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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.
For example, a policyholder believes that their denied claim is unjust. As a result, they inform the insurer that they are considering a lawsuit to recover losses. The insurer seeks a declaratory judgment to clarify its rights and obligations with hopes of preventing the lawsuit.
Declaratory relief refers to a court's declaratory judgment stating the rights of parties without ordering any specific action or listing awards for damages.
Under CCP §1060, declaratory relief is available only "in cases of actual controversy relating to the legal rights and duties of the respective parties." The controversy must be real, involving justiciable questions that relate to the parties' rights and obligations.
A declaratory judgment is a binding judgment from a court defining the legal relationship between parties and their rights in a matter before the court. When there is uncertainty as to the legal obligations or rights between two parties, a declaratory judgment offers an immediate means to resolve this uncertainty.
A declaratory judgment is typically requested when a party is threatened with a lawsuit but the lawsuit has not yet been filed; or when a party or parties believe that their rights under law and/or contract might conflict; or as part of a counterclaim to prevent further lawsuits from the same plaintiff (for example, ...
Declaratory judgments are conclusive and legally binding, but do not have preclusive effect if: A later lawsuit involves issues other than those specifically litigated and ruled on in the declaratory judgment action.