State Of Washington v. Diana Joline Merritt
402 P.3d 862
Wash. Ct. App.2017Background
- Merritt, a mortgage broker (Merit Home Finance), was charged by amended information with 11 counts of mortgage fraud involving loans from June 12, 2008 to June 10, 2009; bench trial resulted in convictions on 10 counts and a 90-day jail sentence.
- Co-defendant Douglas White prepared appraisal reports but used appraiser Tom Reed’s electronic signature and license number; Reed did not perform those appraisals.
- Investigators linked Merritt to the scheme via bank records (showing transfers between White and Merritt), loan files, e-mails requesting appraisals, and files found during a 2014 search of Merritt/White’s home and computers.
- Merritt admitted she ordered and submitted appraisal reports bearing Reed’s name/signature even though White did the work and she knew the appraisals would be relied on by lenders; she received origination fees on the loans.
- The State filed the amended information February 20, 2015; the charged acts occurred more than five years earlier, but the State relied on the three-year discovery toll in RCW 19.144.090(2).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the statute of limitations is an element that must be alleged in the information | State: statute of limitations is not an element of the crime and need not be pleaded | Merritt: the information was defective for failing to allege the offense occurred within the limitations period | Court: statute of limitations is not an essential element; omission is not fatal |
| Whether the convictions were time-barred | State: filed within 3 years of actual discovery (late 2013/2014), so timely under the discovery toll | Merritt: State ‘‘discovered’’ fraud in 2010 when Reed first complained, so 2015 filing was beyond three-year discovery toll | Court: actual discovery of Merritt’s involvement occurred in 2013/2014; the three-year discovery period governs, so prosecutions timely |
| Sufficiency of the evidence to prove mortgage fraud elements | State: documentary and testimonial evidence (appraisals, e-mails, bank transfers, investigator testimony, industry practice) prove scheme, misrepresentations, reliance, and receipt of proceeds | Merritt: contested specific findings, argued inconsistencies and lack of direct proof some borrowers knew Reed wasn’t appraiser | Court: substantial evidence supports findings and legal elements; convictions affirmed |
| Additional grounds (judge/prosecutor/defense relationships) | — | Merritt: alleged improper relationships among judge, prosecutor, defense counsel warranted relief | Court: record contains no evidence of improper relationships; allegations conclusory and meritless |
Key Cases Cited
- State v. Leach, 113 Wn.2d 679 (discussion of elements required in charging document)
- State v. Kjorsvik, 117 Wn.2d 93 (charging document must adequately inform defendant of offense)
- State v. Naillieux, 158 Wn. App. 630 (information that omits elements may be defective)
- Toussie v. United States, 397 U.S. 112 (statute of limitations rules regarding completion and discovery)
- State v. Salinas, 119 Wn.2d 192 (standard for sufficiency of the evidence)
- State v. Homan, 181 Wn.2d 102 (bench-trial review and substantial-evidence standard)
- State v. Thomas, 150 Wn.2d 821 (deference to trier of fact on credibility)