Bailey v. Citibank, N.A.

Filed 7/6/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

CHARLES SCOTT BAILEY et al.,
F079311
Plaintiffs and Appellants,
(Super. Ct. No. BCV-18-101712)
v.

CITIBANK, N.A., OPINION
Defendant and Appellant.

APPEALS from a judgment of the Superior Court of Kern County. Linda S.
Etienne, Temporary Judge. (Pursuant to Cal. Const., art VI, § 21.)
Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, Catherine E. Bennett,
Barry L. Goldner and R. Jeffrey Warren for Plaintiffs and Appellants.
Severson & Werson and Jan T. Chilton for Defendant and Appellant.
-ooOoo-
In their complaint to quiet title, plaintiffs Charles Scott Bailey and Kimberley
Elizabeth Bailey claimed to be rightful owners of certain real property located in Frazier
Park, California (the property), based on their alleged adverse possession thereof for a
five-year period. Before that period was completed, defendant Citibank, N.A. (Citibank),
as successor in interest of a deed of trust recorded against the property long before
plaintiffs’ adverse possession began, foreclosed and acquired title to the property under
the trustee’s deed. When plaintiffs subsequently filed their complaint to quiet title,
Citibank was named as the primary defendant. Citibank, however, failed to answer or
otherwise respond to the complaint, and its default was entered. The trial court
subsequently conducted an evidentiary hearing on plaintiffs’ quiet title claim and
concluded that title to the property was vested in plaintiffs, not Citibank. Citibank did
not appear at the evidentiary hearing. Following the hearing, the trial court entered a
judgment quieting title in plaintiffs’ favor.
Thereafter, Citibank moved to set aside both the default and the judgment under
the mandatory provisions of Code of Civil Procedure section 473, based on Citibank’s
attorney’s affidavit of fault. 1 The trial court granted Citibank’s motion, and the default
and the judgment quieting title were set aside. Plaintiffs appeal from that order on the
ground that no basis existed for potential relief under section 473 since Citibank’s
attorney was not retained to handle this case until after the default was entered. In
response to plaintiffs’ appeal, Citibank has filed a protective cross-appeal, arguing that
even if relief under section 473 was unavailable, the judgment quieting title in plaintiffs’
favor was erroneous as a matter of law and should be reversed. We agree with Citibank.
Although the trial court erred in granting relief under section 473, which order is
reversed, under Citibank’s cross-appeal the underlying judgment quieting title is also
reversed. Moreover, because the undisputed facts show Citibank is the owner of the
property as a matter of law, on remand the trial court is instructed to enter a new
judgment in Citibank’s favor.

1 Unless otherwise indicated, further statutory references are to the Code of Civil
Procedure.

2.
 FACTS AND PROCEDURAL HISTORY
The 2005 Deed of Trust
We begin by describing the original ownership of the property prior to plaintiffs’
commencement of their adverse possession. Robert Lifson and his wife, Toni Black,
acquired the property by grant deed in 2004. In 2005, they executed a deed of trust to
secure a $582,000 loan from Option One Mortgage Corporation. The deed of trust was
recorded on September 1, 2005, and the beneficiary named therein was Option One
Mortgage Corporation (the 2005 deed of trust). In 2008, Lifson and Black defaulted on
the secured loan. A notice of default and election to sell under deed of trust was
recorded. Lifson and Black responded by filing a series of bankruptcy petitions.
Whether due to the bankruptcy filings or other reasons, no notice of trustee’s sale was
recorded at that time; the foreclosure process came to a halt and did not proceed for
nearly a decade.
Plaintiffs’ Adverse Possession Commences
Meanwhile, in 2013, plaintiffs observed the property was unoccupied. On June
28, 2013, plaintiffs took possession of the property without permission and claimed it as
their own. Their possession of the property was open and obvious. Since that time,
plaintiffs have stored equipment and trailers on the property, kept chickens, pigs and
goats there, made repairs to the residence, and paid the assessed property taxes each year
when due.
Citibank Becomes Successor of the 2005 Deed of Trust
The 2005 deed of trust, which continued to constitute a lien or encumbrance on the
property, was assigned by the original beneficiary and subsequently assigned two more
times. In 2017, under a duly recorded assignment, Citibank became the successor in
interest of the 2005 deed of trust. Thereafter, Citibank, as the “present Beneficiary under
said Deed of Trust,” recorded a substitution of trustee. The new trustee proceeded to
record a rescission of the former 2008 notice of default, and then recorded a new,

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operative notice of default. In February 2018, a notice of trustee’s sale was recorded.
The trustee’s sale was conducted on April 2, 2018, and Citibank, the foreclosing
beneficiary, became the owner of the property pursuant to the trustee’s deed (or the
“TRUSTEE’S DEED UPON SALE”) dated April 4, 2018, which was duly recorded on
April 12, 2018.
Plaintiffs’ Complaint to Quiet Title
On July 16, 2018, approximately three months after Citibank’s foreclosure was
completed, plaintiffs filed their complaint to quiet title. The complaint contained a single
cause of action seeking to quiet title to the property in plaintiffs’ favor based on their
alleged adverse possession. Plaintiffs alleged they had openly and adversely possessed
the property for five years, as of June 28, 2013, and had also paid the property taxes
during that five-year period.
Citibank Serves a Notice to Quit
On July 28, 2018, plaintiffs forwarded to their attorney a “Notice to Quit” that had
been served on plaintiffs by Citibank’s eviction or unlawful detainer attorneys (eviction
counsel), dated July 25, 2018. Plaintiffs’ attorney responded by contacting Citibank’s
eviction counsel and (i) informed them of plaintiffs’ pending lawsuit seeking to quiet title
to the property, and also (ii) provided a copy of plaintiffs’ complaint to quiet title and the
related lis pendens. Upon receiving this information, Citibank’s eviction counsel
indicated they were unaware of plaintiffs’ claim of ownership and stated they would have
to confer with their client. However, no further communication was received from
Citibank’s eviction counsel.
Citibank’s Default Taken
Plaintiffs’ complaint was served by mail on Citibank on October 3, 2018. When
Citibank failed to answer or otherwise respond to the complaint, plaintiffs requested and
obtained Citibank’s default. On November 14, 2018, default was entered against
Citibank. Notice of entry of default was served on Citibank on November 15, 2018.

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Evidentiary Hearing on Plaintiffs’ Quiet Title Claim
On February 13, 2019, the trial court conducted an evidentiary hearing on
plaintiffs’ quiet title claim. There was no live testimony at the hearing. The evidence
presented by plaintiffs included the complaint, the declaration of plaintiffs’ attorney
Barry Goldner and attached exhibits, the declarations of plaintiffs (both Charles Scott
Bailey and Kimberley Elizabeth Bailey), and a request for judicial notice of numerous
recorded documents. The recorded documents included the 2005 deed of trust, the
assignment of the 2005 deed of trust to Citibank, and the April 2018 trustee’s deed.
Plaintiffs also submitted a trial brief in support of their request for judgment. After
hearing the evidence, the trial court took the matter under submission.
Days later, the trial court ruled that plaintiffs are the owners in fee simple of the
real property described in the complaint, not Citibank. Accordingly, a written judgment
quieting title in plaintiffs’ favor was entered by the trial court. Notice of entry of
judgment was filed and served on February 21, 2019.
Citibank’s Motion for Relief under Section 473
On March 11, 2019, Citibank served and filed an ex parte application to set aside
the judgment under section 473. In support of the application, Citibank submitted a
declaration by its attorney, Jeremy Katz, asserting that he was assigned to the case on
January 10, 2019, and at that time learned of the prior default taken by plaintiffs against
Citibank. However, due to attorney Katz’s admitted failure to take any action or to
calendar the matter or otherwise monitor the situation, the default prove-up hearing took
place without Citibank’s appearance and judgment was entered.
Attorney Katz’s declaration was obviously for the purpose of obtaining relief
based on an attorney affidavit of fault under section 473. In light of the importance of the
content of the declaration to the question of whether relief was properly granted, we shall
quote portions of it verbatim.

