Deer Valley Unified School Dist. v. Houser

• Decision Date: 26 February 2007
• Docket Number: No. CV-06-0275-PR.,CV-06-0275-PR.
• Citation: 214 Ariz. 293,152 P.3d 490
• Parties: DEER VALLEY UNIFIED SCHOOL DISTRICT NO. 97, a political subdivision of the State of Arizona, Petitioner, v. Hon. Robert C. HOUSER, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge, Pamela McDonald, Real Party in Interest.
• Court: Arizona Supreme Court

152 P.3d 490

214 Ariz. 293

DEER VALLEY UNIFIED SCHOOL DISTRICT NO. 97, a political subdivision of the State of Arizona, Petitioner, v. Hon. Robert C. HOUSER, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge Pamela McDonald, Real Party in Interest.

No. CV-06-0275-PR.

Supreme Court of Arizona, En Banc.

February 26, 2007.

Lewis and Roca LLP, by Mary Ellen Simonson, Justin S. Pierce, Phoenix, Attorneys for Deer Valley Unified School District # 97.

Law Offices of Marshall A. Martin, by Marshall A. Martin, Scottsdale, Attorney for Pamela McDonald.

City of Phoenix, by Gary Verburg, City Attorney, Stephen J. Craig, Phoenix, Attorneys for Amicus Curiae City of Phoenix.

Moyes Storey Ltd, by William J. Sims, III, C. Brad Woodford, Phoenix, Attorneys for Amicus Curiae Arizona Municipal Risk Retention Pool.

League of Arizona Cities and Towns, by David R. Merkel, Tempe, Attorney for Amicus Curiae League of Arizona Cities and Towns.

Mangum Wall Stoops & Warden PLLC, by A. Dean Pickett, Flagstaff, Attorneys for Amicus Curiae Arizona School Risk Retention Trust.

Deconcini McDonald Yetwin & Lacy PC, by John C. Richardson, Tucson, Attorneys for Amici Curiae Pima County Community College District, Graham County Community College District aka Eastern Arizona College, Yuma-La Paz Counties Community College District aka Arizona Western College.

Arizona School Boards Association, by Christopher P. Thomas, Phoenix, Attorney for Amicus Curiae Arizona School Boards Association.

OPINION

McGREGOR, Chief Justice.

¶ 1 Before initiating an action for damages against a public entity, a claimant must provide a notice of claim to the entity in compliance with Arizona Revised Statutes (A.R.S.) section 12-821.01 (2003). Added in 1994, section 12-821.01(A) 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." The question presented is whether the claim letter submitted by respondent Pamela McDonald conforms with section 12-821.01(A). We hold that it does not.

I.

¶ 2 On September 6, 2005, petitioner Deer Valley Unified School District No. 97 (the District) received a "claim letter" sent pursuant to A.R.S. § 12-821.01 from McDonald. In the letter, McDonald asserted that the District wrongfully terminated her as an assistant high school principal in violation of the Arizona Employment Protection Act, specifically A.R.S. § 23-1501 (Supp.2006). McDonald alleged that the District retaliated against her efforts to resolve several illegalities and deficiencies involving counselors at the high school by giving her the choice of either taking a position as a teacher at a substantially lower salary or being fired.

¶ 3 McDonald's letter stated that she "lost her previous salary of $68,000.00 per year and an additional $7,000.00 per year for summer school" and that she had "anticipated a $6,000.00 raise for [the upcoming] school year and similar appropriate pay increases thereafter. As a teacher in the District, she will earn $36,800.00 this year." The letter subsequently identified several claim amounts in the following manner:

1. All economic damages arising as a result of her removal from the position in an amount anticipated to be approximately $35,000.00 per year or more going forward over the next 18 years;

2. Compensatory damages for emotional distress suffered as a result of the wrongful termination in an amount no less than $300,000.00;

3. General damages, compensating Ms. McDonald for damage to her reputation of employment in an amount of no less than $200,000.00.

The letter provided no additional information to support these amounts and concluded by stating that "Ms. McDonald hereby makes demand on the District for payment of these said amounts."

¶ 4 McDonald never received a response from the District and, on March 2, 2006, she filed a complaint in the Maricopa County Superior Court alleging wrongful termination. The District moved to dismiss the claim for failure to comply with A.R.S. § 12-821.01. After the superior court denied the District's motion, the District filed a petition for special action in the court of appeals, which declined to accept jurisdiction.

