Court Opinion

ID: 6500756
Source: CourtListenerOpinion
Date Created: 2022-07-18 17:02:53.908379+00
Date Added: 2024-06-11T09:18:56.605160
License: Public Domain

IN THE

    SUPREME COURT OF THE STATE OF ARIZONA
                          KIZZEN JAMES, ET AL.,
                           Plaintiffs/Appellants,

                                    v.

                          CITY OF PEORIA, ET AL.,
                           Defendants/Appellees,

                           No. CV-21-0125-PR
                           Filed July 18, 2022

          Appeal from the Superior Court in Maricopa County
            The Honorable Theodore Campagnolo, Judge
                         No. CV2019-054635
                            REVERSED

      Memorandum Decision of the Court of Appeals, Division One
                      No. 1 CA-CV 20-0415
                       Filed April 13, 2021
                           VACATED

COUNSEL:

David L. Abney (argued), Ahwatukee Legal Office, P.C., Phoenix; and
Abdoukadir ‘Abdul’ Jaiteh, Elizabeth M. Gonzalez, AJ Law, PLC, Phoenix,
Attorneys for Kizzen James and Dennis McGinnis

Vanessa P. Hickman, Peoria City Attorney, Amanda C. Sheridan, Senior
Assistant City Attorney (argued), Saman J. Golestan, City of Peoria, Office
of the City Attorney, Peoria, Attorneys for City of Peoria

Nancy L. Davidson, General Counsel, League of Arizona Cities and Towns,
Phoenix, Attorney for Amicus Curiae League of Arizona Cities and Towns
                 JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                          Opinion of the Court

JUSTICE KING authored the opinion of the Court, in which CHIEF
JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER, and JUSTICES
BOLICK, LOPEZ, BEENE, and MONTGOMERY joined.

JUSTICE KING, opinion of the Court:

¶1              Arizona’s notice of claim statute clearly and unequivocally
provides that a notice of claim is invalid if it fails to comply with any
requirement in A.R.S. § 12-821.01(A), in which case the claim is “barred and
no action may be maintained thereon.” But § 12-821.01(A) does not
require that a claimant keep a settlement offer open for any specific length
of time. Section 12-821.01(E) provides that a notice of claim “is deemed
denied sixty days after the filing of the claim,” unless the public entity
denies it earlier.

¶2             This case asks us to determine whether a notice of claim is
invalid, under § 12-821.01, if it provides that the claimant’s settlement offer
will terminate less than sixty days after the notice is served. We conclude
that a notice of claim otherwise in compliance with § 12-821.01(A) is not
invalid because it purports to set a deadline for settlement prior to the sixty-
day period in § 12-821.01(E). Therefore, Kizzen James’ statement in her
notice of claim to the City of Peoria (the “City”) that her settlement offer
was “valid for thirty (30) days” did not invalidate her notice of claim.
                            I.      BACKGROUND

¶3            On October 10, 2018, a vehicle struck and killed twelve-year-
old I.M. near 77th Avenue and Peoria Avenue as he walked home from
school.

¶4             On March 26, 2019, James, I.M.’s mother, timely delivered a
notice of claim to the City Clerk’s Office via a licensed process server. See
§ 12-821.01(A). Her notice of claim included a “City of Peoria, Arizona
Notice of Claim” form, wherein James (1) disclosed information about
herself and her claim, (2) referred to the “attached Notice of Claim Letter
and exhibits,” and (3) stated the “[s]pecific amount for which [her] claim
can be settled [was] $10,071,016.72.”

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                 JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                          Opinion of the Court

¶5              James’ notice of claim also included a ten-page letter from
her legal counsel with the heading “Notice of Claim (Pursuant to A.R.S.
§ 12-821.01).” This letter (1) set forth the basis upon which she claimed the
City was liable for I.M.’s death, (2) discussed the nature of her claim, and
(3) proposed a settlement offer to the City of $10,071,016.72. The letter
then stated, “[t]his compromise to settle is valid for thirty (30) days from
the date of this letter.” The City never responded to James’ notice of claim.

¶6              On October 10, 2019, more than six months after serving the
notice of claim, James filed a wrongful death lawsuit against the City and
others. The City moved to dismiss the complaint pursuant to Arizona
Rule of Civil Procedure 12(b)(6). In its ruling, the trial court explained that
a notice of claim “is not deemed denied until sixty days after filing unless
the public entity denies” it earlier, pursuant to § 12-821.01. Relying on
Drew v. Prescott Unified School District, 233 Ariz. 522, 526 ¶ 14 (App. 2013),
the trial court concluded James’ claim was barred by § 12-821.01 for not
keeping the settlement offer open for at least sixty days. See § 12-821.01(E).
Treating the motion to dismiss as a motion for summary judgment, the trial
court granted summary judgment in favor of the City and dismissed James’
complaint with prejudice because the statutory 180-day time period to file
a valid notice of claim had passed.

