JOSEPH E. TERBORG v. TOWN OF PAYSON

IN THE
ARIZONA COURT OF APPEALS
DIVISION TWO

JOSEPH E. TERBORG, INDIVIDUALLY,
Plaintiff/Appellant,

v.

TOWN OF PAYSON,
A POLITICAL SUBDIVISION OF THE STATE OF ARIZONA,
Defendant/Appellee.

No. 2 CA-CV 2025-0080
Filed November 5, 2025

Appeal from the Superior Court in Gila County
No. S0400CV202400109
The Honorable Timothy M. Wright, Judge

VACATED AND REMANDED

COUNSEL

Ahwatukee Legal Office P.C., Phoenix
By David L. Abney
Counsel for Plaintiff/Appellant

Jellison Law Office PLLC, Scottsdale
By James M. Jellison
Counsel for Defendant/Appellee
 TERBORG v. TOWN OF PAYSON
Opinion of the Court

OPINION

Judge Eckerstrom authored the opinion of the Court, in which Presiding
Judge Brearcliffe and Judge Gard concurred.

E C K E R S T R O M, Judge:

In this personal injury action, Joseph Terborg appeals from
the trial court’s grant of summary judgment in favor of the Town of Payson.
The court found Terborg’s notice of claim insufficient under A.R.S.
§ 12-821.01(A). We disagree. For the following reasons, we vacate and
remand.

Factual and Procedural Background

We view the facts, which are largely undisputed, in the light
most favorable to Terborg, the party opposing summary judgment.
Underwood v. Wilczynski, 252 Ariz. 405, ¶ 2 (App. 2021). In June 2023, a
Payson police officer and a police canine pursued a suspect in the vicinity
of Terborg’s residence. The officer unleashed the canine to assist with the
suspect’s arrest. The canine attacked and bit Terborg, a bystander, instead
of the suspect. As a result of that attack, Terborg claimed several physical
and emotional injuries.

In November 2023, Terborg provided his notice of claim to the
Town and the Payson Police Department. In April 2024, Terborg filed his
personal injury complaint, alleging various claims of negligence against the
individual police officer, the officer’s spouse, the Payson Police
Department, and the Town.1 In June 2024, the Town moved to dismiss
Terborg’s claims for failure to comply with § 12-821.01.

In August 2024, the trial court held oral argument on the
Town’s motion to dismiss. Because the motion to dismiss, the response,

1The complaint also included a request for punitive damages. In
June 2024, Terborg and the Town stipulated to dismiss with prejudice the
individual police officer and the officer’s spouse, the Payson Police
Department, and the claim for punitive damages.

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Opinion of the Court

and the reply incorporated the notice of claim, the court treated the motion
to dismiss as a motion for summary judgment. It then granted summary
judgment in favor of the Town, holding Terborg’s notice of claim as
noncompliant with § 12-821.01. Specifically, the court found that Terborg
failed to provide a specific amount that the Town could pay to settle
Terborg’s claims. This appeal followed. We have jurisdiction pursuant to
A.R.S. §§ 12-2101(A)(1) and 12-120.21.

Discussion

Summary judgment is proper when there are no genuine
disputes as to any material fact and the moving party is entitled to
judgment as a matter of law. Ariz. R. Civ. P. 56(a). We review a trial court’s
decision to grant summary judgment de novo. Underwood, 252 Ariz. 405,
¶ 6. We also review de novo whether a notice of claim complies with
statutory requirements. Jones v. Cochise County, 218 Ariz. 372, ¶ 7 (App.
2008).

Before suing a public entity in Arizona, a claimant must file a
notice of claim that strictly complies with the statutory requirements under
§ 12-821.01. Donovan v. Yavapai Cnty. Cmty. Coll. Dist., 244 Ariz. 608, ¶ 7
(App. 2018); see also City of Mesa v. Ryan, 258 Ariz. 297, ¶ 9 (2024)
(“[C]laimants must strictly comply with the statute.”). The statutory
requirements allow the public entity to investigate the claim, consider
settlement, and budget as necessary. Deer Valley Unified Sch. Dist. No. 97 v.
Houser, 214 Ariz. 293, ¶ 6 (2007); City of Mesa, 258 Ariz. 297, ¶ 9. To facilitate
those purposes, the notice must “contain a specific amount” that the public
entity can pay to settle the claim. § 12-821.01(A); Deer Valley, 214 Ariz. 293,
¶ 9. If a claimant fails to present a valid settlement offer in the notice of
claim to the public entity, the claim is statutorily barred. Yahweh v. City of
Phoenix, 243 Ariz. 21, ¶¶ 7-8 (App. 2017) (citing Deer Valley, 214 Ariz. 293,
¶ 9).

