Settlement Offet Pursuant to Rule 408 Am. R. Evid. May 12, 2010

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Jeffery Hamilton
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1 LAW OFFICE OF rreressa M. SANZIO, P.C. ATTORNEY AT LAW REGISTERED NURSE 42e 10:.THUNOE:~8IRO ~CAO. #238 "'HClI!:NIX, ARIZONA S502Z TE:I..E:P"'ONE::(602) 'ii'5l:a F'ACSIMIL-E: (602) 993'? 137 Inadmissible Settlement Offet Pursuant to Rule 408 Am. R. Evid. May 12, 2010 ~er'ljed Under Rule 4. Ariz. R. Ci'V.P. and Via Certified Mail Return Receipt Requested to: Arizona Attorney General 1275 W. Washington, 1 st Floor Reception Phoenix, AZ Joey Ridenour, RN, MS, FAAN, Executive Director Members of the Board ARlZONA STATE BOARD OF NURSING 4747 Street, Suite 200 Phoenix,AZ RE: NOTICE OF CLAIMPursuant to A.R.S LOl Gregg Tidrick, RN and Richard Hendy, RN, each individually and as anticipated class representatives of an others shnilarly situated (the "Class") Dear M". Ridenour and Members of the Board: This letter constitutes a notice of claim for damages on behalf of Gregg Tidrick, RN and Richard Henery, RN. each individually, and as anticipated class representatives of all others similarly situated (hereinafter the "Class") pursuant to A-R.S This office represents Mr. Tidrick and Mr. Hendy, and the Gervase Law Firm, PLLC and this office represent the putative Class in connection with the unlawful actions of the Arizona State Board of Nursiog (the "Board") in issuing Interim Orders to the licensed professionals and certificate holders of the Class, and req1liring the Class to pay for the cost of complying with the Interim. Orders in the absence of any legal authority. Such action violates the law and violates due process rights of the Class. Facts sufficient to pennit the Board to un4etstand claimed: the basis upon which liability is 00 or about September , the Board first obtained legislative authority to order certain Page 1 ofs ~C:~T ntn7117/cn

2 evaluations. SB 1099, 1 st Regular Session, 43 rd Legislature, 1997 (A.R.S F}. The statute, however, did not allow the Board to require the Class to my for the evaluations. Between about September 1997 and Febnw:y 1999, the B02l"d began issuing Interim Orders to the Class. Each Interim Order required the Class to pay for the coat of evaluations, including psychological evaluations> neuropsychological evaluations, boundary evaluations, anger management evaluations, substance abuse/chemical dependency evaluations, and skills assessment evaluations. These evaluations cost, on average, approximately $1, The Board never sought the authority from the legislatw;e to order the Class to pay for these evaluations when it appeared before the legislature in 1999 to ch.inge to the language of.:\.r.s. 32~1664(F) (HB 2515). Nor did the Board seek the requisite legislative authority when it. appeared before the legislature numerous times since 1999 for the purpose of making changes to its statutes. In at least 2005, the Board was put on notice that its action of requiring the Class pay fot the evaluations 'Was unlawful.' Yet, the Board continued to break rather than change the law. In February 2010, the Board received written objections in two specific complaints pending before the Board, placing the Board on notice that it had no authotity to require the licensees in those two cases to pay for evaluations. The Board ~ refused to rescind its orders in those cases that requited the licensees pay for evaluations. OD AprilS, 2010, a lawsuit was filed 2 ~t and served on the Board on behalf of those two licensees, again. raising the issues that bad been raised in the two 2005 lawsuits, Specifically, a Verified Complaint for a Temporary Restraining Order, Injunctive, Declaratory andm:uldamus Relief was filed regarding the Board's lack of legal authority to mandate two nurses to pay for the Board-ordered evaluations} Incorporated herein by reference are the documents, pleadings and audio recordings pertaining to the aforementioned lawsuit filed against the Board on April 8, A heating on the Order to Show Cause why a Temporary Restraining Order ("ose TRO") should not be granted was scheduled for Apri120, 2010, 9:00 a.m. Fifteen' and a half hours before the scheduled OSC no Hearing, the Board rescinded its previously issued orders to the two plaintiffs. Aftex 10 or mote years of illegally ordering the Class to pay for costly evaluations, after 5 years of being on notice via two lawsuits and several written objections on beb2if of specific licensees) after 2 months of receiving written objections on belw of the two plaintiffs. and after 11 days of being served with a lawsuit on behalf of the two plaintiffs, the Board fin2lly capitulated 15% hours before the OSC TRO hearing. On April 19, 2010 dutidga Special M.eeting that was noticed barely 24 hours before the meetiog, the Board capitulated after 5:00p.m.. where no member of the public personally attended (only Ms. Sanzio appeared telephonically). Neither minutes not other notice to the Oass has yet occurred to alert them i See David Stepp v. AZBN, LC i7-001.DT; Mark Closev. AZBN, LC OO Shamie Slusserand Lorna West". AZBN, LOOIO-0003oo (formerly CV201 0-(51468). J Undersigned counselalso raised this issue in prior pleadings filed with the Board in various other cases. The Board, again, remained silent on the issue or simply ignored it. Page 2 ois

