Robert v. Rinehart
| Decision Date | 21 February 2012 |
| Docket Number | WD73947 |
| Parties | ROBERT AND DONNA BATEMAN, Appellants, v. CATHY RINEHART, ASSESSOR, Respondent. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of Clay County, Missouri
The Honorable Larry D. Harman, Judge
Before Special Division: James E. Welsh, Presiding Judge, Cynthia L. Martin, Judge and
Robert and Donna Bateman (collectively, "the Batemans") appeal from the judgment of the trial court affirming the State Tax Commission's (the "STC") classification of their property (the "Property"). For their sole point on appeal, the Batemans contend that the STC erred in determining that the immediate most suitable economic use of the Property required its classification as commercial rather than residential.
We find that the STC did not err in concluding that the Property, which all parties agree was vacant and unused and thus subject to classification pursuant to section 137.016.5,1 should be classified as commercial. We affirm the judgment of the trial court which affirmed the decision of the STC.
The material facts are not in dispute. In approximately 2001, the Batemans purchased the Property. The Property is comprised of two platted lots--lots 21 and 23--in the Bolling Heights subdivision in the City of Gladstone.2 The lots are contiguous and total approximately 1.22 acres in size. The Property is located at Northeast 68th Street and North Oak Trafficway. Lot 23 abuts North Oak Trafficway. Lot 21 abuts Northeast 68th Street. Lot 21 was vacant at the time of the Batemans' purchase. Though lot 23 was improved with a residential structure at the time of purchase, the Batemans tore down the structure almost immediately as it was in very poor condition. The Property is zoned residential.
In 2000, before the Batemans purchased the Property, an unrelated applicant sought to rezone the Property from residential to commercial (CP-3) for use as a gas station. The City of Gladstone Planning Commission rejected the application. Minutes from the Planning Commission's public hearing on the application indicate several concerns, including: (i) that Northeast 68th Street is not a public right-of-way, but isinstead a private, vacated right-of-way requiring the negotiation of access easements for any commercial use of the Property; (ii) that a gas station is too intense a use "right in the back yard of residents' houses;" and (iii) that providing a variance for the City's buffer zone requirements "on the southeast corner [of the Property] is not a good idea for this area." The application to rezone was defeated by the Planning Commission by a unanimous vote.
In July, 2008, the Batemans listed the Property for sale with a realtor for $450,000. The realtor's listing described the Property as "retail-pad." No offers were received for the Property. The listing agreement expired in approximately October, 2009.
Effective January 1, 2009, Cathy Rinehart, Clay County Assessor ("the Assessor"), reclassified the Property from residential to agricultural, and assessed the Property at the agricultural rate of 12% of fair market value, though she placed a fair market value on the Property of $322,100 assuming a commercial use. The Batemans appealed the assessment to the Clay County Board of Equalization which affirmed the Assessor's determination on July 16, 2009. The Batemans then filed a complaint for review of assessment with the STC.
An evidentiary hearing was held before the STC's Senior Hearing Officer Luann Johnson ("Hearing Officer Johnson"). At the hearing, the Assessor and the Batemans agreed that the Property was "vacant and unused," and thus subject to classification based on its "immediate most suitable economic use" pursuant to section 137.016.5. The parties disagreed, however, about what the classification of the Property should be. The Batemans argued the Property should remain classified as residential, as it had been formany years. The Assessor argued the Property should be valued as commercial, but assessed and classified, as agricultural.3
The Assessor presented the expert testimony of Gary Maurer ("Maurer"), a commercial appraiser. Maurer testified that after taking into consideration the factors set forth in section 137.016.5, the Property's "immediate most suitable economic use" was commercial. Maurer testified that the Property should be assigned a fair market value of $345,400 based upon sales of comparable commercial property.4 However, Maurer felt the agricultural assessment rate of 12% should be applied to this commercial fair market value.5
The Batemans offered evidence of the obstacles to commercial development of the Property, including the current residential zoning, the buffer and set-back requirements which would require variances before the Property could be developed as commercial, the requirement to negotiate access easements to Northeast 68th Street, a private right-of- way, the limited access to North Oak Trafficway, the City's rejection of a commercial zoning application in 2000, and the fact that although the Batemans had listed the Property for sale as commercial from July 2008 until about a month before the STC hearing, they had received no offers of any kind. The Batemans argued that the factors described in section 137.016.5 required classification of the Property to remainresidential. They argued the Property, classified as residential, had a fair market value of $21,100, and an assessed value of $4,010.6
Hearing Officer Johnson found that the Property's classification for 2009 and 2010 should be commercial. Hearing Officer Johnson thus set aside the Board of Equalization's decision affirming the Assessor's agricultural classification of the Property. Hearing Officer Johnson agreed, however, with the Board of Equalization's decision to affirm the Assessor's valuation of the Property as $322,100. Hearing Officer Johnson rejected the Assessor's position that the Property could be assessed at the 12% agricultural rate though valued (or classified) as commercial property. As such, Hearing Officer Johnson applied section 137.115.5's commercial assessment rate of 32% to the fair market value of the Property, and concluded the Property had an assessed value of $103,080 for 2009 and 2010. Hearing Officer Johnson found that the Batemans failed to rebut the presumption of correct valuation of the Property by the Board of Equalization.
