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For example, a declaratory judgment action could be brought to determine party rights and obligations under a contract or to establish the validity of a patent. Under Article III of the U.S. Constitution, a federal court may only issue a declaratory judgment when there is an actual controversy.
A declaratory judgment can make sure the dispute is being heard in the forum with the best potential outcome for the insurance company. Finally, declaratory judgment actions can eliminate some of the risks in the event of a trial.
The Court noted that while an action for a declaratory judgment is generally governed by a six-year statute of limitations (see CPLR 213[1]), the applicable statute of limitations in a declaratory judgment action is determined by the substantive nature of the claim.
A declaratory judgment action may be inappropriate where it is filed to beat the natural plaintiff to the courthouse. This tactic may be intended to deprive the other party of its natural position as plaintiff. Or, it may be intended to deprive the natural plaintiff of its choice of forum.
To properly state a sustainable cause of action for declaratory relief, a complainant must allege that (1) there is a bona fide dispute between the parties; (2) the complainant has a justiciable question as to the existence or non-existence of some right, status, immunity, power, or privilege, or some fact upon which ...
86.111 Existence of another adequate remedy; effect. The court may order a speedy hearing of an action for a declaratory judgment and may advance it on the calendar. The court has power to give as full and complete equitable relief as it would have had if such proceeding had been instituted as an action in chancery.