Filed 5/9/13 Degann v. Hunanyan CA2/2
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION TWO


JONATHAN DEGANN et al.,                                              B238685

         Plaintiffs and Respondents,                                 (Los Angeles County
                                                                     Super. Ct. No. LC082607)
         v.

ANNA HUNANYAN et al.,

         Defendants and Appellants.




         APPEAL from a judgment of the Superior Court of Los Angeles County.
Louis M. Meisinger, Judge. Reversed and remanded with directions.


         Law Offices of Wayne M. Abb and Wayne M. Abb for Defendants and
Appellants.


         Luna & Glushon and Robert L. Glushon for Plaintiffs and Respondents.




                                                       ******
       Defendants and appellants Anna Hunanyan also known as Anna Hunanyan-
Meguerian also known as Azniv Meguerian, and Lucy Meguerian appeal from a
judgment quieting title to certain property in favor of plaintiffs and respondents Jonathan
Degann and Tina Degann (the Deganns). Appellants and the Deganns are adjacent
landowners, and the Deganns believed that the property they purchased included certain
outdoor improvements. A survey revealed that part of the improved area included
appellants’ property. Following a bench trial, the trial court ruled that the Deganns had
established all elements of adverse possession. It specifically ruled the Deganns’
evidence that their property had been assessed on the basis of their purchase price,
coupled with evidence that they considered their purchase price to include the visible
improvements, was sufficient to demonstrate they had paid property taxes on that portion
of appellants’ property.
       We reverse. To overcome the presumption that adjoining landowners pay
property taxes only on the property described in their deeds, an adverse claimant may
offer evidence to support an inference that the assessor instead assessed the property
according to the land and improvements visibly possessed by each party. We hold that
where there is no evidence that anyone from the assessor’s office inspected the property
or considered the visible improvements when making a tax assessment, a buyer’s
subjective opinion about the inclusion of those improvements as part of the property’s
purchase price is insufficient to support the inference a fair market value assessment
accounted for those improvements. Alternatively, the Deganns failed to prove their
adverse possession claim because they did not offer evidence of their tax payment via
“certified records of the county tax collector” as required by Code of Civil Procedure
section 325, subdivision (b).
                 FACTUAL AND PROCEDURAL BACKGROUND
       The Dispute Between Adjacent Landowners.
       Appellants own the property at 4536 Vanalden Avenue in Tarzana, and in 2001
the Deganns purchased the adjacent property at 4524 Vanalden Avenue. They paid
$550,000 for the property, which they felt reflected its fair market value. At the time of

                                             2
purchase, the property included a fenced patio area outside the master bedroom,
containing improvements including a concrete patio, in-ground spa, landscaping and
irrigation. The Deganns did not install any additional improvements to that area. They
visually inspected the property at the time of purchase and would not have paid $550,000
for their property without the patio and spa area. Since the time of purchase, the Deganns
paid each property tax bill for the property.
       At some point, appellants sought to construct a significant addition to their home
and undertook to have a survey prepared for the project. The survey revealed that an
existing wall between the properties encroached approximately 10 feet onto appellants’
property. During the summer of 2007, after the survey had been performed, the Deganns
found a business card in their mailbox from appellants that contained a handwritten note
stating: “We have a big problem. You are on our property.” The Deganns then learned
of the survey results. According to appellants, the parties unsuccessfully negotiated for
the Deganns’ purchase of the disputed property. Appellants also asked the Deganns if
they would contribute to the demolition and reconstruction costs of a new wall on the
property line. The Deganns retained counsel.
       The parties exchanged correspondence about the disputed property during the next
several months. Then, the Friday before Labor Day weekend in 2008, the Deganns came
home to find that appellants had removed part of the block wall and fence between their
properties. Despite the Deganns’ protests, appellants continued to perform additional
demolition the following week, but ceased after the Deganns obtained a temporary
restraining order.
       Thereafter, the Deganns obtained their own survey of the property and learned
appellants had correctly claimed their property’s boundary line was approximately
10 feet inside where the wall and fence had been. Relative to the Deganns’ entire lot of
20,040 square feet, or .46 acres, approximately 678 square feet on the Deganns’ side of
the block wall was included in the legal description of appellants’ property. Part of the
legal lot line went through a patio area, some pilasters, portions of a wrought iron fence



