Opinion
No. 1 CA-CV 14-0249
10-01-2015
A. MINER CONTRACTING, INC., an Arizona corporation, Plaintiff/Appellant, v. CITY OF FLAGSTAFF, an Arizona municipality, Defendant/Appellee.
COUNSEL DKL Law, PLLC, Scottsdale By David W. Lunn Counsel for Plaintiff/Appellant Gammage & Burnham, PLC, Phoenix By Cameron C. Artigue Counsel for Defendant/Appellee
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Coconino County
No. S0300CV20070792
The Honorable Jacqueline Hatch, Judge
AFFIRMED
COUNSEL DKL Law, PLLC, Scottsdale
By David W. Lunn
Counsel for Plaintiff/Appellant
Gammage & Burnham, PLC, Phoenix
By Cameron C. Artigue
Counsel for Defendant/Appellee
MEMORANDUM DECISION
Judge Andrew W. Gould delivered the decision of the Court, in which Presiding Judge Donn Kessler and Judge Patricia K. Norris joined. GOULD, Judge:
¶1 A. Miner Contracting, Inc. ("Miner") appeals the dismissal of its complaint with prejudice for failure to comply with Arizona's notice of claim statute, Arizona Revised Statutes ("A.R.S.") section 12-821.01 (Supp. 2014). We affirm because the request for an unspecified amount of interest in the notice of claim failed to comply with the statute's requirement to provide a "specific amount for which the claim can be settled."
Unless otherwise specified, we cite the current versions of statutes and rules when no material revisions have been enacted since the events in question. --------
FACTUAL AND PROCEDURAL HISTORY
¶2 In 2007, Miner, a licensed contractor, provided certain public improvements pursuant to a contract with Premiere Acquisitions, LLC ("Premiere") that Miner alleged benefitted the City of Flagstaff ("the City").
¶3 After Premiere failed to timely pay amounts due, Miner sued Premiere for breach of contract and the City for unjust enrichment. The City filed its first motion to dismiss, arguing Miner failed to serve a notice of claim in compliance with A.R.S. § 12-821.01.
¶4 On January 21, 2008, Miner filed a notice of claim ("the notice") with the City. The notice alleged unjust enrichment and stated "[a]s reflected in the documentation included within Exhibit 2, the City is indebted to Miner for $1,825,042.55 plus additional accrued interest." The notice further stated that, "[t]o settle this claim without the need for protracted litigation, Miner is willing to accept merely the payment of amounts owed to date including all accrued interest." Miner attached documents to the notice supporting different interest rates and accrual dates, but did not specify which document controlled. The City did not respond and withdrew its first motion to dismiss.
¶5 The claims were removed to U.S. Bankruptcy Court due to Premiere's filing for bankruptcy. Miner's claims against the City were ultimately remanded to the superior court. After the remand, Miner filed a second amended complaint alleging unjust enrichment against the City and seeking attorneys' fees pursuant to A.R.S. § 12-341.01 (Supp. 2014). The City moved for dismissal of Miner's second amended complaint. The superior court ultimately granted the City's motion to dismiss with prejudice for failure to state a claim, finding that the notice did not contain a "specific amount for which the Claim could be settled and the facts supporting that amount were not provided" as required by A.R.S. § 12-821.01 and awarded attorneys' fees. Miner timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1) (Supp. 2014).
DISCUSSION
¶6 Because we conclude the notice did not comply with the "specific amount" requirement of A.R.S. § 12-821.01, we do not reach the additional issues Miner argues. See Progressive Specialty Ins. Co. v. Farmers Ins. Co. of Ariz., 143 Ariz. 547, 548 (App. 1985) (noting that appellate court should not decide issues unless required to dispose of appeal under consideration).
¶7 We review the trial court's ruling de novo. See Jones v. Cochise Cnty., 218 Ariz. 372, 375, ¶ 7 (App. 2008) ("We review de novo a trial court's determination that a party's notice of claim failed to comply with § 12-821.01."); Lerner v. DMB Realty, LLC, 234 Ariz. 397, 401, ¶ 10 (App. 2014) ("We review de novo an order dismissing a complaint pursuant to Rule 12(b)(6).").
¶8 As a mandatory prerequisite to maintaining an action against a public entity, a claimant must file a notice of claim containing "a specific amount for which the claim can be settled and the facts supporting that amount." A.R.S. § 12-821.01; Salerno v. Espinoza, 210 Ariz. 586, 587-88, ¶ 7 (App. 2005). The statutory language is "clear and unequivocal" and "unmistakably instructs claimants to include a particular and certain amount of money that, if agreed to by the government entity, will settle the claim." Deer Valley Unified Sch. Dist. No. 97 v. Houser, 214 Ariz. 293, 296, ¶ 9 (2007). To satisfy the specific-amount requirement, the claimant must "be willing to let the government finally settle the claim by paying the amount demanded in the notice of claim." Yollin v. City of Glendale, 219 Ariz. 24, 28, ¶ 9 (App. 2008). The statutory requirement of a specific amount in the notice serves the function of assisting the public entity in financial planning and budgeting. Martineau v. Maricopa Cnty., 207 Ariz. 332, 335-36, ¶ 19 (App. 2004).
¶9 Miner's notice failed to comply with A.R.S. § 12-821.01 because the particular amount of "additional accrued interest" requested by Miner could not be readily ascertained either from the face of the notice or the documents attached to the notice. The notice itself did not identify the amount of additional accrued interest, or an applicable interest rate and accrual date that could be used to calculate the interest.
¶10 Miner argues that "[a]lthough no interest rate is explicitly specified in the Notice of Claim, the City, upon investigating the claim, could reasonably determine an interest rate to apply" by referencing the documentation attached to the notice. However, the relevant documents, a mechanics lien and a promissory note, contain different interest rates and accrual dates. As a result, the City could not make precise financial planning and budgeting calculations based on Miner's notice.
¶11 Miner argues the City could simply have confirmed the interest rate with Miner's counsel, relying on Backus v. State of Arizona, 220 Ariz. 101, 107, ¶ 28 (2009). However, Miner's reliance on Backus is misplaced. At issue in Backus was the applicable standard applied to the "facts supporting the amount claimed" requirement in A.R.S. § 12-821.01. Backus, 220 Ariz. at 101, ¶ 1. The Arizona Supreme Court's statement that "a public entity can request more facts needed to evaluate a claim" has no bearing on the specific-amount requirement. Id. at ¶ 28.
¶12 A claimant must request "a definite amount which he is willing to accept as full satisfaction of his claim. As long as the claimant states a definite and exact amount, and the government may completely satisfy its liability by paying that sum, the claim letter satisfies the sum certain requirement." Yollin, 219 Ariz. at 29, ¶ 12. It is possible to satisfy this requirement by requesting an unspecified amount of "additional accrued interest" if the method for calculating the additional interest is clearly identified in the notice. In such a case, the public entity is given a meaningful opportunity to consider its financial planning and budgeting when considering whether to settle the claim.
¶13 Here, the ambiguities in Miner's request for additional interest made it impossible for the City to determine the precise amount for which Miner would settle its claim. Accordingly, we hold that Miner's notice of claim failed to comply with A.R.S. § 12-821.01 and is deficient as a matter of law.
CONCLUSION
¶14 For the foregoing reasons, we affirm the superior court's dismissal with prejudice for failure to state a claim. Both parties request an award of attorneys' fees pursuant to A.R.S. § 12-341.01(A). We deny Miner's request for fees expended in this appeal because Miner is not the successful party. In our discretion, we award the City reasonable attorneys' fees and its costs on appeal. A.R.S. § 12-342 (2003).