Court Opinion

ID: 9384626
Source: CourtListenerOpinion
Date Created: 2023-04-04 16:02:45.526707+00
Date Added: 2024-06-11T17:17:55.239309
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE

                        STATE OF ARIZONA, Appellee,

                                         v.

                  DAVID LAWRENCE SCHUCK, Appellant.

                              No. 1 CA-CR 22-0342
                                FILED 4-4-2023

            Appeal from the Superior Court in Yavapai County
                         No. P1300CR202000407
                The Honorable Krista M. Carman, Judge

                                   AFFIRMED

                                    COUNSEL

Arizona Attorney General’s Office, Phoenix
By Ashley Torkelson Levine
Counsel for Appellee

Bain & Lauritano, P.L.C., Glendale
By Amy E. Bain
Counsel for Appellant
                            STATE v. SCHUCK
                            Decision of the Court

                       MEMORANDUM DECISION

Judge Anni Hill Foster delivered the decision of the Court, in which
Presiding Judge Samuel A. Thumma and Judge Randall M. Howe joined.

F O S T E R, Judge:

¶1            Defendant David Lawrence Schuck appeals his convictions
for fraudulent schemes and artifices and theft. Schuck argues that the
federal government has exclusive jurisdiction over the regulation of social
security benefits, meaning Arizona’s superior court lacked jurisdiction in
this criminal case. For the following reasons, his convictions and resulting
probation grants are affirmed.

           FACTUAL1 AND PROCEDURAL BACKGROUND

¶2           Schuck and Cynthia have a daughter together, “Abby.”2
Schuck and Cynthia lived separately in Yavapai County and shared
parenting time, with Schuck being Abby’s primary caretaker.

¶3            Schuck received Social Security Disability benefits due to an
injury he sustained. Because Abby was his minor child, she was also
entitled to derivative Social Security benefits payable to Schuck as her
representative payee. See LaMothe v. LeBlanc, 70 A.3d 977, 979, ¶ 4 (2013)
(describing a minor child’s Social Security benefits as “derivative benefits
on account of father’s disability”); 42 U.S.C. § 405(j)(1)(A) (a “representative
payee” may receive a person’s disability benefits to be used for the person’s
“use and benefit”). In 2012 or 2013, Abby went to live with Cynthia and
“fully stopped seeing [Schuck].” Although Abby no longer lived with
Schuck, who moved to Phoenix, he continued to receive Abby’s derivative
benefits.

¶4           In June 2017, Schuck received notice from the Social Security
Administration (“SSA”) that, because Abby recently turned eighteen, she

1     The evidence and all reasonable inferences drawn therefrom are
viewed in the light most favorable to sustaining the verdicts. See State v.
Guerra, 161 Ariz. 289, 293 (1989).
2     We use a pseudonym to protect the victim’s identity.

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                           STATE v. SCHUCK
                           Decision of the Court

was no longer eligible for derivative benefits unless she was a full-time
student. Schuck contacted Abby’s school and, based on paperwork he
completed without Abby’s knowledge, the school sent Schuck a document
certifying Abby was enrolled full-time for her senior year. Schuck
forwarded the document to the SSA.

¶5           Because Abby was no longer a minor, the SSA removed
Schuck as her representative payee. But based on Abby’s full-time
enrollment in school, the SSA continued her derivative benefit checks,
sending the checks to her at Schuck’s address or directly depositing them
in his bank account. The checks, however, were payable directly—and
only—to Abby. Without informing Abby or Cynthia of the checks, Schuck
endorsed them because “he felt he was entitled to these benefits.” Schuck
used the proceeds to pay the mortgage on his Phoenix residence, a place
that Abby never lived or visited.

¶6             After Abby graduated from high school, she discovered that
Schuck had been improperly receiving and cashing her benefit checks.
Abby contacted police, who conducted a joint investigation with the SSA’s
Office of the Inspector General. Based on that investigation, which revealed
that Schuck had received about $5,500 that belonged to Abby, the State
charged Schuck with one count each of fraudulent schemes and artifices, a
class two felony, and theft, a class three felony.

