Filed 5/30/13 Adam v. Adam CA2/6 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for 

publication or ordered published for purposes of rule 8.111.5. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA 

SECOND APPELLATE DISTRICT 

DIVISION SIX 

THOMAS G. ADAM et al., 

 Plaintiffs and Appellants, 

v. 

ANDREW M. ADAM, 

 Defendant and Respondent. 

2d Civil No. B237557 

(Super. Ct. No. 1272918) 

(Santa Barbara County) 

 Appellants Thomas G. Adam and his wife Janice Adam1

 appeal from a 

declaratory relief judgment arising from Andrew M. Adam's (Thomas's brother) sale 

and leaseback of a 321-acre ranch. Thomas argues, among other things, that the trial 

court erred in finding that Andrew breached no fiduciary duty and was not required to 

provide a more detailed accounting. We affirm. 

The Family Ranches 

 In 1990, Thomas's and Andrew's father, William P. Adam, Jr. (Bill), 

owned the 321-acre Union Sugar Ranch (USR) and 134-acre Main Street Ranch in 

 1

 We refer to appellants as Thomas and refer to other family members by 

their first names for the convenience of the reader. 
2

Santa Maria. Due to financial problems, Bill had to file a Chapter 11 bankruptcy and 

wanted to keep the ranches in the family. With the bankruptcy court's approval, 

Andrew purchased USR and Main Street Ranch by paying $100,000, forgiving a 

$157,500 debt, paying Bill's vendors, and executing a $3.462 million all-inclusive note 

(AIN) naming Bill and Georgiana Adam (Thomas's and Andrew's mother) as payees. 

The AIN provided that Andrew would make payments on three loans (underlying 

obligations) encumbering both ranches. 

 In order to finance the purchase, Andrew kept Main Street Ranch and 

sold USR to his brothers, Thomas and William O. Adam, III (William), pursuant to a 

sale and leaseback agreement. Thomas and William executed a $3.557 million AIN 

and trust deed to pay principal and interest in the amounts and times called for in the 

underlying obligations (i.e., the three ranch loans and Bill's $3.462 million AIN). The 

20-year lease provided that Andrew would rent the farmable portion of USR for 

$224,700 a year, that the rent was insufficient to service the underlying obligations, 

and that William and Thomas would have to advance money to avoid a default. By 

the end of 1993, the default amount was almost $300,000. 

Loan Workout Agreement 

 The family attorney, Maurice Twitchell, corresponded with the brothers 

and drafted a 1994 loan workout agreement entitled: "Agreement for Curing of 

Default and Payment of Note" (ACD) and "Renegotiated Farm Lease" (RFL). The 

ACD stated that Andrew had paid all the rent and advanced $557,977.87 to cure the 

defaults on the underlying obligations. It further stated that William and Thomas had 

not paid property taxes and were in default on Andrew's AIN and trust deed. 

 The RFL was for a 26-year lease term (November 1, 1994 to October 31, 

2020) and provided that Andrew would sublease USR and pay rent equal to the 

subrents received, less any amount paid for property taxes, repairs, and maintenance of 
3

wells/pumps and other improvements (i.e., the "Basic Rental").2

 The RFL stated that 

William and Thomas "irrevocably authorizes and directs Tenant [Andrew] to pay such 

basic rent directly to the financial institutions described in said all inclusive deed of 

trust until such obligations shall be paid in full. Any amounts of basic rent in excess of 

the amounts needed to pay said underlying obligations shall be retained by Tenant as 

reimbursement for his prior advances in accordance with that certain 'Agreement for 

Curing of Default and Payment of Note' between the parties signed concurrently 

herewith." 

 The ACD incorporated the RFL and acknowledged that the rents were 

not sufficient to pay the underlying obligations, that advances would have to be made 

to avoid a loan default/foreclosure, and that Andrew has "the legal right, but not the 

obligation, to advance funds to pay the portions of the underlying obligations not paid 

for by the subrents, which advances are added to and become payable to [Andrew] 

under the terms of said all inclusive trust deed note." 

 Over the next 10 years, Andrew used all the rents to make payments on 

the underlying obligations and advanced more than $1 million to avoid a loan default 

and foreclosure. On August 11, 2006, Andrew refinanced Main Street Ranch, paid off 

the underlying obligations, and kept the USR rents. The RFL stated that, commencing 

November 1, 2016, Andrew would share the rents with Thomas and William until the 

RFL expired on October 31, 2020. 

The Complaint 

 Thomas demanded an accounting and filed a complaint on October 24, 

2008, for breach of contract, rescission, breach of fiduciary duty, accounting, and 

declaratory relief. The complaint prayed that "[Andrew] Adam's estate in the Union 

 2

 The RFL states that Andrew is leasing 310 acres. The remaining 11 

acres is either nonfarmable or used by William and Thomas to store equipment and 

materials for their construction business. 
4

Sugar Ranch be destroyed. . . ." At trial, Thomas claimed that Andrew only advanced 

$64,000 to cure the loan default rather than $557,977.87, and that Andrew breached a 

fiduciary duty by not accounting for rents. 

 The trial court found that Andrew breached no fiduciary duty and that 

the rescission cause of action was time barred. (Code Civ. Proc., § 337, subd. 3.) The 

court reopened the trial to receive expert testimony on the August 11, 2006 payoff 

amount, i.e., the amount advanced by Andrew to pay off the underlying obligations. 

Adopting the calculations of Andrew's expert, the court found that the payoff amount 

was $4,498,189. 

 Judgment was entered with findings that Andrew did not materially 

breach the contracts or breach any fiduciary duty, that Thomas suffered no damages, 

and that Andrew is entitled to all the USR rents through October 31, 2016. 

Commencing November 1, 2016, Andrew will split the net rental income with Thomas 

and William until October 31, 2020, when the RFL expires. The judgment states that 

Thomas and William can terminate the RFL at any time by selling the USR and paying 

Andrew $4,498,189 (the August 11, 2006 payoff amount) plus eight percent simple 

interest. 

Fiduciary Duty 

Thomas argues that Andrew breached a fiduciary duty to make a full 

disclosure of the subleases and rents, provide regular accountings, and disclose what 

advances were made to pay off the underlying obligations. The trial court found that 

insufficient evidence was presented to show damages or the breach of any fiduciary 

breach. 

 Because Thomas had the burden of proof at trial, the question on appeal 

is whether the evidence compels a finding in favor of Thomas as a matter of law. 

(Roesch v. De Mota (1944) 24 Cal.2d 563, 570-571.) It is a daunting standard on 

review. A defense judgment based on failure of proof will be upheld unless the 

plaintiff's evidence is "uncontradicted and unimpeached," and "of such a character and 
5

weight as to leave no room for a judicial determination that it is insufficient to support 

a finding . . . ." (Id., at p. 571.) Thomas does not meet that standard. 

 The RFL states that "[t]he relationship between the parties is that of 

landlord and tenant, and not partners or joint venturers." A landlord and tenant 

relationship does not create a fiduciary duty. (Girard v. Delta Towers Joint Ventura

(1993) 20 Cal.App.4th 1741, 1749.) Andrew assumed a lender and borrower 

relationship with Thomas but "[t]he relation between a mortgagee and mortgagor is 

not fiduciary. [Citation.]" (Lineker v. McColgan (1921) 54 Cal.App. 771, 774 

[mortgagee in possession].) Where no negligence or improper conduct is alleged, a 

mortgagee in possession is only chargeable with what he actually received, and no 

more. (Murdock v. Clarke (1891) 90 Cal. 427, 438; Miller & Starr, Cal. Real Estate 

(3d ed 2011) § 10:46, p. 150.) The trial court correctly found no breach of fiduciary 

duty and that it was an arm's length transaction. (See, e.g., Oaks Management Corp. v. 

Superior Court (2006) 145 Cal.App.4th 453, 466; Bastajian v. Brown (1943) 57 

Cal.App.2d 910, 915.) 

$557,977.87 Default Amount 

 Thomas claims that the $557,977.87 default amount was written into the 

ACD after he signed it in 1994. The trial court credited Andrew's testimony that the 

default amount was set forth in the ACD when it was signed. The evidence shows 

Thomas was aware of the $557,977.87 default amount and did not object until 2008 

when he filed the complaint, rendering the rescission claim time-barred. (Code Civ. 

Proc., § 337, subd. 3.) Although Thomas claims that $557,977.87 is too much, the 

trial court found that it is the exact number, to the penny listed in a ledger maintained 

by Thomas's and Andrew's mother, Georgiana. Andrew made additional advances 

after the ACD was signed "by refinancing the debts, paying the obligations that were 

secured by Union Sugar [R]anch and placing the liens against his own property. This 

was something that no party anticipated and which the agreement fails to directly 

address." 
6

 The ACD gave Andrew the legal right but not the obligation to pay the 

underlying obligations in advance.3

 Exercising that right, Andrew paid all the property 

taxes and paid off the underlying obligations so that he could enjoy future USR rental 

income. The trial court found that it "was an entirely voluntary act . . . to go ahead and 

pay off the loans. . . . Is that a bad thing for Andrew to do? Not necessarily. It might 

be a perfectly sound business decision to make . . . ." 

 At the hearing on a motion for new trial, Thomas's counsel conceded that 

"[w]e were never seeking damages from the defendant. . . . [W]e did think there was a 

breach of contract. We wanted to control it, but [Andrew] would still get the same 

money he's going to get now." If no damages were suffered or are being sought, the 

action for breach of contract, failure to disclose, and breach of fiduciary duty fails as a 

matter of law. (See Bramalea California, Inc. v. Reliable Interiors, Inc. (2004) 119 

Cal.App.4th 468, 473; Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.) 

Regular Accountings

 Thomas argues that he is entitled to "regular accountings, and a court 

order requiring Andrew to do so." But that is what Thomas got. Andrew's expert, 

Thomas Rust, provided an accounting. Thomas's accountant, Mike Radakovich, 

reviewed the loan records, ledgers, lease agreements, rent records, and accounting 

prepared by Andrew's and Thomas's mother, Georgiana Adam, and declared that he 

had enough information to calculate the payoff amount. 

 3

 Thomas argues that interpretation of the ACD and RFL is a question of 

law subject to de novo review on appeal. (See WYDA Associates v. Merner (1996) 42 

Cal.App.4th 1702, 1710.) Thomas, however, claimed that the ACD and RFL were 

ambiguous and introduced parol evidence. Where here, the extrinsic evidence is in 

conflict, we will uphold any reasonable interpretation of the contract that is supported 

by substantial evidence. (Ibid.) "Even in cases where the evidence is undisputed or 

uncontradicted, if two or more different inferences can reasonably be drawn from the 

evidence this court is without power to substitute its own inferences or deductions for 

those of the trier of fact . . . ." (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 

631.) 
7

 Thomas is dissatisfied with the accuracy of the accounting but it was his 

own doing. (Civ. Code, § 3517 ["No one can take advantage of his own wrong"].) 

The trial court found: "The simple fact is that the parties entered into a sale and lease 

agreement which resulted in claims and counter claims against each other based on 

failures to make payments, failures to account for rents, and other assorted claims. 

Rather than rely on accountants, the parties kept their own ledgers maintained by their 

mother, Georgiana. Forensic accountants attempted to reconcile financial information 

from the ledger, but were unable to agree." 

 Thomas claims that the trial court erred in not ordering future 

accountings but that was ordered, too. The judgment states that Andrew is "to provide 

yearly accountings along with the leases to plaintiff regarding monies they are 

receiving for the rent." 

Payoff Amount if Thomas Cancels the RFL 

At Thomas's request, the trial court reopened the trial to determine the 

August 11, 2006 payoff amount should Thomas cancel the RFL before it expires on 

October 31, 2020. The court stated: "The starting point is the original amount 

advanced, $577,977.87, plus any additional advances after the date of the Agreement 

[for Curing] Default and Renegotiated Farm Lease plus 'simple interest on such 

advances at the rate of eight percent per annum' less any reimbursement received by 

Andrew from net rental income." 

 The trial court determined that the $4,498,189 payoff amount calculated 

by Andrew's expert (Thomas Rust) was more accurate than the $4,022.218 calculation 

by Thomas's expert (Mike Radakovich). We are precluded from reweighing the 

evidence. (Berniker v. Berniker (1947) 30 Cal.2d 439, 444.) An accounting was 

ordered. Accounts were rendered. Objections were filed and heard, and the trial court 

determined that the payoff amount was $4,498,189. There was no miscarriage of 

justice nor is Thomas entitled to a new accounting. (See, e.g., Sears v. Rule (1945) 27 

Cal.2d 131, 149; Douglas v. Westfall (1952) 113 Cal.App.2d 107, 114.) 
8

Eight Percent Interest on Andrew's Advances

 Thomas argues that the trial court erred in finding that he must pay 

$4,498,189 plus 8 percent simple interest if Thomas cancels the RFL by selling the 

property. Paragraph 23 of the RFL, entitled "Cancellation Clause," states: "Landlord 

[i.e., Thomas] shall have the right, upon written notice to Tenant, to cancel this [lease] 

at such time as all of the underlying obligations, as defined above, have been paid in 

full and Tenant has been reimbursed in full for all advances that Tenant has made 

towards payment of the underlying obligations, together with simple interest on such 

advances at the rate of eight percent per annum." At trial, Thomas admitted there 

were discussions about "breaking the lease" and agreed that Andrew would be "paid 

back for any advances" and "we also pay him eight percent on those advances . . . ." 

 The eight percent interest charge is consistent with the ACD which 

acknowledges that advances had to be made to save the ranches. Thomas's and 

William's initial investment was less than $55,000, they paid no property taxes or loan 

payments after the ACD was signed, and they own USR which is now worth more 

than $19 million. Andrew's refinancing and early payoff of the underlying obligations 

was unexpected but saved William and Thomas more than $1 million in loan interest. 

In the words of William, co-owner of USR , it was "the best investment [Thomas] and 

I ever made in our life." On the first day of trial, Thomas's attorney agreed that 

Andrew should be paid for his advances, "[p]lus, if we cancel this lease, we would 

even say that he would be entitled to interest on that . . . I think in fairness we would 

give [him] that eight percent." There are no grounds in law or equity to rewrite the 

sale and leaseback agreement to make it more profitable for Thomas. 

Sale of USR as Condition Precedent to Cancellation of RFL 

 Thomas argues that the trial court erred in finding that the sale of USR is 

a condition precedent to cancellation of the RFL. The ACD and RFL incorporate each 

other and must be read together in determining the parties' respective rights. (Civ. 

Code, § 1642; Harm v. Frasher (1960) 181 Cal.App.2d 405, 412-413.) Paragraph 4 of 

the ACD states: "Despite any provision in this agreement to the contrary, it is agreed 
9

that [William] and [Thomas] may cancel the renegotiated farm lease at any time that 

they wish to sell the property, in which case the following agreements shall apply: [¶] 

. . . [¶] B. All amounts advanced by [Andrew] towards payment of the underlying 

obligations or taxes on the Union Sugar [R]anch shall continue to be due under the 

terms of the deed of trust and shall be all due and payable upon the consummation of 

the sale of the Union Sugar [R]anch." (Emphasis added.) Reading the ACD and RFL 

together, the trial court reasonably concluded that the sale of USR is a condition 

precedent to cancellation of the RFL. Phrased differently, the only way Thomas can 

cancel the RFL is to sell the USR. 

 Thomas claims that the ACD and RFL have different cancellation rights 

that do not depend upon one another. The argument is based on the theory that 

paragraph 23 of the RFL (cancellation of the RFL) gives Thomas the right to cancel 

the RFL if he pays the underlying obligations and reimburses Andrew for the 

advances. But early cancellation of the RFL would be contrary to the ACD which 

provides that the "renegotiated farm lease shall be fully and completely performed by 

[William] and [Thomas] . . . including the extended term thereof . . . ." The testimony 

and Twitchell's letters show that the 26-year lease term was to ensure that the 

underlying obligations were paid in full and to ensure that Andrew would receive half 

the net rents from November 1, 2016 to October 31, 2020.4

 At trial, Thomas 

acknowledged that Andrew's rent share would be $240,000 between 2016 and 2020. 

 The trial court reasonably concluded that the RFL cancellation clause 

may not be used to trump the ACD and exclude Andrew from receiving his share of 

the rents after he refinanced his ranch (Main Street Ranch) and paid off the underlying 

obligations. The right to cancel the RFL, as described in paragraph 23, is further 

 4

 Andrew testified that the sale "was upside-down for a long time" and, 

now that the rents are more than the payments on the underlying obligations, "the hard 

times should be over and we should be collecting . . . this money back. And I still 

don't believe I'll collect all of my advances back . . . ." 
10

limited by paragraph 13 of the RFL which provides that Andrew "may farm all or a 

portion of the leased premises and continue to farm the same for so long as all of the 

underlying obligations are prepaid at least one year in advance." (Emphasis added.) 

 At the hearing on the motion for new trial, the trial court explained that 

Thomas could pay off the AIN and deed of trust without selling the property. 

Thomas's attorney argued that the judgment could be read to mean that the sale of the 

property was a condition precedent to paying off the AIN and deed of trust. The trial 

court responded: "No, that's not my intent. It's not a condition precedent . . . . It's just 

if the property is sold by . . . plaintiff and his brother, then Andrew must be paid off." 

