The South Dakota Supreme Court affirmed a jury verdict against American West Insurance Company in *Fiechtner v. American West Insurance Company*, upholding a breach of contract and bad faith determination in an underinsured motorist benefits dispute.
Mark Fiechtner was involved in a motor vehicle accident in April 2018 that resulted in significant injuries requiring medical treatment. Following the collision, Fiechtner sought medical care for neck pain, vision issues, and memory problems that developed after the accident.
The case began when Fiechtner filed claims with multiple insurance companies following his accident. American West Insurance Company, his own insurer, paid the full limits of medical benefits coverage under his policy as required. Fiechtner also pursued a claim against the at-fault driver's insurance company and received the complete amount of that carrier's liability coverage.
However, the total insurance payments did not fully compensate Fiechtner for his damages. He then sought underinsured motorist benefits from American West under his own policy, which provides additional coverage when the at-fault driver's insurance is insufficient to cover all damages.
The dispute arose when American West offered Fiechtner an amount that was substantially less than what he demanded for his underinsured motorist claim. Unable to reach a settlement, Fiechtner filed suit against American West in Lincoln County Circuit Court.
In his lawsuit, Fiechtner alleged breach of contract, claiming that American West failed to properly honor his underinsured motorist coverage. He also brought a bad faith claim, alleging that the insurer unreasonably denied or undervalued his legitimate claim. Additionally, Fiechtner sought punitive damages and attorney fees against the insurance company.
The case proceeded to trial before Judge John R. Pekas in the Second Judicial Circuit Court of Lincoln County. After hearing the evidence and arguments from both sides, the jury delivered a verdict in favor of Fiechtner on all counts.
The jury found that American West had breached its contract with Fiechtner by failing to properly pay his underinsured motorist benefits claim. More significantly, the jury also determined that American West acted in bad faith in handling Fiechtner's claim, finding that the insurer's conduct was unreasonable under the circumstances.
In addition to compensatory damages, the jury awarded punitive damages against American West, indicating they found the insurer's conduct to be particularly egregious. The circuit court subsequently granted Fiechtner's request for attorney fees, adding to American West's financial liability in the case.
Dissatisfied with the jury's verdict and the circuit court's rulings, American West appealed the decision to the South Dakota Supreme Court. The insurance company challenged various aspects of the lower court's handling of the case and the jury's findings.
However, in an opinion filed Nov. 5, 2025, and written by Justice Myren, the South Dakota Supreme Court affirmed the circuit court's judgment in its entirety. The high court found no reversible error in the proceedings below and upheld the jury's determinations on all issues.
The case was argued before the South Dakota Supreme Court on June 3, 2025, with Mark J. Arndt and Delia M. Druley of Evans, Haigh & Arndt, LLP representing American West Insurance Company. Seamus W. Culhane and Nancy J. Turbak Berry of Turbak Law Office, P.C. represented Fiechtner.
The decision represents a significant win for policyholders in disputes with their insurance companies over underinsured motorist benefits. Bad faith insurance cases require plaintiffs to prove that their insurer acted unreasonably in denying or undervaluing a claim, a standard that can be difficult to meet.
The jury's finding of bad faith conduct, combined with the award of punitive damages, suggests that American West's handling of Fiechtner's claim was viewed as particularly problematic. Punitive damages in insurance cases are designed to punish insurers for egregious conduct and deter similar behavior.
The affirmance by the South Dakota Supreme Court reinforces the principle that insurance companies must handle claims in good faith and cannot unreasonably deny or undervalue legitimate claims from their policyholders. The decision also confirms that when insurers act in bad faith, they may face not only compensatory damages but also punitive damages and attorney fees.
For American West Insurance Company, the affirmance means the insurer must pay the full amount of the jury's award, including compensatory damages, punitive damages, and Fiechtner's attorney fees. The company has no further avenue for appeal of the South Dakota Supreme Court's decision.