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 In relevant part, Katz stated in his declaration as follows: “1. I was assigned to be
the handling attorney for this matter on January 10, 2019. [¶] 2. On January 10, 2019,
upon being referred this matter, I was informed that Plaintiffs had sent the summons and
complaint to Citibank’s unlawful detainer counsel in July 2018 and that Plaintiffs had
taken Citibank’s default. My intent at the time was to first contact Plaintiffs’ counsel to
see if they would stipulate to set aside the default, as that would be the simplest and most
efficient way to resolve the issue. If Plaintiff’s counsel would not stipulate to set aside
the default, my intent was to affirmatively seek relief from the entry of default. And, if
the court was not inclined to set aside the entry of default, my intent was to actively
monitor the Court’s docket so that Citibank could still appear and present rebuttal
evidence at any subsequent quiet title prove-up hearing. Although the proof of service on
file with the Court indicates that service was effectuated on Citibank in October 2018 by
mail with return receipt requested, it is currently unknown why the complaint was not
properly processed in order to ensure that Citibank made an appearance prior to any
attempted default. [¶] 3. Accordingly, I made personal notes at that time to investigate
whether the summons had been properly served, to follow up with Plaintiffs’ counsel, to
seek … relief from the entry of default if needed, and to actively monitor the court’s
docket to make sure that I was aware of any quiet title prove-up proceedings. I sent my
legal assistant an email on January 10, 2019 instructing my assistant to activate my
calendar notices for this matter in my firm’s calendaring system. [¶] 4. Unfortunately, I
did not reach out to Plaintiff’s counsel immediately upon being referred the matter as I
was in the process of finalizing a summary judgment motion in one of my other matters.
Compounding things, I unfortunately did not expressly ask my assistant to calendar any
follow-up reminders to reach out to Plaintiffs’ counsel or actively monitor the Court’s
docket. Nor did I manually add such reminders myself. Nor did I expressly instruct my
staff to actively monitor the Court’s docket. [¶] 5. As a result of my inadvertent failure
to properly instruct my [assistants] and ensure that such reminders were in place in my

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calendaring system, I did not contact Plaintiffs’ counsel or actively monitor the Court’s
docket. Had I done so, I would have reached out to Plaintiffs’ counsel and/or been aware
that Plaintiff had filed a default prove-up packet on January 28, 2019, and would have
taken appropriate action in response. [¶] 6. On or about March 5, 2019, … I then
checked the court’s online docket, and discovered that a default judgment had been
entered against Citibank on February 19, 2019.”
Citibank’s points and authorities in support of their application under section 473
included argument that the judgment quieting title was erroneous as a matter of law. A
proposed demurrer making the same argument was also submitted in support of the
application.
Plaintiffs filed opposition to Citibank’s motion, arguing that mandatory relief
under section 473 based on the attorney affidavit of fault was not available under the
circumstances because attorney Katz was not retained until after default was entered.
Further, plaintiffs argued that discretionary relief was likewise not available under
section 473 because no explanation was ever provided for Citibank’s unreasonable delay
and inaction.
The hearing was held on March 28, 2019. On March 29, 2019, the trial court
issued its ruling to grant the motion. The trial court explained that although it was
denying discretionary relief because there was no evidence to support a finding of
mistake, surprise, inadvertence or excusable neglect on the part of Citibank, the court was
granting mandatory relief based on the fault of Citibank’s attorney. The trial court noted
that the quiet title statute, at section 764.010, would have permitted the presentation of
rebuttal evidence at the prove-up hearing by Citibank, even though Citibank had
defaulted. Thus, “through the fault of Citibank’s attorney, it was deprived of the
opportunity to present evidence that the court would have been compelled to hear.”
Accordingly, the trial court held “[t]he default and default judgment as to the moving
party are set aside and vacated.”

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 A formal written order setting aside both the default and the judgment quieting
title to real property was filed on May 3, 2019.
Plaintiffs’ Appeal and Citibank’s Cross-Appeal
On May 20, 2019, plaintiffs timely filed their notice of appeal from the trial
court’s order setting aside the default and the judgment quieting title. Plaintiffs’ appeal
contends the trial court erred in granting relief under section 473 under the circumstances
of this case.
On June 5, 2019, Citibank filed notice of its cross-appeal from the “Default
Judgment Quieting Title to Real Property.” Citibank argues in its cross-appeal that, as a
matter of law, plaintiffs’ evidence did not show possession was hostile and adverse to
Citibank for the required five-year period. Also, with reference to plaintiffs’ appeal,
Citibank asserts that its cross-appeal moots plaintiffs’ appeal, but in any event, Citibank
argues the trial court did not prejudicially err in setting aside the default and default
judgment due to the unique nature of a prove-up hearing in a quiet title action.
DISCUSSION
I. Plaintiffs’ Appeal from Order Granting Section 473 Relief
In their appeal, plaintiffs argue the trial court erred in setting aside the default and
judgment under the mandatory relief provision of section 473. As explained below, we
agree with plaintiffs. We begin our discussion of this issue with a brief overview of how
default proceedings are conducted in quiet title actions, because it appears that a unique
aspect thereof was dispositive to the trial court’s decision.
A. Default Proceedings in Quiet Title Cases
The legal effect of a defendant’s default in a quiet title action differs in certain
respects from that which occurs in other types of cases. To make these differences clear,
we first point out the usual or standard consequences of a defendant’s default in cases
alleging other, i.e., non-quiet title, causes of action. Generally, when a defendant’s
default is taken it will—unless set aside—have dire effects on that defendant’s right to

8.
participate in the case. The entry of a defendant’s default cuts off the defendant’s right to
file pleadings and motions (other than a motion to set aside default under § 473), and it
also cuts off the defendant’s right to notices and the service of pleadings or papers.
(Steven M. Garber & Associates v. Eskandarian (2007) 150 Cal.App.4th 813, 823–824;
Sporn v. Home Depot USA, Inc. (2005) 126 Cal.App.4th 1294, 1301.) Moreover, the trial
court, in connection with rendering a default judgment, will treat the well-pled allegations
of the complaint as admitted by the defaulting defendant, and therefore the plaintiff is not
required to provide evidence as to such issues. (Kim v. Westmoore Partners, Inc. (2011)
201 Cal.App.4th 267, 281.) Finally, the defaulting defendant is not entitled to advance
any contentions on the merits, or to participate at all in the default proceedings. (Steven
M. Garber & Associates v. Eskandarian, supra, at pp. 823–824.)
However, where a quiet title action is concerned, the process for entering a
judgment is governed by the specific requirements of the quiet title statutory scheme
codified at section 760.010 et seq. Of particular importance here, section 764.010 of that
statutory scheme provides as follows: “The court shall examine into and determine the
plaintiff’s title against the claims of all the defendants. The court shall not enter
judgment by default but shall in all cases require evidence of plaintiff’s title and hear such
evidence as may be offered respecting the claims of any of the defendants, other than
claims the validity of which is admitted by the plaintiff in the complaint. The court shall
render judgment in accordance with the evidence and the law.” (§ 764.010, italics
added.) Recent appellate decisions have construed this statutory wording to mean that, in
contrast to the usual rules of default, in a quiet title action the plaintiff is not entitled to
entry of judgment as a matter of course, but must affirmatively prove its case in an
evidentiary hearing at which the trial court must hear all the evidence offered concerning
title, including evidence that may be presented at the hearing by a defaulting defendant.
(See Harbour Vista, LLC v. HSBC Mortgage Services Inc. (2011) 201 Cal.App.4th 1496,
1502, 1504–1505 (Harbour Vista); Nickell v. Matlock (2012) 206 Cal.App.4th 934, 947.)

