Declaration sought to determine the insurance issues and appropriate relief. 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.A declaratory judgment is a court-issued judgment that defines and outlines the rights and obligations of each party in a contract. An insured files a declaratory judgment action against their insurer and names an injured third party who shares citizenship with the insured. A declaratory judgment does not determine whether you are entitled to damagesit simply assesses your right to insurance coverage. Courts have traditionally held that an insurance company has no right to intervene in the liability action against the insured to seek a coverage determination. To establish federal jurisdiction in a declaratory judgment action, two conditions must be satisfied. First, is the constitutional inquiry. For a justiciable controversy to exist, the parties to the action must be seeking a declaration or clarification of their rights.3. In concise terms, the relief sought in the opposing carrier's dec action is not monetary.