¶7              The court of appeals affirmed. See James v. City of Peoria, No.
1 CA-CV 20-0415, 2021 WL 1400064, at *1 ¶ 1 (Ariz. App. Apr. 13, 2021)
(mem. decision). The court reasoned that James “failed to comply with the
language and purpose of the notice of claim statute” by providing a thirty-
day settlement offer window. Id. at *4 ¶ 20 (quoting Drew, 233 Ariz. at 526
¶ 14). Further, “although James was at liberty to issue a general settlement
offer that included a shorter window for acceptance,” doing so meant that
this “contract offer” was “ineligible to concurrently serve as her notice of
claim under the statute.” Id. at *3–4 ¶¶ 18–20.

¶8              We granted review to determine whether a notice of claim is
invalid, under § 12-821.01, if it provides that a settlement offer will
terminate in less than sixty days after the notice is served, which is a
recurring issue of statewide importance. We have jurisdiction pursuant to
article 6, section 5(3) of the Arizona Constitution.

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                  JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                           Opinion of the Court

                               II.     DISCUSSION

¶9              “We review questions of statutory construction and grants of
summary judgment de novo. Our task in statutory construction is to
effectuate the text if it is clear and unambiguous.” BSI Holdings, LLC v.
Ariz. Dep’t of Transp., 244 Ariz. 17, 19 ¶ 9 (2018) (internal citation omitted).
“If the statute is subject to only one reasonable interpretation, we apply it
without further analysis.” Stambaugh v. Killian, 242 Ariz. 508, 509 ¶ 7
(2017) (quoting Wade v. Ariz. State Ret. Sys., 241 Ariz. 559, 561 ¶ 10 (2017)).

   A. Requirements for a Valid Notice of Claim Under § 12-821.01(A)

¶10            Section 12-821.01(A) sets forth the statutory prerequisites for
a valid notice of claim:
       Persons who have claims against a public entity . . . shall file
       claims with the person or persons authorized to accept service
       for the public entity . . . as set forth in the Arizona rules of civil
       procedure within one hundred eighty days after the cause of
       action accrues. The claim shall contain facts sufficient to
       permit the public entity . . . to understand the basis on which
       liability is claimed. The claim shall also contain a specific
       amount for which the claim can be settled and the facts
       supporting that amount. Any claim that is not filed within
       one hundred eighty days after the cause of action accrues is
       barred and no action may be maintained thereon.

§ 12-821.01(A). If a notice of claim fails to comply with any requirement
in § 12-821.01(A), the claimant’s claims are statutorily “barred and no action
may be maintained thereon.” Id.

¶11            Here, the City does not dispute that James timely filed and
served a notice of claim. In addition, the City does not dispute that James’
notice of claim complied with the specific requirements in § 12-821.01(A).
The City’s sole argument is that James’ notice of claim is invalid because
the attached letter stated “[t]his compromise to settle is valid for thirty (30)
days from the date of this letter,” and did not allow the City sixty days to
consider and respond to the offer as required by § 12-821.01(E).

¶12           As a starting point, none of the statutory prerequisites for a
valid notice of claim in § 12-821.01(A) include a requirement to keep a
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                  JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                           Opinion of the Court

settlement offer open for any particular length of time. In fact, the only
time period in § 12-821.01(A) is the requirement that a claimant file a notice
of claim “within one hundred eighty days after the cause of action accrues.”
Section 12-821.01(A) sets forth no other temporal requirement for a valid
notice of claim. Thus, the City’s argument rests on whether § 12-821.01(E)
imposes an additional requirement to constitute a valid notice of claim.

             B.   The Meaning and Application of § 12-821.01(E)

¶13               The City concedes that the notice of claim statute does not
directly state that a settlement offer must be held open for sixty days. In
arguing, however, that James’ thirty-day settlement offer invalidated her
notice of claim, the City points to § 12-821.01(E): “A claim against a public
entity . . . filed pursuant to this section is deemed denied sixty days after
the filing of the claim unless the claimant is advised of the denial in writing
before the expiration of sixty days.” The City contends this language, in
conjunction with the requirement in § 12-821.01(A) that a notice of claim
“contain a specific amount for which the claim can be settled,” invalidated
James’ notice of claim because the offer was valid for only thirty days. We
must therefore determine the meaning of § 12-821.01(E).