3 that they were illeg.illy ordered to pay the cost of complying with evaluations. Being forced to finally reconcile this issue, at this SpecialBoard Meeting on April 19, 2010 between 5;00-5;30 p.m., the Board acquiesced to its wrongdoing and stated that it lacked. legal author.ity to require the Class to pay for the evaluations it had been ordering. At this Special Meeting, the Board rescinded the Interim Orders of the two Plaintiffs in the lawsuit, and rescinded all outstanding Interim Orders." Nonetheless, over the past decade, as a result of its admitted unlawful conduct, the Board cost the Class, which is estimated to he over one thousand licensed professionals and certificate holders, an estimated average of $1, per ev-aluation, under written threat and coercion that failure to comply with these Interim Orders would result in disciplinary action. Specifically. each Interim Order and each letter that accompanies an Interim Order, states that failure to comply is, in and of itself, a violation of the Nurse Practice Act. ~ Exhibits to Verified Complaint for Injunctive Relief, incorporated herein by reference. Applicable Law: By its own admission on April 19, 2010, the Board has violated A.R.S et setj. and A.A.C. R4~19-101et seq., which demonstrate the Board's lack of legal authority to mandate the Class to pay for examinations or evaluations. Mr. Tidrick, Mr. Henely, and the Class are entitled to damages as set forth below. Before suing a public entity, a plaintiff must file a notice of claim that includes a specific amount for which the claim Illil.y be settled. See A.RS (A) (2003). A.R.S docs not bar class actions against public entities and a claim against a public entity.ma.y be presented as a class claim, Andrew S. Arena v. SuperiQr Court (pima County), 163 Ariz. 423, 426, 788 P. 2d 1174, 1177 (1990). «If a.claim is denied, the court may thereafter entertain a class action on the claim provided that the case is appropriate as a.class action under the applicable principles of law." ld. A class claim meets the settlement demand requirement of A.R.S (A) if it identifies the amount for whkh 'an individual put2rive class representative would settle his own claim and puts the governmental entity on notice of the claimants' intention to pursue a. class action if his claim does not settle. City of Phoenix v.the Honorable Kenneth L Fidd~. 219 AiJ: , 201 P. 3d 529 (2009). Mr. Tidrick, Mr. Hendy, and the Class were harmed by the unlawful conduct of the Board 'The Class is entitled to reimbursement of its attorneys' fees and costs pursuant to A.R.S , , and the private attorney general doctrine set forth in Arnold v. Amcma 4 This Notice of Claim arises from au unlawfully issued Interim Orders before the Board's April meeting. Page30fS _1-- saal (OO'd 8 0#

