S.D. Codified Laws § 58-12-3

Section 58-12-3 permits attorney’s fees against an insurance company; making group insurance available does not by itself make a business an insurer.

Davis v. Interstate Motor Carriers Agency · filed 1970-06-09

That plaintiff caused the summons to be served on the Insurance Commissioner for IMCA as an Unauthorizad Insurer, SDCL 58-8, and on the Secretary of State for Little Audrey as a foreign corporation indicates his distinction between these two defendants, yet plaintiff asked for and the court’s judgment against Little Audrey granted $3,000 attorney’s fees as permitted by SDCL 58-12-3 as against an insurance company. Plaintiff therefore assumed an inconsistent posture in serving process on Little Audrey as if it were not an Unauthorized Insurer or insurance company, but at time of judgment contended it was and proved and requested fees as against such company.

Section 58-12-3 permits attorney’s fees in an action on a contractor’s performance bond when the surety’s refusal to pay is vexatious or without reasonable cause.

Tracy v. T & B CONSTRUCTION COMPANY · filed 1970-12-18

In our opinion the legislature clearly and unequivocally by the foregoing statutes defined an indemnitor and surety as an insurer and placed them within the purview of SDCL 58-12-3, which reads “In all actions * * * against any insurance company * * * on any policy or certificate of any type or kind of insurance.” Thus, when certain essential prerequisites have been established, the court is authorized to allow the plaintiff a reasonable sum as attorney’s fees as part of his costs.

Section 58-12-3 permits attorney’s fees when an insurer refuses without reasonable cause to pay the full amount of a loss.

Wilson v. Allstate Insurance Company · filed 1971-05-18

The court’s authority of attorneys’ fees for the present action apparently was founded on SDCL 58-12-3 which permits such allowance if it appears from the evidence that an insurance company “has refused to pay the full amount of such loss, and that such refusal is * * * without reasonable cause”.

Section 58-12-3 permits attorney’s fees when an insurer refuses to pay the full loss without reasonable cause after failing to investigate the claim in good faith.

Eldridge v. Northwest G. F. Mutual Insurance · filed 1974-08-28

We conclude that defendant failed in its duty to conduct a good-faith investigation of plaintiff’s claim and that as a result defendant’s refusal to pay the full amount of plaintiffs loss was without reasonable cause.

Section 58-12-3 does not authorize attorney fees against the South Dakota Department of Transportation on an employee's worker's compensation claim.

Ofstad v. South Dakota Department of Transportation · filed 1986-05-21

Accordingly, we hold that SDCL 58-12-3 does not authorize an award of attorneys' fees against employer on employee's claim for worker's compensation benefits.

Section 58-12-3 permits attorney fees when an employer refuses to pay the full amount owed and the refusal is vexatious or without reasonable cause.

Cozine v. Midwest Coast Transport, Inc. · filed 1990-04-18

SDCL 58-12-3 provides that attorney fees may be awarded to an employee if the employer “refused to pay the full amount of such loss, and that such refusal is vexatious or without reasonable cause.” Since Midwest failed to pay the “full amount of such loss” in respect to Issues 5, 6, the first part of 2, and possibly Issue 1 and the second part of 2, we remand this issue for a determination whether such refusal was vexatious or without reasonable cause.

Section 58-12-3 permits attorney’s fees, including appellate fees, for work on an insurance policy contract claim but not for work on a bad faith tort claim.

Isaac v. State Farm Mutual Automobile Insurance Co. · filed 1994-09-14

SDCL 58-12-3 provides for appellate attorney’s fees, but only to the extent the fees are for work done on the contractual claim.

Section 58-12-3 allows attorney's fees only for claims based on an insurance policy, so fees for a separate bad faith claim must be excluded.

Sawyer v. Farm Bureau Mutual Insurance Co. · filed 2000-11-21

Pursuant to SDCL 58-12-3, attorney's fees are allowed only in an action against an insurer based upon the policy. ... Therefore, those attorney's fees relating to the bad faith claim against Farm Bureau, as opposed to the contractual claim should have been excluded.

Section 58-12-3 permits attorney’s fees incurred after a contract verdict, appeal, or settlement offer when contract damages remain unresolved and must be proved again.

Bertelsen v. Allstate Insurance Co. · filed 2013-06-12

The court did not abuse its discretion in awarding attorney’s fees relating to the breach of contract claim. Moreover, attorney’s fees were awardable after the verdict was rendered on the breach of contract claim in June 2010, after our decision in Bertelsen II, and after the settlement offer. Notwithstanding those occurrences, Bertelsen’s claim to $100,000 in contract damages was not resolved in Bertelsen II and Bertelsen was required to re-prove contract damages in the last trial.

Section 58-12-3 allows attorney’s fees when a court finds that an insurer’s denial of coverage was vexatious or without reasonable cause.

