Backus v. State of Arizona – 3/19/2009

March 24, 2009

Arizona Supreme Court Holds That a Claimant Under Arizona’s Notice of Claim Statute Complies With the “Supporting Facts” Requirement by Providing “the Factual Foundation That the Claimant Regards as Adequate to Permit the Public Entity to Evaluate the Specific Amount Claimed.”

Section 12-821.01 of the Arizona Revised Statutes requires a claimant to file a notice of claim before suing a public entity.  One of the requirements is that the claimant set forth “a specific amount for which the claim may be settled and the facts supporting that amount” (the “supporting-facts requirement”).

Gerald Dunford and Vickie Johnson died while in the custody of the Arizona Department of Corrections (ADOC).  Their families filed notices of claim with the State alleging wrongful death and setting forth specific settlement numbers.  Dunford’s notice, relying on mortality tables, stated that 58-year-old Dunford had a life expectancy of 23.6 years and stated that his daughter was claiming $21,500 per year for the loss of her father, for a total of $507,400.  Johnson’s notice of claim noted that Ms. Johnson had six children, that she died as a result of the negligence of ADOC, and stated a settlement total of $2,000,000.

The two cases were consolidated on appeal.  The trial court dismissed both for failing to contain facts supporting the specific amount for which the claims could be settled with the State.  The Court of Appeals reversed, concluding that a claimant satisfies the supporting-facts requirement if the claimant provides “any facts to support the proposed settlement amounts, regardless of how meager.”  The Supreme Court vacated the Court of Appeals’ opinion and likewise reversed the trial court judgment in the two consolidated cases.

The Court began its analysis by setting forth basic statutory interpretations principles.  Noting that clear and unequivocal language is determinative of a statute’s construction, the Court concluded that the statutory language imposing the supporting-facts requirement is not clear and unequivocal.  The Court thus considered “other factors” to reach “the interpretation that best furthers the intent of the legislature.”  Citing the session laws as evidence of intent, the Court found that “the rule is a [governmental] liability and immunity is the exception.”  In addition, the statute is also meant 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.” 

Keeping this intent in mind, the Court held that “a claimant complies with the supporting-facts requirement . . . by providing the factual foundation that the claimant regards as adequate to permit the public entity to evaluate the specific amount claimed.”  The standard does not require a claimant to provide an exhaustive list of facts, and courts “should not scrutinize the claimant’s description of facts to determine ‘sufficiency’ of the factual disclosure.”  This standard, the Court commented, avoids two negative results:  (1) by the time a trial judge decides whether a particular claim satisfies the supporting-facts requirement, the time to file a claim letter will usually have expired given the statute’s relatively short time limits; (2) even in those cases in which a trial judge finds that the notice of claim has met the supporting-facts requirement, all parties may have been exposed to considerable expense and delay in resolved the “satellite litigation.”

Chief Justice McGregor authored the opinion for a unanimous Court.