SHOLI v. STATE

Opinion

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

LAVINIA SHOLI, et al., Plaintiffs/Appellants,

v.

STATE OF ARIZONA, et al., Defendants/Appellees.

No. 1 CA-CV 26-0085

FILED 09-21-2026

Appeal from the Superior Court in Maricopa County No. CV2024-034366

The Honorable Christopher Whitten, Judge

AFFIRMED

COUNSEL

Reynolds Legal Group, PLLC, Flagstaff By Michael T. Reynolds Counsel for Plaintiffs/Appellants

Arizona Attorney General’s Office, Phoenix By Deborah L. Garner and Jennifer Rethemeier Counsel for Defendants/Appellees

Decision of the Court

MEMORANDUM DECISION

Presiding Judge Veronika Fabian delivered the decision of the Court, in which Judge Kent E. Cattani and Judge Michael S. Catlett joined.

F A B I A N, Judge:

¶1 The State of Arizona investigated the Sholis after receiving a report from a hospital that they were refusing to provide their daughter with lifesaving medical treatment. The State later determined the report was unsubstantiated and dismissed its investigation. The Sholis served a notice of claim on the State alleging claims arising out of that investigation and later filed a complaint in superior court. The superior court dismissed their complaint, finding the Sholis’ notice of claim was inadequate. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 In October 2023, the Sholis’ minor daughter (“Daughter”) was diagnosed with cancer. She began chemotherapy at a Phoenix hospital the following month, but the treatment did not go well. She suffered rashes, nausea, vomiting, and chemical burns on her arm from a chemotherapy port that was inserted too deep. As a result, the hospital agreed to postpone further chemotherapy. However, in early December 2023, a hospital physician told the Sholis he would file a report with the Arizona Department of Child Safety (“DCS”) if they did not return Daughter for immediate treatment. Because of their experience with the Phoenix hospital, the Sholis decided to seek a second opinion. The physician then filed a report with DCS, which opened an investigation into the care of Daughter and the Sholis’ son (“Son”).

¶3 On December 15, 2023, the Sholis and their counsel met with a DCS investigator by videoconference. The Sholis told DCS they were taking their daughter to New York for a second opinion and would not return her to the Phoenix hospital. Prior to the meeting, the investigator confirmed Daughter was a new patient at a New York hospital. A few days later, the investigator confirmed that Daughter had been assigned to an oncologist for treatment at the New York hospital.

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¶4 Despite confirmation that Daughter was going to receive treatment, the investigation continued. Following the December meeting, the investigator contacted a social worker at the New York hospital, and child-protection agencies in New York and Michigan. The Sholis allege the investigator made several false statements to the out-of-state agents, including that they were physically abusing Son and denying Daughter necessary medical care. DCS closed its investigation in February 2024 after finding the report from the Phoenix hospital was unsubstantiated. The Sholis then requested the DCS investigation file, which the State eventually produced.

¶5 On May 30, 2024, the Sholis served a notice of claim (“Notice”) under A.R.S. § 12-821.01 on the Arizona Attorney General’s office (“AGO”), the DCS director, and the DCS investigator. The Notice asserted claims for “invasion of privacy, negligence, intentional infliction of emotional distress and other causes of action under Arizona law,” arising from the breach of duties owed to the Sholis “in conducting an investigation into suspected child abuse and/or neglect.” It supported those claims with facts about DCS’s dealings with the Sholis: that DCS sought Daughter’s medical records without their consent, sent employees to their home twice, demanded they return Daughter to the Arizona hospital, contacted them repeatedly without their counsel present, insisted on including Son in the investigation, escalated the matter in a conference with the Sholis’ counsel, and disregarded the parental rights listed in A.R.S. § 8-809.01. It did not, however, mention any of the communications the investigator had with any third parties or the public at large. The Notice demanded $1,750,000 to settle.

¶6 In November 2024, the Sholis sued the parties named in the Notice for defamation, invasion of privacy, negligent infliction of emotional distress (“NIED”), and intentional infliction of emotional distress (“IIED”). They amended in March 2025, leaving the State as the sole defendant. The superior court dismissed the first amended complaint under Arizona Rule of Civil Procedure 12(b)(6) for failure to state a claim, but granted leave to amend. Although the State’s motion also argued the Notice was insufficient, the superior court did not reach that issue.

