Majority
Opinion
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 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).)
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 0.44-acre portion of the 173-acre parcel owned by his adjoining neighbor, the Meher Mount Corporation (Meher Mount).[2] 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.[3] (Code Civ. Proc., § 325, subd. (b).) The court accepted Hagman’s argument that no property taxes had
1 Although Hagman passed away during the pendency of this appeal, the property issues remain live.
2 The undisputed facts established the other four elements of adverse possession: Hagman possessed the half-acre under a claim of right; his possession was open and notorious enough to give reasonable notice; it was hostile and exclusive; and it was continuous and uninterrupted for five years.
I. Meher Mount’s Property Is Not Immune from Adverse Possession
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 [ 107 Cal.Rptr.2d 841 , 24 P.3d 493 ].) 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 [ 148 Cal.Rptr.3d 412 ].)
In
California, title to property owned by a public entity cannot be obtained by another through adverse possession.[4] (Civ. Code, § 1007; Marin Healthcare Dist. v. Sutter Health (2002) 103 Cal.App.4th 861 , 867 [ 127 Cal.Rptr.2d 113 ] (Marin Healthcare Dist.) [no adverse possession against state property]; Hoadley v. San Francisco (1875) 50 Cal. 265 , 274-276 [same]; cf. Guerra v. Packard (1965) 236 Cal.App.2d 272 , 287-288 [ 46 Cal.Rptr. 25 ] [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” must be “public entities.” We reject this argument for two reasons.
First, public benefit corporations are not public corporations. The term “public corporation” is a term of art used to designate certain entities
3 Civil Code section 1007 also reaches property owned by the state or “dedicated to a public use by a public utility.” Meher Mount does not claim to be the state or a public utility.
Second, public benefit corporations are not public entities. “Public entity” is not defined in Civil Code section 1007, but is defined elsewhere throughout the California codes. (E.g., Evid. Code, § 200; Gov. Code, § 811.2; Code Civ. Proc., §§ 481.200, 871.7, subd. (a), 1235.190; Health & Saf. Code, §§ 13050.1, 103660; Pub. Contract Code, §§ 1100, 5100, 7200, subd. (a)(2), 20671, subd. (b); Ins. Code, § 130, subd. (h); Pub. Resources Code, § 5800; Veh. Code, § 17000, subd. (c); Unemp. Ins. Code, § 135, subd. (a)(3); Wat. Code, § 371, subd. (e).) In every instance, the entities listed as public entities-—from traditional bodies like counties and cities to more recent innovations like public authorities and public corporations—have one thing in common; Each is vested with some degree of sovereignty. (Vallas v. City of Chula Vista (1976) 56 Cal.App.3d 382 , 387 [ 128 Cal.Rptr. 469 ], disapproved on other grounds in Peterson v. Long Beach (1979) 24 Cal.3d 238 , 245, fn. 5 [ 155 Cal.Rptr. 360 , 594 P.2d 477 ], superseded by Evid. Code, § 669 [so noting with Evid. Code, § 200]; Lawson v. Superior Court (2010) 180 Cal.App.4th 1372 , 1396 [ 103 Cal.Rptr.3d 834 ] [so noting with Gov. Code, § 811.2].)
Public benefit corporations lack any element of sovereignty. They are not created by the government, even though they may require governmental approval to qualify as a public benefit corporation. They are not owned or operated by the government. They do not possess any of the traditional incidents of sovereign authority such as the power to tax or to condemn property. They do not serve a governmental purpose, although they may serve altruistic purposes that benefit society. (Accord, Code Civ. Proc., § 1235.155 [for condemnation purposes, distinguishing property owned by tax-exempt nonprofit organizations from property owned by public entities].)
Meher Mount’s policy argument is also unpersuasive. Meher Mount argues that granting immunity from adverse possession to public benefit corporations makes good policy sense because they provide a valuable public service and should not have to fend off land-hungry encroachers. That may be so, but the Legislature could reasonably choose to recognize the contribution
Meher Mount lastly contends that Mosk v. Summerland Spiritualist Assn. (1964) 225 Cal.App.2d 376 [ 37 Cal.Rptr. 366 ] requires us to rule in its favor. In Mosk, the plaintiff sought to adversely possess land owned by a religious trust. The court held that the plaintiff had failed to prove his entitlement to adverse possession, but made the following observation: “It seems to us that property held under a charitable trust would have the same immunity” to adverse possession as the government. (Id., at p. 381.) Tellingly, no court has cited Mosk for its observation in the intervening 49 years. We go further, and express our view that Mosk’s observation is incorrect. Mosk contained no statutory analysis. Instead, it reasoned that charitable trusts are imbued with a “public” character because, at that time, only the Attorney General could enforce such trusts. (Ibid.) That premise is no longer valid, as the Attorney General’s authority is no longer exclusive. (See Prob. Code, § 24, subd. (d) [trust beneficiaries have standing]; Gov. Code, § 12598, subd. (a) [Attorney General also has authority over charitable trusts and public benefit corporations]; Corp. Code, § 9230 [Attorney General has fewer powers over “religious corporations”].) More to the point, nothing in Mosk undermines our analysis of Civil Code section 1007’s text or policy. We decline to follow Mosk.
