William & Renda Williaford v. Strahan (Taney)

February 29th, 2012

State Tax Commission of Missouri

WILLIAM M. & RENDA C. WILLIAFORD,)

)

Complainants,)

)

v.) Appeal No.11-89502

)

JAMES STRAHAN,ASSESSOR,)

TANEY COUNTY,MISSOURI,)

)

Respondent.)

DECISION AND ORDER

 

HOLDING

Decision of the Taney County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED.Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.

True value in money for the subject property for tax years 2011 and 2012 is set at $324,000, residential assessed value of $61,500.

Complainant William M. Williaford appeared pro se.

Respondent appeared in person and by Counsel, Jason Coatney, Keck & Austin LLC, Springfield, Missouri.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Taney County Board of Equalization, which reduced the valuation of the subject property.The Commission takes this appeal to determine (1) the true value in money for the subject property on January 1, 2011; and (2) whether there was an intentional plan by the assessing officials (Assessor/Board of Equalization) to assess the property under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2011 residential assessment ratio for Taney County.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 Taney County Board of Equalization.A hearing was conducted on January 12, 2012, at the Taney County Justice Center, Forsyth, Missouri.


2.Subject Property.The subject property is located at 120 Bluff Cover, Blue Eye, Missouri.The property is identified by map parcel number 19-2-3-3-1-26 (Lots 22 & 23 – William’s Landing Subdivision).The property consists of a 171.60 x 227.71 irregular lot, improved by a single family residence containing a base living area of 2,084 square feet.The residence was constructed in 2007.[1]

3.Assessment.Respondent appraised the property under appeal at $363,740, a residential assessed value of $69,110.[2]The Board reduced the value to $324,000, a residential assessed value of $61,560.[3]

4.Complainants’ Evidence.Mr. Williaford testified in his own behalf.He stated his opinion of value for the subject property as of January 1, 2011 to be $290,000 or $300,000.[4]He offered into evidence the following exhibits:[5]


EXHIBIT

DESCRIPTION

A

2011 Change Notice for Subject

B

Complainants’ 2010/2011 Real Property Tax Bill

C

List of Owners by Lot in the subject subdivision

D

Plat of William’s Landing Subdivision

E

Chart of Table Rock Lake/White River levels on May 27, 2011

F

Four Photographs of flooding of the road into the Subject

G

Photographs of three homes in subdivision

H

Photograph of Subject

I

Two Photographs of Subject’s Shop

J

Photo and listing data on 112 Moondance

K

Blueprint of part of Subject’s floor plan

There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.[6]

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, 2011, to be $290,000 to 300,000.

5.Respondent’s Evidence.Respondent testified in support of the valuation made by the Board.Respondent offered the following exhibits at hearing, which were received into evidence:[7]

EXHIBIT

DESCRIPTION

1

Aerial Photograph of subject subdivision

2, 3 & 4

Property Record Card for Subject

5

Property Record Card for Parcel 19-2-3-3-1-56 – Jaynes Property

6

Property Record Card for Parcel 19-2-3-3-1-57 – Hartman (G & J) Property

7

Property Record Card for Parcel 19-2-3-3-1-58 – Reed Property

8

Property Record Card for Parcel 19-2-3-3-1-59 – Rice Property

9

Property Record Card for Parcel 19-2-3-3-1-25 – Poff Property

11

Property Record Card for Parcel 19-2-3-3-1-23 – Hartman (R & K) Property

12

Property Record Card for Parcel 19-2-3-3-1-29 – Brown Property

13

Listing Information on 112 Moondance


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.[8]

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.[9]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[10]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[11]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[12]Complainants presented no substantial and persuasive evidence that rebutted the presumption of correct assessment by the Board.

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 presented no valuation method which has been recognized by the Courts of Missouri or the Commission to establish fair market value.


Complainants Fail To Prove Value


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, 2011.[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]A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.

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]

Complainants’ Evidence

A review of the exhibits tendered by Mr. Williaford shows that none of the documents provided any relevant evidence from which a determination of the fair market value of the subject property could be ascertained under any recognized and established appraisal methodology.


