In a significant victory for public employers in Arizona, the Arizona Supreme Court has held that the state’s notice of claim statute requires a claimant to provide a “particular and certain amount of money” required to settle a claim and that communications containing qualifying language do not meet this requirement. See Deer Valley Unified School District No. 97 v. McDonald.
In a significant victory for public employers in Arizona, the Arizona Supreme Court has held that the state’s notice of claim statute requires a claimant to provide a “particular and certain amount of money” required to settle a claim and that communications containing qualifying language do not meet this requirement. See Deer Valley Unified School District No. 97 v. McDonald. Justin Pierce, an attorney in our Phoenix office, represented the successful school district before he joined Ford & Harrison. According to Mr. Pierce, whose practice is devoted exclusively to representing employers in labor and employment disputes, this decision is good news for public employers: “The Supreme Court’s decision rejected earlier court of appeals opinions that allowed plaintiffs to get away with vague, and sometimes preliminary settlement numbers in their notices of claim that did very little to put public entities on notice as to what it would cost to settle the claim. The law is now clear – the notice must contain an actual dollar amount that the claimant will take in settlement.”
Like many states, Arizona law requires claimants to file a notice of claim against a public entity before filing a lawsuit for damages against the entity. Specifically, Arizona’s notice of claim statute requires, in part, that a notice of claim include “a specific amount for which the claim can be settled and the facts supporting that amount.” Ariz. Rev. Stat. § 12-821.01.A.
In this case, the claimant claimed the school district wrongfully terminated her and sent a “claim letter” alleging she lost her previous salary and a $6,000 raise she “anticipated” for that year as well as “similar appropriate pay increases thereafter.” She also claimed economic damages “in an amount anticipated to be approximately $35,000 per year or more” for the next 18 years. She identified compensatory damages as “an amount no less than $300,000” and general damages of “no less than $200,000.”
The Court held that the claim letter did not meet the statute’s requirements because it did not include a specific amount for which the claim could be settled. According to the Court, “the repeated use of qualifying language” made it impossible to determine the precise amount for which the District could have settled the claim. For example, the court noted that it was not clear whether the claimant would have settled her economic damages claim for $630,000, the total obtained by multiplying $35,000 by 18 years, or whether she would have demanded the “more” referenced in her letter. Similarly, the Court held that the use of the language “no less than” in reference to her emotional distress and punitive damages claims made it impossible to determine whether she would have settled these claims for $500,000 or whether the District “would need to pay more to avoid litigation.”
Additionally, the Court refused to adopt a “reasonableness” standard that could validate a claim letter even if it does not state a specific amount, as long as the letter satisfies the underlying purposes of the statute. The Court held that such a standard would be contrary to the language of the statute and the intent of the legislature. The Court found “nothing to suggest that the Legislature intended anything other than to clearly define the information needed in future claims.”
Because the Court found that the letter sent by the claimant in this case did not meet the statute’s requirements, and the claimant did not file a valid notice of claim within the time limit for doing so, the Court held that her claim was barred and dismissed the case.
Finally, the Court did not address whether the claim letter met the statutory requirement that it provide facts supporting the claim for damages, since the case was resolved by addressing the specific amount requirement. The Court noted, however, that the letter did not provide any facts supporting the claimed amounts for emotional distress damages and damages to the claimant’s reputation. According to Mr. Pierce, “it’s probably only a matter of time before the Court is called upon to address what it means to include ‘facts to support’ the proposed settlement amount. Based on the Court’s opinion, though, when the day comes I think the Court will apply the language of the statute strictly and require that a notice include information such as the amount of medical bills, and even facts such as a claimant’s inability to sleep, work, or take care of him or herself, so that claimants or their attorneys don’t just pull a ‘specific amount’ out of thin air and expect the public entity just to take the claimant’s word for it that he or she has suffered such damages.”
If you have any questions regarding the decision in this case or other labor or employment related issues, please contact the Ford & Harrison attorney with whom you usually work or Justin Pierce, jpierce@fordharrison.com, 602-627-3505.