Marin Healthcare District v. Sutter Health

In this action, we must determine whether the judicially created doctrine enunciated in Hoadley v. San Francisco (1875) 50 Cal. 265 (Hoadley)—that the statute of limitations does not apply to actions by the state to recover property dedicated for public use against an adverse possessor—should be extended to bar the application of the statute of limitations to the state’s action to void a lease of public-use property. Because the purpose of the Hoadley doctrine is to prevent public-use property that the state cannot directly alienate from being indirectly alienated through the passage of time—that is, through the statute of limitations—we conclude that the doctrine has no application to a lease of property which the state is authorized to make.

In this case, the plaintiff, Marin Healthcare District (the District), a political subdivision of the state, brought suit to recover possession of a publicly owned hospital and related assets that it had leased and transferred in 1985 to defendant Marin General Hospital (Marin General) pursuant to the terms of the Local Health Care District Law (Health & Saf. Code, § 32000 et seq.). The District’s complaint alleges that the 1985…