>FWIW, I got this to work:
>
>

select 1 
>	from ClaimItems inner join Claims on cit_clmfk = clm_pk
>	where dbo.claimitemstatus(clm_forwarded
>				,cit_received
>				,(select com_overduedays
>				from companies
>					inner join Clients on cli_comfk = com_pk
>					inner join Claims subclaims on clm_clifk = cli_pk
>				where subclaims.clm_pk = claims.clm_pk)) = 3

This is absolutely not readable query.

I was trying to fix your query in the meantime (when you replied) using CROSS APPLY, but I think your query should be a simple query with JOINS and then select with the restriction from derived table. Can you please explain this query in English, I'll write a better version?

BTW, using Scalar functions in WHERE clause will make your query suffer from performance.