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Deer Valley Unified School District v. Houser/McDonald - 2/26/2007

Arizona Supreme Court Holds That A Claim Letter Sent to a Public Entity Containing Qualifying Language Regarding Damage Claims Fails to Satisfy the Requirements of Arizona’s Notice of Claim Statute.

Pamela McDonald, a former school administrator, sent a “claim letter” to Deer Valley Unified School District No. 97 (the “District”) pursuant to Arizona Revised Statutes (A.R.S.) section 12-821.01, asserting that the District had wrongfully terminated her employment in violation of the Arizona Employment Protection Act. McDonald’s letter identified the following claim amounts:

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 damages to her reputation of employment in an amount of no less than $200,000.00.

After receiving no response to her letter, McDonald filed a complaint in superior court. The District moved for dismissal for failure to comply with Arizona’s Notice of Claim statute, A.R.S. § 12-821.01. The superior court denied the District’s motion, and the District petitioned for special action to the court of appeals. The court of appeals declined to accept jurisdiction, and the District petitioned the Supreme Court for review. The Supreme Court granted review and reversed the superior court’s order denying the District’s motion to dismiss.

A.R.S. § 12-821.01 mandates that any party wishing to bring a claim against a public entity must provide a notice of claim to the entity setting forth the factual basis for the claim and “a specific amount for which the claim can be settled and the facts supporting that amount.” The Supreme Court held that this clear and unequivocal statutory language does not permit a claimant to include qualifying language that makes it impossible for a public entity to calculate the specific amount for which the claim will settle. Ms. McDonald’s claims for approximate damages of $35,000 or more per year, and no less than $300,000 in compensatory damages and $200,000 in general damages did not satisfy this requirement. In so holding, the Court declined to adopt a “reasonableness standard” with respect to the “specific amount” requirement of A.R.S. § 12-821.01, and expressly disapproved of the analysis of the court of appeals in Young v. City of Scottsdale, 193 Ariz. 110, 970 P.2d 942 (App. 1998).

Chief Justice McGregor authored the opinion for a unanimous court.

Posted On: 3/7/2007