¶ 5 The District then petitioned this Court for review, which we granted because the issue presented involves a matter of public significance that occurs often and has important legal and practical consequences for political subdivisions of the state. Furthermore, the decisions rendered on this issue by the court of appeals are not consistent.¹ We have jurisdiction under Article 6, Section 5, Clause 3 of the Arizona Constitution and A.R.S. § 12-120.24 (2003).

II.

¶ 6 In addition to describing the proper method and time frame for filing claims, the notice of claim statute directs that all claims "shall contain facts sufficient to permit the public entity . . . to understand the basis upon which liability is claimed" and "shall also contain a specific amount for which the claim can be settled and the facts supporting that amount." A.R.S. § 12-821.01(A). The statutory requirements serve several important functions: They "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." Falcon ex rel. Sandoval v. Maricopa County, 213 Ariz. 525, 527 ¶ 9, 144 P.3d 1254, 1256 (2006) (quoting Martineau v. Maricopa County, 207 Ariz. 332, 335-36 ¶ 19, 86 P.3d 912, 915-16 (App.2004)). Claims that do not comply with A.R.S. § 12-821.01(A) are statutorily barred. A.R.S. § 12-821.01(A) ("Any claim which is not filed within one hundred eighty days after the cause of action accrues is barred and no action may be maintained thereon."); Falcon, 213 Ariz. at 527 ¶ 10, 144 P.3d at 1256 ("Actual notice and substantial compliance do not excuse failure to comply with the statutory requirements of A.R.S. § 12-821.01(A).").

¶ 7 The District argues that McDonald's claim letter lacks both the "specific amount for which the claim can be settled and the facts supporting that amount." A.R.S. § 12-821.01(A). The District asserts that, by using phrases such as "approximately," "or more going forward," "similar appropriate pay increases," and "no less than," McDonald's letter fails to identify any "specific amount," let alone an amount "for which the claim can be settled." The District concludes that McDonald's use of qualifying language makes it impossible to calculate the amount that will settle the claim and thus fails to comply with the plain language of A.R.S. § 12-821.01(A). The District also argues that, even if the various amounts in her claim letter could be regarded as defining a specific amount, McDonald's letter does not include "the facts supporting" the amount claimed. Id.

¶ 8 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." Janson ex rel. Janson v. Christensen, 167 Ariz. 470, 471, 808 P.2d 1222, 1223 (1991). "Each word, phrase, clause, and sentence [of a statute] must be given meaning so that no part will be void, inert, redundant, or trivial." Williams v. Thude, 188 Ariz. 257, 259, 934 P.2d 1349, 1351 (1997) (alteration in original) (emphasis omitted) (quoting City of Phoenix v. Yates, 69 Ariz. 68, 72, 208 P.2d 1147, 1149 (1949)).

¶ 9 The notice of claim statute is clear and unequivocal: The statute instructs that a claim "shall also contain a specific amount for which the claim can be settled and the facts supporting that amount." A.R.S. § 12-821.01(A) (emphasis added). This language unmistakably instructs claimants to include a particular and certain amount of money that, if agreed to by the government entity, will settle the claim. The attendant statutory obligation that claimants present "facts supporting that amount" requires that claimants explain the amounts identified in the claim by providing the government entity with a factual foundation to permit the entity to evaluate the amount claimed. This latter requirement ensures that claimants will not demand unfounded amounts that constitute "quick unrealistic exaggerated demands." Hollingsworth v. City of Phoenix, 164 Ariz. 462, 466, 793 P.2d 1129, 1133 (App.1990). In tandem, these two statutory mandates ensure that government entities will be able to realistically consider a claim. Compliance with this statute is not difficult; the statute does not require that claimants reveal the amount that they will demand at trial if litigation ensues but simply requires that claimants identify the specific amount for which they will settle and provide facts supporting that amount.

¶ 10 We agree with the District that McDonald's claim letter does not include a specific amount for which her claim can be settled. McDonald's repeated use of qualifying language makes it impossible to ascertain the precise amount for which the District could have settled her claim. McDonald defines her economic damages as being "approximately $35,000.00 per year or more going forward over the next 18 years." McDonald also refers to a raise of $6,000 and notes that she anticipated "similar appropriate pay increases" over the next eighteen years. Her letter then states that her damages for emotional distress and harm to her reputation are "no less than" $300,000 and $200,000, respectively. These statements simply do not define a specific amount that McDonald would have accepted to resolve her dispute with the District.

¶ 11 It is unclear whether McDonald would have resolved her claim for economic damages for payment of $630,000, the total reached by multiplying $35,000 by eighteen years, whether she would have demanded the "more" she...