                                                3
and brick edging, but not the house or the spa; another part went through an undeveloped
hillside area.
       Pleadings, Trial and Judgment.
       In September 2008, the Deganns filed a complaint against appellants,1 alleging
causes of action for negligent and willful trespass and quiet title, and seeking a permanent
injunction. After they obtained a temporary restraining order, the trial court issued a
preliminary injunction on October 3, 2008, preventing further construction on the
disputed property during the pendency of the lawsuit. The operative first amended
complaint, filed in February 2009, alleged the same causes of action but included
allegations concerning the Deganns’ claim by adverse possession. Appellants answered
and filed a cross-complaint for ejectment, trespass, quiet title and declaratory relief.
       A bench trial commenced on September 13, 2011. A key issue at trial was
whether the Deganns had satisfied the adverse possession element of payment of property
taxes on the disputed property. Bruce Bagano, a supervising appraiser with the Los
Angeles County Assessor’s Office, testified about how the office assesses property for
the purpose of computing property taxes. The goal is to establish a property’s fair market
value at the time of transfer, and the office applies a rebuttable presumption that a
property’s purchase price is the fair market value. In ascertaining fair market value,
appraisers do not perform surveys and visually inspect a property only in an unusual case.
On the basis of his review of the Assessor’s office file for the Deganns’ property, he
opined that the $550,000 assessed value was based on the property’s purchase price. He
further opined that no survey was done and that it was highly unlikely that anyone from
the Assessor’s office had performed a visual inspection of the property. He explained
that the Assessor’s office has and takes into account a physical description of the property




1       The original complaint named only Anna Hunyan, also known as Anna Hunyan-
Meguerian (Meguerian). Lucy Meguerian was later added as a party; her name appears
in the judgment and she is a party to the appeal. For simplicity, we generally refer to the
two collectively as “appellants” throughout our discussion.

                                              4
when ascertaining fair market value, but that description is not cross-checked against a
survey.
       Real estate expert Alan Wallace testified that it is not customary in the industry for
a buyer and realtor to obtain a survey before the purchase of a single-family home.
Instead, buyers typically rely on a visual inspection of the property and presume that
existing walls and fences demarcate the property line. In a minority of transactions—
such as when a property in a high-end neighborhood has a relatively low sales price—the
Assessor’s office would visually inspect the property. Wallace did not know when the
Assessor’s office stopped conducting visual inspections for all transactions. The current
practice can occasionally result in boundary line problems—particularly with hillside
properties. Moreover, realtors typically do not check to see whether improvements have
been permitted, as the presumption is that the seller has accurately represented any
improvements comply with the law. Wallace added that a property’s purchase price, or
fair market value, includes hardscape and landscape improvements.
       In addition to experts, the Deganns and Meguerian testified. In connection with
her testimony concerning her refusing the Deganns’ offer to purchase the disputed
property for $10,000, Meguerian—a realtor—opined that the area was worth more than
$100,000. The trial court heard closing argument, during which time it asked multiple
questions. Thereafter, notwithstanding that a statement of decision was neither required
nor requested, the trial court offered its reasons for its ruling. Characterizing the payment
of property taxes as the only issue in dispute, it found that the existing case law
compelled the conclusion that the Deganns had paid property taxes on the disputed
property for the requisite five-year period.
       The trial court reasoned that the evidence showed there were significant
improvements on the disputed property. Expressly according great weight to
Meguerian’s testimony that the disputed property was worth over $100,000, the trial
court found that her testimony, taken together with the Deganns’ testimony that they
would not have purchased the home without the disputed property, showed that a
meaningful portion of the property’s purchase price was for the disputed property. On

                                               5
the basis of expert testimony that a property’s assessed or fair market value is typically
the same as a property’s purchase price, the trial court concluded: “[W]here the fair
market value is the test and the appraiser does not do a visual inspection or a survey, the
purchase price of land and improvements actually occupied by the parties is a proxy for
fair market value, and therefore, assessed value, and therefore, taxes that are actually paid
on the assessed value, i.e., the fair market value, means that the plaintiffs in this case paid
taxes on the land and improvements that they actually occupied, regardless of the fact
that the tax bills may actually refer to the correct legal description . . . which corresponds
to the correct description in the deed.” Summarizing, the trial court stated: “Since the
assessor uses the purchase price of the property that was actually occupied by the parties
who fully bargained for the price on that basis, this is equivalent functionally to a visual
inspection or assessment by the assessor.”
       With respect to the Deganns’ cause of action for trespass, the trial court found they
had failed to satisfy their burden to establish damages. It further concluded that its ruling
on the quiet title cause of action was dispositive of the cross-compliant.
       The trial court entered judgment at the conclusion of trial and an amended
judgment in November 2011, finding in favor of the Deganns on their third cause of
action for quiet title, ruling that the Deganns “were, on September 8, 2008, the date of the
commencement of the above-entitled action, and now are the owners in fee simple
absolute, and in actual and peaceable possession of the real property” described in an
attached legal description. The trial court found in favor of appellants on the Deganns’
causes of action for trespass, and in favor of the Deganns on appellants’ cross-complaint.
       This appeal followed.
                                       DISCUSSION
       Appellants contend the trial court misapplied the law in concluding that the
Deganns satisfied the requisite elements of adverse possession—specifically, the element
of the payment of property taxes on the disputed property. We agree in principle with
appellants’ position, though conclude that the deficiency is one of proof rather than
application of law.

