State v. Mullen

• Citation: 259 P.3d 158,171 Wash.2d 881
• Decision Date: 23 June 2011
• Docket Number: 84283–3.,Nos. 83981–6,s. 83981–6
• Court: Washington Supreme Court
• Parties: STATE of Washington, Respondent,v.Lisa A. MULLEN, Petitioner.State of Washington, Respondent,v.Kevin E. Dean, Petitioner.

171 Wash.2d 881
259 P.3d 158

STATE of Washington, Respondent,
v.
Lisa A. MULLEN, Petitioner.State of Washington, Respondent,
v.
Kevin E. Dean, Petitioner.

Nos. 83981–6

84283–3.

Supreme Court of Washington, En Banc.

Argued Feb. 17, 2011.Decided June 23, 2011.

[259 P.3d 161]

Craig Douglas Magnusson, Magnusson Law Office PS, Jennifer Lynn Castro, Attorney at Law, Bellevue, WA, Gregory Charles Link, Washington Appellate Project, Seattle, WA, for Petitioner.Erik Pedersen, Attorney at Law, Skagit Co. Prosc. Atty. Office, Mount Vernon, WA, Skagit County Prosecuting Atty., Attorney at Law, Mount Vernon, WA, for Respondent.J.M. JOHNSON, J.

[171 Wash.2d 886] ¶ 1 Skagit County prosecuted both petitioners for stealing funds from their employer, Frontier Ford, a local car dealership. This case concerns the State's disclosure obligations to their defense under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963).

¶ 2 The prosecution retained Frontier Ford's accountant to investigate the crime and to testify at trial. At trial, the petitioners argued that Frontier Ford's owner authorized their personal use of dealership funds largely as a reward for assistance with the owner's dishonest financial dealings.

¶ 3 A jury convicted both petitioners. After their convictions, the petitioners obtained a previously sealed deposition of Frontier Ford's accountant taken in a separate civil suit between the owner of Frontier Ford and the accountant's firm. The deposition occurred before the conclusion of the criminal trial.

[171 Wash.2d 887] ¶ 4 In a motion for a new trial, the petitioners argued that the accountant's deposition testimony supported the defense theory that the owner authorized use of the funds. The petitioners contended that the

[259 P.3d 162]

prosecution's failure to disclose the information contained in the deposition and other documents pertaining to the civil suit constituted a due process violation under Brady. The trial court denied the motion, and the Court of Appeals affirmed.

¶ 5 We affirm the Court of Appeals and hold that no Brady violation occurred. We also hold that the trial court did not abuse its discretion by refusing to grant a new trial under CrR 7.5 on the asserted ground of newly discovered evidence.

Facts and Procedural History 1. The Facts of the Case

¶ 6 In 1992, Ron Rennebohm owned Frontier Ford and Lisa Mullen worked for him as office manager. Mullen's responsibilities included handling the dealership's bookkeeping. In 1996, Rennebohm hired Kevin Dean to work as Frontier Ford's general manager. That same year Dean and Mullen began a romantic relationship. Over the following years, Mullen embezzled funds from Frontier Ford, buying thousands of dollars worth of jewelry, expensive clothing, and other items unrelated to the automotive industry with company funds. When co-workers commented on Mullen's extravagant clothing, she credited her new lifestyle to profitably selling items at a popular on line auction web site (i.e., www. e Bay. com). By 2001, Rennebohm's wife also noted Mullen's lavish lifestyle and suspected that Mullen was stealing from Frontier Ford.

¶ 7 In 2002, Rennebohm brought in Larry Stordahl to serve as his corporate general manager with authority over Frontier Ford. In June 2002, as a result of discussions with Stordahl, Rennebohm fired Dean. Hearing of the firing, Mullen told another Frontier Ford employee, “I may be next.” Verbatim Report of Proceedings (VRP) (Jan. 9, 2006) [171 Wash.2d 888] at 125. Mullen confronted Rennebohm about firing Dean and was visibly upset.

¶ 8 During a review after Dean's departure, Rennebohm became aware of allegations of fraudulent bookkeeping practices at Frontier Ford. He contacted Rick Rekdal of the accounting firm Clothier & Head to analyze the company's financial records. Rekdal had served for several years as Rennebohm's personal accountant and as the accountant for Frontier Ford.

¶ 9 While waiting for Rekdal to arrive, Rennebohm had a conversation with Mullen. Mullen appeared nervous and asked if Rennebohm intended to fire her. Mullen called Rennebohm later that day, wanting to arrange a meeting. She confessed to Rennebohm that she had stolen from the dealership, stating that “it snowballed on her” and that if Rennebohm fired her “she could never pay” him back. VRP (Jan. 19, 2006) at 76. Mullen later made similar admissions to Rekdal, telling him that “she had lost her integrity” and that “she did not want to come back in to the dealership to face” her co-workers. VRP (Jan. 24, 2006) at 56.

