State v. Merritt

• Decision Date: 21 February 2019
• Docket Number: No. 95115-2,95115-2
• Citation: 434 P.3d 1016
• Court: Washington Supreme Court
• Parties: STATE of Washington, Respondent, v. Diana Joline MERRITT, Petitioner, Douglas Ross White, Defendant.

434 P.3d 1016

STATE of Washington, Respondent,

v.Diana Joline MERRITT, Petitioner,Douglas Ross White, Defendant.

No. 95115-2

Supreme Court of Washington.

Argued October 9, 2018

Filed February 21, 2019

Casey Grannis, Nielsen Broman & Koch, PLLC, 1908 E. Madison Street, Seattle, WA 98122-2842, for Petitioner.

David M. Seaver, Jennifer H.S. Atchison, King County Prosecutor's Office, 516 3rd Avenue, Suite W554, Seattle, WA 98104-2362, for Respondent.

MADSEN, J.

¶ 1 Diana Merritt was convicted of 10 counts of mortgage fraud in 2015. Although the crimes charged occurred between 2008 and 2009, the criminal activity was not actually discovered by law enforcement until 2014. Merritt argues the charging document did not sufficiently provide information that the alleged charges occurred within the statute of limitations as required by RCW 10.37.050(5). Merritt also argues that the State’s alleged failure to comply with the statute of limitations constitutes a due process violation because the statute of limitations is an essential element of which Merritt must be given notice.

¶ 2 The Court of Appeals affirmed Merritt’s convictions. We hold that the information is sufficient and affirm the Court of Appeals.

FACTS

¶ 3 In 2004, Tom Reed employed Douglas White as an appraiser trainee at his company, Washington Appraisal Reviews Inc. As a trainee, White was permitted to write appraisal reports, but he was not permitted to sign the reports. Instead, Reed reviewed White’s reports, and if satisfactory, Reed would sign the report using password protected software that generated an electronic signature. White subsequently failed the licensing exam, and he did not retake it. He stopped working for Reed in 2008.

¶ 4 In 2010, Reed discovered that someone submitted appraisals using his electronic signature and license number. Reed contacted federal authorities in light of this discovery. Reed met with an agent of the United States Department of Housing and Urban Development’s Office of Inspector General and identified White as one of only two people who could possibly have had access to Reed’s electronic signature.

¶ 5 In late 2013 or early 2014, the agent obtained copies of White’s bank records, which showed several financial transactions between White and Merritt. Merritt was White’s girlfriend. The agent learned that Merritt operated a mortgage brokerage business, Merritt Home Finance, and subsequently obtained a search warrant for the corporation.

¶ 6 The search warrant was executed in June 2014, and the agent uncovered loan originations performed by Merritt that included appraisals bearing Reed’s name and signature but were actually performed by White. A forensic search of White’s and Merritt’s computers revealed several e-mail exchanges between White and Merritt in which Merritt asked White to perform appraisals for her clients. E-mails with copies of Reed’s license, which White sent to Merritt, were also uncovered.

¶ 7 In 2015, Merritt was charged by amended information with 9 counts of second degree identity theft and 11 counts of mortgage fraud. Clerk’s Papers (CP) at 48-77. Merritt waived her right to a jury, and her case proceeded to a bench trial.¹ Merritt was found guilty of 10 counts of mortgage fraud.

¶ 8 Prior to the entry of the trial court’s written findings of fact and conclusions of law, Merritt’s substitute counsel filed a motion for reconsideration and a supplemental memorandum supporting reconsideration, arguing, among other things, that Merritt should be acquitted of the mortgage fraud charges because "the State has failed to prove beyond a reasonable doubt when the alleged crimes were or could have been discovered, and has therefore failed to prove that any of them occurred within the statute of limitations." CP at 319. The trial court rejected this argument, holding that the statute of limitations was satisfied because Merritt’s charging occurred within three years of discovery.

¶ 9 Merritt appealed, and the Court of Appeals affirmed the trial court, holding that the charging document was sufficient. State v. Merritt , 200 Wash. App. 398, 412-13, 402 P.3d 862 (2017). We granted review. State v. Merritt , 189 Wash.2d 1039, 409 P.3d 1069 (2018).