                                               6
I.     Standard of Review.
       Consistent with their claim of error, appellants urge us to independently review the
matter. (See, e.g., Souza v. Wetlands Water Dist. (2006) 135 Cal.App.4th 879, 891 [if
“the issue is presented to the court on the basis of undisputed facts and uncontroverted
evidence and only a question of the application of the law to those facts need be
answered, our review is de novo”].) But in rendering its decision, the trial court
expressly relied on one party’s testimony concerning the value of the disputed property
and disregarded other evidence on the point. It also drew specific inferences from the
evidence concerning the significance of the disputed property relative to the Deganns’
purchase of the entire parcel.
       Under these circumstances, we must review the trial court’s determination for
substantial evidence. (Axis Surplus Ins. Co. v. Glencoe Ins. Ltd. (2012) 204 Cal.App.4th
1214, 1222.) In resolving challenges to a verdict based on sufficiency of the evidence,
we review the record as a whole, resolving all conflicts and indulging all legitimate and
reasonable inferences in favor of the prevailing party, to determine whether substantial
evidence supports the verdict. (Western State Petroleum Assn. v. Superior Court (1995)
9 Cal.4th 559, 571.) Substantial evidence, however, is not synonymous with “any”
evidence. (Kruse v. Bank of America (1988) 202 Cal.App.3d 38, 51.) To be substantial,
the evidence supporting the judgment must be “of ponderable legal significance,
. . . reasonable, credible and of solid value.” (Roddenberry v. Roddenberry (1996) 44
Cal.App.4th 634, 651.) “[I]t is ‘“‘substantial’ proof of the essentials which the law
requires.”’ [Citations.]” (Ibid.) “Inferences may constitute substantial evidence, but
they must be the product of logic and reason. Speculation or conjecture alone is not
substantial evidence. [Citation.] The ultimate test is whether it is reasonable for a trier of
fact to make the ruling in question in light of the whole record. [Citation.]” (Buckley v.
California Coastal Com. (1998) 68 Cal.App.4th 178, 192.)
       Moreover, while the determination of the trier of fact is entitled to great weight
(Fortman v. Hemco, Inc. (1989) 211 Cal.App.3d 241, 259), substantial evidence “is
. . . not merely an appellate incantation designed to conjure up an affirmance. To the

                                              7
contrary, it is essential to the integrity of the judicial process that a judgment be
supported by evidence that is at least substantial.” (Roddenberry v. Roddenberry, supra,
44 Cal.App.4th at p. 652.) Quoting former Chief Justice Traynor, the Roddenberry court
elaborated that on occasion “‘“an appellate court affirms the trier of fact on isolated
evidence torn from the context of the whole record. Such a court leaps from an
acceptable premise, that a trier of fact could reasonably [have believed] the isolated
evidence, to the dubious conclusion that the trier of fact reasonably rejected everything
that controverted the isolated evidence. Had the appellate court examined the whole
record, it might have found that a reasonable trier of fact could not have made the finding
in issue. One of the very purposes of review is to uncover just such irrational findings
and thus preclude the risk of affirming a finding that should be disaffirmed as a matter of
law.” [Citation.]’ [Citation.]” (Ibid.)
II.    The Deganns’ Evidence Was Insufficient to Satisfy the Requisite Elements of
Adverse Possession.
       A.     Applicable Legal Principles.
       Under California law, to establish adverse possession, a claimant must allege and
prove: “(1) possession under claim of right or color of title; (2) actual, open, and
notorious occupation of the premises constituting reasonable notice to the true owner;
(3) possession which is adverse and hostile to the true owner; (4) continuous possession
for at least five years; and (5) payment of all taxes assessed against the property during
the five-year period. [Citation.]” (Mehdizadeh v. Mincer (1996) 46 Cal.App.4th 1296,
1305; see also Gilardi v. Hallam (1981) 30 Cal.3d 317, 321 (Gilardi); Code Civ. Proc.,
§ 325.) The doctrine of adverse possession is strictly construed, and the burden of
proving all of the essential elements is on the party seeking to assert the right to title.
(E.g., Landini v. Day (1968) 264 Cal.App.2d 278, 282 [claimant bears the burden of
proving every element by “‘clear and satisfactory evidence’”]; Nelson v. Robinson (1941)
47 Cal.App.2d 520, 528 [adverse possession cannot be established by inference “‘but
only by clear and positive proof’”].)