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In other words, as convincingly reasoned by the Harbour Vista and Nickell cases, a
defaulting defendant in a quiet title action is not barred from participating in the
evidentiary hearing but may appear at said hearing and present evidence relating to title. 2
In the present case, although Citibank admitted it did not engage an attorney to
handle this matter until after default was already entered, it appears the trial court was
nevertheless persuaded it should grant mandatory relief under section 473 because the
fault of Citibank’s attorney deprived Citibank of an opportunity to appear and present
evidence at the required evidentiary hearing. Having explained the quiet title context and
rationale of the trial court’s ruling, we next consider whether, under the circumstances,
that ruling is consistent with the mandatory relief provision of section 473,
subdivision (b).
B. Mandatory Relief Provision and Standard of Review
Section 473, subdivision (b), contains two distinct provisions for relief: one is
discretionary and is reserved for situations of excusable neglect, while the other is
mandatory and applies even to inexcusable neglect of an attorney resulting in his or her
client’s default provided that the attorney submits an adequate affidavit of fault. (See
Martin Potts & Associates, Inc. v. Corsair, LLC (2016) 244 Cal.App.4th 432, 438; Todd
v. Thrifty Corp. (1995) 34 Cal.App.4th 986, 990–991.) Here, the trial court rejected
discretionary relief from the default and default judgment but found that mandatory relief

2 As noted in Harbour Vista, a defaulting defendant in a quiet title action is still
“severely disadvantaged” by the default since the plaintiff is no longer required to serve
documents or give notice of any future court dates. (Harbour Vista, supra, 201
Cal.App.4th at p. 1505.) “This cuts the defendant off from the most readily available
source of information about the case. The defendant also cannot participate in any other
hearings or conferences with the court. In fact, the most likely outcome is that the
defaulting defendant will not learn of the hearing to adjudicate title until it is too late to
attend.” (Ibid.)

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was available based on Citibank’s attorney’s declaration of fault. 3 Plaintiffs appeal from
that order. The sole issue on appeal is whether grounds for mandatory relief were
presented—i.e., whether the requirements for such relief under the statute were met.
“Whether section 473, subdivision (b)’s requirements have been satisfied in any given
case is a question we review for substantial evidence where the evidence is disputed and
de novo where it is undisputed.” (Martin Potts & Associates, Inc. v. Corsair, LLC, supra,
244 Cal.App.4th at p. 437.) The underlying facts in this case appear to be undisputed,
therefore we apply de novo review.
The mandatory relief provision of section 473, subdivision (b), states as follows:
“Notwithstanding any other requirements of this section, the court shall, whenever an
application for relief is made no more than six months after entry of judgment, is in
proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her
mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the
clerk against his or her client, and which will result in entry of a default judgment, or
(2) resulting default judgment or dismissal entered against his or her client, unless the
court finds that the default or dismissal was not in fact caused by the attorney’s mistake,
inadvertence, surprise, or neglect.” (§ 473, subd. (b), italics added.) When a complying
affidavit is filed relief is mandatory, even if the attorney’s neglect was inexcusable.
(Rodrigues v. Superior Court (2005) 127 Cal.App.4th 1027, 1033.) However, relief may
be denied if the court finds the default was not in fact the attorney’s fault, for example
when the attorney is simply covering up for the client’s neglect. (Ibid.; Rogalski v.
Nabers Cadillac (1992) 11 Cal.App.4th 816, 821.) Similarly, where a party inexcusably
allows default to be entered and then afterwards hires an attorney, the provision does not

3 The validity of the denial of discretionary relief is not raised by either party as an
issue on appeal. In any event, the trial court’s ruling on that issue was clearly correct
since there was no evidence to show any possible excusable basis for the client’s, i.e.,
Citibank’s, delay and inaction after being served with the complaint.

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apply because the default must in fact be caused by the attorney’s mistake. (Cisneros v.
Vueve (1995) 37 Cal.App.4th 906, 908, 910–912 (Cisneros).)
C. Mandatory Relief Was Not Available
In Cisneros, supra, 37 Cal.App.4th 906, the Court of Appeal held, based on the
unequivocal language of the mandatory relief provision of section 473, subdivision (b),
that “this provision does not afford relief to a client who, after inexcusably allowing his
default to be entered, hires an attorney whose neglect results in a default judgment.”
(Cisneros, supra, at p. 908.) In so holding, Cisneros focused on the “unless” clause,
which states that mandatory relief shall be granted based on an attorney affidavit of fault
“unless the court finds that the default … was not in fact caused by the attorney’s mistake
… or neglect.” (§ 473, subd. (b); see Cisneros, supra, at pp. 909–912.) As the court
explained: “[W]hile the amendment [enacting the mandatory provision] authorizes relief
from both default and default judgment, the statute is equally clear that for mandatory
relief to apply the court must also satisfy itself that the default (i.e., the failure to respond)
was in fact caused by attorney mistake or neglect.” (Cisneros, supra, at pp. 910–911.)
Further, “[n]othing in the legislative history [of the mandatory provision] … indicates
that the Legislature intended mandatory relief for neglectful clients who allow their
default to be entered simply because that neglect is compounded by attorney neglect in
permitting the judgment to be perfected.” (Id. at p. 911.) Based on the clear wording of
the “unless” clause, the court found it created a necessary test of “causation” relating to
the default. (Id. at p. 912.) As the court concluded: “The statute mandates relief ‘unless
the court finds that the default … was not in fact caused by the attorney’s mistake,
inadvertence’ etc. (Italics added.) While attorney cover-up is obviously one instance in
which the default would not truly be caused by the attorney, there are others like the one
at bar in which a neglectful client permits the default to be taken against him before
retained counsel enters the scene. [¶] Because [the attorney] was not representing
defendants at the time the default was entered, we find as a matter of law, that he was not

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the proximate cause of the entry of default as defined in the ‘unless clause.’ Hence, the
trial court properly concluded that defendants were not entitled to relief under the
attorney affidavit provisions of section 473.” (Ibid., fn. omitted.)
Here, it is undisputed that Citibank’s default was entered on November 14, 2018,
but Citibank’s attorney, Jeremy Katz, was not referred or assigned to act as attorney on
this case until January 10, 2019. Because attorney error could not possibly have caused
the default in this case, mandatory relief was unavailable under the reasoning of Cisneros
as a matter of law. (Accord, Cowan v. Krayzman (2011) 196 Cal.App.4th 907, 915 [no
relief where attorney not representing defendants at time default was entered].)
Citibank argues that because of the differences in the consequences of default in a
quiet title case as compared to other cases, we should uphold the trial court’s decision to
grant mandatory relief in this unique setting. We decline to do so because we are bound
to follow and apply the clear statutory wording of section 473. As correctly observed in
Cisneros, the default and default judgment are distinct procedures, and the Legislature
made specific and careful use of each and understood the distinction between them.
(Cisneros, supra, 37 Cal.App.4th at p. 910.) The mandatory relief provision is
unambiguous, and it plainly requires that attorney fault be the cause-in-fact of the default
(i.e., the failure to respond), and not merely of the ensuing judgment. (Id. at pp. 910–
911.) In short, we are not at liberty to disregard the plain meaning of section 473 simply
because the consequences of the default are not as severe in a quiet title case. (See
Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [“If the language is clear and
unambiguous there is no need for construction, nor is it necessary to resort to indicia of
the intent of the Legislature”]; People v. Snook (1997) 16 Cal.4th 1210, 1215 [“If there is
no ambiguity in the language, we presume the Legislature meant what it said and the
plain meaning of the statute governs.”].)
Based on the foregoing, we conclude the trial court erred as a matter of law in
granting mandatory relief under section 473, subdivision (b). Accordingly, the order