Exhibit A – 2011 Change Notice for Subject

The 2011 Change Notice for the Subject provides no information from which a determination of value can be concluded as of January 1, 2011.There is nothing that supports the owner’s opinion of value of $290,000 – $300,000.The fact that the assessed value increased from $38,265 (2010) to $69,110 (2011) is irrelevant to the fair market value as of January 1, 2012.

Exhibit B – Complainants’ 2010/2011 Real Property Tax Bill

Tax bills are never relevant to proving value.They only go to prove the amount of taxes on a given property.Like Exhibit A the increase in taxes is irrelevant to establish what a willing buyer would have paid for Complainants’ property on January 1, 2011.

Exhibit C – List of Owners by Lot in the Subject Subdivision

A list of owners has nothing to do with establishing fair market value of the property.It is irrelevant.

Exhibit D – Plat of William’s Landing Subdivision

The plat helps the Hearing Officer understand the general configuration and location of lots within the subdivision.However, none of that proves value.There is no relevance to the plat since there was no real dispute as to the location of subject or other properties.

Exhibit E – Chart of Table Rock Lake/White River levels on May 27, 2011

The Exhibit was excluded due to an objection as to relevance.There being no factual issue concerning what the lake levels were during May 27, 2011 the exhibit was irrelevant.There was nothing in the document to assist in establishing what a willing buyer and seller would have agreed to as the purchase price on January 1, 2011.


Exhibit F – Flooding Photographs

The testimony of Mr. Williaford established some incidents of flooding of the entry road to the subject division.It appears to be an irregular occasion.While the photographs have some small degree of relevance in conjunction with Complainant’s testimony concerning a factor which would impact value, in the case a picture (or four of them) are not worth a thousand words to establish value.They are hardly worth a few words.The Hearing Officer can’t conclude the Williaford home is worth $290,000 to $300,000 based on some occasional flooding of the entry road to the subdivision.

Exhibits G, H & I – Photographs

The photographs of three other homes, the subject, and the shop in the subject fail to provide any basis to determine the true value in money as of January 1, 2011 for the property under appeal.Value of a home cannot be ascertained from comparing photographs of other properties to the subject.

Exhibit J – Photo and Listing Data – 112 Moondance

Information on one property which sold in November, 2011 is insufficient to establish the value of the Complainants’ property.The Moondance property might have been utilized by an appraiser as a comparable property in a sales comparison analysis.However, the raw data and photograph are far short of an appraisal of the subject.Furthermore, the sale of a single similar property is insufficient to provide a valid basis for performing a sales comparison approach to value.Therefore, the Exhibit is not probative on the value of the subject property.

Exhibit K – Blueprint – Part of Subject’s Floor Plan

This Exhibit was offered to challenge the Subject’s Property Record Card which showed an adjusted living area of 4099 square feet.The document showed a total of 3264 square feet of living area.Irrespective of the variation between the subject’s floor plan dimensions and the calculation under the Assessor’s mass valuation system of an adjusted living area, the Exhibit does not prove fair market value of the subject.

Summary

None of Complainants’ Exhibits provide any basis from which a determination of value can be concluded.Therefore, Complainants’ entire case rests upon Mr. Williaford’s opinion of value offered at the evidence hearing and the basis for his opinion.The Exhibits presented by Complainants do not constitute substantial and persuasive evidence to prove value.Complainant’s failed to carry their burden of proof based on the Exhibits received into the record.

Owner’s Opinion of Value Non-Probative

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] In response to the Hearing Officer’s inquiry as to Mr. Williaford’s opinion as owner of the property under appeal, the opinion of $290,000 to $300,000 was given. When further inquiry was made as to what formed the basis for the owner’s opinion of value, he indicated it would be developed from the exhibits which he would offer into evidence.

As reviewed above, none of Complainants’ exhibits individually or collectively provide substantial and persuasive evidence that would establish that as of January 1, 2011, the subject property would have sold for only $290,000 to $300,000. “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.”[25] Therefore, the opinion of Mr. Williaford was based upon improper elements and an improper foundation. Accordingly, there is no probative value whatsoever in the owner’s opinion.

