City of Phoenix v. Fields
| Decision Date | 22 April 2008 |
| Docket Number | No. 1 CA-SA 07-0152.,1 CA-SA 07-0152. |
| Citation | 193 P.3d 782,219 Ariz. 88 |
| Parties | CITY OF PHOENIX, a municipal corporation; City of Phoenix Employees' Retirement System Board, Petitioners, v. The Honorable Kenneth L. FIELDS, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge, Mary Ann Perez, Lou Krafts, Sherry Gill, Nan Nelson, Dorothy Hansen, Eva Hernandez, Norma Veach, Lillie Dye, Nefretari Salahdeen, Teresa Anderson, Elaine Stockton, Geraldine Martinez, Maria Montoya, Pauline Hodges, Violet Todd, Martha Martinez, Real Parties in Interest. |
| Court | Arizona Court of Appeals |
J. Mark Ogden, R. Shawn Oller, J. Greg Coulter, Littler Mendelson, P.C. Phoenix, Attorneys for Petitioner, City of Phoenix.
Marc R. Lieberman, Paige A. Martin, Jennifer L. Kraham, Kutak Rock LLP, Attorneys for Petitioner, City of Phoenix Employees' Retirement System Board.
Jennings, Strouss & Salmon, P.L.C. by Philip A. Robbins, Peter W. Sorensen, Paul G. Johnson, Phoenix, Attorneys for Real Parties in Interest.
¶ 1 The City of Phoenix (the City) seeks special action review of the superior court's order denying its motion for summary judgment.1 The City requested judgment in its favor on damages, arguing that the notice of claim submitted by the class action plaintiffs, the real parties in interest, did not contain a specific amount for which the claim could be settled as mandated by Arizona Revised Statutes (A.R.S.) section 12-821.01(A) (2003). In denying the City's motion, the superior court determined that "strict adherence" to the statutory "specific amount" requirement is unnecessary, and indeed "impossible," for class action claims.
¶ 2 In the exercise of our discretion, we accept jurisdiction. The question presented raises a purely legal issue of first impression and is a matter of statewide importance. See Deer Valley Unified Sch. Dist. No. 97 v. Houser, 214 Ariz. 293, 295, ¶ 5, 152 P.3d 490, 492 (2007) (); see also Sonoran Desert Investigations, Inc. v. Miller, 213 Ariz. 274, 276, ¶¶ 2-3, 141 P.3d 754, 756 (App.2006). Moreover, the purpose of the notice of claim provision would be thwarted if our review of this matter were delayed pending an appeal. Cf. Canteen Corp. v. Superior Court, 158 Ariz. 461, 461, 763 P.2d 525, 525 (App.1988) (), overruled on other grounds by Ritchie v. Grand Canyon Scenic Rides, 165 Ariz. 460, 465, 799 P.2d 801, 806 (1990). We conclude that the notice of claim requirements set forth in A.R.S. § 12-821.01(A) apply to all claims against public entities, including class action claims.
¶ 3 On April 11, 2002, eight current or former employees of the City of Phoenix submitted a notice of claim to the City declaring their intention to file a lawsuit, as claimants and as representatives of a class, against the City for its alleged failure to permit claimants and similarly situated current and former Head Start employees to "participate in the benefits the City of Phoenix provides to its employees, including the retirement and pension plan, deferred compensation plan, annual leave, sick leave and healthcare benefits." The notice of claim demanded:
4. A sum of money representing the difference between what each Claimant and each class member was entitled to receive as benefits by comparison to those benefits each Claimant and each class member actually received, in an amount not less than 10 million dollars;
5. Funds which represent contributions which should have been made by the City of Phoenix to the City of Phoenix Retirement Plan in behalf of each Claimant and each member of the classes represented by the Claimants, in an amount which Claimants believe is greater than 50 million dollars and less than 100 million dollars.
6. An award of claimants' attorneys' fees and costs in an amount not less than $1,500,000.00.
(Emphasis added.) On May 16, 2002, plaintiffs filed an amended notice of claim with the City that added eight additional named representatives. However, their "demand for resolution" remained unchanged. When the City did not respond to the amended notice within sixty days, it was deemed denied. A.R.S. § 12-821.01(E).