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granting Citibank’s motion to set aside both the default and the judgment quieting title is
reversed. This effectively revives the underlying judgment quieting title, which is
presumed to be correct on appeal and would have to be affirmed unless Citibank’s cross-
appeal therefrom has successfully demonstrated that the judgment must be reversed.
(Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2020)
¶ 3:169, p. 3-77; see, e.g., Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 910;
Mercer v. Perez (1968) 68 Cal.2d 104, 124; cf. Adams v. City of Fremont (1998) 68
Cal.App.4th 243, 261, fn. 15.) This leads us to our consideration of the merits of the
cross-appeal.
II. Citibank’s Cross-Appeal from the Judgment Quieting Title
As noted, Citibank has filed a protective cross-appeal challenging the judgment
quieting title. According to Citibank, the judgment must be reversed because it is
unsupported by any evidence on essential elements of an adverse possession claim;
namely, possession that is hostile and adverse to Citibank’s title for a full five years. 4
For the reasons explained below, we agree with Citibank.
In an action to quiet title based on adverse possession, the burden is upon the
plaintiff to establish every necessary element. (Dimmick v. Dimmick (1962) 58 Cal.2d
417, 421.) The elements of an adverse possession claim consist of the following:
(1) actual possession by the plaintiff of the property under claim of right or color of title;
(2) the possession consists of open and notorious occupation of the property in such a
manner as to constitute reasonable notice to the true owner; (3) the possession is adverse
and hostile to the true owner; (4) the possession is uninterrupted and continuous for at

4 We note the five-year period necessary for adverse possession is sometimes
referred to in the cases as a statute of limitations. (See Laubisch v. Roberdo (1954) 43
Cal.2d 702, 706–707; Code Civ. Proc., §§ 321, 325, subd. (b); Civ. Code, § 1007.) The
five-year period is an element of an adverse possession claim, but also operates as a
statute of limitations against the true owner of the land. (De Frieze v. Quint (1892)
94 Cal. 653, 662–663.)

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least five years; and (5) the plaintiff has paid all taxes assessed against the property
during the five-year period. (Hansen v. Sandridge Partners, L.P. (2018) 22 Cal.App.5th
1020, 1032–1033; Buic v. Buic (1992) 5 Cal.App.4th 1600, 1604; Gilardi v. Hallam
(1981) 30 Cal.3d 317, 321.) 5 Unless each of these elements is established by the
evidence, the plaintiff has not acquired title by adverse possession. (West v. Evans
(1946) 29 Cal.2d 414, 417.)
Based on our review of the undisputed facts and applicable law, we conclude
plaintiffs have not established that their possession of the property was adverse or hostile
to Citibank for the required five-year period. Rather, as we shall make clear, plaintiffs’
possession of the property did not become adverse or hostile to Citibank’s rights until
such time as Citibank actually took title under the trustee’s deed in April of 2018, only a
few months before plaintiffs’ complaint was filed. Significantly, the trustee’s deed was
based upon the foreclosure of the 2005 deed of trust—a deed of trust that was executed
and recorded as a lien or encumbrance on the property long before plaintiffs’ adverse
possession began. Under such facts, during the time period when Citibank’s interest was
merely that of beneficiary of the 2005 deed of trust (i.e., a lienholder), plaintiffs’
possession of the property would not be considered hostile to Citibank’s rights.
Additionally, plaintiffs could gain no greater title than that of the original owners they
had dispossessed; namely, title subject to the 2005 deed of trust. Consequently,
plaintiffs’ adverse possession claim was subject to and eliminated by Citibank’s
foreclosure of the 2005 deed of trust. Below, we explain each of our conclusions more
fully in light of applicable law.

5 The requirement that the possession be hostile does not mean the parties must
have a dispute as to title during the period of possession, but that the claimant’s
possession must be adverse to the rights of the record owner. (Sorensen v. Costa (1948)
32 Cal.2d 453, 459.)

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A. Plaintiffs’ Possession Was Not Adverse to Citibank’s Rights as Trust Deed
Beneficiary Under Preexisting Deed of Trust
At its most basic level, the doctrine of adverse possession relates to possessory
estates, i.e., it involves possession of property hostile to the corresponding rights of the
true owner. (Gilardi v. Hallam, supra, 30 Cal.3d 317, 321; Sorensen v. Costa, supra, 32
Cal.2d 453, 460 [statute accrues when owner deprived of possession]; see Unger v.
Mooney (1883) 63 Cal. 586, 590.) Here, however, Citibank’s interest in the property
until it obtained fee title under the 2018 trustee’s deed was not that of an owner with a
right of possession, but merely that of a trust deed beneficiary. Therefore, under the
particular facts of this case, prior to Citibank gaining possessory rights at the time of the
foreclosure sale and delivery of the trustee’s deed in 2018, plaintiffs’ occupation of the
property was not hostile to Citibank’s rights as a secured lienholder, and therefore the
five-year statute was not running against Citibank under the undisputed facts of this
case. 6
In our discussion of these principles, an elaboration of the nature of the interest
held by a trust deed beneficiary, i.e., Citibank’s interest prior to foreclosure, is helpful.
“ ‘[D]eeds of trust, except for the passage of title [to the trustee] for the purpose of the
trust, are practically and substantially only mortgages with a power of sale .…’ ”
(Monterey S.P. Partnership v. W. L. Bangham, Inc. (1989) 49 Cal.3d 454, 460.) “In
practical effect, if not in legal parlance, a deed of trust is a lien on the property.” (Ibid.)

6 An exception exists to this analysis, although it is not applicable to this case.
Namely, where a transfer affecting the state of title (e.g., the recording of a deed of trust
or a grant deed) is made after the adverse possession has already begun, a successful
claim of adverse possession will prevail over the subsequent transferee’s title once the
five-year period is completed. (See Sevier v. Locher (1990) 222 Cal.App.3d 1082, 1084–
1085; cf. Le Roy v. Rogers (1866) 30 Cal. 229.) In other words, once adverse possession
has begun, subsequent transfers during the statutory period do not affect it. That rule
does not assist plaintiffs here, because the deed of trust in this case was recorded and
effective as a lien or encumbrance on the property prior to plaintiffs’ possession thereof.