¶7 The Sholis then filed their Second Amended Complaint (“SAC”), which added details about the investigator’s statements to various third parties including social workers, medical providers, an attorney with the Maricopa County Attorney’s Office, and two out-of-state child-welfare agencies. Specifically, the Sholis alleged DCS falsely informed the CPS agencies that Plaintiffs were abusing their son, neglecting their daughter’s

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treatment, and/or fleeing the country. However, the Sholis never served a supplemental or amended notice under A.R.S. § 12-821.01 containing those facts.

¶8 The State again moved to dismiss based on insufficiency of the Notice, qualified and/or absolute immunity, and failure to state a claim. The superior court dismissed the SAC on all three grounds and denied further leave to amend as both futile and unduly prejudicial. The court entered judgment in December 2025.

¶9 The Sholis timely appealed. We have jurisdiction under Article VI, Section 9 of the Arizona Constitution and A.R.S. §§ 12-120.21(A)(1) and 2101(A)(1).

DISCUSSION

¶10 The Sholis raise four issues on appeal. They argue the superior court erred by ruling that: 1) the Notice was insufficient under A.R.S. § 12-821.01, 2) qualified immunity bars their claims, 3) they failed to state claims for defamation and invasion of privacy, and 4) leave to amend was futile. Because we agree the Notice was insufficient under A.R.S. § 12- 821.01 and further amendment would be futile, we do not address the Sholis’ remaining arguments.

¶11 Because the Sholis’ opening brief does not argue that the superior court erred by dismissing their NIED and IIED claims, those arguments have been waived. See MacMillan v. Schwartz, 226 Ariz. 584, 591

¶ 33 (App. 2011). We therefore address the Notice only as it bears on the defamation and false light claims.

I. The Notice Did Not Meet the Statutory Requirements Under A.R.S. § 12-821.01.

¶12 The Sholis argue the Notice gave the State enough information to understand the basis of their claims as required by A.R.S. § 12-821.01. We review de novo whether a notice of claim complies with the statute. See Jones v. Cochise County, 218 Ariz. 372, 375 ¶ 7 (App. 2008).

¶13 Section 12-821.01(A) provides:

Persons who have claims against a public entity . . . shall file claims with the person or persons authorized to accept service for the public entity . . . within one hundred eighty days after the cause of action accrues. The claim shall contain facts sufficient to

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permit the public entity . . . to understand the basis on which liability is claimed. The claim shall also contain a specific amount for which the claim can be settled and the facts supporting that amount. Any claim that is not filed within one hundred eighty days after the cause of action accrues is barred and no action may be maintained thereon.

(emphasis added). Subsection B adds, “a 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.”

¶14 “The purpose of the notice is to allow the [public entity] to investigate and assess liability, [and] permit the possibility of settlement prior to litigation . . . .” Crum v. Superior Court (Cutler), 186 Ariz. 351, 352 (App. 1996). A claimant must strictly comply with the statute, Simon v. Maricopa Med. Ctr., 225 Ariz. 55, 62 ¶ 23 (App. 2010), and neither actual notice nor substantial compliance excuses a failure to do so. Falcon ex rel. Sandoval v. Maricopa County, 213 Ariz. 525, 527 ¶ 10 (2006). Compliance “is not difficult,” and claims that do not comply are statutorily barred. Deer Valley Unified Sch. Dist. No. 97 v. Houser, 214 Ariz. 293, 295-96 ¶¶ 6, 9 (2007).

A. The Notice Was Inadequate.

¶15 The Notice did not identify a defamation claim or false light claim as such. Although the statute does not require the identification of specific claims, it requires the factual basis for those claims. See A.R.S. § 12-821.01(A). Defamation turns on what a defendant communicates to a third party and false light turns on what a defendant communicates to the public at large. See Hart v. Seven Resorts, Inc., 190 Ariz. 272, 280 (App. 1997). Put another way, both defamation and false light turn on what a defendant says and to whom he says it. See id.

¶16 In their SAC, the Sholis allege that the DCS investigator told social workers, medical providers, an attorney with the Maricopa County Attorney’s office, and two out-of-state child-welfare agencies various falsehoods about them, including that they were abusing their children, denying Daughter proper medical care, and had fled Arizona to escape local authorities. But the Notice did not include any of those facts. Indeed, it did not describe the investigator making statements about the Sholis to

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any third party,1 let alone the public at large. See id. Without knowing what the investigator allegedly said or who he said it to, the State could not investigate and assess its potential liability. See Crum, 186 Ariz. at 352; A.R.S. § 12-821.01(A). Thus, the Notice did not comply with the statutory requirements and the Sholis’ subsequent claims were barred. See Houser, 214 Ariz. at 295 ¶ 6.

