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What is a Declaratory Judgment Action?

Thu, 03 Apr 2014
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Published in Articles

A declaratory judgment is a judgment by a jurisdiction based on their interpretation of the facts and a policy form which determines the rights of parties without ordering anything be done or awarding damages. By seeking a declaratory judgment, the party making the request is seeking for an official declaration of the status of a matter in controversy. A petition for a declaratory judgment asks the court to review the facts and define the legal relationship between the parties and their rights with respect to the matter before the court. A declaratory judgment is binding. It is different from other judgments or court opinions because it doesn't provide a method of enforcement.

Insurance companies often file a declaratory judgment action to determine whether a defense obligation is owed. A favorable result in the coverage suit can alleviate the insurer from defending the insured. Filing a declaratory judgment action may also give the insurer a tactical advantage by choosing a more favorable venue.

Under what circumstances and how the extrinsic evidence is used in the declaratory judgment action has produced many results across the country. Most courts allow the use of this evidence in a declaratory judgment action in order to determine the duty to defend only if the evidence does not affect the merits of the underlying lawsuit.

On the other hand, some courts have allowed a declaratory judgment to prove that an insured acted intentionally. This is sometimes done even though the insured was sued for negligence. Some of the reasons for filing for the declaratory judgment can be the absence of critical dates within the complaint as in the date of loss. Other reasons include cancellation of a policy, progressive or continuing bodily injury or property damage, or date of the offense as in a personal or advertising injury situation.

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Author: Partners of Claims Resources and Solutions LLC publishes this article as a public service. It is provided for general information and is not intended to replace legal advice for specific cases.

 

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