purchased on December 30, 2004 for $54,000.The Complainant testified that a realtor was involved.The Complainant testified that his property’s value has not increased due to the economy.He testified that he may have paid more than market value since the purchase was part of 1031 exchange.The Complainant did not present market information regarding the issues presented.
Methods of Valuation
Missouricourts 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).
Complainant failed to meet his burden of proof.There was no substantial and persuasive evidence provided to support the fair market value of $54,000 proffered by Complainant.
The Assessor meets the standard of clear, convincing and cogent evidence as required by the statute to sustain the assessor’s original value.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forSt. LouisCityfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $13,430.
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis City, 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.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 February 19, 2008.
STATE TAX COMMISSION OFMISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 19thday of February, 2008, to:William May, Jr., 4600 Chippewa #126, St. Louis, MO 63116, Complainant; Carl W. Yates III, Associate City Counselor, 314 City Hall,St. Louis,MO63103, Attorney for Respondent; Ed Bushmeyer, Assessor, 120 City Hall,St. Louis,MO63103; Gregory Daly, Collector, 110 City Hall,St. Louis,MO63103.