Appeals from Arbitration are common. Litigants will sometimes appeal from an arbitration award in order to continue the negotiation process or where they are disappointed with an arbitration award. The tactic makes sense. An appeal from compulsory arbitration will result in a trial de novo before a superior court Judge or Jury. But it is not without risk.

Rule 77 (f) allows the party defending the appeal (appellee) to collect its reasonable attorney’s fees where the party bringing the appeal (appellant) does not receive an award on the appeal at least 23% more favorable than the sums awarded in arbitration. This rule can turn a win into a loss. An Appellant who does not do substantially better on Appeal can be required to pay the legal fees of the Appellee.

Many times every week we discuss filing suit with potential plaintiffs. Uncomfortable with the high cost of litigation in the Superior Court, sometimes plaintiffs consider filing a reduced or stripped down claim in Justice Court or in Small Claims Court. This is more affordable. It can be done without large legal fees. The thinking often is that they will test the waters with a small claim and file their larger, more comprehensive claims later.

This is dangerous and can be a mistake. This strategy should be used only where there is no intention of filing additional claims later. Because pursuing a small claims court lawsuit to a final judgment may prevent the filing of additional claims later. This was the ruling in a recent Arizona Court Of Appeals case, Peterson v. Fenztlaff. Here is why this is so.

In Arizona, a person is required to bring a notice of claim prior to filing a lawsuit against a public entity or employee. The requirements concerning the notice of claim are set forth in Arizona Revised Statutes Section 12-821.01. The purpose of the statute is to allow the public entity to investigate and assess liability, to permit the possibility of settlement prior to litigation and to assist the public entity in financial planning and budgeting. The statute also aims to guard against the possibility that claimants will present the State with baseless demands.

Requirements of Notice of Claim Statute

Pursuant to A.R.S. §12-821.01(A), the notice of claim shall be filed with the person or persons authorized to accept service for the public entity or public employee within 180 days after the cause of action accrues. The cause of action accrues when the damaged party realizes he or she has been damaged and knows or reasonably should know the cause, source, act, event, instrumentality or condition that caused or contributed to the damage.

There is not a specific form that must be filed in order to present a notice of claim. The notice of claim is usually presented by filing a letter with the person authorized to accept service on behalf of the public entity. Some public entities have their own notice of claim forms, however, a claimant is not required to use the public entity’s specific form.