William & Verona Johnson v. Muehlheausler (SLCO)

 

WILLIAM M. &VERONAJOHNSON,)

)

Complainants,)

)

v.) Appeal No.07-12420

)

PHILIP MUEHLHEAUSLER, ASSESSOR,)

ST. LOUIS COUNTY,MISSOURI,)

)

Respondent.)

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumption of correct assessment not rebutted by Complainants. True value in money for the subject property for tax years 2007 and 2008 is set at $107,200, residential assessed value of $20,370.

Complainant, William M. Johnson, appeared pro se.

Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.

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, 2007.

SUMMARY

Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $107,200, assessed value of $20,370, as residential property.Complainant proposed a value of $95,000, assessed value of $18,050.A hearing was conducted on July 8, 2008, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainants’ Evidence

Mr. Johnson testified on behalf of Complainants.He offered as the owners’ opinion of value as of January 1, 2007 the amount of $95,000.This was based on the value set by the Board of Equalization in Complainants’ 2005 appeal to the Board.

Exhibit A, a group of miscellaneous documents, was offered into evidence by Mr. Johnson.Counsel for Respondent objected to all documents, except Exhibit A-7, on the grounds of relevance, hearsay and lack of foundation.Objections were sustained and the other portions of Exhibit A were excluded.Excluded documents are maintained in the case file, but are not received as part of the evidentiary record in this appeal.

 

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Eric Hubbard, Missouri State Licensed Residential Real Estate Appraiser for St. LouisCounty.The appraiser testified as to his appraisal of the subject property.The Appraisal Report (Exhibit 1) of Mr. Hubbard was received into evidence.Mr. Hubbard arrived at an opinion of value for the subject property of $120,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of four properties deemed comparable to the subject property.

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 County Board of Equalization.

2.The subject property is located at 749 Fox Island DriveFlorissant, Missouri.The property is identified by parcel number 05J340201.The property consists of a 10,089 square foot lot improved by a one-story brick veneer and vinyl sided, ranch, single-family structure of average quality construction.The house was built in 1976 and appears to be in average condition.The residence has a total of seven rooms, which includes three bedrooms, two full baths, and contains 1,433 square feet of living area.There is a full basement, with 975 square feet of finished area, and an attached oversized two-car garage. Exhibit 1.

3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.

4.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, 2007, to be $95,000, as proposed.

5.The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value of the subject property. The fourproperties were located within less than a mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007 (all in 2006).The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.Exhibit 1.

6.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The net adjustments ranged from -3.4% to -13.8% of the sale prices.Exhibit 1.

7.The adjusted sales prices for the comparables calculated to $120,700, $122,800, $112,305 and $125,000, respectively.The appraiser concluded on a $120,000 value which calculated to a value per square foot of $83.75 compared with the sales prices per square foot of living area for the comparables of $110.91, $127.75, $105.48 and $105.99. Exhibit 1.

8.Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2007, to be $120,000.However, Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value.Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $107,200. Exhibit 1.

 

 

 

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.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.

Presumption In Appeals

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). 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.Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).In this instance, Complainants’ opinion of value was based upon the value set by the Board in 2005.This does not constitute substantial and persuasive evidence of the true value in money of the property as of January 1, 2007.The Board clearly recognized this fact when it sustained the Assessor’s 2007 value of $107,200.The presumption of correct assessment by the Board was not rebutted by Complainant’s reliance on the 2005 valuation.

 

 

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 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; Exhibit 1.

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’ methodology for valuation was to simply rely on the value previously set by the Board for the 2005 assessment.This is not a recognized approach for the appraisal of real property.Respondent’s appraiser developed an opinion of value utilizing a well accepted methodology for appraising property.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.

Complainants Fail To Meet 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, 2007.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. 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.” 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).

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).

The owner of property is generally held competent to testify to its reasonable market value.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).Mr. Johnson’s opinion of value was based upon a determination made by the Board of Equalization in 2005.This opinion is not based upon proper elements or a proper foundation.The Board determination was for the value of the property as of January 1, 2005.Therefore, it is not relevant to a valuation for January 1, 2007.No probative weight can be given to the owners’ opinion of value in this instance.The documents tendered by Complainants were irrelevant to a valuation for January 1, 2007 and to support the opinion of $95,000.The documents did not address the fundamental question of what a willing buyer and seller would have agreed to as the purchase price for the property on January 1, 2007.

Respondent Met 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 which 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 $107,200, 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).

The Hubbard appraisal constituted clear, cogent and convincing evidence that the true value in money of the Johnson property was at least $107,200 on January 1, 2007.In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.Section 138.060, RSMo; 12 CSR 30-3.075.Therefore, while Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2007, to be $120,000, that evidence is only received to sustain the value of $107,200.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forSt. LouisCountyfor the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2007 and 2008 is set at $20,370.

Complainants 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.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. Section 138.432, RSMo 2000.

The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 139.031.8 RSMo.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

 

SO ORDERED August 4, 2008.

STATE TAX COMMISSION OFMISSOURI

 

 

_____________________________________

W. B. Tichenor

Senior Hearing Officer

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 4^th day of August, 2008, to:William Johnson,749 Fox Island Drive,Florissant,MO63034-2012, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent; Philip A. Muehlheausler, Assessor; John Friganza, Collector,CountyGovernmentCenter,41 South Central Avenue,Clayton,MO63105.

 

 

________________________________

W. B. Tichenor

Senior Hearing Officer