16.
It conveys title to the trustee only so far as may be necessary to the execution of the trust
for purposes of security. (Ibid.) Thus, “[t]he right to possession does not pass to the
trustee or the beneficiary under a trust deed in the absence of a special agreement.”
(Snyder v. Western Loan & Bldg. Co. (1934) 1 Cal.2d 697, 701.) To summarize, a deed
of trust carries none of the incidents of ownership of the property, other than the trustee’s
right to convey upon default, and in the absence of a special agreement conveys no right
of possession to the trustee or beneficiary. (Ibid.; MacLeod v. Moran (1908) 153 Cal. 97,
99; Zolezzi v. Michelis (1948) 86 Cal.App.2d 827, 830.) Because of their similarities,
deeds of trust and mortgages are generally treated as analogous under the law. (See, e.g.,
Monterey S.P. Partnership v. W. L. Bangham, Inc., supra, 49 Cal.3d at pp. 460–461;
Snyder v. Western Loan & Bldg. Co., supra, 1 Cal.2d at pp. 701–702.) “[T]he substantial
rights of the parties should not be altered because of the more or less accidental form
which the security takes.” (Wilson v. McLaughlin (1937) 20 Cal.App.2d 608, 611
(Wilson).) For these reasons, in the context of adverse possession law it is appropriate to
apply the cases discussing the status of mortgagees to that of the situation here of a trust
deed beneficiary.
For purposes of a claim of adverse possession, “[t]o be considered hostile, the acts
relied upon must operate as an invasion of the right of the party against whom they are
asserted.” (Laubisch v. Roberdo, supra, 43 Cal.2d 702, 706, citing City of San Diego v.
Cuyamaca Water Co. (1930) 209 Cal. 105, 133.) Because, as here, a trust deed
beneficiary does not have a right of possession, but stands in substance as a lien holder,
the occupation of the property by a person seeking to acquire title by adverse possession
would not be considered hostile to the trust deed beneficiary whose rights under the
preexisting trust deed would be unaffected. (See Comstock v. Finn (1936) 13 Cal.App.2d
151, 156–158 [applying this principle in context of a mortgagee].) As our Supreme Court
observed in a case involving foreclosure of a mechanics lien where an occupying party
claimed adverse possession: “The situation here is analogous to a mortgagor-mortgagee

17.
relationship. A mortgagor or his grantee in possession of mortgaged property may not set
up the [adverse possession] statute of limitations against the mortgagee” since such
possession is “presumed to be amicable and in subordination to the mortgage.”
(Laubisch v. Roberdo, supra, 43 Cal.2d at p. 706.) Instead, the five-year period of the
statute of limitations would not commence to run against a foreclosing mortgagee until
the deed was delivered to him at a sheriff’s sale. (Id. at pp. 706–707.) Applying these
principles, the Supreme Court held that the occupier’s possession was “not hostile” to the
interests of one “who had only a lien upon the land,” and was not hostile to the purchaser
at the foreclosure sale until the time the commissioner’s deed was obtained. (Id. at
p. 707, italics added; accord, Baumgarten v. Mitchell (1909) 10 Cal.App. 48, 51–52
[where mortgage preexisted the period of alleged adverse possession, the right of the
foreclosing mortgagee prevailed and was not affected by alleged claim of adverse
possession].)
Comstock v. Finn, supra, 13 Cal.App.2d 151 (Comstock) further exemplifies the
application of these principles. In Comstock, the defendant in a postforeclosure ejectment
action claimed title or ownership to the property based on adverse possession. The
defendant asserted that her possession of the property was adverse and hostile even as
against the mortgagee where the mortgage preexisted the period of alleged adverse
possession. The trial court denied the defendant’s claim of adverse possession, holding
the possession was not adverse or hostile to the mortgagee, whose interest was merely
that of an “ ‘owner of the mortgage lien’ ” on the property during much of the five-year
period, and the trial court’s reasoning and conclusion were affirmed on appeal. (Id. at
pp. 155–158.) In affirming the judgment, Comstock relied on two distinct rationales.
The first was the general rule that the possession of property by a mortgagor or his or her
assignees “ ‘cannot be adverse’ ” to the mortgagee unless or until the possessor’s conduct
has invaded the mortgagee’s rights under the mortgage. (Id. at p. 156.) Based on this
rule, Comstock held the trial court had reasonably concluded that the possession of the

18.
property, although open and notorious, was not hostile to the rights of the mortgagee.
(Id. at p. 157.)
The second rationale relied on by Comstock was based on the recognition that a
mortgagee ordinarily does not have a right of possession. (Comstock, supra, 13
Cal.App.2d at pp. 156–157.) Comstock explained the significance of this fact at length:

“A further reason appears why the judgment must be affirmed. In California a
mortgage does not give the mortgagee right of possession of the mortgaged
premises in the absence of a special agreement to that effect. Neither the United
States Building and Loan Association [i.e., the assignee of the original mortgage],
nor plaintiff [i.e., the receiver who purchased the property at the foreclosure sale],
had any right of possession of the mortgaged premises … until delivery of the
sheriff’s or commissioner’s deed. [Citation.] A situation involving a legal
principle similar to the one before us was before the Supreme Court in the case of
Leonard v. Flynn [(1891)] 89 Cal. 535, where it was said: ‘Plaintiff’s grantor, as
we have already seen, was not possessed of the legal title to this tract of land until
he received the deed from the sheriff [in 1888]. He had no right of entry until that
time, and it was only at that time that his cause of action accrued. The statute of
limitations does not begin to run until the cause of action has accrued. [Citation.]
If he had no right of entry until 1888, it would be a harsh rule to hold that a title by
adverse possession was undergoing the process of creation against him prior to
that time …. [Citation.] … [I]t is of vast importance that the law as heretofore
laid down by this court should be deemed unquestioned and conclusive. “The
statute of limitations does not commence running against a purchaser of land at a
sheriff’s sale until the sheriff’s deed has been delivered to the purchaser.”
[Citation.]’ ” (Id. at p. 157.)
As the above discussion indicates, apart from a right to possession by the
mortgagee, a claim of adverse possession would not accrue against the mortgagee as
such, at least with respect to the circumstance of a preexisting mortgage as existed in
Comstock. Applying this rationale to the case before it, Comstock stated:

“It follows that as plaintiff’s [the receiver’s] right of possession did not accrue
until June 6, 1932, and as there had been no holding of possession hostile and
adverse to his interest prior to that time[,] no title by adverse possession was
established against him or his predecessor in interest [the mortgagee].”
(Comstock, supra, 13 Cal.App.2d at pp. 157–158.)

19.
 Based on the entire analysis presented in Comstock, the principle that emerges is
that where a mortgage was recorded prior to the start of the period of alleged adverse
possession, the possession of the land will not be deemed hostile or adverse to the rights
of the mortgage holder or to a successor thereof, until such time as a right to possession
of the property is acquired under the mortgage through foreclosure and delivery of the
trustee’s deed. (Comstock, supra, 13 Cal.App.2d at pp. 155–158; see Harvey v. Nurick
(1968) 268 Cal.App.2d 213, 215 [since a mortgage does not give the mortgagee the right
of possession in the absence of a special agreement, the adverse possession statute does
not begin to run in the possessor’s favor “until foreclosure and … the delivery of the
trustee’s deed”].) Comstock also made the following important clarification of the case
law: “There are cases holding that a person in possession may gain title by adverse
possession, against a mortgagee, where the adverse possession antedated the mortgage.
Those cases are not controlling here, as in the instant case the asserted adverse possession
started, if at all, subsequent to the date and recordation of the mortgage.” (Comstock,
supra, 13 Cal.App.2d at p. 158.)
Here, based on the recorded documents and other undisputed facts and in light of
the relevant legal principles outlined hereinabove, we conclude that plaintiffs’ possession
of the property did not become adverse or hostile to Citibank’s rights until such time as
Citibank took fee title under the trustee’s deed in 2018, only a few months before
plaintiffs’ complaint was filed. As we have explained, the 2018 trustee’s deed was based
upon the foreclosure of the 2005 deed of trust—a deed of trust that was executed and
recorded as a lien or encumbrance on the property long before plaintiffs’ adverse
possession began. Under such facts, plaintiffs’ claim of adverse possession fails as a
matter of law.
B. Plaintiffs Could Gain No Greater Title Than the Original Owners They Dispossessed
A second reason we conclude Citibank’s cross-appeal must prevail is this: When
adverse possession is being claimed, the possessor—assuming he or she prevails on the