An owner’s opinion of value unsupported and unsubstantiated by market data provides no evidence to either rebut the presumption of correct assessment by the Board or to establish fair market value. 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.”[4] Mr. Williaford failed to meet his burden of proof on the single essential element of his case, i.e. what a willing buyer and seller would have agreed to as the purchase price on January 1, 2011. The case presented by Complainants leaves the Hearing Officer with nothing but speculation, conjecture and surmise as to what the fair market value of the property under appeal was on January 1, 2011.

Complainant Fails To Prove Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2011; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction.[26] Evidence of value and assessments of a few properties does not prove discrimination. Substantial evidence must show that all other property in the same class, generally, is actually undervalued.[27] The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive.[28] No other methodology is sufficient to establish discrimination.[29]

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainants have the burden to prove the level of assessment for the subject property in 2011. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.

Complainants must then prove the average level of assessment for residential property in Taney County for 2011. This is done by (a) independently determining the market value of a representative sample of residential properties in Taney County as of January 1, 2011; (b) determining the assessed value placed on the property by the assessor’s office for the 2011 assessment year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results. The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in Taney County must demonstrate a disparity that is grossly excessive.[30]

Complainants’ discrimination claim fails because they failed to establish the market value of their property. Without establishing their market value, they cannot establish their assessment ratio. Without establishing their ratio, they cannot establish that they are being assessed at a higher percentage of market value that any other property.

However, even if Complainants had established their market value, their discrimination claim would still fail because they have not demonstrated that a statistically significant number of other residential properties within Taney County are being assessed at a lower ratio of market value than their property. Complainants provided no relevant evidence to establish their claim of discrimination.

Because Complainants have failed to establish the market value of their property and have failed to establish that they are being assessed at a higher percentage of market value than a

statistically significant number of other properties in Taney County, they have failed to establish discrimination.

Respondent’s Evidence

Complainants having failed to carry their burden of proof, there is no need to perform a review and analysis of Respondent’s evidence. Respondent had no burden of proof in the appeal.

ORDER

The assessed valuation for the subject property as determined by the Board of Equalization for Taney County for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2011 and 2012 is set at $61,560.

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. 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. [31]

Disputed Taxes

The Collector of Taney 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 February 29, 2012.

STATE TAX COMMISSION OF MISSOURI

 

 

_____________________________________

W. B. Tichenor

Senior Hearing Officer

w.b.tichenor@stc.mo.gov

 

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 29th day of February, 2012, to:  William Williaford, 120 Bluff Cove, Blue Eye, MO 65611, Complainant; Jason Coatney, 1112 E. Walnut, Springfield, MO 65806, Attorney for Respondent; James Strahan, Assessor, P.O. Box 612, Forsyth, MO 65653; Donna Neeley, Clerk, P.O. Box 156, Forsyth, MO 65653; Sheila Wyatt, Collector, P.O. Box 278, Forsyth, MO 65653.

 

 

___________________________

Barbara Heller

Legal Coordinator

Barbara.Heller@stc.mo.gov

 

 

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax

 

 

 

[1] 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).

 

[2]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).

 

[3] Carmel Energy at 783.

 

[4] See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).

 

[5] Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959).

 

[6] State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964).

 

[7] Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).

 

[8] Cupples-Hesse, supra.

 

[9] Savage, supra.

 

[10] Section 138.432, RSMo.

[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).

 

[1] 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).

 

[14] Hermel, supra.

 

[15] 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.

 

[16] 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).

 

[17] 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).

 

[18] Hermel, supra.

 

[19] 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).

 

[20] See, Cupples-Hesse, supra.

 

[21] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

 

[22] 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).

 

[23]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).

 

[24] Carmel Energy at 783.

 

[25] See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).

 

[26] Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959).

 

[27] State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964).

 

[28] Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).

 

[29] Cupples-Hesse, supra.

 

[30] Savage, supra.

 

[31] Section 138.432, RSMo.