Morton v. Brenner, 74558
| Decision Date | 24 November 1992 |
| Docket Number | No. 74558,74558 |
| Citation | 842 S.W.2d 538 |
| Parties | Kenneth D. MORTON, Assessor for St. Louis County, Plaintiff-Respondent, v. William R. BRENNER, et al., Defendants-Appellants. |
| Court | Missouri Supreme Court |
Aimee L. Smashey, R. Randall Turley, Jefferson City, James Owen, Tom McCarthy, Sharon K. Zackula, Chesterfield, for defendants-appellants.
John A. Ross, Dennis C. Affolter, Clayton, for plaintiff-respondent.
Taxpayers Tedford and Margaret Lewis and the members of the State Tax Commission appeal a judgment of the Circuit Court of St. Louis County in favor of County Assessor Kenneth D. Morton. The circuit court ruled that the Lewises' 50-unit apartment complex in St. Louis County should be classified as commercial property and not residential property for real estate tax purposes under § 137.016.1, RSMo Supp.1991. We reverse.
Procedurally, the Lewises petitioned the State Tax Commission to overturn the determination by the St. Louis County Assessor that the apartment complex was commercial property. The tax commission ruled that 40 of the 50 apartment units should be assessed as residential property; the assessor, in turn, appealed to the Circuit Court of St. Louis County pursuant to the provisions of the Administrative Procedure Act, Chapter 536, RSMo. The circuit court held that the ruling of the State Tax Commission was neither supported by the evidence, nor was it a proper application of § 137.016.1(1) to the facts. This appeal followed. 1
The question of the classification of real property as commercial or residential turns on the meaning and application of the term "structure" in § 137.016.1(1). In particular, we must decide whether the complex consists of just two large structures containing six connecting substructures, or instead, two rows of six separate structures. If the former, both structures are commercial; if the latter, five of the six structures in each row are residential. Because this issue requires us to construe a revenue law, § 137.016.1, we have exclusive jurisdiction. Mo. Const. art. V, § 3.
The facts critical to a resolution of this case are those that describe the physical configuration and characteristics of the apartment complex. These facts as determined by the State Tax Commission are largely undisputed.
The Lewises own a 50-unit apartment complex in St. Louis County. The complex is arranged in two rows, and the buildings or structures 2 in each row accommodate 25 apartment units. Each row has six two-story structures, five of which contain four apartment units and the other containing five units. Each of the 12 structures has individual and separate sewer, water, and electric lines and hookups. Furthermore, each structure has a separate entry with a foyer and a stairway to the second floor apartments, and there is no entry or direct access from one structure to another. The foundations for the structures, though they were poured separately, are "tied together with reinforcing bar," except at the midpoint of each row where there is a construction joint. Although the foundations are connected, they are offset horizontally from each other, and some lie at different elevations. In each row, the structures themselves abut one another and connect by way of a common, eight-inch concrete firewall, which extends continuously from the foundation to the roof and protrudes laterally through the exterior framework. These structural walls meet the criteria for the Building Officials and Code Administrators [BOCA] code, in that they have "sufficient structural stability under fire conditions to allow collapse of construction on either side without collapse of the walls...."
The Lewises built the 12 structures, one by one, during the years 1960 through 1963. Mr. Lewis testified that his purpose in constructing what he considers to be separate, distinct buildings was to enable him to partition or sell any of the 12 buildings individually. A drawing of the configuration of the apartment complex is attached.
We first address taxpayers' contention that the circuit court erred by applying the wrong standard of review. This Court reviews only the findings and decision of the administrative agency, not the judgment of the circuit court. Hence, the circuit court's error, if any, is not relevant to our review. City of Cabool v. Missouri State Bd. of Mediation, 689 S.W.2d 51, 53 (Mo. banc 1985).
As stated earlier, the principal issue of this appeal involves the State Tax Commission's interpretation and application of the term "structure" as used in § 137.016.1(1). As such, the issue is purely a question of law. It is well-settled that "Administrative agency decisions based on the agency's interpretation of law are matters for the independent judgment of the reviewing court." King v. Laclede Gas Co., 648 S.W.2d 113, 114 (Mo. banc 1983).
Nevertheless, taxpayers contend that § 536.140.3, RSMo 1986, requires this Court to defer to the Commission's application of the term "structure." That section provides:
Whenever the action of the agency being reviewed does not involve the exercise by the agency of administrative discretion in the light of the facts, but involves only the application by the agency of the law to the facts, the court may weigh the evidence for itself and determine the facts accordingly. The law applied by the agency as aforesaid may include the agency's own rules. In making such determination the court shall give due weight to the opportunity of the agency to observe the witnesses, and to the expertness and experience of the particular agency.
This claim is wholly without merit. In this case, where the critical facts are undisputed, there is no need for the reviewing court to weigh the facts independently. Evangelical Retirement Homes of Greater St. Louis, Inc. v. State Tax Comm'n, 669 S.W.2d 548, 553 (Mo. banc 1984). Taxpayers misconstrue the purpose of § 536.130.3. It is designed only to give a reviewing court the authority to weigh the evidence and arrive at its own factual determinations in cases in which the agency has merely applied the law to the facts at hand. It provides an exception to the general rule that requires a reviewing court to defer to an agency's findings of fact. But in no way does § 536.140.3 require the forbearance of a reviewing court where the agency's application of law to facts is contested. St. Louis County v. State Tax Comm'n, 562 S.W.2d 334, 337-38 (Mo. banc 1978).
The parties agree that the apartment complex, as real property, should be classified for tax purposes as either "residential property" or "commercial property." Taxpayers seek the benefit of the lower tax rates imposed for "residential property." 3 As defined in § 137.016.1(1), "residential property" is "all real property improved by a structure which is used or intended to be used for residential living by human occupants and which contains not more than four dwelling units...."
We are asked to determine the number of structures, if any, that qualify for residential treatment under the statute. The taxpayers count two rows of six separate structures, 12 total. In each row, five of the six structures contain only four dwelling units each and, thus, should be classified as residential property. Taxpayers concede that the sixth structure in each row contains five dwelling units and must be classified as commercial property. 4 On the other hand, assessor claims that there are only two structures, each of which contains 25 dwelling units and that each row is actually a single structure divided into six substructures. Because each of the two rows/structures contains more than four dwelling units, he argues that each should be classified as commercial property. To phrase the issue more specifically, we are asked whether the apartment complex consists of 12 separate, distinct structures or just two structures divided into 12 sections. To answer this question, we must ask another: What is a structure, or rather, what is a separate structure?
When we interpret statutory language, we must ascertain the intent of the legislature. In so doing, we consider the plain and ordinary meaning of the terms. Rothschild v. State Tax Comm'n, 762 S.W.2d 35, 37 (Mo. banc 1988). To that end, we refer to Webster's Third New International Dictionary, which defines structure as:
1: the action of building ... 2a: something constructed or built ...: a building of imposing size ... b: something made up of more or less interdependent elements or...
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