¶ 10 Rennebohm reported his suspicions to the local police. Lacking in-house accounting expertise to investigate the alleged fraud, Skagit County authorities retained Rekdal's services to assist in their investigation. Rekdal ultimately concluded that Mullen and Dean took at least $1.2 million from Frontier Ford over a period of six years.

2. The Criminal Trial

¶ 11 There were three years of discovery and pretrial proceedings before the case went to a jury trial. The State jointly prosecuted Mullen and Dean in the Skagit County Superior Court. During the discovery period, defense counsel deposed Rennebohm and examined Rekdal, under oath, on multiple occasions. In addition to Mullen's admissions, including those referenced above, the prosecution presented several lines of evidence inculpating Mullen and Dean. The prosecution presented evidence to the jury that Rennebohm heavily relied on Mullen and Dean to run Frontier Ford. [171 Wash.2d 889] The jury heard evidence that Rennebohm could not fully interpret financial statements and was unable to personally confirm Mullen's handling of the company's financial records. The jury heard evidence that Mullen was the only person in the dealership with access to all of the databases on the company's computers; Rennebohm did not even have the computer password to access the company's financial records. Rennebohm expressly denied

[259 P.3d 163]

that he authorized Mullen and Dean to spend company funds for their personal use. Other witnesses testified that Rennebohm was visibly upset upon discovering Mullen's fraudulent activity.

¶ 12 The prosecution also presented evidence that Mullen and Dean enjoyed an extravagant lifestyle between 1996 and 2002. Several merchants testified about selling expensive clothing, jewelry, and other nonbusiness related items to Mullen. Many of the purchases involved travel from Skagit County to Palm Springs, California. These purchases were not commensurate with Mullen's salary at the dealership. The jury heard evidence from Mrs. Rennebohm and Frontier Ford employees regarding Mullen's expensive wardrobe and jewelry. Additionally, the jury viewed numerous exhibits demonstrating extensive travel and other nonbusiness purchases made with company funds that benefited both Dean and Mullen.

¶ 13 The prosecution provided the jury with an extensive presentation of evidence, mostly through Rekdal, regarding the accounting practices at Frontier Ford. Rekdal testified that Mullen used a complex system of draws and balance transfers to divert company funds to the personal use of both petitioners. Rekdal testified that Mullen and Dean ultimately spent $1.2 million of Frontier Ford's money for nonbusiness purposes.

¶ 14 Mullen's defense largely conceded the prosecution's evidence but argued that Rennebohm authorized the nonbusiness use of Frontier Ford funds. The defense supported its theory in two ways. First, the defense attacked Rennebohm's credibility. The defense presented evidence that Rennebohm understood financial documents and accounting[171 Wash.2d 890] practices in the automotive sales industry and at Frontier Ford. The defense also presented evidence that Rennebohm shielded assets from a former business partner and his ex-wife. The defense cross-examined Rennebohm regarding his dealings with his ex-wife and his former business partner.

¶ 15 Second, the defense presented Mullen's own testimony to the jury. Mullen testified that she assisted Rennebohm in “cooking the books.” VRP (Feb. 1, 2006) at 21. According to Mullen, though she felt initial reservations about aiding Rennebohm's dishonest activity, she claimed that a lawyer advised her that she had nothing to fear so long as Rennebohm authorized her activities. Mullen's testimony claimed that her assistance in hiding profits from Rennebohm's ex-wife, the government, his former business partner, and his employees made “millions” for Rennebohm. VRP ( Id.) at 24. She testified that Rennebohm authorized her use of company funds on jewelry and other personal items as a reward for her excellent work, as gifts for other people, and because he wanted his employees to present a nice image. She testified that Rennebohm authorized the nonbusiness use of the money for Dean because Dean was a uniquely talented manager.

¶ 16 Mullen specifically testified regarding Payment Insured Plan Inc. (PIPI) income. PIPI plans are warranty plans that Frontier Ford offered to its customers. National Warranty Corporation (NWC) insured the plans. Frontier Ford, along with Rennebohm's other car dealerships, sold the PIPI plans and, based upon the sale of the plans, received refunds from NWC. Mullen testified that Rennebohm directed her to credit these refunds to his personal account rather than to Frontier Ford. According to Mullen, this scheme allowed Rennebohm to hide assets from his business partner and from employees and to avoid taxes on the money. The defense chose not to cross-examine Rennebohm or Rekdal regarding PIPI income and instead relied solely on Mullen's testimony.

[171 Wash.2d 891] ¶ 17 Though Dean did not testify, his attorney argued that the government failed to prove that he knew of Mullen's acts or to prove that he benefited from her acts.

¶ 18 On February 7, 2006, the jury convicted both petitioners of first degree theft and conspiracy to commit first degree theft. The jury convicted Mullen of the additional offense of...