                                               8
       Since 1878, payment of taxes has been a “requisite condition to the acquisition of
title by adverse possession.” (O’Hara v. O’Brien (1895) 107 Cal. 309, 316.)
Consequently, the failure to pay taxes on the land is fatal to a claim of adverse
possession. (Gilardi, supra, 30 Cal.3d at pp. 326–327; Raab v. Casper (1975) 51
Cal.App.3d 866, 878.) The Gilardi court explained that “[o]rdinarily, when adjoining
lots are assessed by lot number, the claimant to the disputed portion cannot establish
adverse possession, because he cannot establish payment of taxes. [Citations.]” (Gilardi,
supra, at p. 326; see also Raab v. Casper, supra, at p. 878 [“As a general rule, where
adjoining lots are assessed merely by numbers and without reference to a survey, the
claimant cannot establish adverse possession because he cannot establish payment of
taxes”].) Applying the general rule, multiple cases have rejected claims of adverse
possession. (E.g., Friedman v. Southern California T. Co. (1918) 179 Cal. 266, 271 [no
adverse possession because “the defendant paid no taxes except those assessed upon the
land described by its deed”]; Pedersen v. Reynolds (1939) 31 Cal.App.2d 18, 29 [no
adverse possession of portion of adjoining parcel where “the holders of the deeds which
actually contain within their descriptions the disputed strip of land, paid the taxes
thereon”]; Johnson v. Buck (1935) 7 Cal.App.2d 197, 202 [“The evidence shows clearly
that the taxes were paid upon the land described in respondents’ deed, which did not
include the strip in dispute, and in the absence of an agreement extending the boundary to
include this strip, this does not constitute a payment of taxes on such strip”].)
       Two exceptions exist to the ordinary rule that those whose taxes are assessed by
lot number cannot establish the payment of taxes on a portion of another’s lot. First, the
claimant may show “that there is an error in the description on the assessment roll” to
establish the error and his payment of taxes. (Gilardi, supra, 30 Cal.3d at p. 326.) For
example, in Sorensen v. Costa (1948) 32 Cal.2d 453, for over 40 years adjacent
landowners occupied and improved one-half of their own lot and one-half of the
adjoining lot as described in the city’s official map. Affirming a judgment quieting title
to one-half of one of the lots, the appellate court found that the plaintiff met his burden to
show the payment of taxes where the land was actually assessed as improved property

                                              9
even though the description on the tax assessment roll was unimproved property. (Id. at
pp. 465–466.) Under such circumstances, the plaintiff “proved by substantial evidence
that the description on the tax assessment rolls was mistaken and that he and his
predecessors not only thought that they were paying taxes on the land occupied but in
fact paid taxes actually assessed against such lands.” (Id. at p. 466.)
       The Gilardi court described a second exception: “[W]here the claimant by
construction of buildings or other valuable improvements or by the building of fences has
visibly shown occupation of a disputed strip of land adjoining the boundary, several cases
have reasoned that the ‘natural inference’ is that the assessor did not base the assessment
on the record boundary but valued the land and improvements visibly possessed by the
parties.” (Gilardi, supra, 30 Cal.3d at p. 327; accord, Price v. De Reyes (1911) 161 Cal.
484, 490 [where claimant had enclosed area including 18 inches of adjoining parcel, “the
natural inference would be that the assessor put the value on the land and improvements
of each party as disclosed by the visible possession, rather than that he ascertained the
true line by a careful survey and assessed to one a part of the possessions of the other”];
Drew v. Mumford (1958) 160 Cal.App.2d 271, 277 [where fence had been constructed
and reconstructed in an area enclosing 21 inches of adjoining parcel, court concluded “it
would be possible to infer in support of the judgment in the instant case that taxes were
assessed and paid on the basis of the property in the possession of the parties”].)
       In Gilardi, supra, 30 Cal.3d 317, the court found the evidence insufficient to
satisfy the second—or “natural inference”—exception. There, a survey stake purporting
to mark the property line between lot 1407, owned by the plaintiffs, and adjoining
lot 1408, owned by the defendants, had been erroneously placed on a portion of lot 1407.
(Id. at p. 320.) Relying on the position of the stake, the defendants’ predecessors had
improved a portion of lot 1407 with a sidewalk, sprinkler system, trees, and a lawn.
(Ibid.) Lot 1408 was also improved with a house, while lot 1407 remained unimproved
except for what the defendants’ predecessors installed. (Id. at p. 321.) Finding that this
evidence did not support the natural inference that taxes had been assessed on the
improvements, the Supreme Court held the defendants failed to prove the requisite

