Declaratory Judgment Action and Insurance Coverage

What is a declaratory judgement?

A declaratory judgment in a personal injury action bought by an insurance company or an insured, to determine the rights and obligations of the parties when someone is injured in a personal injury case.

For example, if there is a trip and fall in front of a home, and the resident does not live in the apartment, then this may have violated the insurance policy that was originally written by the insurance company. This may happen in the sense that when the original insurance policy was written, the language of the agreement said that the person who is insured must actually live in the home.

If the person did not live in the home, and the plain meaning of the language was such that the insured had to live in the home, and did not, then the insurance company can bring an entirely different case against the home owner. That’s right – the insurance company can sue their own insured.

Declaratory Judgment 

The insurance company brings  the action called a declaratory judgment or DJ action for short, to determine the rights of the parties. The insurance company wants to know if they do or do not have a duty to defend, and/or insure the person with exposure to liability because of an accident.  If the contract for insurance is not abided by, then the Court may let the insurance company out of the case – having to defend and cover the homeowner in front of whose property, for example, someone sustained a personal injury.

This would be a separate case from the underlying personal injury action, and the insurance company will typically ask the Court to determine the rights of the parties. The insured (generally a large building represented by counsel), may also bring a declaratory judgment action to enforce and or apportion the responsibility among multiple carriers depending on time on the risk of the policy.

Some of this is complex, but what you need to know is that sometimes a personal injury case can start out seeming to have an insurance policy to cover the insured, but later there is a decision of the Court that in effect nullifies insurance coverage altogether.

This makes a case far less attractive to a lawyer

At best, you will get a judgment against the home owner that may never yield any monetary award. At the same time, a lawyer is not interested in trying a case that is expensive to try, and has no award for their time, significant amount financed, time, and effort.

For a free consultation, contact the office of Personal Injury Attorney Manuel Moses, Esq. 236 West 26th Street Suite 303, New York, New York 10001. (212) 736-2624  Extension 11.

Nothing in this blog is intended to be formal legal advice you are urged to consult a qualified attorney for guidance of your construction accident or personal injury case.

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