Adverse Possession vs. Public Benefit Corp.
No matter how many times a nonprofit religious corporation says the word “public,” it cannot protect its land against adverse possession. Hagman v. Meher Mount Corporation, No. B239014 (Cal. App., 2nd App. Dist., Apr. 3, 2013).
Hagman’s fence enclosed a small portion of Meher Mount’s adjoining parcel. The common-law elements of adverse possession were satisfied, but Meher Mount claimed that its property was immune from adverse possession under Cal. Civ. Code §1007 because “tax-exempt religious organizations are public entities.” In addition, it claimed that Hagman had not paid property taxes on the disputed area (the payment of taxes is a statutory prerequisite to obtaining land by adverse possession in California).
Meher Mount claimed that "[p]ublic benefit corporations" are "public corporations" and "public corporations" are "public entities"; ergo, "public benefit corporations" must be "public entities." The Court pointed to several statutes that define the term “public corporation” and concluded: “[o]ur Legislature knows how to designate an entity as a ‘public corporation,’ and it has not so designated ‘public benefit corporations.’ That the terms ‘public corporation’ and ‘public benefit corporation’ happen to share two of the same words does not make them synonymous.” Similarly, it rejected the notion that Meher Mount was a “public entity.” Reciting numerous statutory sections defining various “public entities,” the Court focuses on their essential shared characteristic: ‘[e]ach is vested with some degree of sovereignty....” It then determines that “[p]ublic benefit corporations lack any element of sovereignty” and therefore lack immunity from adverse possession.
Concerning the tax payments, the Court notes that the statute requires payment of “taxes that have been levied and assessed” to permit adverse possession. In this case, since the land was properly exempt from taxation, no tax was “levied or assessed,” rendering the requirement inapplicable.
The Court also took the opportunity to flatly reject the notion that dicta in Mosk v. Summerland Spiritualist Association, 225 Cal. App.2d 376 (1964) required a finding of public-entity immunity.