Declaratory Judgment Act Lawsuit in Texas

The purpose of the Declaratory Judgments Act is to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations. Tex. Civ. Prac. & Rem. Code Ann. § 37.002(b) (Vernon 2008); see Bonham State Bank, 907 S.W.2d at 467; Indian Beach Property Owners’ Ass’n v. Linden, 222 S.W.3d 682, 699 (Tex. App.—Houston [1st Dist] 2007, no pet.). The statute is remedial and to be liberally construed. A declaratory judgment is appropriate only if a justiciable controversy exists as to the rights and status of the parties, and a declaration will resolve the controversy. Bonham State Bank, 907 S.W.3d at 467; Fort Bend County v. Martin-Simon, 177 S.W.3d 479, 482–83 (Tex. App.—Houston [1st Dist.] 2005, no pet.). A trial court has discretion to enter a declaratory judgment so long as it will serve a useful purpose or will terminate the controversy between the parties. Bonham State Bank, 907 S.W.3d at 467 (citing James v. Hitchcock Independent School Dist., 742 S.W.2d 701, 704 (Tex. App.—Houston [1st Dist.] 1987, writ denied).

Justiciable controversy is when parties have a dispute or controvery over an issue to a point of the necessity of a referees' interpretation. In this case, Texas courts are afforded the judicial review of such ripe controversies. See Ainsworth v. Oil City Brass Works, 271 S.W.2d 754, 760–61 (Tex. App.—Beaumont 1954, no writ) (holding that an action for declaratory judgment lies when the fact situation manifests the presence of “ripening seeds of a controversy”).

Moreover, a declaratory judgment can be a proper method to determine that a party performed under a contract. See Martin-Simon, 177 S.W.3d at 483–84 (holding that judgment was proper to determine that plaintiff paid her taxes). See also, Indian Beach, 222 S.W.3d at 700 (holding that whether the plaintiffs’ construction of a fence was in compliance with deed restrictions applicable to their property was not a purely factual dispute but related to their status with regard to the fence and deed restrictions, and was a proper subject for declaratory judgment). There are numerous other cases where a claim under the Declaratory Judgment Act would be proper, but the key underlying threshold would be a justiciable controversy. That is a controversy ripe for a court to referee or decide.