Application for insurance policy (containing insured's representations). In this motion, Borne argues that the declaratory judgment action should be dismissed for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(1).Federal courts are reluctant to consider novel insurance coverage issues. It is, therefore, ORDERED, ADJUDGED AND DECREED that. Defendant sought dismissal of the action, relying on certain evidence extrinsic to the complaint. Declaratory Judgment Actions are utilized to determine insurance coverage issues and to prevent bad faith allegations. A declaratory judgment action is a type of lawsuit that allows businesses and individuals to seek a court's conclusive ruling on an uncertain legal issue. Declaratory Judgment Actions are utilized to determine insurance coverage issues and to prevent bad faith allegations. The declaratory judgment would clarify the parties' rights and obligations under the insurance policy. A declaratory judgment action is not necessarily an action for affirmative relief.