¶7           Before trial, Schuck moved to dismiss on jurisdictional
grounds, arguing the federal government has exclusive jurisdiction “when
dealing with SSA fraud.” The superior court denied the motion. Schuck
sought special action relief in this court, which declined jurisdiction; the
supreme court denied further review.

¶8           Trial proceeded, and the jury found Schuck guilty on both
counts. The trial court imposed four years’ supervised probation. Schuck
timely appealed. This Court has jurisdiction under article 6, § 9 of the
Arizona Constitution and A.R.S. §§ 12–120.21(A)(1), 13–4031, and –4033(A).

                              DISCUSSION

¶9             As the sole issue on appeal, Schuck challenges the denial of
his motion to dismiss. He argues, “Because of . . . preemption, state courts
lack jurisdiction to review the mismanagement of derivative Social Security
benefits.” In support, Schuck exclusively relies on Peace v. Peace, 234 Ariz.
546 (App. 2014). We review preemption claims de novo. City of Scottsdale v.
State, 237 Ariz. 467, 469, ¶ 9 (App. 2015).

                                     3
                           STATE v. SCHUCK
                           Decision of the Court

¶10            Article VI, § 2 of the U.S. Constitution, known as the
Supremacy Clause, establishes that the U.S. Constitution is the supreme law
of the land; however, the Tenth Amendment to the U.S. Constitution
provides that all “powers not delegated to the United States by the
Constitution” are reserved to the states. Accordingly, the states have “vast
residual powers. Those powers, unless constrained or displaced by the
existence of federal authority or by proper federal enactments, are often
exercised in concurrence with those of the National Government.” United
States v. Locke, 529 U.S. 89, 109 (2000). The states have the principal
responsibility for defining and prosecuting crimes. Abbate v. United States,
359 U.S. 187, 195 (1959) (citations omitted). However, a state cannot exercise
jurisdiction where Congress has “occup[ied] the field.” See, e.g., Hines v.
Davidowitz, 312 U.S. 52, 67 (1941). Thus, unless preempted by the
Supremacy Clause, states have the power to prosecute crimes based on acts
which might also violate federal law. Abbate, 359 U.S. at 195.

¶11            To support his preemption argument, Schuck cites Peace v.
Peace, in which this court addressed “whether federal law preempts a state
court from reviewing a representative payee’s use of Social Security funds.”
234 Ariz. at 548, ¶ 7. After noting that Congress and the SSA “enacted
extensive oversight mechanisms” regulating a representative’s use of
derivative benefits, Peace concluded that, “[b]ecause federal law occupies
the [regulatory] field, a family court is preempted from reviewing the
actions of a representative payee.” Id. at ¶¶ 8–9.

¶12            Schuck’s case, though, is different. This is not a case of a
family court being asked to provide oversight of the specific manner in
which derivative benefits are used. Instead, it involves Schuck receiving,
withholding, and using for his own benefit in violation of Arizona criminal
law his daughter’s derivative payments after she turned eighteen. Because
she was no longer a minor, Schuck had no authority to serve as her
representative payee and had no entitlement to those payments. Unlike in
Peace, where we recognized clear congressional intent to preempt state
regulatory authority over representative payees who are subject to detailed
federal regulations, Schuck’s criminal conduct in this case was subject to
the State’s “historic police power” to prosecute theft and fraud. Schuck has
not discharged his burden of demonstrating otherwise. See United States v.
Skinna, 931 F.2d 530, 533 (9th Cir. 1990) (stating that the party asserting a
preemption defense has the burden of proof).

¶13          Peace is therefore inapposite. Schuck fails to establish that the
superior court lacked jurisdiction. Accordingly, the superior court did not
err in denying Schuck’s motion to dismiss.

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                       STATE v. SCHUCK
                       Decision of the Court

                          CONCLUSION

¶14         Schuck’s convictions and resulting probation grants are
affirmed.

                      AMY M. WOOD • Clerk of the Court
                      FILED: AA

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