                                             10
adverse possession element of the payment of taxes on lot 1407: “The parties and their
predecessors were assessed taxes by lot number. There is no direct evidence that the
sidewalk or ornamental plantings were considered in the assessment of the lots. There
are no physical barriers, structures, or enclosures indicating that plaintiffs and their
predecessors were excluded from using the sidewalk and planted areas on their land, or
that the improvements were not a joint undertaking of the landowners. In the
circumstances, the trial court was not required to infer that the assessor concluded the
sidewalk and plantings reflected ownership of the disputed land by defendants and their
predecessors.” (Id. at p. 327.)
       B.      The Deganns’ Evidence Did Not Establish the Payment of Taxes on the
Disputed Property.
               1.     The evidence did not reasonably and logically support the
inference that the Assessor visibly inspected and assessed the disputed property to
the Deganns.
       Here, as is the typical case with adjoining landowners, the evidence showed that
appellant and the Deganns paid property taxes on the land described in their deeds. (See,
e.g., Walner v. City of Turlock (1964) 230 Cal.App.2d 399, 410 [“The record reflects that
the land here involved was assessed according to the deeds on file in the office of the
county recorder”].) “The burden is on the adverse claimant of the fee to establish that no
taxes were assessed against the land or that if assessed he paid them.” (Gilardi, supra, 30
Cal.3d at p. 326.) Thus, to meet their burden the Deganns necessarily had to rely on one
of the two exceptions to the ordinary rule by establishing an error in the assessment rolls
or offering evidence to support the natural inference that their tax assessment was based
on the improvements made to the disputed property. (Id. at pp. 326–327.) As there was
no evidence of any assessment roll error, the Deganns’ theory was that they were entitled
to a natural inference their tax assessment included the disputed property because they
paid taxes on the basis of their purchase price, and their purchase price accounted for the
improvements on the disputed property.



                                              11
       The trial court accepted their theory. Essentially, it found that the Deganns met
their burden to establish the natural inference exception on the basis of evidence showing
the disputed property contained significant improvements, Meguerian’s testimony that
the disputed property had a value of over $100,000, the Deganns’ testimony that the
improvements on the disputed property were an important part of their decision to
purchase the property for $550,000, and Bagano’s testimony that a property’s purchase
price forms the basis for its assessed value for property tax purposes. The trial court
found that the Assessor’s use of the bargained-for price the Deganns paid, which took
into account their visual assessment of the improvements, was the “equivalent
functionally to a visual inspection or assessment by the Assessor. In other words, the
buyer’s eyes reflected in the purchase price, essentially becomes the Assessor’s eyes.”
The trial court concluded: “I think that there is, because of the way that these taxes were
assessed, a natural inference, and in my view, a reasonable inference that the taxes paid
by the plaintiffs in this case reflected the property based upon the boundary that had been
constructed between these two properties.”
       The court in Price v. De Reyes, supra, 161 Cal. 484 first articulated the natural
inference concept. There, the adverse claimant and a neighbor agreed to a boundary line
between their properties that did not reflect the true description in the deeds, and the
claimant constructed improvements along the boundary line which were actually on his
neighbor’s property. (Id. at pp. 487–489.) Although the parties paid taxes according to
the legal descriptions of the property, the court relied on the rule that when parties are
uncertain of a boundary and agree to its location, that boundary attaches to the deeds so
that one in possession of the overlap holds title thereto. (Id. at pp. 489–490; see also
Ernie v. Trinity Lutheran Church (1959) 51 Cal.2d 702, 707 [the agreed boundary
doctrine “requires that there be an uncertainty as to the true boundary line, an agreement
between the coterminous owners fixing the line, and acceptance and acquiescence in the
line so fixed for a period equal to the statute of limitations”].) In light of the boundary
agreement, the Price court held that the payment of taxes assessed on the basis of the
deeds amounted to payment of the taxes on the property actually possessed by the parties