¶ 4 On October 21, 2002, plaintiffs filed a class-action complaint against the City seeking declaratory and monetary relief. They alleged that each was employed by the City as a "teacher, administrator, aide or director in a delegate agency of the Head Start Program administered by the City," but nonetheless was "denied participation in the benefits program, including the Retirement Plan, adopted by the City for its employees[.]" They further alleged that the City "knowingly and willfully concealed the fact that it is the employer of Head Start employees, and ... deliberately misrepresented the material facts concerning the employment relationship[.]" According to the complaint, in January 2002, the City "determined to transition" the program "to make each delegate agency the employer of Head Start employees in each program" rather than the City, and plaintiffs thereafter discovered that they had indeed been employees of the City despite its representations to the contrary. The superior court granted class certification on October 24, 2003. As presently constituted, the class consists of approximately 1,167 members.
¶ 5 More than four years into the litigation, shortly after the Deer Valley decision, the City filed a motion for summary judgment on damages.2 In its motion, the City requested judgment in its favor as a matter of law because claimants "failed to comply with the mandatory requirements of A.R.S. § 12-821.01(A) before filing suit[.]" Citing Deer Valley, in which the supreme court held that a claim letter that did not include a specific amount for which the claim could be settled was insufficient, 214 Ariz. at 296-97, ¶¶ 10-11, 152 P.3d at 493-94, the City argued that neither notice of claim submitted by plaintiffs provided "a specific amount" for which the claim could be settled and also that each failed to set forth sufficient facts to support the amounts requested as required by statute. In response, claimants countered that Deer Valley should be limited to individual claims and that it should only be applied prospectively.
¶ 6 After hearing argument from both sides, the superior court issued a minute entry denying the City's motion for partial summary judgment. Although it agreed with the City that Deer Valley applied retroactively, the court held that the case did not apply to class actions:
The factual situations surrounding the case at hand and that in Deer Valley are drastically different so that strictly adhering to the language of the Statute would prevent this type of case from ever moving forward .... [I]t was not the Supreme Court's intention to prevent class action law suits against government entities when deciding Deer Valley.
....
[T]he factual situation in the case at hand and the situation in Deer Valley are drastically different.... [T]he plaintiff in Deer Valley [] was a single individual, claiming damages from a single defendant. Here there are numerous plaintiffs, potentially thousands, seeking class certification. Potential class action suits at this stage have an unpredictable number of plaintiffs and potential class members because the class has not yet been certified and all the potential class members are not yet known to the named plaintiffs.
....
[T]he extent of the damages were unknown to the plaintiffs at the time of filing the claim because they were not privy to the accounting practices of the City of Phoenix.... This information was in the control of the defendants, not the plaintiffs.
....
[A] specific sum and a factual foundation to evaluate the claim were not some secret that only the plaintiff could reveal. The information necessary to calculate a specific amount was within the control of the defendants through their knowledge of the retirement system and personnel records of the potential class members.
....
The facts submitted in the Notice here would have allowed the City of Phoenix and the Retirement Board to investigate the practices at issue and potentially produce an amount within the range of damages claimed by the plaintiffs. Here, sufficient facts were included to validate the claims and the relief sought.
....
The claim for monetary damage was as exact as could be expected considering the specific information needed for the calculations was in the hands of the Defendant City of Phoenix.
....
[T]here are many extenuating circumstances that differentiate this case from Deer Valley and make strict adherence to the Statute impossible.
¶ 7 The City contends that the superior court erred by denying its motion for summary judgment on damages because the notices of claim submitted by claimants are statutorily non-compliant. Specifically, the City argues that there is no exception to the "specific amount" requirement for class-action claims.
¶ 8 We review de novo questions of law such as the interpretation of statutes. Schwarz v. City of Glendale, 190 Ariz. 508, 510, 950 P.2d 167, 169 (App.1997). "When analyzing statutes, we apply `fundamental principles of statutory construction, the cornerstone of which is the rule that the best and most reliable index of a statute's meaning is its language and, when the language is clear and unequivocal, it is determinative of the statute's construction.'" Deer Valley, 214 Ariz. at 296, ¶ 8, 152 P.3d at 493 (quoting Janson v. Christensen, 167 Ariz. 470, 471, ...
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