4 Diepartl]len~ of Health ~ervices, 1~ Ariz. 593, 775 P.2d 521 (1989); and for general, consequential and special damages 1n amounts to be determined. na~ages - the specific amou»js forwhic~ rep~esentatives' claims can he settled, and estimated amount fot which the cla.iw of the anticipated. Class may be settleg, and the additional facts sullvorriog these adloun~: Mr. Tidrick submitted to a board-ordered evaluation for which he was required to pay pursuant to an Interim Order, which is in the Board's possession. The cost of this evaluation performed on January R, 2010 W~ $1, plus interest accruing at the legal rate of 10% compounded annwilly. (At this time, no interest is included). (Exhibit. 1). Attonley fees to date arc estimated to be $2,500.00, for a total settlement amount of $3, Mr. Henel)' Mr. Hendy submitted to a board-ordered. psychological evaluation for which he was required to pay pursuant to an Interim Order, which is in the Board's possession. of this evaluation, performed in February 2003 was $1,000.00, plus interest accruing at the legal tate of 10% compounded annually, totaling $1, Attorney fees to date are estimated to be $2,500.00, for a total settlement amount of $5, The COSt Remaining Class Members If li.~0fl ensu...es~e.representatives intend to seek certification of a plainriff class. If a class is later certi.fieti this notice of claim -w.i11serve as a repre:sentative notice for other cass memberr;;. The factual information to establish a mote specific amount of damages for the anticipated Class is SOLEI. Y within the Board's knowledge and control, Undersigned counsel have attempted to obtain information via a public records request filed 'With.the Board on April 21, 2010; however, that information has not yet been forthcoming. Therefore, an estimation of the number of individuals in the anticipated Class who have been damaged including the amount of damages for each individual is provided Upon receipt of the requested. informacion, a more specific calculation will be supplemented. The estimated damages for the other class members similarly situated are based on the following: The Board has been illegally ordering individuals to pay for the evaluations since about 1998 (the first calendar yea.r after the effective date of the Board's statute allowing it to order evaluations), which is 12 calendar years. The Board has held between six and 12 meetings pet year since At each meeting, the Board has issued between 2 and 3S Interim Or.dets requiring the subject individuals to pay for evaluations without authority to Page 4 ofs 1'\ T f'\? I I",,...,... sool voo'd 8 0#

5 do so. The evaluations raoge in cost from about $ each to about $3, each, with an average cost per evaluation as $1,500. The average number of years that interest has accrued is 6 years. Interest accrues at 10 10compounded annually. Legal fees for prosecuting these matters arc estimated to be $2,500,OOO.OO.~ Calculation to determine est:ima~d number of plaintiffs in the Class: 12 years ( ) multiplied by The average number of annual meetings :;;9 Multiplied by the mean number of Interim Orders issued per meeting '= Totals 1,998 members of the Class Calculation to determine esrima,ted thma~e~ amount per metnber of the C~<;,,: $1,500 average cost of evaluation per member plus 10% interest compounded annually for averag~ of 6 years = $2, per member Totals $3, per member (plus legal fees and costs>which are not included in this estimation) The amount demanded to settle this case is $7,816,176.00plus le.gal feg and costs. 6 The estimated damages for the Class will compensate the estimated 2,000 individuals who. over the past 12 calendar years have paid for evaluations pursuant to the Board's illegal. mandate, coercion, and threat of disciplinary action if they failed to do so. If you have any questions reg:tt<lingthis Notice of Claim or the facts supporting please contact us. this claim, Sincerely yours, TERESSA M. SANZIO, P.c. GERV ASE LAW FIRM, PILe. ". '.'.' ~.~ ~ '. T eressa M. Sanzio Lisa Gervase Encl Exhibit 1 C; MI". Tidrick Mr. Hm~ (withour ~bir) IUDS. s Actual legal fees and costs will be pled and determined at trial should a lawsuit follow,, JfTidrick and Henely's matters are resolved, the demand will be reduced accordingly. Page 5 of 5 ('\" e, T {'\T"'" I J 7 r r-r.

SUPERIOR COURT OF ARIZONA MARICOPA COUNTY

SUPERIOR COURT OF ARIZONA MARICOPA COUNTY 1 II Terry Goddard Attorney General Rebecca J. Herbst, Bar No. 01 II Assistant Attorney General W. Washington II Phoenix, Arizona 00- Telephone: (0) - II Fax: (0) - Rebecca.Herbst@azag.gov Attorneys for