RONALD E. LEVY,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 01-12558
	)
PHILIP A. MUEHLHEAUSLER,	)
ACTING 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, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax years 2001 and 2002 to be $106,000, assessed value of $20,140.

Complainant appeared pro se.

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

Case heard and decided by Chief 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, 2001.

SUMMARY

Complainant appeals 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 $109,350 (assessed value of $16,980, as residential property). Complainant proposed no opinion of value on the Complaint for Review of Assessment. An evidentiary hearing was conducted on October 23, 2002, at the St. Louis County Government Center, Clayton, Missouri.

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

Complainant's Evidence

Complainant testified in his own behalf. He gave no opinion of value testifying that he did not know the value until the property was sold. Complainant asserted that his property should be valued based upon the average sales prices of six properties with the same zip code as the subject property which had been recorded during the period of February 4 through February 8 of 2002 and reported in the South County Journal of June 19, 2002.

Complainant offered into evidence Exhibit A. Exhibit A consisted of ten pages prepared or copied by Complainant.

Counsel for Respondent objected to Exhibit A on grounds of relevancy. The objection was sustained. The Exhibit was only received as an offer of proof, but not as a part of the record for purposes of rendering a decision on fair market value.

Respondent's Evidence

Respondent placed into evidence the testimony of Mr. Arthur R. Froeckmann, state certified real estate appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Froeckmann was received into evidence. Mr. Froeckmann arrived at an opinion of value for the subject property of $106,000 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property. The appraiser also performed a cost approach which resulted in an indicated value of $108,540.

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 4635 Candace Drive, St. Louis Missouri. The property is identified by locator number 26H431350. The property consists of a .13 of an acre site. It is improved by a split foyer style single-family residence having primarily brick exterior walls, composition shingle roof, concrete foundation, a two-car built-in garage, concrete block rear patio, and concrete front stoop with steps. The quality of construction is average. The structure was built in 1966 and appears to be in average to fair condition due to the lack of updates, maintenance and repairs.

Most deferred maintenance concerns the interior. The kitchen wood cabinet fronts show worn surfaces. The wall and ceiling paint shows age. Carpeting and vinyl floor cover show wear and tear and the lower level half bath room has worn plumbing parts. Estimated cost to cure to average condition is $7,500.

The residence has a total of six rooms above grade, which includes a living room, kitchen, four bedrooms, two baths and contains 1,319 square feet of living area. The lower level has approximately 500 square feet of recreation area, and a half bath. Exhibit 1, p. 5.

3. There was no evidence of new construction and improvement from January 1, 2001, to January 1, 2002.

4. Complainant's evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish a true value in money as of January 1, 2001.

5. Complainant's offer of proof was not based upon any recognized methodology for determining value in an ad valorem tax appeal. The averaging of six sales prices of properties which sold during February, 2002, to determine the value as of January 1, 2001, is not a method for either the valuation or assessment of property which is recognized by any court decisions, statutes, or Commission decisions and rules.

6. 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 less than one mile of the subject. The properties were similar to the subject in lot size, quality of construction, age, condition, room count, living area and other amenities. Exhibit 1, pp. 8-9.

7. The comparables were described as follows (Exhibit 1, pp 8-9):

Comparable 1 (4643 Candace Dr. - .02 of a mile West of the subject) sold in July, 1999 for $112,000. This property consists of a .14 of an acre lot improved by a split foyer single- family residence having mostly brick exterior walls, composition shingle roof, concrete foundation, a two-car built-in garage, a double size patio, and concrete front stoop with steps. The quality of construction is average. The structure was built in 1967 and is reported to be in average to good condition due to updates and remodeling. The residence has a total of six rooms above grade, which includes a living room, kitchen, dining rooms, three bedrooms, two full baths and one half bath, and contains 1,140 square feet of living area. There is a lower level that has approximately 460 square feet of recreation area.

Comparable 2 (4606 Don Ron Dr. - .12 of a mile Southeast of the subject) sold in May, 2000 for $109,000. This property consists of a .14 of an acre lot improved by a ranch-style, single-family residence having mostly brick exterior walls, composition shingle roof, concrete foundation, a two-car attached garage, a patio, and covered front porch. The quality of construction is average. The structure was built in 1965 and is reported to be in average to fair condition due to lack of updates, maintenance and repairs. The residence has a total of seven rooms above grade, which includes a living room, kitchen, dining rooms, three bedrooms, two full baths and one half bath, and contains 1,416 square feet of living area. There is a lower level that has approximately 800 square feet of recreation area.