20.
claim—can gain only the title which the owners had when the adverse possession began;
and conversely, the possessor cannot, by adverse possession, acquire a greater estate than
that held by the owner. (Williams v. Sutton (1872) 43 Cal. 65, 73 [the title acquired by
the adverse possessor “must of necessity correspond with that on which the disseizin
operated, as he could not acquire by disseizin a greater estate than that held by” the prior
owner].) 7 Thus, where the claim of adverse possession is concerning the title to property
that was subject to a previously recorded deed of trust, the possessor can only gain a
corresponding title—that is, a title subject to the prior deed of trust. Consequently, in the
present case, the most that plaintiffs could ever have potentially obtained as a result of
their possession initiated against the original owners was a title subject to the preexisting
2005 deed of trust.
The correctness of this analysis is further confirmed by the well-established
principle that the title obtained by a trustee’s deed on foreclosure relates back to the
status of the title held by the trustor when the deed of trust was originally executed and
recorded. (See Dover Mobile Estates v. Fiber Form Products, Inc. (1990) 220
Cal.App.3d 1494, 1498 [title obtained by trustee’s deed on foreclosure relates back to
execution of the trust deed].) “The trustee’s deed therefore passes the title held by the
trustor at the time of execution,” free of liens or encumbrances attaching after the deed of
trust was recorded. (Id. at p. 1498; accord, Nativi v. Deutsche Bank National Trust Co.
(2014) 223 Cal.App.4th 261, 272; R-Ranch Markets #2, Inc. v. Old Stone Bank (1993) 16
Cal.App.4th 1323, 1328; Sain v. Silvestre (1978) 78 Cal.App.3d 461, 471 [purchaser at
foreclosure acquired title free of equitable servitudes recorded after recording of trust
deed].)

7 We note “disseizin” is an old term for wrongful dispossession. As Black’s Law
Dictionary states, it is “[t]he act of wrongfully depriving someone of the freehold
possession of property.” (Black’s Law Dict. (11th ed. 2019) p. 594.)

21.
 In conclusion, plaintiffs’ claim of ownership by adverse possession fails as a
matter of law for two basic reasons. First, the undisputed record shows that plaintiffs’
possession was not adverse or hostile to Citibank for the required five-year period.
Second, plaintiffs’ attempt to acquire title by engaging in adverse possession, even
assuming it had been successful, could only have gained a title corresponding to, but not
greater than, the original owners’ title; that is, title subject to the 2005 deed of trust of
which Citibank was the foreclosing beneficiary in 2018. Based on the foregoing, it is
clear that Citibank holds the rightful title and ownership of the property under the 2018
trustee’s deed.
C. Plaintiffs’ Counter Arguments Are Unpersuasive
In seeking to overcome Citibank’s arguments discussed above, plaintiffs make a
series of counter arguments, including (i) that Citibank did have a right to possession of
the property prior to foreclosure, (ii) the doctrine of merger of title salvages plaintiffs’
claim of adverse possession, and (iii) the policy of the law of adverse possession weighs
in plaintiffs’ favor. We consider each of these points below, and, as noted, we find them
unpersuasive.
1. Citibank Did Not Have a Right to Possession
As we have discussed hereinabove, one of Citibank’s main arguments is that
because it was—until 2018—merely a beneficiary of the deed of trust without a right to
possession, plaintiffs’ occupation of the property was not adverse to Citibank’s rights as a
lienholder. In an attempt to undermine Citibank’s position on this point, plaintiffs argue
that Citibank did have a right to possession. We disagree.
Plaintiffs make several arguments concerning the right to possession. First,
plaintiffs contend that in the bankruptcy proceedings, Citibank or its predecessors were
permitted under the terms of the bankruptcy plans filed by the prior owners (i.e., Robert
Lifson and Toni Black, husband and wife) to move forward with foreclosure of the
property and could have done so with minor effort as early as in 2010. However, even if

22.
true, that assertion is beside the point. As correctly noted by Citibank, neither Citibank
nor its predecessors were under a duty to foreclose quickly upon the borrower’s default—
and certainly under no such duty for the benefit of would-be adverse possessors. (See,
e.g., Nicolopulos v. Superior Court (2003) 106 Cal.App.4th 304, 310 [lien on deed of
trust expires 10 years after the final maturity date if ascertainable from the record, or 60
years after recordation of the deed if the final maturity date is not ascertainable from the
record].) 8 Plaintiffs have also suggested that one of the bankruptcy plans granted a right
to immediate possession—but that suggestion is plainly not correct. Under the
bankruptcy plan, a creditor with a secured claim would be allowed “to exercise its rights
against its collateral.” Such a surrender of secured collateral in a bankruptcy plan would
merely allow Citibank or its predecessor the right to proceed with foreclosure under the
2005 deed of trust, assuming of course that the plan was approved by the bankruptcy
court. 9 (See Selene Fin. LP v. Brown (In re Brown) (Bankr. D.Mass. 2017) 563 B.R.
451, 456 [to surrender collateral as part of a bankruptcy plan is to make the collateral
available to a secured creditor so that the creditor can exercise its rights in the collateral].)
It is apparent that no right to possession of the property is indicated in the bankruptcy
plan’s provisions. We conclude that none of the bankruptcy records referenced by
plaintiffs support their contention that Citibank, or Citibank’s predecessors, had a right to
the present possession of the property.
Plaintiffs also argued that Citibank had the right to possession of the property
under the terms of paragraphs 6 and 7 of the 2005 deed of trust. However, there is
nothing in paragraph 6 or 7 of the 2005 deed of trust that would grant or convey to
Citibank, or Citibank’s predecessors, a possessory right to the property. Rather, those
provisions merely give to the lender (i.e., the beneficiary under the deed of trust) broad

8 The maturity date indicated on the 2005 deed of trust was “September 01, 2035.”
9 It appears the plan was not approved.