¶17 The Sholis argue that the statute’s notice of claim standard is lower than what the rules of civil procedure require for a complaint and that their notice still gave the State enough details to understand the basis of its liability. True, compliance with the notice statute does not require exhaustive detail. See id. at 296 ¶ 9. A claimant need only provide “facts sufficient to permit the public entity . . . to understand the basis on which liability is claimed.” A.R.S. § 12-821.01(A). But the Sholis’ Notice did not meet even that low standard. It was not just scant on the supporting details, it provided no facts to support the basis of liability for the defamation and false light claims.

B. The Sholis Did Not Amend Their Notice.

¶18 The Sholis argue that the inadequacy of their notice should be excused because when they served the Notice, the State had not yet produced the DCS investigation file, which contained many of the facts about what the investigator said and to whom. The problem with the Sholis’ argument is that they never amended their notice after receiving the file.

¶19 As noted above, the notice of claim statute provides that a cause of action accrues when the claimant “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.” A.R.S. § 12-821.01(B).

¶20 The Sholis do not say when they received the file. Below, the State claimed DCS provided the file on May 22, 2024, which the Sholis did not dispute. Regardless, the Sholis’ original complaint, filed November 29, 2024, uses the past tense to describe receiving the complete file some months after they requested it. So, according to their own pleading, the Sholis had the file no later than the day they sued. Accepting the complaint

1 The notice of claim does mention the DCS investigator speaking with

attorneys from the AGO. It is not clear whether the Sholis base their claims in any part on that communication. But in any event, the AGO, as counsel for DCS, was a party to the lawsuit and thus not a third party.

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filing as the accrual date, the 180-day statutory deadline to amend was May 28, 2025. See A.R.S. § 12-821.01(A). But the Sholis never served a supplemental or amended notice. Thus, the superior court’s dismissal of the SAC for inadequate notice was proper.

¶21 The Sholis also argue that they needed the court to explicitly permit or demand a supplement to the Notice before amending. However, a notice of claim is served on the public entity, not filed with a court. Nothing in § 12-821.01 conditions an amendment on leave of court. A claimant who learns additional facts may serve an amended notice within the 180-day period.2 See Haab v. County of Maricopa, 219 Ariz. 9, 13-14 ¶ 24 (App. 2008); Turner v. City of Flagstaff, 226 Ariz. 341, 344 ¶ 15 (App. 2011), abrogated on other grounds by Craig v. Craig, 227 Ariz. 105 (2011).

¶22 The Sholis next argue the superior court’s respective rulings on the first and second amended complaints are “irreconcilable” because after granting the first motion to dismiss the court allowed them to amend. They reason the court must have found the Notice sufficient and thus could not revisit that finding. But the court’s first order does not say that it found the notice of claim sufficient. And the court’s October 2025 ruling made clear that it was considering the sufficiency of the notice of claim for the first time.

II. Leave to Amend Would Be Futile.

¶23 The Sholis’ final argument is that the superior court erred by not allowing them leave to amend for a third time. We review the denial of leave to amend for an abuse of discretion. See Valley Farms, Ltd. v. Transcon. Ins. Co., 206 Ariz. 349, 352 ¶ 6 (App. 2003). Amendments “should be granted with great liberality so that cases are decided on their merits rather than on technicalities of pleadings,” Cagle v. Carr, 101 Ariz. 225, 227 (1966), but a court need not permit an amendment that would be futile. Walls v. Ariz. Dep’t of Pub. Safety, 170 Ariz. 591, 597-98 (App. 1991).

¶24 The Sholis’ claims were not barred because of a pleading defect, but rather by the notice of claim defect. See supra ¶ 17. No amendment to the July 2025 complaint could supply facts to a notice served in May 2024, and the period to amend that notice has closed. Therefore,

2 And where, as here, the additional facts are essential for allowing the State

to assess its liability, the claimant must amend or file a new claim within 180 days of accrual or have their claims barred. See Haab v. County of Maricopa, 219 Ariz. 9, 13-14 ¶¶ 20, 24 (App. 2008).

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amendment would be futile. See Swenson v. County of Pinal, 243 Ariz. 122, 128 ¶ 22 (App. 2017) (holding amendment futile where the proposed amendments “did not cure the notice-of-claim deficiency”).

CONCLUSION

¶25 Neither party requested attorney fees. As the successful party, the State is entitled to an award of taxable costs upon compliance with Arizona Rule of Civil Appellate Procedure 21. See A.R.S. § 12-341.

¶26 We affirm.

MATTHEW J. MARTIN • Clerk of the Court FILED: JR