Accordingly, we conclude that Meher Mount is not a public entity immune from adverse possession.
II. Hagman Need Not Pay Property Taxes Never Levied and Assessed
To obtain title, an adverse possessor is required to prove that he or she “timely paid all state, county, or municipal taxes that have been levied
A. Property Taxes Were Not Assessed or Levied on Meher Mount’s Property
Because Code of Civil Procedure section 325 does not use its own definition for when taxes have been “levied” and “assessed,” we look to the general definitions. (See Allen v. McKay & Co. (1898) 120 Cal. 332 , 334 [ 52 P. 828 ].) A tax is assessed when the county assessor prepares the roll listing all properties subject to taxation and their assessed value. (Rev. & Tax. Code, §§ 401, 109, 601.) This occurs annually. (Id., § 405, subd. (a).) A tax is levied when the county’s board of supervisors fixes the tax rate and orders that the taxes be paid “in specific sums in terms of the rates so adopted.” (Gov. Code, § 29101; see id., § 29100.)
For each tax year pertinent in this case, Meher Mount applied and qualified for the welfare exemption on that property. (See Rev. & Tax. Code, § 214.) Once these exemptions were granted, the property became “exempt from taxation.” (Id., § 214, subd. (a).) The question then becomes: Does the grant of the welfare exemption from property taxes preclude a county from assessing and levying taxes on the exempt property? As discussed below, the exemption precludes both assessment and levy.
The grant of the welfare exemption precludes the assessment of property taxes. Assessment requires both valuation of the property and its placement on the roll. Meher Mount notes that property will often be valued before a welfare exemption is granted. This is true, but valuation is only the first portion of assessment. Under the statutorily prescribed deadlines, exemption applications are due before property is placed on the roll. (Rev. & Tax.
The welfare exemption also precludes any levy of property taxes. Levy presupposes assessment. If, due to the exemption, no tax is assessed, there can be no subsequent levy. Even if a tax is levied, the levy is canceled by a later-granted exemption. (See Mountain Club v. Pinney (1924) 67 Cal.App. 225 , 248-249 [ 227 P. 630 ] [holding that adverse possessor need not pay later canceled tax].)
Meher Mount argues that excusing Hagman from the statutory duty to pay property taxes on the disputed parcel, just because Meher Mount is excused, is bad public policy. Meher Mount posits that the exemption is meant to benefit the public-minded property owner, and should therefore apply only to the owner and not .the adverse possessor. Meher Mount also anticipates that our rule will make it easier to adversely possess the land of tax-exempt organizations. Be that as it may, these are policy arguments we are not free to follow when faced with statutes that dictate a different result.
We therefore conclude that no property taxes were assessed or levied on Meher Mount’s property during the years it qualified for the welfare exemption. Hagman is accordingly not required to pay property taxes on that land under Code of Civil Procedure section 325, subdivision (b).[5] (See Allen v. Allen (1911) 159 Cal. 197 , 200 [ 113 P. 160 ] [if no taxes are levied or assessed, adverse possessor need not pay taxes].)
B. The Mosquito Assessment Is Not a “Tax”
In determining whether the mosquito assessment is a tax, we start with the generic definition. “[T]axes are imposed for revenue purposes, rather than in return for a specific benefit conferred or privilege granted. [Citations.]” (Sinclair Paint Co., supra, 15 Cal.4th at p. 874; see San Marcos Water Dist., supra, 42 Cal.3d at p. 162; Pajaro Valley Water Management Agency v.
4 In light of our ruling, we need not reach Hagman’s further argument that he already paid the property taxes on the disputed half-acre because he openly improved that land. (See Gilardi, supra, 30 Cal.3d at p. 327.)
