Legal Question in Real Estate Law in California

I can think of about a half dozen legal or equitable theories that could be asserted in court in defense of your neighbor's suit for trespass and injunction if you rebuilt the fence where the existing one stands. Unfortunately, if the neighbor is well represented, all the defenses are likely to lose and the neighbor will prevail: (1) agreed boundary principle; (2) adverse possession; (3) prescriptive easement; (4) good-faith improver of the land of another; (5) equitable easement; and (6) balancing of the hardships.

The neighbor possibly can't sue you for trespass now, because the trespass arguably occured 30 years ago and is not a continuing trespass as would be the case if a "portable" object were sitting there, like an old automobile, so the statute of limitations has run. Building a new fence without permission would be a new act of trespass, and the right to sue would arise afresh.

Absent a written agreement, I'd advise not rebuilding the fence on the neighbor's property.