Pinal Cnty. v. Fuller

Citation: 429 P.3d 570Docket: No. 2 CA-SA 2018-0051

Court: Court of Appeals of Arizona; August 28, 2018; Arizona; State Appellate Court

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Pinal County has initiated a special action review following the denial of its motion to dismiss a complaint from NGU Contracting Inc. The County contends that NGU did not comply with the notice-of-claim statute, A.R.S. 11-622(A). The court accepted jurisdiction, emphasizing that the issues at hand are purely legal and significant statewide. 

In 2015, NGU was awarded a public works contract by the County. After delays due to flooding, NGU's request for a change order was denied, and the project was completed in June 2016. NGU submitted a notice of claim in December 2016, demanding over $550,000, which the County denied, citing that the flooding risks were foreseeable and part of NGU's contractual responsibilities. In May 2017, NGU filed a lawsuit claiming breach of contract and unjust enrichment.

The County's motion to dismiss was based on NGU's notice of claim not being executed under penalty of perjury as required by A.R.S. 11-622(A). The respondent judge denied the motion but ordered NGU to comply with the statute by a specific date. NGU subsequently provided a notarized notice with a declaration under penalty of perjury from its president. The County then sought special action, arguing that the initial notice's execution was inadequate and that the judge erred in permitting NGU to amend the notice. Compliance with A.R.S. 11-622(A) is deemed a mandatory prerequisite for NGU's claims.

NGU argues that its notice of claim meets the requirements of A.R.S. 11-622(A) by fulfilling its purpose and intent, asserting that the County had adequate notice, and claiming that any deficiencies were merely technical. NGU also contends that the County has waived its defense regarding the notice's alleged defects and seeks to amend the notice based on equitable tolling since the County rejected it on its merits prior to litigation. 

The court reviews the dismissal of the complaint and compliance with the claim statute de novo. It examines whether a signature alone satisfies the execution requirement under A.R.S. 11-622(A), which mandates that the notice be executed under penalties of perjury. The interpretation of this statute must reflect legislative intent, relying on its plain language. 

The term "executed" indicates that the document must be signed, and for a statement to be perjurious, it must be sworn under penalty of perjury. NGU has not provided authority to support its claim that a mere signature can lead to a perjury conviction. The court cites State v. Salazar, which determined that an attorney's signature alone does not fulfill the requirement for an oath in a legal context. 

The ruling emphasizes that while an attorney's signature carries ethical significance, it does not equate to a perjury statement. Furthermore, the court reinforces that compliance with A.R.S. 11-622(A) requires more than just a signature, as perjury carries more severe consequences than ethical violations, underscoring that an attorney's signature alone does not meet the statutory requirement.

NGU argues that the avowal requirement of A.R.S. 11-622(A) is merely "technical" and claims to have complied with its purpose despite not meeting strict compliance. However, Arizona courts have established a precedent for requiring strict adherence to the notice-of-claim statute, A.R.S. 12-821.01. The purposes of both A.R.S. 12-821.01 and A.R.S. 11-622 are aligned, aiming to enable public entities to investigate claims, consider settlements, and manage financial planning. While NGU cites Arizona Telco Federal Credit Union v. Arizona Department of Revenue to support a substantial compliance argument, this case is deemed inapplicable because it has been overshadowed by more recent rulings that mandate strict compliance. The rationale of ensuring notice to public entities does not apply in this case, especially given the specific avowal requirement that aims to address fraudulent claims as perjury. NGU also references New Pueblo Constructors, Inc. v. State, arguing that substantial compliance suffices without showing prejudice. However, this case dealt with regulatory notice rather than notice-of-claim statutes and thus does not support NGU's position. The avowal requirement cannot be satisfied by an attorney's signature alone, as it does not impose perjury liability, and therefore, NGU has not achieved even substantial compliance with A.R.S. 11-622(A).

NGU's argument that it substantially complied with A.R.S. 11-622(A) is undermined by Arizona courts' insistence on strict compliance with statutory notice of claim requirements. NGU contends that the County has waived or is estopped from asserting a defense based on its noncompliance. It also claims that its compliance should be equitably tolled, asserting that a second notice of claim filed post-judicial ruling is sufficient. However, courts generally resist applying equitable estoppel against government entities unless erroneous government advice causes a detriment. While it's acknowledged that waiver by conduct may potentially apply pre-litigation, this risks shifting the compliance burden from the claimant to the government. Arizona law places the responsibility on claimants to ensure statutory compliance, and public entities are not obligated to assist in this regard. Consequently, the court declines to find waiver, noting the County's actions were consistent with the purpose of evaluating claims and facilitating potential settlements. The court emphasizes that a public entity can respond to claim merits while reserving the right to assert a noncompliance defense once litigation ensues. Waiver by conduct requires evidence of actions inconsistent with the intent to assert a right.

NGU's claims of equitable estoppel and tolling are rejected, as they rely on a party's reasonable reliance on another's conduct. For equitable tolling to be valid, a party must have reasonably delayed action due to the conduct of another party. NGU failed to demonstrate reasonable reliance, as it was unreasonable for them to neglect compliance with the notice-of-claim statute based on the County's rejection of their claim, especially since the County retained the right to assert further defenses. NGU's subsequent compliant notice of claim is deemed untimely and does not rectify the earlier deficiency. The court accepts special action jurisdiction, granting relief by vacating the respondent judge's order that denied the County's motion to dismiss and directing that the motion be granted. The question of whether the required avowal must be made by the claimant rather than counsel is not addressed. NGU's interpretation of A.R.S. 11-622(A) regarding perjury penalties is unsupported by the statutory text, distinguishing this case from Young, where the claim was rejected without addressing the merits, leading to a waiver of defects by the state.