What Are Declaratory Judgments and How Might They Affect My Personal Injury Case?

What Is the Purpose of a Declaratory Judgment?

A declaratory judgment is a judicial remedy used to clarify and determine the rights and obligations of parties in a dispute without necessarily providing for or ordering enforcement or damages. Its primary purposes are:

• Clarification of Rights: It allows parties to determine their rights and duties before any actual harm has occurred or before they proceed with a certain course of action. This can help avoid potential future disputes or litigation.
• Provide Certainty: It helps resolve uncertainties or ambiguities, giving parties a clear understanding of their legal position.
• Prevent Future Wrongdoing: By clarifying the rights and obligations of parties, it can serve as a preventative measure, discouraging potential wrongful actions.
• Alternative to Coercive Remedies: Unlike injunctive relief or damages, a declaratory judgment doesn’t coerce a party to act or refrain from acting. It’s simply a statement of what the law is in relation to a particular matter.
• Efficient Resolution: In some cases, a declaratory judgment can be a more efficient means of resolving disputes than other legal remedies.

Common Situations a Declaratory Judgment May be Requested

• Provide certainty in disagreements or potential legal conflicts
• Prevent a dispute from going to trial by asserting specific legal rights
• Parties believe the law and an existing contract may conflict

How to Obtain a Declaratory Judgment

A declaratory judgment can be sought voluntarily by a party or initiated as an action by the court. To obtain a declaratory judgment, the following steps are typically taken:

1. Determine Jurisdiction: A declaratory judgment lawsuit can be filed in state or federal court. Depending on the case, one may have an advantage over the other.
2. File a Complaint: The party seeking a declaratory judgment will typically file a complaint with the appropriate court stating their reasons for seeking relief.
3. Serve the Defendant(s) : After filing the complaint, the plaintiff must serve all involved parties, providing them with a copy of the complaint and a summons to appear in court.
4. Await a Response: The defendant(s) will have a set period to respond or file a counterclaim.
5. Discovery Phase: Similar to other legal actions, both parties may engage in discovery to gather evidence and build their case.
6. Preliminary Hearing: The court may hold a preliminary hearing to determine if the case should proceed to trial.
7. Trial or Disposition: Depending on the outcome of the preliminary hearing, the case may proceed to trial or be disposed of with a ruling from the judge.

How Are Declaratory Judgments Used in Personal Injury Cases?

The Sheraton Atlanta made national news in July 2019 when it voluntarily shut down after several guests tested positive for Legionnaires’ disease. By January 2020, the hotel faced five personal injury lawsuits and 50 claims, one of which was brought by the estate of someone whose wrongful death was linked to the Legionnaires’ outbreak at the Sheraton Atlanta.

However, Sheraton Atlanta’s insurance company was doing what insurance companies often do – avoid footing the cost of the hotel’s legal costs or honoring their business interruption claims. This can happen sometimes in personal injury cases, especially when:

• A commercial general liability policy excludes illnesses caused by mold, fungus, or microorganisms
• The insured business’s shutdown was not due to actual physical damage, such as a fire, but due to an excluded peril
• If the Sheraton Atlanta’s policy excludes “stigma loss” (they lose money because guests are afraid to go to the hotel after the outbreak), the hotel’s business interruption policy may not cover it

Sheraton Atlanta sought a declaratory judgment action from the courts over their insurance policy contract. If the court rules the Legionnaires’ outbreak and subsequent business interruption are covered by Sheraton’s commercial policies, the insurance company must pay for legal defense, revenue losses, and associated repair costs.

Suppose the court decides the damages related to the outbreak are legitimately excluded perils. In that case, Sheraton Atlanta may be on their own fighting personal injury, wrongful death claims, and resulting lawsuits.

Are Declaratory Judgments Common in Atlanta Personal Injury Cases?

No. Declaratory judgment actions usually arise in business and contract disputes, but there is some crossover potential, such as in the example above.

The same scenario can happen in smaller personal injury cases as well. If a person was injured in a slip and fall accident in someone else’s home, a situation could arise where the homeowner’s insurance company cites a policy exclusion that frees them from the obligation of paying for their client’s defense.

Declaratory judgments may also arise in auto accident injury cases, especially in cases where you must file an uninsured or underinsured motorist claim. The insurance company may assert your injuries or damages were caused by excluded perils or your situation does not meet the necessary criteria to justify a claim for your damages or injuries.

In some declaratory judgment cases, such as in the Sheraton Atlanta case, the motion doesn’t involve the plaintiff but is between the defendant and their insurance company. From a plaintiff’s perspective, these scenarios could delay the trial, meaning the injured party may have to wait longer to win the compensation they need to recover.

How Is a Summary Judgment Different from a Declaratory Judgment?

If you’re not a lawyer, it’s understandable that you may confuse a declaratory judgment with a summary judgment. They are two very different motions.

A summary judgment doesn’t help define any particular guidelines, obligations, or rights. A summary judgment motion is only used if the material facts of a case are clear and not open to interpretation or arguments regarding liability.

In a personal injury case, summary judgment motions are usually an attempt to assert that liability is clear due to entirely one-sided evidence, so there’s no need for a full-blown trial. This scenario could arise in a personal injury case if the defense or the plaintiff had a video of the accident and injury that clearly shows one of the parties was liable for an injury.

If someone ran a stop sign and T-boned your vehicle in the middle of an intersection, resulting in severe injuries, and there was a video of the accident showing:

• You stopped at a four-way stop sign and checked for traffic before proceeding
• When you’re halfway through the intersection, a speeding car smashes into your vehicle without slowing down at the four-way stop

If the defense were going to attempt to dispute liability in the accident, their entire case could be shut down by that video. However, in most cases, if that scenario occurred, the insurance company would not even take the case to trial since the overwhelming evidence against their client would almost always lead them to seek a pre-trial settlement.

Most auto accidents are unclear-cut, and liability is often in question or shared by both drivers, so they sometimes go to trial.

Get Help from Atlanta Personal Injury Attorneys

If you are still confused, you’re not alone. Declaratory judgments and summary judgments are not particularly well-known aspects of law outside legal circles, but they could have a significant impact on your personal injury case and your ability to win compensation in settlement negotiations or at trial.

If another person’s negligence has injured you and you have questions about liability or are just interested in speaking with an attorney about your situation, call the Dressie Law Firm at (678) 735-3734 for a free consultation. We would be happy to discuss the details of your case.