Arizona Court of Appeals Division Two Holds That compliance with the notice of claim statute, A.R.S. § 12-821.01, is to be determined by reading the notice as a whole, and a defense that the notice of claim filed did not meet the statutory requirements will be deemed waived if the governmental entity has taken substantial action to litigate the merits of the claim prior to asserting the defense

Plaintiffs filed a notice of claim with Cochise County for injuries suffered as a result of being hit by a sheriff’s vehicle.  The notice was signed by Plaintiffs’ attorney and stated that the attorney would recommend settlement of claims for certain dollar amounts and that the offers would expire in 60 days.  When no settlement was reached, Plaintiffs filed a complaint.  The County answered without asserting a defense that the notice was insufficient.  Discovery then ensued, which included multiple depositions.  One year later, the County sought to amend its answer to assert the defense that the notice did not meet the statutory requirements.  The trial court gave the County leave to amend the answer and granted the County’s motion to dismiss (which it treated as a motion for summary judgment because the notice of claim was considered) on the ground that the notice simply stated that the attorney would recommend settlement for a particular dollar amount, but did not contain a specified amount for which the Plaintiffs would settle. 

Relying on the Deer Valley Unified School District No. 97 v. Houser, 214 Ariz. 293, 152 P.3d 490 (2007), the Arizona Appeals Court reversed and remanded.  The Court held that the notice of claim filed complied with the statutory requirement that a specific amount be provided for which the claim could be settled.  When read in the context of the entire letter – including the statement that the offers would expire within 60 days – the recommended settlement amount was in fact an a specific sum for which the claims could be settled.  The Court further held that the notice provided sufficient facts to support the amount claimed, noting that claims for pain and suffering, loss of future earnings, and future medical expenses do not require a precise accounting at the notice of claim stage.

The Court then turned to issue of whether the County had in fact waived the defense that the notice of claim did not meet the statutory requirements.  The Court reasoned that the County waived the defense by its conduct by taking substantial action to litigate the merits of Plaintiffs’ claims, including participating in discovery — discovery that would have been unnecessary if the defense had been promptly asserted.       

Judge Brammer authored the opinion, Judges Howard and Pelander concurred.