I've been using end-of-line punctuation, rather than beginning-of-line characters, to distinguish paragraph marks. This can lead to false positives if punctuation just happens to fall at the end of a line, but my results have been fairly good so far.
One problem with relying on quotation marks specifically is that in English language texts, often a quote that runs for more than one paragraph does not have closing quotation marks for the earlier paragraph(s), but only for the final paragraph of the quote. The use of single quotes as both apostrophes and as dialogue markers (more common in British than American English) can be a problem, especially in the case of plural possessives, as you describe above.
