Sometimes you get the bear …

In Golden Bear Ins. Co. v. 34th S&S, LLC, the Fifth Circuit rejected an insurer’s declaratory-judgment action about coverage.

The Court emphasized that the Declaratory Judgment Act is intended to provide “early adjudication” of legal rights before disputes ripen into violations of law or breaches of contractual duty. In this case, the alleged misconduct by Golden Bear—negligently refusing to settle a claim—had already occurred, as evidenced by the jury’s verdict exceeding the policy limit.

Therefore, Golden Bear’s could not seek a declaratory judgment  to argue retroactively that it never had a duty to settle was inappropriate. More broadly, the Court observed:  “Allowing the complaint to proceed here would ‘enable a prospective negligence action defendant to obtain a declaration of non-liability,’ which ‘is not one of the purposes of the declaratory judgment act[].'” No. 24-20332, Mar. 14, 2025.