                                              12
based on the agreed boundary line. (Price v. De Reyes, supra, at p. 490.) The court then
added: “Furthermore, the natural inference would be that the assessor put the value on
the land and improvements of each party as disclosed by the visible possession.” (Ibid.)
       Here, there was no evidence to show that the parties satisfied the elements of the
agreed boundary doctrine, and hence no evidence to support any natural inference of
valuation by the Assessor as the principle was originally conceived. Nonetheless, over
time, the natural inference exception has become attenuated from the agreed boundary
doctrine. For example, the court in Raab v. Casper, supra, 51 Cal.App.3d at page 878,
explained the natural inference exception as follows: “[W]here one party is visibly in
possession of land under a claim of right and has placed valuable improvements on the
land, the natural inference is that the assessor did not base his assessment on the true
boundary but valued the land and improvements visibly possessed by the claimants.”
(See also Gilardi, supra, 30 Cal.3d at p. 327 [analyzing application of natural inference
exception where no issue as to agreed boundary].)
       Consistently, however, the exception has remained an “inference.” (Gilardi,
supra, 30 Cal.3d at p. 327.) As explained in Aguimatang v. California State Lottery
(1991) 234 Cal.App.3d 769, 800: “‘An inference is a deduction of fact that may logically
and reasonably be drawn from another fact or group of facts found or otherwise
established in the action.’ (Evid. Code, § 600, subd. (b), italics added.) An inference is
more than a surmise or a conjecture. [Citations.] An inference cannot be based on mere
possibilities; it must be based on probabilities. [Citations.]” (See also Estate of
Braycovich (1957) 153 Cal.App.2d 505, 512 [an inference “is a reasonable deduction
from the facts proved and, of course, must be logical”].)
       Here, there was no evidence from which to infer logically and reasonably that the
property tax assessment for the Deganns’ property accounted for the disputed property.
To Bagano’s knowledge, no one from the Assessor’s office conducted a visual inspection
of the Deganns’ property; such an assessment would have been contrary to normal
procedure. While Bagano conceded that the Assessor’s office typically uses a property’s
purchase price as the assessed value, he added that “when we do the assessment we

                                             13
generally have a physical description of the property such as the lot size, the size of the
improvement, the age of the improvement and that sort of thing. So that physical
description is taken into account when we do the assessment.” Yet, neither he nor any
other witness testified that the physical description of the Deganns’ property included the
disputed property. (Cf. Mesnick v. Caton (1986) 183 Cal.App.3d 1248, 1260 [insufficient
evidence of tax payment element of adverse possession where assessor’s representative
visually inspected property but inspection made no reference to disputed improvements].)
We cannot conclude that the mere visibility of the improvements reasonably and logically
leads to the inference that the Assessor factored them into the assessment where the
evidence establishes that no one from the Assessor’s office ever saw them.
       In the face of evidence that the Assessor did not conduct a visual inspection, the
trial court relied on evidence of the Deganns’ visual inspection, concluding it could serve
as a proxy for an inspection by the Assessor’s office. The trial court applied the natural
inference exception on the basis of evidence the Deganns considered the disputed
property as part of their $550,000 purchase price, coupled with evidence that the
$550,000 amount formed the basis for the property’s assessed value. According to this
reasoning, one may establish the payment of taxes element of an adverse possession
claim by merely asserting his or her subjective belief that a disputed area was acquired at
the time of purchase. We cannot conclude that a property owner’s opinion as to whether
certain improvements were considered in determining the property’s purchase price
constitutes substantial evidence supporting an inference the Assessor actually considered
the visible improvements in assessing the property.
       We are guided by Sorensen v. Costa, supra, 32 Cal.2d 453. There, the court found
the adverse claimant had in fact been paying taxes on the house he occupied, not on the
“unimproved land” described in his deed; it relied on evidence of a mistaken description
in the tax assessment rolls, which established that the claimant and his predecessors “not
only thought that they were paying taxes on the land occupied but in fact paid taxes
actually assessed against such lands.” (Id. at p. 466.) The court elaborated: “There is no
question that a person claiming title by adverse possession must show that he and his

