Revocable Trust Trustor, Trustee, Beneficiary Allowed to Recover from Arizona’s Residential Contractors’ Recovery Fund

After problems with the construction of Krishna Pinnamaneni’s home he filed a complaint under the Residential Contractors’ Recovery Fund requesting compensation. The Fund created by Arizona statute allows a “person injured” to recover when a contractor performs deficient work.

The work performed by the contractor was determined to be deficient by an administrative judge, but the Arizona Registrar of Contractors (ROC) denied Pinnamaneni’s claim based on it being filed by someone that was not an “injured person.” The real property that is the site of the home is owned by a revocable trust, which Pinnamaneni is the trustor, trustee, and beneficiary. The contract with the contractor was made by Pinnamaneni through his LLC, Pioneer Family Investments. The denial of Pinnamaneni’s claim was affirmed by a superior court, and Pinnamaneni appealed.

In Pinnamaneni v. ROC, an Arizona appeals court reversed the superior court, and held that Pinnamaneni met the required definition of an “injured person” and that the “statute does not require contractual privity between an owner of property and the residential contractor as a prerequisite to recovery from the Fund.”

Special thanks to Ike Devji for bringing this case to my attention.