A court's first step in a declaratory judgment action concerning insurance coverage is to determine the scope of the policy's coverage. An insured files a declaratory judgment action against their insurer and names an injured third party who shares citizenship with the insured.Title was obligated under Illinois law to defend the entire lawsuit. In most jurisdictions, an insurer's duty to defend is broad and an insurer cannot flush away the fundamental obligation to defend its insured. 4. A court's first step in a declaratory judgment action concerning insurance coverage is to determine the scope of the policy's coverage. Buck, Philadelphia, for Potamac Insurance, appellee. 1935); rehearing denied, 300 U.S. 687 (1937). Court previously granted summary judgment. To procure appropriate insurance. In August 2004, Meridian filed a motion for summary judgment in the declaratory judgment action.