23.
powers to sue or to defend litigation to protect the property or its lien rights in the
property, such as the power to defend against waste, condemnation or forfeiture.
Paragraph 6 of the 2005 deed of trust required the borrower to occupy the property.
Paragraph 7, in permitting the lender to protect the property’s value and the lender’s
rights in the property, accorded to the lender a limited right to enter for the purpose of
making repairs. We conclude paragraphs 6 and 7 of the 2005 deed of trust do not provide
or grant any actual possessory interest in, or a right to possession of, the property. In
short, the general rule that deeds of trust and mortgages do not convey possessory rights
to the beneficiary or mortgagee is clearly applicable here, as there is no special agreement
to the contrary. (E.g., Harvey v. Nurick, supra, 268 Cal.App.2d at p. 215 [a mortgage
does not give the mortgagee the right of possession in the absence of a special
agreement].)
Contrary to plaintiffs’ contentions, neither the bankruptcy records nor the
language of the 2005 deed of trust conferred upon Citibank a right to possession of the
property prior to completion of foreclosure.
2. The Doctrine of Merger Does Not Assist Plaintiffs
Plaintiffs make a somewhat novel argument that the doctrine of merger establishes
the validity of their adverse possession claim against Citibank, free and clear of the 2005
deed of trust. In essence, plaintiffs appear to be claiming that due to the doctrine of
merger, Citibank’s former interest as beneficiary of the 2005 deed of trust merged into
the fee title ownership it acquired at the time of the foreclosure and no longer exists.
From this seemingly innocuous premise, plaintiffs proceed to argue that Citibank’s
ownership would have to be treated like any other transferee or purchaser of the property
against whom plaintiffs’ adverse possession would have continued to run—since adverse
possession runs with the land and against title, not against the particular person who
happens to be the owner or holder thereof. Under this logic as pressed further by
plaintiffs, since Citibank acquired title to the property in fee—with the prior deed of trust

24.
having been extinguished by merger—plaintiffs “could therefore acquire title in fee from
Citibank” (italics added), and not from “Lifson and Black,” and thus without the title
being subject to the former deed of trust.
For several reasons that shall presently be set forth, we disagree with plaintiffs’
argument premised on the concept of merger. First, plaintiffs have failed to recognize a
unique characteristic of the state of title acquired by delivery of a trustee’s deed upon
foreclosure sale. As we have noted previously, the title obtained by a trustee’s deed on
foreclosure relates back to the title held by the trustor when the deed of trust was first
executed and recorded. (Dover Mobile Estates v. Fiber Form Products, Inc., supra, 220
Cal.App.3d 1494, 1498.) In its legal effect, “[t]he trustee’s deed … passes the title held
by the trustor at the time of execution,” free of liens or encumbrances affecting the title
after the deed of trust was originally recorded. (Id. at p. 1498; accord, Nativi v. Deutsche
Bank National Trust Co., supra, 223 Cal.App.4th 261, 272 [trustee’s deed conveys “the
trustor’s interest as of the date that the deed was recorded”]; R-Ranch Markets #2, Inc. v.
Old Stone Bank, supra, 16 Cal.App.4th 1323, 1328; Sain v. Silvestre, supra, 78
Cal.App.3d 461, 471 [purchaser at foreclosure acquired title free of equitable servitudes
recorded after recording of trust deed].) Plaintiffs have failed to adequately explain, with
requisite legal authority, how the doctrine of merger would supplant this basic rule of
foreclosure in this case.
Second, it is not entirely clear the doctrine of merger applies, but even if it does
apply, plaintiffs have not shown it would make any difference here. The doctrine of
merger typically involves situations where one person has acquired both a greater and a
lesser estate as to the same property. “ ‘When a greater and lesser estate coincide and
meet in one and the same person, … without any intermediate estate, the latter is in law
merged in the greater.’ [Citation.]” (Sheldon v. La Brea Materials Co. (1932) 216 Cal.
686, 689.) “ ‘Under ordinary circumstances where the holder of a mortgage acquires the
estate of the mortgagor, the mortgage interest is merged in the fee and the mortgage is

25.
extinguished.…’ [Citation.]” (Id. at pp. 689–690.) For example, the doctrine may apply
where the beneficiary of a deed of trust is given by the property owner a deed in lieu of
foreclosure. (Decon Group, Inc. v. Prudential Mortgage Capital Co., LLC (2014) 227
Cal.App.4th 665, 673 (Decon) [acknowledging the potential of merger, but finding an
exception applied due to existence of junior lien].) It has been held to apply where an
individual first gave several promissory notes secured by a deed of trust on real property
and later conveyed the real property to one of the two recipients of the secured
promissory notes. (Wilson, supra, 20 Cal.App.2d 608, 609 [holding the “interest of Mrs.
Nelson as beneficiary under the trust deed was merged in the fee title which she received
from her husband”].) In Wilson, the merger of Mrs. Nelson’s equitable interest as a
beneficiary under the trust deed with the fee simple title in the real property extinguished
the debt owed to her under the promissory notes because “her beneficial interest in the
property, founded upon that debt, became merged in the title which she acquired from the
trustor.” (Id. at p. 611.)
Here, in contrast to Wilson, it does not appear the same person acquired or came
into the possession of two estates together in the same property, one greater and one
lesser, such that the lesser estate would be deemed merged into the greater. (See Sheldon
v. La Brea Materials Co., supra, 216 Cal. at p. 689.) Rather, this was a straightforward
foreclosure and trustee’s sale. When a trustee’s sale of property under a deed of trust
occurs, it ordinarily extinguishes the deed of trust. (Civ. Code, § 2910; Streiff v.
Darlington (1937) 9 Cal.2d 42, 45 [upon the trustee’s sale, the deed of trust “ceased to
exist”]; San Mateo County Bank v. Dupret (1932) 124 Cal.App. 395, 397.) Thus, here, it
does not appear that for any appreciable time there were actually two estates residing
together in one person, and certainly nothing on parity with the situation in Wilson where
the two estates were concurrently held side-by-side. But even if it may be said, in a more
general or conceptual sense, that the deed of trust was extinguished by a merger of the
lien and fee ownership of the land in one person (see, e.g., Ralph C. Sutro Co. v.

26.
Paramount Plastering, Inc. (1963) 216 Cal.App.2d 433, 438), plaintiffs’ argument still
suffers from the same fundamental problem we raised above: Namely, the title obtained
by a trustee’s deed on foreclosure relates back to the title held by the trustor when the
deed of trust was first executed and recorded. (Dover Mobile Estates v. Fiber Form
Products, Inc., supra, 220 Cal.App.3d 1494, 1498.)
It is not a question of whether the 2005 deed of trust was extinguished upon
foreclosure and the delivery of the trustee’s deed in 2018—both parties admit the
beneficial interest under the deed of trust was extinguished or no longer exists. The real
question is the time reference point for the fee title obtained under said trustee’s deed,
and the cases we have cited provide a clear answer to that question. (Dover Mobile
Estates v. Fiber Form Products, Inc., supra, 220 Cal.App.3d 1494, 1498 [a trustee’s deed
“relates back” to title that existed when deed of trust originally executed]; see also Nativi
v. Deutsche Bank National Trust Co., supra, 223 Cal.App.4th 261, 272 [a trustee’s deed
conveys “the trustor’s interest as of the date that the deed was recorded”]; R-Ranch
Markets #2, Inc. v. Old Stone Bank, supra, 16 Cal.App.4th 1323, 1328; Sain v. Silvestre,
supra, 78 Cal.App.3d 461, 471.)
As succinctly summarized in Decon, supra, 227 Cal.App.4th 665: “ ‘Title
conveyed by a trustee’s deed [(i.e., in a foreclosure sale)] relates back in time to the date
on which the deed of trust was executed. The trustee’s deed therefore passes the title
held by the trustor as of that earlier time … , rather than the title that the trustor held on
the date of the foreclosure sale. [Citation.]’ ” (Id. at pp. 670–671.) Consequently, any
liens or other encumbrances created or otherwise attaching to the property after execution
of the deed of trust are eliminated by the foreclosure. (Ibid.) However, as Decon further
explained, in the case of other types of conveyances subsequently made by a trustor—
such as through a deed in lieu of foreclosure (as opposed to a trustee’s deed)—title passes
to the transferee subject to all existing liens or encumbrances at the time of the
conveyance, and, depending on the circumstances, principles of merger may come into