¶14             The clear and unequivocal language of § 12-821.01(E) creates
a deadline for the public entity. Once a claimant timely files and serves a
notice of claim that meets the requirements in § 12-821.01(A), a valid claim
exists. Section 12-821.01(E) then shifts the obligation from the claimant to
the public entity to respond to the notice of claim. The plain meaning and
significance of § 12-821.01(E) is that the public entity has sixty days in which
to consider the basis for the claim and the amount for which it can be settled,
and the public entity may accept within sixty days if it wishes to resolve the
claim for that amount. See § 12-821.01(A), (E). If the public entity does
not respond within sixty days, the claim will be “deemed denied.” 1
§ 12-821.01(A).

1   While the public entity statutorily has up to sixty days to consider
whether to resolve the claim, it expressly has the ability to shorten that
window of time if it advises the claimant “of the denial in writing before
the expiration of sixty days.” § 12-821.01(E).

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                   JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                            Opinion of the Court

¶15             This Court confirmed this plain meaning of the sixty-day
period in Falcon ex rel. Sandoval v. Maricopa County, 213 Ariz. 525 (2006).
There, the plaintiffs served their notice of claim on just one member of the
Maricopa County Board of Supervisors. Id. at 526 ¶ 4. In concluding that
service on one member was insufficient to satisfy the service requirement
in § 12-821.01(A), this Court explained, “[m]any of the part-time members
of political subdivisions . . . may not . . . realize that such a claim must be acted
upon within sixty days,” citing § 12-821.01(E). Id. at 529 ¶ 26 (emphasis
added).

¶16             Significantly, there is nothing in § 12-821.01(A) or (E) that
burdens the claimant with a requirement to keep a settlement offer open for
sixty days. In fact, § 12-821.01(E) does not set forth any requirements on
the part of a claimant.

¶17            Further, we note that the plain language of § 12-821.01(E)
does not address what constitutes a valid notice of claim or what would
“bar” a claim, as § 12-821.01(A) clearly does. Section 12-821.01(E) simply
provides that if a public entity does not respond to a notice of claim within
sixty days, the claim is automatically “deemed denied.”

¶18            Accordingly, we conclude subsections (A) and (E) work
together in the following manner: § 12-821.01(A) delineates the
requirements a claimant must follow to timely file and serve a valid notice
of claim. Once the claimant satisfies those requirements, the public entity
has sixty days to consider and respond to the notice of claim pursuant to
§ 12-821.01(E). If the public entity does not respond within sixty days, the
claim is “deemed denied.” § 12-821.01(E).

    C. The Effect of an Offer that Terminates in Less than Sixty Days

¶19              The court of appeals analyzed the issue here as one of
contract. The court described James’ letter as “a contract offer” for which
the City “could have accepted the[] terms within that thirty-day window,”
James, 2021 WL 1400064, at *3 ¶ 18, but the consequence was that “this same
offer [was] ineligible to concurrently serve as her notice of claim under the
statute,” id. at *4 ¶ 20. But the issue presented here is expressly governed
by § 12-821.01. Indeed, the City even conceded at oral argument that this
is a matter of statutory interpretation, not contract law. Because the

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                  JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                           Opinion of the Court

statute governs this claims process, we evaluate the issue presented here as
one of statutory interpretation.

¶20               Any attempt by a claimant to shorten the public entity’s
statutory sixty-day response period is a legal nullity. See Nullity, Black’s
Law Dictionary (11th ed. 2019) (“Something that is legally void.”); see also
Void, Black’s Law Dictionary (11th ed. 2019) (“To render of no validity or
effect.”); Jackson v. Sears, Roebuck & Co., 83 Ariz. 20, 23 (1957) (holding that
by “statute, execution may not issue prior to . . . entry” of the judgment, and
“[s]ince the execution was issued five days prior to the entry of judgment,
it was issued without authority of law and was a legal nullity”); Pima
County v. Sch. Dist. No. One of Pima Cnty., 78 Ariz. 250, 253 (1954) (holding
“the County was without authority to enter into the cooperative contract
with” the school district and thus the “contract is null and void”); McCarthy
v. State ex rel. Harless, 55 Ariz. 328, 337 (1940) (explaining that because “[t]he
board of supervisors . . . was the only body authorized by law to accept
[appellant’s] resignation,” his “resignation submitted to the county welfare
board and its purported acceptance thereof was a nullity”). Because James
did not have the statutory or other legal authority to impose a shorter time
for the City to respond, her attempt in the notice of claim to shorten the
sixty-day deadline to thirty days had no effect. Accordingly, James’ thirty-
day deadline did not invalidate her otherwise valid notice of claim.

