Declaration sought to determine the insurance issues and appropriate relief. The bottom line is – there is no good reason, nor even any need, to allow a bad faith cause of action for the filing of a declaratory action.Through a Declaratory Judgment action, an insured can make an application to the Court to have a judge review the contract of insurance. This is an action for declaratory relief to settle important questions concerning the. The declaratory judgment would clarify the parties' rights and obligations under the insurance policy. The Trial Court held that the statute of limitations on a declaratory judgment action was four years, and dismissed the complaint. The Insurer will reimburse the Insured Entity for Breach. Complaint for Declaratory Judgment says: COUNT I. 1. Collins filed a Petition for Declaratory Judgment in the 32nd. Hawley Insurance Company sued its policyholder, a retail shopping center and hotel, in federal court (E.