ANALYSIS

¶ 10 The mortgage fraud counts in the amended information, which are virtually identical to one another,² state:

That the defendants DOUGLAS ROSS WHITE AND DIANA JOLINE MERRITT and each of them in King County, Washington, between June 12, 2008 and August 6, 2008, in connection with making, brokering, obtaining, or modifying a residential mortgage loan, did directly or indirectly: (1)(a) knowingly employ any scheme, device, or artifice to defraud or materially mislead a borrower, to-wit: Kirk Lakey, during the lending process; and (b) knowingly defraud or knowingly materially mislead a lender, or any person, to wit: Kirk Lakey, in the lending process, or knowingly engage in any unfair or deceptive practice toward any person, to-wit: Kirk Lakey, in the lending process; and (c) knowingly obtain property by fraud or material misrepresentation in the lending process; and (2) knowingly make any misstatement, misrepresentation, or omission during the mortgage lending process knowing that it might be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process, to-wit: Kirk Lakey; and (3) knowingly use or facilitate the use of any misstatement, misrepresentation, or omission, knowing the same to contain a misstatement, misrepresentation, or omission, during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process, to-wit: Kirk Lakey; and (4) knowingly receive any proceeds or anything of value in connection with a residential mortgage closing that the defendant knew resulted from a violation of RCW 19.144.080 ;

Contrary to RCW 19.144.080 and 19.144.090, and against the peace and dignity of the State of Washington.

And further do allege the crime was a major economic offense or series of offenses, so identified by consideration of the following: multiple incidents per victim, monetary loss substantially greater than typical for the offense, occurred over a long period of time, and the defendants used their position of trust to facilitate the commission of the current offense, under the authority of RCW 9.94A.535(3)(d).

CP at 70-71.

Constitutional Sufficiency

¶ 11 Merritt first argues that the amended information is not constitutionally sufficient. Suppl. Br. of Pef’r (Corrected) at 9. Specifically, Merritt argues:

A charging document is constitutionally defective if it fails to include all "essential elements" of the crime. State v. Vangerpen , 125 Wn.2d 782, 787, 888 P.2d 1177 (1995) ; Hamling v. United States , 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974) ; U.S. Const. Amend. VI ; Wash. Const. Art. I, § 22.

Id. " ‘[E]ssential elements’ include only those facts that must be proved beyond a reasonable doubt to convict a defendant of the charged crime." State v. Powell , 167 Wash.2d 672, 683, 223 P.3d 493 (2009) (plurality opinion) (emphasis added) (citing State v. McCarty , 140 Wash.2d 420, 425, 998 P.2d 296 (2000) ), overruled on other grounds by State v. Siers , 174 Wash.2d 269, 274 P.3d 358 (2012). The primary reason for the inclusion of essential elements in a charging document is "to afford notice to an accused of the nature and cause of the accusation against him." State v. Kjorsvik , 117 Wash.2d 93, 97, 812 P.2d 86 (1991). Such notice is important so that the defendant "will be able to prepare and mount a defense at trial." McCarty , 140 Wash.2d at 425, 998 P.2d 296.

¶ 12 The Court of Appeals rejected Merritt’s constitutional sufficiency argument, holding that "[t]he statute of limitations is not an essential element of a crime." Merritt , 200 Wash. App. at 400, 402 P.3d 862. The information here clearly states each element of the mortgage fraud claims of which Merritt was accused, meaning the alleged defect in the amended information did not affect Merritt’s notice of the charges brought against her or her ability to prepare and mount a defense.

¶ 13 Merritt relies on State v. Schaffer , where the court held, "It is essential ... to allege facts sufficient to show that the acts committed which constituted the crime were committed within the time limited by law for the commencement of an action therefor." 31 Wash. 305, 310, 71 P. 1088 (1903) (emphasis added). This reliance is misplaced. The Schaffer court was referencing the statute currently codified at RCW 10.37.050, not analyzing whether the statute of limitations was an essential element as it pertains to the Sixth Amendment to the United States Constitution or article I of the Washington State Constitution.³

¶ 14 Merritt also suggests that the statute of limitations is an essential element of the crime charged because "[t]he facts necessary for conviction and the fact of compliance with the statute of limitations share other salient characteristics," and the jury must decide the underlying factual matters pertaining to the statute of limitations. Suppl. Br. of Pet’r (Corrected) at 14. In support for her contentions, Merritt cites State v. Newton , 39 Wash. 491, 493, 81 P. 1002 (1905), where the court held that determining whether the State was barred by the statute of limitations was a question for the jury. Newton presents a very limited circumstance in which the jury may be called to assess the facts underlying a statute of limitations issue. Specifically, in Newton, the timing of the incident giving rise to the lawsuit was disputed by both parties, making compliance with the statute of limitations impossible to assess. This court has held that "[w]hether the statute of limitations bars a suit is a legal question, but the jury must decide the underlying factual questions unless the facts are susceptible of but one reasonable interpretation." Goodman v. Goodman , 128 Wash.2d 366, 373, 907...