State High Court upholds 'bad faith' jury verdict against insurance company

American West refused to pay out under-insured motorist benefit to man hurt in auto accident

A more than $1.3 million jury verdict awarded to a man injured in an automobile accident was appropriate given the conduct of the man’s insurance company, the South Dakota Supreme Court ruled.

The Lincoln County jury found that American West Insurance Co. acted in bad faith when it declined to pay Mark Fiechtner $900,000 from a policy he had to protect from under insured motorists. Besides awarding Fiechtner damages for breaching its contract and duty of good faith and fair dealing, the jury also awarded Fiechtner $890,000 in punitive damages.

“The jury could have reasonably concluded that American West did not have a reasonable basis to deny Fiechtner’s claim and that it was aware that it lacked a reasonable basis to deny the claim,” Justice Scott Myren wrote in the majority opinion, published Thursday.