In a new case, the Arizona Supreme Court clarified the notice of claim statute. The case reviewed whether a plaintiff can place a deadline for settlement prior to the sixty-day period provided in the Arizona notice of claim statute, A.R.S. § 12-821.01.[i]
On October 10, 2018, I.M., a twelve-year-old child, was walking home from school near 77th Avenue and Peoria Avenue. I.M. was struck and killed by a vehicle. I.M.’s mother, plaintiff, timely served the City of Peoria’s (“City”) Clerk’s Office with a notice of claim pursuant to A.R.S.§ 12-821.01(A). Plaintiff’s notice of claim complied with Arizona’s notice of claim statute, but the notice included a deadline for settlement, leaving the settlement demand open for only thirty (30) days from the date of the notice. The city did not respond.
Plaintiff filed a wrongful death lawsuit against the city, and others, more than six months after serving the notice of claim. The city moved to dismiss the lawsuit under Arizona Rules of Civil Procedure 12(b)(6). The trial court relied upon Drew v. Prescott Unified School District[ii] to conclude the matter was barred by A.R.S. § 12-821.01 for not keeping the settlement offer for at least sixty days. Since the statutory time period of 180 days to file a valid notice of claim had passed, the trial court granted summary judgment in favor of the city, dismissing the matter with prejudice.
The court of appeals affirmed the trial court, reasoning plaintiff failed to comply with the notice of claim statute by providing a settlement deadline less than the statutory sixty days. The court of appeals also reasoned plaintiff’s notice of claim could be considered a settlement offer under contract theory, but it could not also serve as a notice of claim under the statute; therefore, the claim was barred.
The Arizona Supreme Court analyzed 1) the requirements for a valid notice of claim under A.R.S. § 12-821.01(A), 2) the purpose and application of A.R.S. § 12-821.01(E), and 3) the effect of an offer that terminates prior to the sixty-day statutory deadline.
As the Arizona Supreme Court provides, A.R.S. § 12-821.01 is very clear: if a notice of claim fails to comply with any requirement set forth in A.R.S. § 12-821.01(A), the claimant’s claim is statutorily “barred and no action may be maintained thereon.”[iii] None of the statutory prerequisites for a notice of claim mandate the claimant maintain the settlement offer open for any set length of time. The only time requirement in the notice of claim statute is to file a notice of claim within 180 days after the cause of action accrues.[iv]
Secondly, the court reasoned A.R.S. § 12-821.01(E) only creates a deadline for the public entity—not the claimant. Once a claimant timely files and serves a notice of claim in compliance with the Arizona notice of claim statute, a valid claim exists, and the public entity has sixty days to accept the demanded amount. If the public entity does not respond within sixty days, then the claim is “deemed denied” pursuant to A.R.S. § 12-821.01(A). The court found nothing in the notice of claim statute that requires the claimant keep a settlement offer open for sixty days, and A.R.S. § 12-821.01(E) does not address the validity of a notice of claim—unlike A.R.S. § 12-821.01(A).
Lastly, the Arizona Supreme Court rejected the Court of Appeals’ finding the notice of claim in this instance was transformed into a settlement offer under contract law upon including the time limitation of thirty days to accept the settlement offer. As the court points out, statute governs the notice of claim—not contract law. Since plaintiff had no statutory authority to impose a shorter time for the city to respond to the notice of claim, the thirty-day deadline had no effect. Since there was no effect, it did not invalidate the otherwise compliant notice of claim.
A.R.S. § 12-821.01 authorizes claims against a public entity and defines requirements that must be met to successfully bring such a claim. The notice of claim statute clearly provides a claim is invalid if it fails to comply with any requirement in A.R.S. § 12-821.01(A). If a claimant fails to comply with every requirement, the claim is invalid, and the claimant is barred from bringing the claim.
A notice of claim in compliance with A.R.S. § 12-821.01(A) is not invalid because it set a deadline for settlement prior to the sixty-day period to respond in A.R.S. § 12-821.01(E); rather, the shortened deadline is a nullity and has no effect. In reaching its holding, the Arizona Supreme Court overruled Drew.
Claimants might include deadlines to respond in their notice of claim; however, any deadline other than the statutorily mandated sixty days, has no effect. Therefore, it is important to review the notice of claim for compliance with the Arizona notice of claim statute and be aware that any deadline to respond other than the 60-day window to accept has no effect. If a conforming notice of claim goes unaccepted for more than 60 days, it will be deemed denied.
[i] James v. City of Peoria, CV-21-0125-PR, 2022 WL 2794359 (Ariz. July 18, 2022)
[ii] Drew v. Prescott Unified School District, 233 Ariz. 522 (App. 2013).
[iii] A.R.S. § 12-821.01.
[iv] A.R.S. § 12-821.01(A)