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Maj I. Hagman, As Trustees, Etc v. Meher Mount Corporation

April 3, 2013

MAJ I. HAGMAN, AS TRUSTEES, ETC., PLAINTIFF AND RESPONDENT,
v.
MEHER MOUNT CORPORATION, DEFENDANT AND APPELLANT.



(Case No. 56-2011- 00393722-CU-OR-VTA) Henry J. Walsh, Judge Superior Court County of Ventura

The opinion of the court was delivered by: Hoffstadt, J.*fn6

CERTIFIED FOR PUBLICATION

(Ventura County)

In this boundary dispute, one neighbor seeks to quiet title by adverse possession to an adjoining piece of his neighbor's land that he inadvertently fenced in and later improved. The unusual twist is that the neighboring land on which the adverse possession took place belongs to a nonprofit religious organization. We hold that a nonprofit religious organization's status as a "public benefit corporation" does not make it a "public entity" immune from adverse possession under Civil Code section 1007. We further hold that a nonprofit religious organization's "welfare exemption" from property taxes (see Rev. & Tax. Code, § 214) means that no such taxes were "levied and assessed" on the property during the years it qualified for the exemption. Under the plain and binding language of Code of Civil Procedure Code section 325, the adverse possessor is consequently excused from the usual requirement that he pay taxes on the disputed land for five years. (Id., subd. (b).)

FACTS AND PROCEDURAL HISTORY

Larry Hagman or his trust (Hagman) owns a 30-acre parcel of land in Ojai, California. In 1987, one of the fences marking the boundary of his property was built in the wrong place. Since then, Hagman has been occupying and improving a .44-acre portion of the 173-acre parcel owned by his adjoining neighbor, the Meher Mount Corporation (Meher Mount).*fn1 Meher Mount is a religious group whose "primary purpose" is to "provide for the betterment of mankind by implementing the teachings of Meher Baba." The land it owns is irrevocably dedicated to that purpose.

Between 1999 and 2004, Meher Mount applied and qualified for a welfare exemption as a religious organization using its property for educational purposes. (See Rev. & Tax Code, §§ 214, 271.) Accordingly, it did not pay Ventura County property taxes during those years. It did, however, pay the Mosquito Control and Vector Borne Disease Prevention Assessment (mosquito assessment) levied on its land, which amounted to $12.08 for all five years. Hagman did not pay any taxes or assessments on Meher Mount's property for those years.

In early 2011, Hagman sued Meher Mount to quiet title to the disputed half acre on the theory that he had acquired title by adversely possessing that parcel between 1999 and 2004. Hagman moved for summary judgment. Meher Mount answered, opposed summary judgment and filed a cross-complaint for trespass and ejectment. In those filings, Meher Mount argued that (1) tax-exempt religious organizations are public entities immune from adverse possession under Civil Code section 1007; and (2) Hagman did not prove, as a prerequisite to adverse possession under Code of Civil Procedure section 325, that he paid either the yearly property taxes or the mosquito assessment on Meher Mount's land between 1999 and 2004.

The trial court granted summary judgment for Hagman. The court ruled that Civil Code section 1007 limits immunity from adverse possession to "public utilities" and "public entities." Meher Mount was neither. The court further noted that the only contested element of adverse possession was the requirement that Hagman pay all taxes levied and assessed on the property for the five years of alleged adverse possession.*fn2 (Code Civ. Proc., § 325, subd. (b).) The court accepted Hagman's argument that no property taxes had been assessed or levied on Meher Mount's property by virtue of its welfare exemption. Relying on San Marcos Water District v. San Marcos Unified School District (1986) 42 Cal.3d 154 (San Marcos Water Dist.), superseded on other grounds by Government Code section 54999 et seq., the court further ruled that the mosquito assessment was not a "tax." The court reasoned that the assessment was levied to "clearly benefit specific real property" and not to raise "general revenue." Because it was not a tax, Hagman was not required to pay it under Code of Civil Procedure section 325.

DISCUSSION

A party is entitled to summary judgment only if he proves there are no triable issues of material fact and that he is entitled to judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) We review de novo a trial court's conclusion that a party has carried his burden. (Winchester Mystery House, LLC v. Global Asylum, Inc. (2012) 210 Cal.App.4th 579, 587.)

I. Meher Mount's Property Is Not Immune From Adverse Possession

In California, title to property owned by a public entity cannot be obtained by another through adverse possession.*fn3 (Civ. Code, § 1007; Marin Healthcare Dist. v. Sutter Health (2002) 103 Cal.App.4th 861, 867 (Marin Healthcare Dist.) [no adverse possession against state property]; Hoadley v. City and County of San Francisco (1875) 50 Cal. 265, 274-276 [same]; cf. Guerra v. Packard (1965) 236 Cal.App.2d 272, 287-288 [adverse possession permissible against privately owned land].) Meher Mount offers arguments based on statutory language, policy, and precedent as to why a "public benefit corporation" like itself is a "public entity."

Meher Mount's statutory argument is a tidy syllogism: "Public benefit corporations" (Corp. Code, § 5060) are "public corporations" (Evid. Code, § 200), and "public corporations" are "public entities"; ergo, "public benefit corporations" ...


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