Legal Question in Real Estate Law in California

It's not clear from your post whether the fence is too close to your house now, and you are proposing to move it further away, thus increasing the size of your enclosed area, or vice-versa. I assume the former, otherwise your neighbor wouldn't be complaining.

This situation of "fence not on actual property line" is fairly common. People in randomly-developed neighborhoods often built fences based on inaccurate surveys or, more often, no survey at all, and maybe not even an amateur's guesstimate of where the property line was.

I suggest that before consulting a lawyer, you have the property boundary determined and marked by a licensed surveyor, hopefully one that you and your neighbor can agree upon beforehand. Accurate surveys are quicker and cheaper than they used to be, thanks to advances in the instruments used. No one should consider litigating a boundary dispute without a recent survey in hand.

Once the true boundary as described in the deeds has been located and marked, maybe you and your neighbor can resolve the fence and related land-use and land-possession issues without resorting to court action.

If you have to go to court in Sonoma County over an urban (Healdsburg?) property boundary issue, I can predict that 99% of the time the court will say the property line was, is and shall remain where the licensed surveyor says, and neither party gains any rights to additional land or rights to land based on adverse possession, prescriptive easement, "agreed boundary" or any other theory. The 1% exception might arise if permanent structures had been built by X on Y's land in an innocent mistake as to the true boundary.