In contending that Terborg had failed to present a valid offer,
the Town focused on the following text in Terborg’s notice of claim: “A
demand on behalf of Joseph Terborg is hereby made for the sum-certain
amount of One Hundred Thousand Dollars ($250,000.00) upon the City of
Payson, the Payson Police Department, and/or Gila County.” Terborg
argues the notice of claim met the specific amount requirement,
notwithstanding the inconsistency between the request in words and the
request in numbers, because, under settled notions of resolving

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Opinion of the Court

discrepancies in contract language, written words prevail over numbers.2
The Town counters that the notice of claim did not meet the specific amount
requirement because that inconsistency created an insoluble ambiguity in
the settlement demand, rendering it impossible to determine the amount
for which Terborg would settle the claim.

However, we do not view portions of notice of claim language
in isolation. See Jones, 218 Ariz. 372, ¶¶ 10-12. Instead, we read the
language in Terborg’s notice of claim in the context of the notice as a whole
and the purposes sought by the notice. Id. ¶ 11.

We can measure compliance with § 12-821.01 with reference
to contract law principles. Yollin v. City of Glendale, 219 Ariz. 24, ¶ 19 (App.
2008). The Town contends that Terborg’s notice of claim was ambiguous
because the inconsistency between the written numbers and the numerical
figures presented two distinct sums. However, the Town incorrectly
conflates an inconsistency with ambiguity.

An inconsistency is not inherently ambiguous. Words are
ambiguous only when there is more than one reasonable interpretation.
Cardon v. Cotton Lane Holdings, Inc., 173 Ariz. 203, 207 (1992). Ambiguity
does not exist if the parties’ intent is clear in light of the contract’s language
and all of the circumstances. Smith v. Melson, Inc., 135 Ariz. 119, 121 (1983);
Miller v. Hehlen, 209 Ariz. 462, ¶ 12 (App. 2005). Even if a specific term is
ambiguous, the party’s intention must be determined from the whole to
interpret the ambiguous term’s meaning. Emp.’s Liab. Assur. Corp. v. Lunt, 82 Ariz. 320, 326 (1957). Therefore, we consider Terborg’s notice of claim as
a whole to interpret whether Terborg provided the Town with a specific
amount to settle.

The Town asserts that Terborg’s notice of claim “contain[ed]
no facts upon which the Town might ascertain which sum was intended,”
$100,000 or $250,000. The Town refers to cases where Arizona courts held

2Terborg also appears to argue that public policy requires Arizona

courts to abandon or amend the strict compliance standard for notice of
claims. Specifically, Terborg proposes that Arizona courts impose a
minimum duty on public entities to clarify notice of claim issues with
claimants to effectuate legislative intent. However, our supreme court has
held that public entities do not have a duty to assist claimants with statutory
compliance. See Backus v. State, 220 Ariz. 101, ¶ 28 (2009); Yahweh, 243 Ariz.
21, ¶ 12. We are bound to follow that holding.

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notices of claim as noncompliant because qualifying language prevented
public entities from ascertaining the specific settlement amount. See, e.g.,
Deer Valley, 214 Ariz. 293, ¶¶ 10-11, 16 (“approximately” and “no less than”
qualified claimant’s settlement offer); City of Mesa, 258 Ariz. 297, ¶¶ 2, 16,
20 (claimant’s use of “or” in settlement offer expressly triggered two
alternative amounts). However, Terborg’s notice did not use qualifying
language to equivocate the settlement amount. Terborg did not use the
qualifier “or” to communicate two alternate settlement amounts. Rather,
Terborg employed punctuation connoting a very specific relationship
between the offer’s textual language and the conflicting numbers that
followed―a pair of parentheses.

While our courts have yet to address whether words prevail
over numbers in the context of notices of claim, a basic principle stands:
intent governs. See Alabam Freight Lines v. Stewart, 70 Ariz. 140, 144 (1950)
(“predominant and all-essential” rule for reconciling inconsistent contract
clauses is to ascertain party intent). In Arizona, all rules of contract
interpretation seek to arrive at the parties’ expressed intent. Phelps Dodge
Corp. v. Brown, 112 Ariz. 179, 181 (1975). Interpretation is the process to
ascertain the meaning of words in a contract term or promise. Taylor v. State
Farm Mut. Auto. Ins. Co., 175 Ariz. 148, 152 (1993). Punctuation cannot be
used to defeat obvious intent, but punctuation can illuminate meaning. Joy
v. City of St. Louis, 138 U.S. 1, 32 (1891).

We can understand how Terborg employed the parentheses
as a clarifying mechanism by reading two paragraphs below the settlement
offer on the same page of the notice of claim. There, Terborg wrote “sixty
(60)” in two separate sentences to detail the Town’s deadline to accept the
settlement offer. The numbers enclosed in parentheses are used in this
subsequent paragraph to be thoroughly clear and to supplement the
preceding written words.