                                             14
predecessors actually paid the taxes assessed on the particular land occupied, and he
cannot show compliance with section 325 of the Code of Civil Procedure by merely
proving that he and his predecessors ‘thought or supposed they were paying taxes’ on the
land occupied by them, when the lands were assessed under a correct description that
applied to other land.” (Ibid.; see Gilardi, supra, 30 Cal.3d at p. 327 [no basis for
“‘natural inference’” that assessment included disputed improvements where the
evidence showed parties paid taxes by lot number and there was “no direct evidence” that
the improvements were considered as part of the lots’ assessment]; see also Smith v. Byer
(1960) 179 Cal.App.2d 118, 121 [“The word ‘assessment’ in [§ 325] refers to the act of
the assessor”].)
       This case is no different than Dooley’s Hardware Mart v. Trigg (1969) 270
Cal.App.2d 337. There, the defendant acquired a lot and thought the existing block wall,
which had been erected by the plaintiff who owned the adjacent lot, marked the boundary
between her property and the plaintiff’s. She built a driveway abutting and parallel to the
block wall before the plaintiff conducted a survey and learned the true boundary line was
one foot into the driveway. (Id. at p. 339.) Though the court concluded that the
defendant had established her entitlement to an easement over the one-foot strip, it further
concluded that she could not claim title to the strip by adverse possession because she did
not pay taxes on the area during the period of encroachment. (Id. at pp. 339, 341.)
       Here, similarly, we decline to find a buyer’s subjective opinion about the extent of
property or improvements acquired amounts to substantial evidence sufficient to support
the payment of property taxes element of adverse possession. In the absence of any
evidence that the Deganns communicated the intended scope of their acquisition to the
Assessor’s office, a reasonable and logical inference that the Assessor’s office visibly
assessed the disputed property and included it as part of its assessment cannot be drawn
from the Deganns’ inspection and resulting purchase of the property. (See Aguimatang v.
California State Lottery, supra, 234 Cal.App.3d at p. 800.) Nor do we find that
Meguerian’s valuation testimony added anything relative to the application of the natural
inference exception. Whether the disputed property was worth over $100,000 as stated

                                             15
by Meguerian or $10,000 according to the Deganns did not tend to show how the
disputed property had been visibly assessed.
       We recognize that the trial court intended to fashion an application of the natural
inference exception that took account of both Proposition 13, which mandates that
properties are assessed on the basis of their market value at the time of transfer (e.g.,
Auerbach v. Assessment Appeals Bd. No. 1 (2006) 39 Cal.4th 153, 157) and the current
practice of the Assessor’s office to not make visual inspections. Nonetheless, where
there is no evidence that the Assessor’s office in any way considered or was even aware
of the improvements on the disputed property, we cannot conclude that the Deganns’
testimony about their property’s market value can support a finding that they paid taxes
on the property they claim through adverse possession. We do not intend to suggest that,
in light of Proposition 13 and the Assessor’s office non-inspection practice, adjoining
property owners will never be able to establish the requisite payment of taxes where a
residence encroaches on a neighbor’s land. For example, an adverse claimant may offer
evidence that the parties had agreed on a boundary line different from that reflected in the
assessment rolls, that at some earlier point in time the Assessor’s office conducted a site
inspection or that the Assessor’s office had some knowledge of the improvements by
other means, such as their inclusion in the “physical description” of the property
referenced by Bagano. Here, however, there was no such evidence.
       Though the result that appellants are entitled to property which the Deganns
believed was theirs may seem harsh, the doctrine of adverse possession is not an
equitable one, designed to reward the taker or punish the person dispossessed. (Finley v.
Yuba County Water Dist. (1979) 99 Cal.App.3d 691, 696.) Accordingly, an adverse
claimant must strictly comply with the statutory requirements for taking title by this
method: “There are no equities in favor of a party seeking by adverse holding to acquire
the property of another . . . . ‘Section 325 of the Code of Civil Procedure requires that
one who seeks or claims to obtain title by adverse possession shall have paid “all the
taxes, state, county, or municipal, which have been levied and assessed upon such land
during the five years of his adverse occupancy.” . . . If the owner of the land pays the

                                              16
taxes as they fall due, there is no reason why his title should be impaired . . . . The statute
makes the payment of taxes as important an element as actual occupancy of the land for
the purpose of gaining a title by adverse possession, and the burden is upon the claimant
to do the acts required to create the adverse title. He should be as vigilant in paying the
taxes as in holding possession of the land. He is seeking to gain the title of another
through statutory authority, and it is for him to see that he does all of the acts which the
statute requires.’” (Glowner v. De Alvarez (1909) 10 Cal.App. 194, 196; accord, Smith v.
Byer, supra, 179 Cal.App.2d at p. 121.)2
         Because there was no substantial evidence to support an inference that the
Assessor based the property tax assessment on the visible improvements on the disputed
property, the Deganns failed to establish the requisite property tax payment element of
their adverse possession claim. Consequently, reversal of the judgment with directions to
enter judgment in favor of appellants is required. (See Frank v. County of Los Angeles
(2007) 149 Cal.App.4th 805, 833 [effect of reversal for insufficient evidence].)
                2.     The Deganns’ testimony was insufficient to establish they paid
taxes on the disputed property.
         Even if we were to accept the trial court’s conclusion that the natural inference
exception may be satisfied by the evidence offered here, we would still find that the
Deganns failed to establish the payment of taxes element of their adverse possession
claim.
         Code of Civil Procedure section 325, subdivision (b) sets forth the requirements
for one claiming title by adverse possession: “In no case shall adverse possession be
considered established under the provision of any section of this code, unless it shall be
shown that the land has been occupied and claimed for the period of five years



2      While it is not the exclusive means by which an adverse claimant may establish
the payment of property taxes, Revenue and Taxation Code section 610 provides a
specific mechanism for one to assure his or her name is included as an assessee on the
assessment roll. (See Froehlich v. Board of Directors (1973) 35 Cal.App.3d 98, 103.)
There was no evidence that the Deganns availed themselves of this procedure.

