Opinion ID: 2279609
Heading Depth: 1
Heading Rank: 9

Heading: Valuation of the Lakehause Line

Text: [¶ 19] The Water Company challenges the referee's decision to adjust his valuation of the Lakehause line downward from $69,422 to $55,066. In his final report, the referee made two adjustments to the valuation of the Lakehause line. First, he adjusted for inflation by reducing the 1993 value of the Lakehause line by 3% per year from the 1987 construction date to the 1993 condemnation. Second, he applied a five year depreciation in value based on a 75 year life of the line. The Water Company argues that there is no evidence in the record supporting either reduction. [¶ 20] We find no error in the referee's inflation calculation. The fact that there has been a substantial inflation has not escaped our attention. `Judges are not necessarily ignorant in court of what everybody else, and they themselves out of court, are familiar with; and there is no reason why they should pretend to be more ignorant or unobserving than the rest of mankind'. Central Maine Power v. P.U.C., 150 Me. 257, 272, 109 A.2d 512, 519 (1954) (rejecting PUC valuation for failure to take account of substantial inflation) (quoting Affiliated Enterprises v. Waller, 5 A.2d 257, 261 (Del.1939)). The referee's use of a 3% inflation rate to reduce the value of the Lakehause line is consistent with this rationale. [¶ 21] The depreciation figure is based on a trial exhibit, the 1992 annual report of the Rangeley Water Company, which contained a schedule of depreciation losses taken by the Water Company. Depreciation, like the market value of property, could not be proved with mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment. Kittery Electric Light Co. v. Assessors of Town of Kittery, 219 A.2d 728, 738 (Me.1966). The referee was not required to accept the Water Company's estimate of the value of the line, and the referee's reduction in the value of the line based on depreciation is supported by the record.