The Batemans filed an application for review of Hearing Officer Johnson's decision with the STC. On April 13, 2010, the STC entered its order affirming Hearing Officer Johnson's decision.
On May 12, 2010, the Batemans filed a petition for judicial review of the STC's decision in the Circuit Court of Clay County. The Batemans then filed a motion for summary judgment. After a hearing on the Batemans' motion for summary judgment, thetrial court entered judgment denying the Batemans' motion and affirming the STC's decision.
This appeal followed.
On an appeal from a judgment of a trial court addressing the decision of an administrative agency, we review the decision of the administrative agency and not the judgment of the trial court. Bird v. Mo. Bd. of Architects, 259 S.W.3d 516, 520 n.7 (Mo. banc 2008). Notwithstanding, in our mandate, we reverse, affirm or otherwise act upon the judgment of the trial court. Id.
"Pursuant to Mo. Const. art. V, section 18 and section 536.140, we must determine 'whether the agency's findings are supported by competent and substantial evidence on the record as a whole; whether the decision is arbitrary, capricious, unreasonable or involves an abuse of discretion; or whether the decision is unauthorized by law.'" Henry v. Mo. Dept. of Mental Health, 351 S.W.3d 707, 712 (Mo. App. W.D. 2011) (quoting Coffer v. Wasson-Hunt, 281 S.W.3d 308, 310 (Mo. banc 2009)).
"[A] court reviewing the actions of an administrative agency should make a 'single determination whether, considering the whole record, there is sufficient competent and substantial evidence to support the award.'" Albanna v. State Bd. of Registration for Healing Arts, 293 S.W.3d 423, 428 (Mo. banc 2009) (quoting Hampton v. Big Boy Steel Erection, 121 S.W.3d 220, 223 (Mo. banc 2003)). Though we "consider[] the entire record to determine whether the decision is supported by competent and substantial evidence, . . . '[w]e may not substitute our judgment on the evidence for that of theagency, and we must defer to the agency's determinations on the weight of the evidence and the credibility of witnesses.'" Henry, 351 S.W.3d at 712 (quoting Stacy v. Harris, 321 S.W.3d 388, 393-94 (Mo. App. S.D. 2010)). "We 'must look to the whole record in reviewing the Board's decision, not merely at that evidence that supports its decision, 'and we no longer view the evidence in the light most favorable to the agency's decision."'7 Id. ().
When an administrative agency decision is based on the agency's interpretation and application of the law, we review the administrative agency's conclusions of law and its decision de novo, and we make corrections to erroneous interpretations of the law. Algonquin Golf Club v. State Tax Commission, 220 S.W.3d 415, 418 (Mo. App. E.D. 2007).
In this case, the STC incorporated the decision of Hearing Officer Johnson into its order. "This court reviews the decision of the STC and not the hearing officer, Cohen v. Bushmeyer, 251 S.W.3d 345, 350 n. 4 (Mo. App. E.D. 2008), unless, as here, the STC incorporated the decision of hearing officer, in which case we consider both together, Loven v. Greene County, 94 S.W.3d 475, 477 (Mo. App. S.D. 2003)." Peruque, LLC v. Shipman, 352 S.W.3d 370, 374 (Mo. App. E.D. 2011).
For their sole point on appeal, the Batemans contend that the STC erred in holding that the "immediate most suitable economic use" of the Batemans' vacant and...
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