                                              17
continuously, and the party or persons, their predecessors and grantors, have timely paid
all state, county, or municipal taxes that have been levied and assessed upon the land for
the period of five years during which the land has been occupied and claimed. Payment
of those taxes by the party or persons, their predecessors and grantors shall be established
by certified records of the county tax collector.” While the payment of taxes has long
been an element of an adverse possession claim, the statutory requirement regarding
proof is more recent; it was enacted at a regular session of the Legislature in 2010
(Stats. 2010, ch. 55, § 1) and became effective on January 1, 2011. (See Cal. Const.,
art. IV, § 8, subd. (c)(1) [absent urgency clause, a statute enacted at a regular session of
the Legislature becomes effective on January 1 of the following year].)
       Here, the evidence concerning the payment of taxes was undisputed. Each of the
Deganns testified separately that they paid the taxes on their property annually. They
further testified that they had requested proof of tax payment from the appropriate office
and submitted those documents to their counsel, but their counsel specifically represented
that he did not have copies of the Deganns’ tax bills in court. Moreover, although the
Assessor’s office file for the Deganns’ property was admitted into evidence, there was no
testimony or other indication that the file contained certified copies of their tax payment
records. When appellants’ counsel raised the issue of this deficiency in proof during his
motion for judgment at the conclusion of the Deganns’ case, the trial court found it
sufficient that the Deganns testified they paid their tax bill on the full assessed value of
their home. The trial court stated: “I don’t need to have the bill to say I have paid my
taxes. I can testify that I paid all of my income taxes since 1942 even though I don’t have
the bills, can’t I?”
       The proper interpretation of a statute and its application to undisputed facts present
questions of law subject to de novo review. (People ex rel. Lockyer v. Shamrock Foods
Co. (2000) 24 Cal.4th 415, 432; California Veterinary Medical Assn. v. City of West
Hollywood (2007) 152 Cal.App.4th 536, 546.) The rules governing statutory
interpretation are well-settled. Our goal is to ascertain legislative intent, and to do so “we
turn first to the words of the statute, giving them their usual and ordinary meaning.

                                              18
[Citations.]” (Nolan v. City of Anaheim (2004) 33 Cal.4th 335, 340.) “If the statutory
language is unambiguous, ‘we presume the Legislature meant what it said, and the plain
meaning of the statute governs.’ [Citations.]” (People v. Toney (2004) 32 Cal.4th 228,
232; see also Lennane v. Franchise Tax Bd. (1994) 9 Cal.4th 263, 268 [“‘Where the
statute is clear, courts will not “interpret away clear language in favor of an ambiguity
that does not exist”’”].)
       There is no ambiguity in Code of Civil Procedure section 325, subdivision (b). It
provides that the payment of taxes for the requisite five-year period “shall be established
by certified records of the county tax collector.” (Code Civ. Proc., § 325, subd. (b).) It is
a well-established rule of statutory construction that the word “shall” connotes mandatory
action. (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 443; Puerta v.
Torres (2011) 195 Cal.App.4th 1267, 1272; In re Marriage of Fossum (2011) 192
Cal.App.4th 336, 348.) The Deganns did not satisfy this mandatory requirement, as they
failed to offer into evidence the tax collector’s certified records showing their payment of
taxes for the requisite five-year period. The statute itself sets forth the consequence for
this failure, which is that adverse possession has not been established. (Code. Civ. Proc.,
§ 325, subd. (b) [providing that “[i]n no case shall adverse possession be considered
established” unless the statutory requirements are met].)
       Accordingly, the failure to establish the payment of taxes as required by Code of
Civil Procedure section 325, subdivision (b) constitutes an alternative basis for reversal
of the judgment.




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                                     DISPOSITION
       The judgment is reversed and the matter is remanded with directions to enter
judgment in favor of appellants. Appellants are entitled to their costs on appeal.
       NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.


                                            _____________________, J. *
                                                    FERNS
We concur:




____________________________, Acting P. J.
       ASHMANN-GERST


____________________________, J.
       CHAVEZ




*       Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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