¶21            The City argues that our interpretation of § 12-821.01 must
“be consistent with both the general intent of the claims statutes and the
intent of the specific statute involved.” Because § 12-821.01 is clear, there
is no need to consider secondary interpretation principles, such as the
purpose of the statute. See State v. Burbey, 243 Ariz. 145, 147 ¶ 7 (2017).
But even if the language was unclear, our interpretation of § 12-821.01 is
consistent with legislative intent. In 1984, the legislature specified the
purpose of statutes governing claims against public entities when it
adopted those statutes:

       [I]t is hereby declared to be the public policy of this state that
       public entities are liable for acts and omissions of employees
       in accordance with the statutes and common law of this state.
       All of the provisions of this act should be construed with a
       view to carry out the above legislative purpose.

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                 JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                          Opinion of the Court

Backus v. State, 220 Ariz. 101, 104 ¶ 9 (2009) (quoting 1984 Ariz. Sess. Laws
ch. 285, § 1 (2nd Reg. Sess.) (codified as amended and renumbered at A.R.S.
§§ 12-820 to -823)). The statutes governing claims against public entities
“advance the overarching policy of holding a public entity responsible for
its conduct.” Id. This Court has noted that the specific statutory
requirements in § 12-821.01 serve to “allow the public entity to investigate
and assess liability, . . . permit the possibility of settlement prior to
litigation, and . . . assist the public entity in financial planning and
budgeting.” Deer Valley Unified Sch. Dist. No. 97 v. Houser, 214 Ariz.
293, 295 ¶ 6 (2007) (alteration in original) (quoting Sandoval, 213 Ariz. at 527
¶ 9). Our decision here is consistent with this legislative intent. We will
not construe the notice of claim statute, under which the claimant satisfies
the relevant requirements but adds a condition of no legal consequence, in
a way that defeats the clear text of the statute.

¶22             In Drew, the court of appeals reached a different conclusion,
holding the claimant failed to comply with § 12-821.01 because the
claimant’s settlement offer was open for only fifteen days. 233 Ariz. at 523
¶ 1. The court explained that § 12-821.01(E) “plainly states” the public
entity may shorten the sixty-day statutory period “but does not contain any
language suggesting that a claimant can unilaterally shorten the statutory
period.” Id. at 525 ¶ 12. The court therefore held that the notice of claim
with a fifteen-day response window did not comply with the statute and
thus plaintiffs’ claims were barred. Id. at 523 ¶¶ 1, 16. Because we reject
this interpretation of § 12-821.01, we overrule Drew.

¶23              In the course of litigating this case, the City expressed
concern about being able to rely on the specific settlement amount in the
notice of claim and having the ability to accept that amount at any point
within the sixty-day period. The City also raised a concern about potential
satellite litigation to enforce a settlement agreement if the City were, for
example, to accept a settlement offer on day thirty-one, but the notice of
claim indicated it was valid for only thirty days. The interpretation and
application of § 12-821.01(A) and (E) we have set forth here obviate these
concerns: by operation of law, a public entity has a statutory sixty-day
period to respond to and accept a settlement offer presented in a valid
notice of claim that was timely filed and served. We continue to recognize
that “[e]ncouraging additional litigation frustrates one of the goals of
§ 12-821.01, which is to encourage public entities and claimants to resolve
claims without resorting to litigation.” Backus, 220 Ariz. at 106 ¶ 21.
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                 JAMES, ET AL. V. CITY OF PEORIA, ET AL.
                          Opinion of the Court

¶24             Finally, James argues that Arizona law permits a claimant to
file a lawsuit against a public entity immediately after the claimant has filed
a notice of claim, even before the expiration of the sixty-day period in
§ 12-821.01(E). Because James filed her lawsuit against the City more than
six months after filing her notice of claim (well outside of the sixty-day
period), the issue of whether a claimant may file a lawsuit before the
expiration of the sixty-day period in § 12-821.01(E) is not before us. We
leave that issue for another day.
                             III.   CONCLUSION

¶25             For all these reasons, we conclude that James’ attempt to
shorten the City’s statutory sixty-day response deadline in her notice of
claim was a legal nullity that did not invalidate her notice of claim. We
reverse the trial court’s grant of summary judgment in favor of the City and
dismissal of James’ complaint with prejudice, and we remand for further
proceedings. We vacate the court of appeals’ memorandum decision.

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