For 20 years, the State of Arizona, its agencies and political subdivisions have held a secret weapon to thwart claims made against them for everything from breach of employment contracts to gross negligence in providing public services. The Arizona Notice of Claim Statute was enacted in 1994, and it has been a trap for the unwary ever since.
The Notice of Claim Statute lurks behind any claim made against the state, a state agency or a political subdivision of the state such as a city, a county, a board, a commission, or even the Salt River Project. It requires that anyone who wishes to make a claim against such a public entity must first provide the entity with notice of the claim within 180 days (about six months) after the claim has accrued. This is a much shorter time than allowed by statutes of limitations applied to claims against anyone else. If you are injured by a public entity’s negligence, for example, you do not have two years to sue. You have only 180 days to present your claim to the entity or risk losing it altogether.
The statute also requires that you serve your notice of claim upon a person who is authorized to accept service of process. This is not always an easy thing to determine. The notice is required to state: (a) sufficient facts that support the claim, and (b) a “specific amount for which the claim can be settled and the facts supporting that amount.” If this seems complicated and sounds like a lot of work, it is and does.
The statute provides that a notice of claim is deemed denied if not accepted within 60 days after it is submitted, and, regardless of whether it is accepted or denied, a plaintiff has no more than one (1) year after the claim has accrued to sue, a limitations period that in some cases may expire before or soon after a claim has been denied. This confusing matrix of deadlines has tripped up many a lawyer on his or her way to the courthouse.
The presumed purpose of these requirements is to give government entities time to evaluate and settle claims before they are dragged into court. Vasquez v. State, 220 Ariz. 304, 308, ¶9, 206 P.3d 753, 757 (App. 2008) (Notice of Claim Statute anticipates that government entities will investigate and assess claims and permits possible settlement). In real life, however, other than low-money claims for personal injury or property damage, few significant claims that are submitted for evaluation are either evaluated or settled, and the vast majority of them are simply ignored.
The practical purpose of the statute is to block claims that are made too late or for some reason fail to comply with the statute’s requirements. Many lawsuits filed against public entities have been tossed out of court for failing to comply, and the consequence of failing to comply is severe. You lose your claim and any right to recover from the public entity that caused or contributed to your injury or loss.
In one case, a plaintiff’s wrongful discharge claims were dismissed because her notice of claim “approximately” estimated and requested damages of “no less than” stated amounts. The Court held that her efforts to estimate her unliquidated damages did not comply with the Notice of Claim Statute’s clear directive that a notice of claim “shall also contain a specific amount for which the claim can be settled.” Deer Valley Unified School Dist. No. 97 v. Houser, 214 Ariz. 293, 296, ¶9, 152 P.3d 490, 493, 496 (2007).
In another case, a plaintiff lost its claim for misrepresentation because, although it had timely served its notice of multiple claims, it had failed to include that particular claim in its notice. Canyon del Rio Investors, L.L.C. v. City of Flagstaff, 227 Ariz. 336, 344, ¶33, 258 P.3d 154, 162 (App. 2011).
And in another case, a plaintiff lost her claims because, even though she had timely served her notice of claim, she had mistakenly served the wrong public entity, believing that her employer had been the county, rather than the state. Slaughter v. Maricopa County, 227 Ariz. 323, 325-26, ¶10, 258 P.3d 141, 143-44 (App. 2011).
In a more recent case, however, a plaintiff who had mistakenly failed to serve a timely notice of claim was spared the ax because of the municipal defendant’s own mistakes. In Ponce v. Parker Fire Dist., 683 Ariz.Adv.Rep. 30 (App., filed March 27, 2014), the Arizona Court of Appeals found that, although the plaintiff had narrowly missed the 180-day notice of claim deadline by 16 days, the Parker Fire Department had waived its right to take advantage of that when it participated in the case for more than a year, litigated issues that had nothing to with its notice of claim defense, and failed to “promptly [seek] judicial resolution of the notice of claim defense.” The Fire Department’s mistake trumped the plaintiff’s mistake, and the plaintiff retained his claims.
The Ponce case is not unique in principle. A public entity has been found to have waived its rights under the Notice of Claim Statute before, although in far more egregious circumstances. See City of Phoenix v. Fields, 219 Ariz. 568, 575, ¶33, 201 P.3d 529, 536 (2009) (notice of claim defense waived when not raised until after four years of litigation and defendant’s substantial participation in the lawsuit). Nevertheless, it is worthy of note that Ponce had his case dismissed and had to appeal that dismissal in order to win on appeal, a long and expensive road to vindication. The case may not even be significant or all that useful. It is unlikely that the next public entity sued will make the same mistake. The case is important, however, if only because of the court’s willingness to erode our state government’s ability to sidestep the merits of a claim and defend itself based on procedural mistakes made by the plaintiff’s lawyer. That sword cuts both ways.
The practical solution for plaintiffs is to not make mistakes in the first place. Anyone with a possible claim against the state, any county, any city, or any government agency or board must be acutely aware of the Notice of Claim Statute and its procedural requirements.
Make sure that you hire an experienced and knowledgeable attorney who is seasoned in doing battle with public entities subject to the Notice of Claim Statute.