Comparable 3 (4334 Debra Kay Lane - .54 of a mile Southeast of the subject) sold in November, 2000 for $109,900. This property consists of a .14 of an acre lot improved by a split foyer single-family residence having mostly brick exterior walls, composition shingle roof, concrete foundation, a two-car built-in garage, a patio, and concrete front stoop with steps. The quality of construction is average. The structure was built in 1965 and is reported to be in average to good condition due to updates and remodeling. The residence has a total of four rooms above grade, which includes a living room, kitchen, dining rooms, two bedrooms, one full baths and two half baths, and contains 1,042 square feet of living area. There is a lower level that has approximately 400 square feet of recreation area.

8. The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. Adjustments made by Respondent's appraiser were appropriate and accounted for the relevant differences between the comparables and the subject. The adjustments accounted for the needed updating and deferred maintenance of the subject. Exhibit 1; Testimony of Mr. Froeckmann.

9. The net adjustments for Comparable 1 amounted to -$4,900 or -4.4% of the sales price. The net adjustments for Comparable 2 amounted to -$4,200 or -3.8% of the sales price. The net adjustments for Comparable 3 amounted to -$1,600 or -1.5% of the sales price.

10. The adjusted sales prices for the comparables calculated to $107,100, $104,800 and $108,300, respectively. The appraiser concluded on a $106,000 value which calculated to a value per square foot of $80.36 compared with the sales prices per square foot of living area for the comparables of $98.25, $76.98 and $105.47.

11. Respondent did not have to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, as he was not seeking to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program.

12. Respondent's evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2001, to be $106,000.

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.

Board of Equalization Presumption

There is a presumption of validity, good faith and correctness of assessment by the County Board of 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). There is no presumption that the assessor's valuation is correct. Section 138.431.3, RSMo.

Standard for Valuation

Section 137.115, RSMo 1994, 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, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).

Market Value

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, p. 3.

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. 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).

Trier of Fact

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 he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert's testimony and accept it in part or reject it in part. St. Louis County v. Boatmen's Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

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

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Cupples-Hesse, Brooks, supra.

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, 2001. 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).

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).

Methods of Valuation

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) 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).

DECISION

The initial responsibility of a taxpayer when appealing the assessment of property before the Commission is to put forth an opinion of the fair market value of the property under appeal. In order to establish a prima facie case, an opinion of value of the owner must be given. Then it is necessary for the taxpayer to present evidence which will support and establish that the opinion of value is based upon proper elements and a proper foundation. Complainant in this appeal has failed in both of these basic and required steps.

Complainant offered no opinion of value, only asserting that he could not know the value until the property sold. Mr. Levy then put forth his theory that his property should be assessed based on the average of sales prices of six properties, the sales of which were recorded during the period of February 4 to 8 of 2002. No evidence was put forth that any of these properties were comparable according to any of the various factors which an appraiser and the Hearing Officer consider when determining comparability of properties. The only factor upon which these properties were selected was the fact they had the same zip code as the subject property.

This methodology offered by Mr. Levy is without any weight, merit, relevancy or probative value. The issue before the Commission is the fair market value (true value in money) of the property at 4635 Candace Drive, St. Louis County, Missouri. The issue is not what is the average sales price of six properties that sold in February, 2002. Under the Complainant's theory of value, assessment of property would simply be reduced to the assessor selecting six sale properties, that have the same zip code as the property being assessed, from any given time period the assessor might want to use, and then averaging those sales prices. This would be an assessment methodology without any rhyme, reason, or rational basis. It would be the most arbitrary and capricious method for valuation one could devise. It would be in total violation of state statute and relevant case law of this state and every other known jurisdiction.

Complainant failed to present any substantial and persuasive evidence to establish any value for the subject property.

Respondent's proposed value, on the other hand, was based upon two recognized methodologies for the valuation of real property in ad valorem tax appeals. Respondent's evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and to establish the value for the subject property to be $106,000.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2001 and 2002 is set at $20,140.

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 1994.

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 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. 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 November 13, 2002.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer