Filed 10/19/20 DeVoe v. Heinemann CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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

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or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

DANIEL R. DEVOE et al.,

 Plaintiffs and Appellants,

v.

S. BLAKE HEINEMANN et al.,

 Defendants and Respondents.

 G058272

 (Super. Ct. No. 30-2018-00974499)

 O P I N I O N 

Appeal from a judgment of the Superior Court of Orange County, Deborah 

C. Servino, Judge. Affirmed.

Daniel R. DeVoe and Angela S. DeVoe, in pro. per., for Plaintiffs and 

Appellants.

Hall Griffin, George L. Hampton IV, and Laura J. Petrie, for Defendants 

and Respondents. 

* * *
2

Plaintiffs Daniel and Angela DeVoe (DeVoes) brought an action against 

Blake and Carolyn Heinemann (Heinemanns)1 for wrongful foreclosure and other causes 

of action following Blake’s foreclosure on their home. The foreclosure occurred after the 

DeVoes defaulted on a promissory note (Note) held by Blake and secured by a second 

deed of trust that named Blake and Carolyn as beneficiaries. After a court trial on the 

wrongful foreclosure claim, judgment was entered in favor of the Heinemanns. 

Appealing from the judgment, the DeVoes contend the foreclosure was 

unlawful. They assert Blake did not have the authority to foreclose because Carolyn’s 

assignments of her beneficial interests in the Note and deed of trust to him prior to the 

foreclosure were void. We disagree and affirm. Blake was the holder of the Note, 

payable to bearer as a matter of law, and had a right to foreclose as either a cobeneficiary 

or the sole beneficiary under the deed of trust. The court properly found the DeVoes 

failed to prove their wrongful foreclosure claim. 

FACTS AND PROCEDURAL HISTORY2

In July 2006, the Heinemanns owned a home in Mission Viejo, which they 

sold to the DeVoes. A portion of the DeVoes’ purchase price was financed by the 

Heinemanns. The $500,000 loan was reflected in a Note executed by the DeVoes and 

secured by a second deed of trust recorded against the property. The deed of trust named 

1 For clarity and convenience, we refer to Mr. and former Mrs. Heinemann 

collectively as the Heinemanns and individually by their given names, Carolyn and 

Blake. No disrespect is intended.

2 At the outset, we note our ability to ascertain the facts is limited because we 

have not been provided with a reporter’s transcript of the trial proceedings. These facts 

are developed from the trial court’s statement of decision and exhibits in the clerk’s 

transcript.
3

the DeVoes as the trustors and the beneficiaries were listed as “S. Blake Heinemann and 

Carolyn Heinemann, Husband and Wife.” 

In 2010, Carolyn, who was then living in Arizona, petitioned for dissolution 

of her marriage to Blake. A consent decree of dissolution of marriage (consent decree) 

was filed in Arizona in July 2011. Attached to the consent decree was a property 

settlement agreement that provided for the disposition of their property and obligations 

and stated it was “a separate, enforceable contract” between them. In the property 

settlement agreement, the DeVoes’ Note secured by the deed of trust was not included in 

the list of “community, quasi-community or jointly held assets” that Carolyn agreed to 

“transfer, assign, and convey” to Blake. Instead, the Note and deed of trust were listed as 

property “confirmed to” Blake as his “sole and separate property.”3 A “Mutual Release” 

clause in the property settlement agreement provided: “Subject to the provisions of this 

Agreement each party hereby releases any and all interest or other right which he or she 

may now or hereafter have or claim in any and all property now owned or hereafter 

acquired by or on behalf of the other party.” There was also a “Deed and Transfer” 

clause, which stated: “Except as provided herein, the parties shall execute all documents 

necessary to affect [sic] the transfer of the properties referred to in this Agreement. It is 

agreed, however, that this Agreement is intended to be and shall be deemed a sufficient 

deed, conveyance, assignment, transfer and bill of sale of any and all right, title, interest, 

claim and demand of every nature covered by this Agreement.” The property settlement 

agreement also contained a full disclosure clause, indicating that “[a]ll community or 

other jointly owned property not set forth in this Agreement or undisclosed . . . shall 

remain the property of both parties as tenants-in-common, each owning one-half interest 

3 The record suggests an explanation for this as the Mission Viejo property 

appears to have been Blake’s separate property originally but was transferred from him to 

“both spouses” “as joint tenants” through an “Interspousal Transfer Grant Deed” that was 

recorded in connection with the sale to the DeVoes.
4

therein.” No modifications were made to the Note and no assignment of the deed of trust 

was recorded immediately after the divorce decree. 

The DeVoes failed to make their balloon payment when it was originally 

due on August 31, 2011. In July 2014, Blake’s counsel sent the DeVoes a letter as notice 

that their balloon payment was past due. At the time, the DeVoes owed the principal 

amount of $500,000 and $128,700 in interest and other charges. Their efforts to 

refinance their mortgage were unsuccessful. 

In October 2014, Blake appointed TD Service Company (trustee) as the 

trustee under the deed of trust. He provided it with an affidavit stating he was the holder 

of the beneficial interest under the deed of trust that secured the $500,000 Note, as the 

Note did not include the names of any payees. Blake averred in his affidavit that the 

payees intended in the Note “were S. Blake Heinemann and Carolyn Heinemann as 

reflected on the Deed of Trust . . . .” He also provided the trustee a declaration of default,

stating the DeVoes had defaulted on their obligations under the Note, and he instructed 

the trustee to initiate foreclosure. 

On November 19, 2014, Carolyn’s assignment to Blake of her beneficial 

interest in the deed of trust was recorded. That same day, the trustee recorded a notice of 

default. A trustee’s sale was conducted and a trustee’s deed upon sale was recorded in 

May 2015.

The DeVoes filed a complaint against the Heinemanns in February 2018, 

alleging causes of action for wrongful foreclosure, negligent misrepresentation, fraud, 

negligent interference with prospective economic advantage, and interference with 

prospective economic advantage. The court granted the Heinemanns’ motion for 

judgment on the pleadings as to all claims except for wrongful foreclosure, which 

proceeded to a court trial. After two days of testimony, the court concluded the DeVoes 

had failed to prove this remaining cause of action. The Heinemanns filed a proposed 
5

statement of decision to which the DeVoes filed objections. On July 8, 2019, the court 

filed its statement of decision and judgment in favor of the Heinemanns.

In its statement of decision, the court found Carolyn did not participate in 

the foreclosure sale, and, therefore, the DeVoes could not prove the first element of 

wrongful foreclosure as to her. The court concluded Blake “had the authority to conduct 

the nonjudicial foreclosure sale.” Rejecting the DeVoes’ argument that Carolyn’s 

assignment of the deed of trust on November 19, 2014, “was late, illegal, ineffective and 

void,” the court found the assignment of the Note and deed of trust was valid and 

occurred through the Heinemanns’ divorce consent decree. The court further found that 

“[r]egardless of the validity of the assignment, [Blake] was always a beneficiary of the 

Deed of Trust” and had possession of the Note “at all times.” The court concluded the 

foreclosure sale was valid and that the DeVoes had not proven the remaining elements of 

their wrongful foreclosure claim—prejudice and tender or an exception to the tender rule.

Consistent with the statement of decision, judgment was entered in favor of 

the Heinemanns. The DeVoes timely appealed.

 

DISCUSSION

The DeVoes frame the issue on appeal as “whether a Note ‘originated in 

blank’ secured by property in California was properly assigned from one spouse to 

another through a Marital Dissolution Consent Decree . . . issued in Arizona.” They 

contend the trial court committed reversible error when it concluded the Note was 

assigned to Blake by the consent decree and that “[w]ithout the proper assignment of the 

Note, the nonjudicial foreclosure by S. Blake Heinemann was illegal and all the elements 

for the wrongful foreclosure causes of action are satisfied.” We disagree.4

4 We note the court entered judgment in favor of Carolyn after finding she 

did not participate in the foreclosure sale. The DeVoes do not challenge this; instead, 
6

“In reviewing a judgment based upon a statement of decision following a 

bench trial, we review questions of law de novo.” (Thompson v. Asimos (2016) 6 

Cal.App.5th 970, 981.) Generally, “[w]e apply a substantial evidence standard of review 

to the trial court’s findings of fact.” (Ibid.) However, the DeVoes elected to proceed on 

appeal without a reporter’s transcript and thus have failed “to provide this court with a 

record adequate to evaluate” whether the trial court’s factual findings are supported by 

substantial evidence. (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 

132; see Cal. Rules of Court, rule 8.120(b) [“If an appellant intends to raise any issue that 

requires consideration of the oral proceedings in the superior court, the record on appeal 

must include a record of these oral proceedings”].) When the record on appeal includes 

only a clerk’s transcript, it is “considered to be upon the judgment roll alone.” (Krueger 

v. Bank of America (1983) 145 Cal.App.3d 204, 207.) In such an appeal, “we ‘“must 

conclusively presume that the evidence is ample to sustain the [trial court’s] findings”’ 

[Citation.] Our review is limited to determining whether any error ‘appears on the face of 

the record.’” (Nielsen v. Gibson (2009) 178 Cal.App.4th 318, 324-325.)

Under Civil Code section 2924, when the trustor (borrower) defaults on a 

loan secured by a deed of trust containing a power of sale, the current beneficiary under 

the deed of trust may direct the trustee to conduct a nonjudicial foreclosure sale. 

(Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 926-928 (Yvanova).) 

After the sale, a borrower can sue for wrongful foreclosure when “an assignment by 

which the foreclosing party purportedly took a beneficial interest in the deed of trust was 

not merely voidable but void, depriving the foreclosing party of any legitimate authority 

to order a trustee’s sale.” (Id. at pp. 942-943.) Here, the DeVoes make such an 

allegation in their wrongful foreclosure claim against Blake. 

their appellate arguments focus on whether Blake had the legal authority to foreclose. 

Accordingly, our discussion will focus on whether the court properly concluded the 

DeVoes failed to prove their wrongful foreclosure claim as to Blake.
7

“The basic elements of a tort cause of action for wrongful foreclosure . . . 

are: ‘(1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive 

sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the 

party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced 

or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor 

or mortgagor tendered the amount of the secured indebtedness or was excused from 

tendering.’” (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 

408.) “[M]ere technical violations of the foreclosure process will not give rise to a tort 

claim; the foreclosure must have been entirely unauthorized on the facts of the case.” (Id.

at p. 409.) The court, in its statement of decision, concluded the DeVoes’ wrongful 

foreclosure claim failed because they did not establish these three elements. We agree.

Discussing the first element of a wrongful foreclosure claim, our Supreme 

Court has explained, “A foreclosure initiated by one with no authority to do so is 

wrongful for purposes of such an action.” (Yvanova, supra, 62 Cal.4th at p. 929.) Civil 

Code section 2924, subdivision (a)(6), provides that only “[1] the holder of the beneficial 

interest under the mortgage or deed of trust, [2] the original trustee or the substituted 

trustee under the deed of trust, or [3] the designated agent of the holder of the beneficial 

interest” can record or cause to be recorded a notice of default or “otherwise initiate the 

foreclosure process.” “While it is the trustee who formally initiates the nonjudicial 

foreclosure, by recording first a notice of default and then a notice of sale, the trustee may 

take these steps only at the direction of the person or entity that currently holds the note 

and the beneficial interest under the deed of trust—the original beneficiary or its 

assignee—or that entity’s agent.” (Yvanova, at p. 927.) 

In challenging the judgment, the DeVoes focus on whether Carolyn 

properly assigned her interest in the Note and deed of trust to Blake and argue Blake 

lacked authority to foreclose on the property. But, as we will explain, their argument that 

Carolyn never assigned the Note and deed of trust lacks merit, and, moreover, Blake was 
8

the holder of the Note entitled to enforce it without Carolyn’s assignment. When 

analyzed, the Devoes’ argument is exposed as an ipse dixit assertion, unsupported by any 

reasoned argument or authority, and which ignores the express terms of the property 

settlement agreement between Blake and Carolyn as incorporated in the Arizona consent 

decree.

Thus, the DeVoes argue there is no evidence to support the court’s finding 

that the Note was assigned by Carolyn to Blake through the Arizona consent decree. 

They assert the consent decree’s property settlement agreement did not direct Carolyn to 

assign her interest in the Note and deed of trust because the Note was listed as Blake’s 

separate property and not as a martial asset that required assignment. They further argue 

that even if the property settlement agreement required Carolyn to assign her interest in 

the Note, she never executed such an assignment. They contend because Carolyn never 

assigned her interest in the Note to Blake, her assignment of the deed of trust to him was 

void and Blake did not have the authority to foreclose on the property. 

The DeVoes’ entire argument is based on the erroneous assumption that 

something in addition to the property settlement agreement was somehow required to 

assign Carolyn’s interest in the Note and deed of trust. Blake and Carolyn had agreed, 

however, that the property settlement agreement “shall exist as a separate, enforceable 

contract between the parties, shall be self-sustaining as to all terms and conditions hereof 

and may be enforced by appropriate action and specific performance, as either party may 

desire to enforce same.” Thus, quite apart from the actual Arizona consent decree, 

Carolyn and Blake had expressly agreed that the Note and deed of trust was confirmed to 

Blake as his separate property, and the agreement went on to provide that “It is agreed . . . 

that this [property settlement agreement] is intended to be and shall be deemed a 

sufficient deed, conveyance, assignment, transfer and bill of sale of any and all right, 

title, interest, claim and demand of every nature covered by this Agreement.” Simply 

put, that language, together with Blake and Carolyn’s agreement that the Note and deed 
9

of trust was confirmed to Blake as his separate property, is a plain and unambiguous 

assignment of Carolyn’s interest in the Note and deed of trust to Blake.

Even more fundamentally, under the facts as found by the court, and the 

law of negotiable instruments,5 Carolyn’s assignment of the Note was not required, 

because the Note did not specify a payee. Where a negotiable instrument does not 

specify a payee, it becomes “payable to bearer.” (Cal. U. Com. Code, § 3109, subd. 

(a)(2) [“A promise or order is payable to bearer if it is any of the following:” “Does not 

state a payee”].)6 The person in possession of a negotiable instrument that is payable to 

bearer becomes the “holder” of the instrument. (§ 1201, subd. (b)(21)(A) [“‘Holder’ 

means” “the person in possession of a negotiable instrument that is payable . . . to 

bearer”].) And the “holder” of an instrument is entitled to enforce the instrument. 

(§ 3301 [“‘Person entitled to enforce’ an instrument means (a) the holder of the 

instrument”].)

Here, the Note did not state a payee. Thus, under the law of negotiable 

instruments as outlined above, the Note was payable to bearer. And because the court 

found that the Note was in Blake’s possession “at all times,” Blake was at all times the 

holder of the Note entitled to enforce it, even without Carolyn’s assignment.7 

5 A “‘negotiable instrument’ means an unconditional promise or order to pay 

a fixed amount of money, with or without interest or other charges described in the 

promise or order if it is all of the following: (1) Is payable to bearer or to order at the 

time it is issued . . . . [¶] (2) Is payable on demand or at a definite time. [¶] (3) Does not 

state any other undertaking or instruction by the person promising or ordering payment to 

do any act in addition to the payment of money, but the promise or order may contain (i) 

an undertaking or power to give, maintain, or protect collateral to secure payment . . . .” 

(Cal. U. Com. Code, § 3104, subd. (a).) An “‘[i]nstrument’ means a negotiable 

instrument.” (Id., subd. (b).)

6 All statutory references are to the California Uniform Commercial Code 

unless otherwise stated.

7 At this point we disagree with the court’s legal analysis. The court relied 

on section 3110 to construe the Note “as payable to the Heinemanns.” Section 3110, 
10

Moreover, the Devoes’ argument overlooks one simple but crucial fact—in 

addition to being the holder of the Note “at all times,” Blake was always either the sole 

beneficiary or the cobeneficiary under the deed of trust. He, therefore, had the authority 

to direct the trustee to initiate the foreclosure process, regardless of the validity of 

Carolyn’s assignment of her interest to him in November 2014. In its statement of 

decision, the court found Blake “was always a beneficiary of the Deed of Trust.” Based 

on this finding, the court concluded Blake “had the authority to conduct the nonjudicial 

foreclosure sale” under Civil Code section 2924.

We reach the same conclusion, accepting, as we must, the court’s factual 

findings. (Nielsen v. Gibson, supra, 178 Cal.App.4th at p. 324.) Because Blake was the 

holder of the Note and either the sole beneficiary or cobeneficiary under the deed of trust, 

he had the authority to initiate the nonjudicial foreclosure process after the DeVoes 

defaulted. (Civ. Code, § 2924, subd. (a)(6).) “[W]here there is more than one 

beneficiary under a single note and trust deed, in the event of a default, any one of the 

beneficiaries is empowered to give notice of default and election to sell.” (Perkins v. 

Chad Development Corp. (1979) 95 Cal.App.3d 645, 651.) Thus, even if Carolyn did not 

effectively assign her interest to Blake, he was still a cobeneficiary and as such “a tenant 

in common in the beneficial interest under the note and trust deed” with “a right to 

subdivision (a) provides: “The person to whom an instrument is initially payable is 

determined by the intent of the person, whether or not authorized, signing as, or in the 

name or behalf of, the issuer of the instrument.” But according to the commentary to 

section 3110, the statute “states rules for determining the identity of the person to whom 

an instrument is initially payable if the instrument is payable to an identified person.” 

Here, the Note did not state a payee. Thus, section 3109, subdivision (a)(2) applies 

thereby making the Note payable to bearer. The court also relied on section 3205 to hold 

that the Note was payable to the person in possession. But section 3205, subdivision (b) 

deals with the effect of a special or “in blank” endorsement. Here, the Note was payable 

to bearer, and the person in possession of such a note is entitled to enforce it. Our 

disagreement with the court’s legal analysis, however, does not alter the ultimate 

conclusion.
11

protect the estate from injury or loss without the aid or assistance of other cotenants” by 

proceeding with the nonjudicial foreclosure. (Id. at p. 650; accord, 5 Miller & Starr, Cal. 

Real Estate (4th ed. 2020) § 13:227.) Accordingly, the court properly concluded Blake 

had the authority to initiate the foreclosure.

Finally, as a final rejection of the DeVoes’ argument, the court’s statement 

of decision indicates Carolyn “testified that she intended to assign and did not contest any 

assignment of the note or Deed of Trust through the Dissolution Consent Decree, and the 

Heinemanns’ Dissolution Consent Decree also corroborates her testimony.” We must 

accept the court’s factual findings. (Nielsen v. Gibson, supra, 178 Cal.App.4th at p. 324.) 

Consistent with her intent, Carolyn’s assignment of her beneficial interest in the deed of 

trust was recorded on November 19, 2014. The same day, the notice of default was 

recorded by the trustee. Thus, at the time the trustee began the nonjudicial foreclosure 

process, Blake was the holder of the Note and the sole beneficiary in the deed of trust. 

As such, he had the authority to direct the trustee to foreclose. Because Blake had a 

current beneficial interest in the deed of trust, he had a right to foreclose and the DeVoes 

did not suffer a wrongful foreclosure.

As to the remaining two elements of their wrongful foreclosure claim, the 

DeVoes do not directly challenge the court’s findings that they failed to establish 

prejudice and failed to tender the amount of the debt or were excused from doing so. 

Here and in the trial court, the DeVoes do not dispute that they defaulted on the Note and 

failed to tender the outstanding debt. Instead, relying on their argument that Blake did 

not have authority to foreclose because Carolyn’s assignments were void, they assert 

prejudice was established by the void assignments and tender was not required. It may be 

true that “a homeowner who has been foreclosed on by one with no right to do so—by 

those facts alone—sustains prejudice or harm sufficient to constitute a cause of action for 

wrongful foreclosure.” (Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 

552, 555.) But here, Blake had the right to proceed with the foreclosure; therefore, the 
12

DeVoes failed to establish prejudice or an exception to the tender rule and failed to prove 

their wrongful foreclosure claim.

The court properly entered judgment in favor of the Heinemanns.

DISPOSITION

The judgment is affirmed. The Heinemanns shall recover their costs on 

appeal.

IKOLA, J.

WE CONCUR:

ARONSON, ACTING P. J.

GOETHALS, J.