 Thomas's attorney asked the trial court to "clear that up a little bit, just to 

make sure somebody else who reads that in the future doesn't have a 

misunderstanding." Thomas submitted a proposed order containing the language he 

seeks on appeal (i.e., that Thomas cannot pay off the AIN unless the USR is sold). 

Andrew objected and the trial court issued its own order omitting the language 

proposed by Thomas. There is no merit to the argument that the judgment misstates 

the trial court's findings or should be modified. 

1985 Judgment lien 

Thomas also requested that the trial court order Andrew to "pay" a 1985 

judgment lien that was recorded before Andrew bought and resold USR. Andrew 

testified that he would relieve Thomas of responsibility for the $500,000 lien if the 

RFL "is left intact." 

 Thomas argues that Andrew should be ordered to pay the judgment lien 

because it his contractual responsibility. But that misstates the RFL which provides 

that "Tenant agrees to keep the leased premises free and clear of all liens . . . arising 

out of Tenant's operation of the premises . . . ." Andrew has no contractual obligation 

to pay a judgment lien recorded before the RFL was executed. 

 At the hearing on a motion for new trial, the trial court stated that it 

would not order Andrew to pay the judgment lien because the lien could be removed 

by other means. Andrew could void the lien in bankruptcy court or get the lienholder 
11

to agree to transfer the lien to other property. If Andrew was ordered to pay the 

judgment lien, it would have the unintended consequence of making the judgment 

creditor a third party beneficiary and giving the judgment creditor the right to sue 

Andrew. 

 The judgment provides that removal of the 1985 judgment lien "shall be 

the sole responsibility of Andrew Adam" and that Andrew "shall indemnify, defend 

and hold plaintiffs harmless from said judgment . . . ." As worded, the judgment is 

like a title insurance policy and adequately protects Thomas's ownership rights. (See, 

e.g., Rosen v. Nations Title Ins. Co. (1997) 56 Cal.App.4th 1489, 1499.) We reject the 

argument that the judgment should be corrected to say that Andrew must pay the 

judgment lien.5

Additional Declaratory Relief

 Thomas requests that we grant additional relief and render our "own 

judgment in order to avoid future delay or expense to the parties."6

 Reviewing courts 

do not make advisory opinions based on a hypothetical state of facts. (Hunt v. 

Superior Court (1999) 21 Cal.4th 984, 998; Selby Realty Co. v. City of San 

Buenaventura (1973) 10 Cal.3d 110, 117.) The trial court was concerned that 

 5

 After the trial court granted Thomas's motion to reopen and receive 

expert testimony on the payoff amount, it modified the statement of decision to 

provide that Andrew "shall pay, indemnify, and hold harmless plaintiffs from said 

judgment lien." At the July 6, 2011 hearing on attorney's fees, Thomas argued that the 

judgment should be modified to say that Andrew must defend, indemnify and hold 

Thomas harmless on the 1985 lien. The trial court agreed and signed a proposed 

judgment, omitting the word "pay." It did not err. "[A] court is not bound by its 

statement of intended decision and may enter a wholly different judgment than that 

announced." (Canal-Randolph Anaheim, Inc. v. Wilkoski (1978) 78 Cal.App.3d 477, 

494.) 

6

 Thomas requests that we decide whether the sale and leaseback "debt" 

will be deemed paid in full when the RFL expires on October 31, 2020. Thomas also 

wants a determination that the Cancellation Clause in paragraph 23 of the RFL gives 

him the right to refinance the USR and pay off Andrew. 
12

"William is not a party to this action and therefore the Court believes that it cannot 

order the Renegotiated Farm Lease terminated." We, too, are precluded from 

considering hypothetical future actions the brothers may take in what the trial court 

characterized as "a family broken apart by financial dealings." Wise adjudication has 

its own time for ripening. (Sierra Club v. California Dept. of Parks & Recreation

(2012) 202 Cal.App.4th 735, 738.) 

 Thomas's remaining arguments have been considered but merit no 

further discussion. 

 The judgment is affirmed. Andrew is awarded costs on appeal. 

 NOT TO BE PUBLISHED.

 YEGAN, J. 

We concur: 

 GILBERT, P. J. 

 PERREN, J. 
13

Arthur A. Garcia, Judge 

Superior Court County of Santa Barbara 

______________________________ 

 Brenneman Juarez & Adam, LLP, Richard C. Brenneman for Plaintiffs 

and Appellants. 

 The Law Offices of Robert D. Reed, Robert D. Reed for Defendant and 

Respondent.