Plaintiff individual brought suits,

Plaintiff individual brought suits, arising out of a construction contract, for declaratory relief against defendants, contractor, surety, and Department of Veterans Affairs (department), and against the contractor alone. The Superior Court of Sacramento County (California) sustained the contractor’s demurrer in the second suit and entered judgment against the contractor and surety in the first. The individual, contractor, and surety appealed.

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The individual hired the contractor to build a home. The surety supplied a performance bond. The department supplied partial financing. The individual argued that the trial court erred in finding no contractual breach by the department and in denying permission to amend his complaint regarding additional damages due from the surety and contractor. The contractor and surety urged that a stipulation between the parties constituted a novation and limited damages. The court held that the trial court impliedly absolved the department of all liability and that the trial court’s findings with respect to the department were supported by substantial evidence. The court held that no amendment was necessary because the trial court was obligated to make a complete disposition of the controversy in an action for declaratory relief, that based upon uncontroverted evidence, the individual was entitled to additional damages proximately caused by the breach, Cal. Civ. Code § 3300, and that the surety was equally liable for those damages. The court fond no novation because the stipulation allowed the individual to proceed pursuant to the contract and the contractor repudiated the stipulation.


The court dismissed the individual’s appeal from the trial court’s order sustaining the contractor’s demurrer because the order was not appealable. The court affirmed the judgment against the contractor and surety and impliedly for the department except for the matter of further damages and remanded to the trial court to enter further damages, if any, for additional relief against the contractor and surety.