Under settled understandings of legal style, Terborg signaled
that the contents of his parentheticals were in service to, and therefore
subordinate to, the text. The foremost contemporary manual on legal style
observes that parentheses suggest to the reader: “Take me or leave me.”
Bryan A. Garner, The Redbook: A Manual on Legal Style §§ 1.35-36 (4th ed.
2018). Text, by contrast, must be given effect. See Allstate Prop. & Cas. Ins.
Co. v. Watts Water Techs., Inc., 244 Ariz. 253, ¶ 12 (App. 2018). Notably,
Terborg repeatedly uses parentheticals in precisely this manner throughout
the notice. In the first sentence of the notice of claim, Terborg used
parentheses to clarify that Terborg is referred to by his first name, full name,

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Opinion of the Court

or “Claimant” throughout the document. In the factual summary section,
Terborg mentions his Payson-located business, followed by parentheses
around the name of the specific business he is referring to. The information
that Terborg enclosed in parentheses was helpful, but incidental and, as the
Redbook observes, “could be removed without changing the meaning of
the sentence.” Garner, supra, §§ 1.35-36.

Furthermore, Terborg contends that, under settled notions of
contract interpretation, words prevail over numbers when the two conflict.
There is some support for that proposition in Arizona statute. Our
legislature has expressly instructed that “words prevail over numbers”
when the two contradict each other in a negotiable instrument. A.R.S.
§ 47-3114.

For the foregoing reasons, we are unpersuaded by the Town’s
contention that “no evidence of which amount was actually intended by
Terborg” was available to ascertain the settlement amount. There exists no
ambiguity in the settlement offer amount because the sole reasonable
interpretation of the numerical inconsistency is that Terborg meant “one
hundred thousand dollars.” Thus, Terborg met the specific amount
requirement.3

This conclusion is reinforced by the other language of the
notice. That language demonstrated an intent by Terborg to be bound by
his offer. “An offer is the manifestation of willingness to enter into a
bargain, so made as to justify another person in understanding that his
assent to that bargain is invited and will conclude it.” Restatement (Second)
of Contracts § 24 (1981). Whether an offer has been made depends on
whether a reasonable person would understand that an offer has been made
and that acceptance would bind the offeror. Ballesteros v. Am. Standard Ins.
Co. of Wis., 226 Ariz. 345, ¶ 13 (2011). In other words, the claimant must
manifest an intent to be bound to the specific amount offered. See Yahweh,
243 Ariz. 21, ¶ 10.

Terborg directly referred to the notice of claim statute in the
first line: “This letter constitutes a Notice of Claim pursuant to Arizona
Revised Statutes § 12.821.01.” And, Terborg indirectly referred to the
statute when he set an expiration date for the offer that matched the

3For the same reasons, Terborg would have been mutually bound to

the one hundred thousand dollar offer under the terms of the notice had
the Town accepted it.

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Opinion of the Court

sixty-day time limit imposed by the same notice of claim statute. See Jones,
218 Ariz. 372, ¶ 11. In Jones, a claimant provided a notice of claim with
language indicating that the claimant’s attorney “recommend[ed]” the
offered settlement amount. Id. ¶ 3. Nonetheless, this court held that the
claimant intended to be bound to a specific amount because the claimant
conclusively characterized the amounts as settlement offers subject to the
statutory sixty-day deadline. Id. ¶¶ 8-14 (reasoning claimant intended to
be bound because “[t]here would have been no reason to describe the
amounts as offers if they were not offers, and certainly no reason to
prescribe when they would expire” otherwise). In this case, Terborg
similarly stated “this matter will be closed” upon the public entity’s
acceptance and mentioned his right to litigate the matter upon the public
entity’s rejection or failure to accept by the sixty-day deadline. See
§ 12-821.01(E).

The notice does suggest that further negotiation might be
possible, stating that Terborg “trust[ed] and expect[ed]” the Town to “take
[the] opportunity to negotiate a fair settlement.” However, precatory
language does not prevent the formation of a valid offer if the plain offer of
settlement still manifests an unequivocal intent to be bound. Id. ¶ 18;
cf. Yahweh, 243 Ariz. 21, ¶¶ 3, 10 (no settlement offer where notice of claim
directed municipality to contact claimant’s lawyer to “obtain an agreeable
resolution to this matter”). Thus, Terborg manifested an evident intent to
be bound by expressly referencing the statute in his notice of claim and by
structuring the time available for accepting his settlement offer around the
statute. Therefore, Terborg complied with § 12-821.01 because he provided
a valid settlement offer.

Costs on Appeal

Terborg requests costs incurred on appeal pursuant to A.R.S.
§§ 12-331, 12-332, 12-341, 12-342 and Ariz. R. Civ. App. P. 21. As he is the
prevailing party, we grant Terborg’s request upon his compliance with
Ariz. R. Civ. App. P. 21.

Disposition

For the foregoing reasons, we vacate the trial court’s grant of
summary judgment and remand this matter for proceedings consistent
with this opinion.

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