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Randolph County v. Tregnago

United States District Court, E.D. Missouri, Northern Division

February 13, 2015

RANDOLPH COUNTY EX RE. AND TO THE USE OF JERRY SWARTZ AND RANDOLPH COUNTY AND JERRY SWARTZ Plaintiff,
v.
JOHN RICHARD TREGNAGO, in his official and individual capacity, AND OLD REPUBLIC SURETY COMPANY Defendants.

MEMORANDUM AND ORDER

RODNEY W. SIPPEL, District Judge.

Defendant John Richard Tregnago is the Assessor of Randolph County, Missouri. Plaintiff Jerry Swartz alleges in his complaint that Tregnago's appraisals of Swartz's real and personal property violated Swartz's constitutional rights. Tregnago has filed a motion for summary judgment. Because Swartz cannot establish his constitutional claims I will grant Tregnago's motion for summary judgment.

Background

Plaintiff Swartz is a business man who owns and operates several businesses in Randolph County. Swartz owns both real property and personal property which is subject to Randolph County property taxes. Defendant Tregnago is and has been the elected county Assessor for Randolf County since 1985. The Assessor's Office generates appraisals of real and personal property. Appraisals are calculated by using an automated cost system, unless and until an assessment is appealed. This approach is intended to show the replacement cost of the property.

In this lawsuit, Swartz claims that his equal protection rights under the Fourteenth Amendment and his free speech rights under the First Amendment of the United States Constitution were violated by Tregnago's appraisal of Swartz's real property (his residence) in 2007 and 2009 and the appraisal of his personal property in 2010.

The 2007 appraisal of Swartz's house

Randolph County has more than 14, 000 real property parcels. In assessment years, the Assessor's Office sends out notices of an increase in property value to 1, 400 to 1, 800 tax payers. Roughly five percent of those taxpayers contact the Assessor's Office for an explanation of the increased assessment. In 2007, Randolph County conducted its biannual reassessment and increased the assessment on 10, 154 properties, the majority of which were residential. Swartz's residence was one of those properties. The assessment of Swartz's house was raised from $455, 376 to $592, 073.

Swartz's residence is located on eleven acres of property in Moberly, Missouri. It is a one-and-a-half story house constructed in 2000. The base area of the house is 2, 860 square feet, with an additional 1, 200 square feet above the first level, for a total of 4, 060 square feet above grade. The house also has a full basement. The house has an 874 square foot attached garage and a detached 960 square foot garage. In addition, the property has a 1, 700 square foot patio and approximately 8, 000 square feet of concrete drive which connects the entrance to the property to the front of the house with a circle drive and continues to the attached and detached garages. The property also has a built in swimming pool.

After Swartz received the assessment, he appealed it to the Randolph County Board of Assessment. The Board found in favor of Swartz and reduced the assessment to $547, 350. Swartz appealed the Board's decision to the State Tax Commission, which ruled in favor of Swartz and further reduced the assessment to $438, 000.

Tregnago's Appraiser's Report which was submitted in the appeals process stated that he used the comparable sales approach to establish the value of the Swartz residence. That report used as a comparable residence the "Wilson property" located in Moberly approximately four miles from the Swartz property. This house was built in 1987 and had improvements made in 1994. The house sits on 9.7 acres of land and has an above grade square footage of 3, 013 compared to Swartz's 4, 060 square feet. The report stated that the house sold in 2006 for $610, 000 which included a fair trade of land valued at $369, 000 and a balance of $241, 000 for a total of $610, 000. A cost approach valuation of the Wilson property set the value at $589, 935. Tregnago adjusted the value of the Swartz property based on the difference in the characteristics of the Wilson property and the Swartz property. In the report and in testimony at the State Tax Commission appeal hearing, Tregnago stated that Wilson provided him with the sales information concerning the Wilson property. At his deposition for this lawsuit in 2014, Tregnago testified that the Wilson property was listed on the Multiple Listing Service for $610, 000 but that Wilson would not tell Tregnago the sales price.

At the appeal hearing Swartz presented the report and testimony of his own appraiser, James K. Stone, that there were no comparable properties to Swartz property in the Moberly market due to the quality, design, appeal, and nature of construction of the Swartz property. Instead, he presented comparable sales from Columbia, Missouri, thirty-five miles from Swartz's house. Like Tregnago, Stone adjusted the comparable properties based on their different characteristics and reached a valuation of $438, 000 for the Swartz residence. The State Tax Commission determined that Swartz's evidence was substantial and persuasive to overcome the presumption of correct assessment by the Randolph County Board of Assessment and set the value of Swartz's house at $438, 000.

Swartz claims in his compliant that Tregnago's assessment of his property was unfair. Swartz claims that Tregnago violated Swartz's equal protection rights in how assessed his property. In support of this claim Swartz asserts that Tregnago falsely stated in his appraisal report and testimony at the State Tax Commission hearing that Wilson provided Tregnago information about the sale of the Wilson property. In support of this claim Swartz has submitted an affidavit from Wilson, dated January 2011, in which Wilson denies he provided Tregnago or any employee of Randolph County with sales information regarding the Wilson property. Swartz argues that the Wilson property was not a proper comparison because it involved a swap of real property as well as a cash payment. Swartz also asserts that Tregnago discounted Stone's valuation of the Swartz property because Stone used comparable sales in Columbia. Tregnago argued that he believes sales in Columbia are not comparable to sales in Moberly based on different market factors. Tragnago stated that sales in Hannibal and Kirksville would be comparable because those markets are similar to Moberly. Swartz claims his equal protection rights were violated because Tregnago stated in his deposition that, other than in the Swartz appeal, he has never criticized an owner or appraiser in an appeal for using a comparable sale in a different city or county than the subject property. However, there is no evidence in the record that anyone else on appeal had ever engaged an appraiser who used comparable properties in another city or county generally, or Columbia specifically. Nor has Swartz presented any evidence that his equal rights were violated because Tregnago did not make false statements or perjure himself in connection with any other taxpayer's appeal. (This is an odd proposition. However, since Swartz is attempting to prove Tregnago treated him differently that any other similarly situated taxpayer, he must come forward with evidence to support that claim. Whether Tregnago made false statements in the Swartz case is in dispute. Whether he did or didn't is not the issue because Swartz's claim is based on the allegation that he was treated differently than other taxpayers.)

Swartz claims that Tregnago was purposely over-appraising Swartz's property. Swartz alleges that Tregnago's actions in the 2007 appeal and in future assessments in 2009 and 2010 were based on personal animosity towards Swartz.

The 2009 appraisal of Swartz's house

As in 2007, Randolph County conducted its biannual reassessment and increased the assessment on 4, 201 properties, the majority of which were residential. Swartz's residence was one of those properties. The assessment of Swartz's house was raised from $438, 000 to $584, 098. This appraisal was based on the recent sale of a residence on Trails End, less than a mile from the Swartz residence. The Trails End property listing stated the size of the residence was 5, 100 square feet with less than 3, 800 square feet above grade. The size of this property was smaller than Swartz's 4, 060 square feet above grade. The assessed value of this house had been raised in 2007 from $415, 438 to $536, 004. [Doc. #47, Ex. A at 330] The ...


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