On March 17, Dewain D. Fox, judge of the Superior Court of Maricopa County, declared Santa Cruz County’s lawsuit against the State of Arizona in the Elizabeth Gutfahr case null and void.
This is a significant development in that the county hoped to use any funds they might win from the State as a result of this action to help repay amounts owed various other entities who suffered losses from former County Treasurer Gutfahr’s embezzlement. If the dismissal stands – and the county is certain to appeal the ruling – loss of this source of funds will be a big loss to the county.
Back in April 2024, Santa Cruz County discovered an ongoing embezzlement by the county treasurer. Ultimately that theft was found to total in the neighborhood of $38.7 million. Many entities within the county, from school districts to fire districts, were found to have been shorted substantial money from tax dollars owed to them as a result of this theft and its cover-up. The county was in the position of needing to repay this money.
Over the next few months, the county held numerous public meetings. At no time did the county notice or conduct a public meeting to discuss whether to initiate any legal proceedings related to the embezzlement.
On Aug. 19, 2024, the county served notice on the State of Arizona of its intent to file a suit against the state in relation to the matter. That suit was filed on Nov. 24, 2024. Although not pertinent to this ruling, the gist of the lawsuit by the county against the state is that the state should have discovered the embezzlement during its annual audit of county funds, and that the state is therefore responsible to repay the county.
On Nov. 18, 2025, the state filed a motion for summary judgment asking for dismissal of the county’s lawsuit based on violation of the Arizona Open Meetings Law. Following that motion, the county held an open meeting to “ratify” its actions against the state. Among other responses, the county maintained that should its suit be dismissed, it would simply refile and that this would be counted as falling within the statute of limitations – the time period in which a action must be filed – since the original action was within that time period.
In his explanation of his decision on March 17, Fox explained that the violation of the Open Meetings Law, which all parties admit happened, does not simply allow dismissal of the action but declares it “null and void.” This is a significant difference. If a case is dismissed, the court ends the case but acknowledges it did exist. It can dismiss “without prejudice,” allowing it to be filed again to fix the issues that led to it being dismissed. Cases can also be dismissed “with prejudice,” meaning it is over and cannot be refiled.
When a court declares something “null and void,” it is saying that it was legally invalid from the start, as if it never existed. In the instance of an Open Meetings Law violation, a dismissal would allow the decision by the entity to remain valid, and the matter could be refiled. In this instance of filing the lawsuit against the state, the action has been declared to legally have never happened. That means any attempt to refile the action now would be well beyond the statute of limitations.
The county will certainly appeal this decision, but the case law cited by Fox seems to indicate that is a lost cause. Had the county “ratified” its actions at a public meeting within 30 days of filing the case, it might well have allowed the filing to stand. Given that this did not take place for 60 days and until the state filed its motion for summary judgment, that was too little, too late.
While this will play out over whatever time period it takes for the appeal, it appears the county has lost its opportunity to obtain funds from the state and will need to repay the entities who lost tax funds from its own funds. Unfortunately for county residents, this would likely result in raises to real estate taxes.