There is no policy-driven reason to depart from this generic definition when defining the term “taxes” under Code of Civil Procedure section 325 because the policy served by the taxation requirement in this context is a relatively weak one. An adverse possessor is required to pay taxes to put the record owner on notice of the adverse possessor’s interest in the property. Notice is surely important, but the notice imparted by the payment of taxes is “entirely insignificant” when compared to notice imparted by the adverse possessor’s open and notorious possession of the land itself. (Cavanaugh v. Jackson (1893) 99 Cal. 672 , 674 [ 34 P. 509 ].) The notice arising from payment of taxes borders on trivial in this case, where the assessment ranged from $1.12 to $7.60 per year.
The mosquito assessment is not a tax under the generic definition. The assessment does not raise general revenues for the county or any other public entity. To the contrary, the environmental health division that administers this program is limited to monitoring, abating and preventing mosquitos (Gov. Code, § 53750, subd. (Z)), and may only seek assessments for this program if its revenues are not enough to meet the costs of providing these services (Health & Saf. Code, §§ 2080, 2082, subd. (a)). We therefore agree with the trial court that the mosquito assessment is not a tax. Hagman was not required to pay it in order to perfect his claim of adverse possession.
Meher Mount contends that the mosquito assessment is not an “assessment” under California Constitution, article XIII D, section 2, subdivision (b),[6] and is instead a “special tax” under article XIII C, section 1, subdivision (d); as such, it is a tax. These constitutional provisions do not use the generic definition we have adopted. Accordingly, how the mosquito assessment is classified under their rubric is irrelevant. (Richmond, supra, 32 Cal.4th at p. 422.)
We decline to consider Meher Mount’s further challenge to the enactment of the mosquito assessment under article XIII D, section 4. As an initial
5 All further references to articles are to the California Constitution.
DISPOSITION
The judgment quieting title to Hagman is affirmed. Costs on appeal are awarded to Hagman.
Gilbert, P. J., and Yegan, J., concurred.
Footnotes
- * Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Cases cited
- San Marcos Water District v. San Marcos Unified School District 42 Cal.3d 154 p. 87
- Aguilar v. Atlantic Richfield Co. 25 Cal.4th 826 at 850 p. 87
- Winchester Mystery House v. Global Asylum, Inc. 210 Cal.App.4th 579 at 587 p. 87
- Marin Healthcare District v. Sutter Health 103 Cal.App.4th 861 at 867 p. 87
- Hoadley v. City & County of San Francisco 50 Cal. 265 at 274-276 p. 87
- Guerra v. Packard 236 Cal.App.2d 272 at 287-288 p. 87
- People ex rel. Post v. San Joaquin Valley Agric. Ass'n 151 Cal. 797 at 799, 803-804 p. 88
- Bettencourt v. Industrial Accident Commission 175 Cal. 559 at 561 p. 88
- Vallas v. City of Chula Vista 56 Cal.App.3d 382 at 387 p. 88
- Peterson v. City of Long Beach 24 Cal.3d 238 at 245 p. 88
- Lawson v. Superior Court 180 Cal.App.4th 1372 at 1396 p. 88
- Hays v. Vanek 217 Cal.App.3d 271 at 286 p. 89
- Mosk v. Summerland Spiritualist Ass'n 225 Cal.App.2d 376 p. 89
- Gilardi v. Hallam 30 Cal.3d 317 at 326 p. 90
- Glatts v. Henson 31 Cal.2d 368 at 372 p. 90
- Main Street Plaza v. Cartwright & Main, LLC 194 Cal.App.4th 1044 at 1054 p. 90
- Sinclair Paint Co. v. State Board of Equalization 15 Cal.4th 866 at 873-874 p. 90
- Lockyer v. Shamrock Foods Co. 24 Cal.4th 415 at 432 p. 90
- Allen v. McKay & Co. 120 Cal. 332 at 334 p. 90
- Hollister v. Sherman 63 Cal. 38 at 39 p. 91
- Mountain Club v. Pinney 67 Cal.App. 225 at 248-249 p. 91
- Allen v. Allen 159 Cal. 197 at 200 p. 91
- Pajaro Valley Water Management Agency v. Amrhein 150 Cal.App.4th 1364 at 1381 p. 92
- Richmond v. Shasta Community Services District 32 Cal.4th 409 at 421 p. 92
- United Business Commission v. City of San Diego 91 Cal.App.3d 156 at 165 p. 92
- Cavanaugh v. Jackson 99 Cal. 672 at 674 p. 92
- Barratt American, Inc. v. City of San Diego 117 Cal.App.4th 809 at 812 p. 93