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In re The Foreclosure of Liens For Delinquent Land Taxes By Action In rem: Collector Of Revenue

Court of Appeals of Missouri, Western District, Second Division

October 31, 2017

IN THE MATTER OF THE FORECLOSURE OF LIENS FOR DELINQUENT LAND TAXES BY ACTION IN REM: COLLECTOR OF REVENUE, BY AND THROUGH THE DIRECTOR OF COLLECTIONS FOR JACKSON COUNTY, MISSOURI, Respondent,
v.
CHANCELLOR MEDIA WHITECO OUTDOOR CORP., Appellant, AMIN ENTERPRISE LLC, Respondent.

         Appeal from the Circuit Court of Jackson County, Missouri The Honorable Kenneth R. Garrett III, Judge

          Before: Anthony Rex Gabbert, Presiding Judge, Thomas H. Newton, Judge, Gary D. Witt, Judge

          Anthony Rex Gabbert, Judge

         Waitt Outdoor Corp.[1] (Waitt) appeals the circuit court's judgment finding $11, 000 was adequate consideration paid at a public tax foreclosure sale for a billboard previously owned by Waitt and for which Waitt owed delinquent property taxes. Waitt raises two points on appeal. First, Waitt contends that the trial court's findings regarding the market value of the property were against the weight of the evidence, thereby causing the court to conclude erroneously that $11, 000 was adequate consideration for the foreclosed property pursuant to Section 141.580.2, RSMo Cum. Supp. 2012. Second, Waitt contends that the trial court misapplied the law in determining that adequate consideration was paid for the property; Waitt argues that the court erroneously applied the standard that, if the purchase price at a tax foreclosure sale is greater than ten percent of the real estate's market value, adequate consideration was paid. We affirm.

         Waitt owned a small parcel of land (Parcel) containing a two-sided advertising billboard in Oak Grove, Jackson County, Missouri. Waitt failed to pay taxes on the Parcel, resulting in Jackson County pursuing the delinquency through a tax foreclosure sale. The amount owed to satisfy the full amount of general taxes, interest, penalties, attorney fees and costs on the Parcel at the time of the sale was $7, 528.55. Waitt does not dispute the tax delinquency or proper notice of the foreclosure.

         On August 15, 2016, the Court Administrator for the Circuit Court of Jackson County offered the Parcel for sale at the Jackson County Courthouse in Independence, Missouri. After competitive bidding, Amin Enterprise, LLC, purchased the Parcel for the sum of $11, 000.00.

         On November 30, 2016, a confirmation hearing was held on the sale of the Parcel. Jackson County assessment records were entered into evidence showing the assessed value of the Parcel to be $48, 947 in 2015. On December 21, 2016, the court held an evidentiary hearing related to the confirmation of the sale of the Parcel. At that hearing, Jackson County's counsel reminded the court of the previously admitted business records assessing the value of the Parcel at $48, 947.

         No objections were raised. The county admitted photographs of the Parcel into evidence and asked that the sale of the Parcel be confirmed.

         Waitt contended that inadequate consideration had been paid for the Parcel, introduced evidence to support its claim, and asked the court to decline confirmation. Waitt called Kevin O'Brien, a real estate appraiser, to testify. O'Brien testified that, after considering a number of factors, he determined the fair market value of the Parcel to be $90, 000 using the income approach to valuation. He testified that, because billboards typically sell for their income value, this approach was most appropriate. He testified that the range of value for the Parcel using this approach is $70, 000 to $110, 000. He reached a value of $70, 000 to $80, 000 using a gross income multiplier analysis, and $80, 000 to $110, 000 using a net income multiplier analysis. O'Brien testified on cross examination that he based these figures on expected lease revenue of $950 per month on the Parcel. O'Brien acknowledged, however, that Waitt received only $475 per month lease income on the Parcel. Although O'Brien disagreed that the $475 per month figure was appropriate for the valuation, he agreed that a market is defined by a willing buyer and a willing seller at an arm's length negotiating price. He also agreed that, if his valuation had been based on a $475 per month lease rate, the market value of the Parcel would approximate $45, 000.

         O'Brien testified that the comparable sales approach to valuation provided good secondary support for the value he placed on the Parcel, but that he placed less reliance on this approach due to limited data. He agreed that none of the comparables were close in nature to the actual subject property. O'Brien determined the market value of the Parcel to be $90, 000 using the sales comparison approach. O'Brien was asked on cross-examination what percentage a forced sale decreases value. O'Brien testified that the estimated value of property subjected to a forced sale decreases by twenty to twenty-five percent.

         On January 23, 2017, the circuit court entered a Judgment deeming the purchase price of $11, 000 adequate consideration for the Parcel and confirming the sale of the Parcel to Amin Enterprise, LLC. The court concluded that evidence showed possible market values ranging from $48, 947 as appraised by the County Tax Assessor, to $90, 000 as appraised by Waitt's witness. The court also noted a $110, 000 market value suggested by Waitt's appraiser. The court concluded that the purchase price, therefore, varied between ten to twenty-two percent of appraised market value, "well within the precedential range of adequate consideration in the state of Missouri." Waitt appeals.

         Our standard of review is set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Schollmeyer v. Schollmeyer, 393 S.W.3d 120, 122 (Mo. App. 2013). We will affirm the circuit court's judgment unless it is unsupported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. at 122-123.

         In Waitt's first point on appeal, Waitt contends that the trial court's findings regarding the market value of the Parcel were against the weight of the evidence, thereby causing the court to conclude erroneously that $11, 000 was adequate consideration for the foreclosed property pursuant to Section 141.580.2. Waitt argues that the weight of the evidence was that the market value of the Parcel was between $80, 000 and $110, 000 and potentially $125, 000, not $48, 947 to $110, 000 as found by the court. We find no error.

When reviewing the record in an against-the-weight-of-the-evidence challenge, this Court defers to the circuit court's findings of fact when the factual issues are contested and when the facts as found by the circuit court depend on credibility determinations. A circuit court's judgment is against the weight of the evidence only if the circuit court could not have reasonably found, from the record at trial, the existence of a fact that is necessary to sustain the judgment. When the evidence poses ...

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