27.
play. (Decon, supra, at pp. 670–671.) Here, the situation is that of a trustee’s deed
delivered in connection with the foreclosure of the 2005 deed of trust. Consequently, the
title obtained by Citibank related back to that which existed in 2005, a title that predated
and was consequently free of plaintiffs’ subsequent conduct seeking to gain adverse
possession of the property. In light of the above principles relating to trustee’s deeds and
our application thereof to this case, we conclude that plaintiffs’ effort to utilize the
merger doctrine to somehow create a contrary rule as to the status of Citibank’s title
under the 2018 trustee’s deed is ultimately misplaced and unconvincing. 10
Finally, we briefly address the second prong of plaintiffs’ merger argument, which
is the proposition that adverse possession runs with the land and against the title, and not
against any particular owner of the title. In plaintiffs’ view, this leads to the conclusion
that Citibank is just like any other transferor or purchaser of property against whom the
adverse possession statutory period would continue to run. Citibank responds by noting
the cases relied on by plaintiffs actually stand for a somewhat narrower or more nuanced
rule that an adverse possessor’s continuous possession is not interrupted by the title
owner’s subsequent conveyance of an interest in the property to a third party after the
adverse possession has commenced. We conclude that Citibank has accurately stated the
applicable law.
Plaintiffs primarily rely on Sevier v. Locher, supra, 222 Cal.App.3d 1082.
However, the first sentence of that case plainly announces the nature of the appellate
court’s ruling: “In this case we hold that a transfer of title to real property after the
prescriptive period for adverse possession of the property has begun does not interrupt or

10 Consistent with the outcome we have reached herein is the fact that the doctrine of
merger is generally not applied where its invocation would inequitably impede or fail to
protect the rights of the mortgagee or grantee. (See, e.g., Decon, supra, 227 Cal.App.4th
at pp. 671–672; Davis v. Randall (1897) 117 Cal. 12, 16; Hines v. Ward (1898) 121 Cal.
115, 118–119.)

28.
terminate the running of the prescriptive period.” (Id. at p. 1084.) In Sevier, the adverse
possession or prescriptive use by the Lochers concerning a driveway easement began in
1982 and continued unabated thereafter. In 1986, the owners conveyed the property and
the appurtenant driveway easement to the Seviers. (Id. at pp. 1084, 1087.) The Seviers
sued to quiet title in 1988, after the five-year prescriptive period had expired. The
Seviers contended that the Lochers did not occupy the easement adversely to them (i.e.,
to the Seviers) for a full five years, since the Seviers did not own the property until 1986.
(Id. at pp. 1084–1085.) The Court of Appeal in Sevier affirmed the trial court’s
determination to quiet title in favor of the adverse possessors of the easement, stating as
the reason for so holding that “a transfer of title to real property after the prescriptive
period for adverse possession of the property has begun does not interrupt or terminate
the running of the prescriptive period.” (Id. at p. 1084.) It was in the context of the
particular facts before it that the Court of Appeal in Sevier also stated, “[a]dverse
possession refers to occupation or use of land adverse to legal title, not to a particular
holder of legal title.” (Ibid.) In other words, once adverse possession has begun, the
owner of the property cannot interrupt the five-year period merely by conveying the
property to another. In so holding, Sevier followed Le Roy v. Rogers, supra, 30 Cal. 229,
which was a case where “the prescriptive period had already run before the mortgage was
executed ….” (Sevier, supra, 222 Cal.App.3d at p. 1085.) Le Roy similarly expressed
that the running of the statute could not be avoided by simply conveying the land “during
the running or after the expiration of the five years.” (Le Roy, supra, 30 Cal. at p. 235.)
Because the relevant statements in Sevier and Le Roy were concerning conduct by a
property owner to convey the property to a third party after the adverse possession has
already begun, we agree with Citibank that they are distinguishable. Here, in contrast,
the original property owners (i.e. Lifson and Black) executed and recorded the subject
deed of trust in 2005, long before the adverse possession had begun, thereby establishing

29.
Citibank’s interest in the property as of 2005 by virtue of the relation-back attribute of a
trustee’s deed on foreclosure.
A sound basis for reconciling the case law in this area was provided in Comstock,
supra, 13 Cal.App.2d at p. 158, and bears repeating here: “There are cases holding that a
person in possession may gain title by adverse possession, against a mortgagee, where the
adverse possession antedated the mortgage. Those cases are not controlling here, as in
the instant case the asserted adverse possession started, if at all, subsequent to the date
and recordation of the mortgage.” As in Comstock, plaintiffs’ adverse possession here
started after the deed of trust was signed and recorded. Therefore, Comstock, not Sevier,
states the precise rule governing this case.
3. Policy Arguments Unavailing
Plaintiffs make a series of assertions to the effect that Citibank should have
realized what plaintiffs were doing (i.e., trying to gain title to the property by adverse
possession) and Citibank should have done something much sooner, such as seeking to
eject plaintiffs. Citibank responds, correctly, that ejection “is a possessory action in
which the plaintiff must show himself entitled to the present possession.” (Montgomery
v. Santa Ana Railway Co. (1894) 104 Cal. 186, 197.) We have elsewhere in this opinion
addressed and rejected plaintiffs’ arguments that Citibank had a right to possession prior
to purchasing the property at the trustee’s sale.
Plaintiffs further argue that, because Citibank purportedly lacked vigilance, we
should allow plaintiffs’ adverse possession claim to prevail as a means of furthering the
public policy that underlies the law, which policy they contend (based on a quote from a
treatise on American jurisprudence) is not to reward the diligent trespasser, but to
penalize the negligent and dormant owner who allows another for many years to exercise
acts of possession over his property. We find the policy argument to be misplaced. Here,
Citibank was not a negligent owner, but only had a lien on the property without a right of
possession until the time of foreclosure in 2018, as we have explained hereinabove.

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Thus, in effect, plaintiffs are asking that we reward the diligent trespasser, contrary to the
purported policy they cite. Moreover, this case is a title case, resolved by application of
legal precedent and established principles of property law under the title record before us.
It is not the sort of case that lends itself to a weighing of the sort of generalized policy
concerns raised by plaintiffs, and we decline to do so here.
III. Summary of Disposition of Appeal and Cross-Appeal
As to plaintiffs’ appeal, and as previously explained herein, we conclude the trial
court erred as a matter of law in granting mandatory relief under section 473,
subdivision (b). Accordingly, the order granting Citibank’s motion to set aside both the
default and the judgment quieting title is reversed.
As to Citibank’s cross-appeal, we hold that Citibank has successfully shown the
judgment quieting title must be reversed. To summarize, plaintiffs’ claim of adverse
possession fails as a matter of law because (i) the undisputed record shows that plaintiffs’
possession was not adverse or hostile to Citibank for the required five-year period, and
(ii) alternatively, even if plaintiffs could have prevailed on their adverse possession
claim, the title they would have acquired would have been subject to the 2005 deed of
trust of which Citibank was the foreclosing beneficiary in 2018. Based on the record and
title documents before us, it is clear that Citibank—and not plaintiffs—holds the rightful
title and ownership of the property under the 2018 trustee’s deed. Accordingly, the
judgment quieting title is hereby reversed, and further, upon remand the trial court is
instructed to enter a new judgment in favor of Citibank.
DISPOSITION
On plaintiffs’ appeal, the trial court’s order under section 473 to set aside the
default and judgment is reversed. On Citibank’s cross-appeal, the judgment quieting title

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is reversed, and the matter is remanded to the trial court to enter a new judgment in favor
of Citibank. Each party is to bear their own costs on appeal.

LEVY, Acting P.J.
WE CONCUR:

POOCHIGIAN, J.

SNAUFFER, J.

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