Kern v. Progressive Northern Insurance Co. · filed 2016-07-20

In order to be awarded attorney’s fees under this statute, a court must find that an insurer’s denial of coverage was vexatious or without reasonable cause. ... In light of these factors, the trial judge’s determination that Progressive’s conduct was not vexatious was not clearly erroneous.

Section 58-12-3 permits attorney’s fees for an insurer’s denial of coverage without reasonable cause only if judgment or an award is rendered for the plaintiff.

Western National Mutual Insurance Co. v. TSP, Inc. · filed 2017-11-08

SDCL 58-12-3 permits a court to award attorneys’ fees in an action against an insurance company for the denial of coverage without reasonable cause but only “if judgment or an award is rendered for plaintiff.” TSP is not entitled to judgment or an award against Western National for the denial of coverage and is therefore not entitled to an award of fees under this provision.

Section 58-12-3 requires attorney’s fees when an insurer refuses to pay a claim without reasonable cause; an inadequate investigation can make the refusal unreasonable.

Lagler v. Menard, Inc. · filed 2018-07-03

Therefore, the circuit court correctly concluded that the Department’s reasonable-cause finding is clearly erroneous, and Lagler was entitled to attorney’s fees.

Section 58-12-3 permits attorney’s fees for a breach of contract claim, but not for a bad faith tort claim; a finding of bad faith is not required for a fee award.

Wiebers v. Farmers Mutual Hail Insurance Company of Iowa · filed 2019-12-12

A plaintiff can recover attorney’s fees under § 58-12-3 for a breach of contract claim but not for a bad faith claim. ... Thus, summary judgment on the attorney fee claim would be premature and is denied.

Section 58-12-3 permits attorney’s fees when an insurer refuses to pay benefits vexatiously or without reasonable cause and the plaintiff obtains a judgment or award.

Sioux Steel Company v. American International Group, Inc. · filed 2023-12-21

SDCL § 58-12-3 authorizes attorney’s fees in certain situations for insurance disputes, but they are only available if, in refusing to pay benefits under the policy, the insurer’s refusal was “vexatious or without reasonable cause[.]” Additionally, such attorney’s fees are only available “if judgment or an award is rendered for plaintiff[.]” Id. Here, because ISOP did not act vexatiously or without reasonable cause in denying coverage, and because the court is not entering judgment in favor of Sioux Steel, Sioux Steel cannot recover attorney’s fees.

Section 58-12-3 does not allow attorney’s fees for a tort action alleging an insurer’s wrongful refusal to settle within policy limits.

Crabb v. National Indemnity Company · filed 1973-03-23

This is not an action against an insurance company on a policy of insurance within the contemplation of our statute. The gist of the action is tortious in nature i. e., for the wrongful refusal to settle within the policy limits of its insured.

Section 58-12-3 does not authorize attorney's fees against the Public Entity Pool for Liability because the pool is excluded from the insurance code.

Public Entity Pool for Liability v. Score · filed 2003-02-12

Because § 58-12-3 is inapplicable against the PEPL fund, there is no need to decide whether the fund's actions were vexatious.

Section 58-12-3 subjects the State to attorney fees when it elects to self-insure its workers’ compensation obligations.

Lewis v. South Dakota State Department of Transportation · filed 2003-07-16

If either State or private employers opt to self insure in order to provide workers’ compensation they are subject to the provisions of SDCL 58-12-3.

An insured may recover attorney’s fees under § 58-12-3 only if the insurer breaches the contract by denying coverage vexatiously or without reasonable cause.

Sioux Steel Company v. Ins. Co. of the State of PA · filed 2025-02-06

Accordingly, Sioux Steel is not entitled to attorney’s fees. See S.D. Codified Laws § 58-12-3 (stating that insured may recover attorney’s fees only if insurer breaches contract by denial of coverage that was “vexatious or without reasonable cause”).

Whether an insurer’s refusal to pay was vexatious or without reasonable cause under § 58-12-3 is a question of fact.

Ranger Insurance Company v. MacY · filed 1975-03-26

Whether the refusal to pay is “vexatious or without reasonable cause” is a question of fact. ... This record reveals facts in support of the trial court, and we refuse to overturn that decision.

Section 58-12-3 allows attorney fees when an insurer’s refusal to pay a loss is vexatious or without reasonable cause.

North River Insurance Co. v. Golden Rule Construction, Inc. · filed 1980-10-01

On May 17, 1978, North River refused full payment for Golden Rule’s loss, and on May 19, 1978, North River drafted its complaint, which was filed one week later. In light of the facts and issues in this case, these acts were not “vexatious or without reasonable cause,” as required by SDCL 58-12-3. We conclude, therefore, that the trial court was correct in refusing to allow such attorney fees.

Section 58-12-3 allows attorney fees when an insurer’s refusal to pay is vexatious or without reasonable cause.

Johnson v. Skelly Oil Co. · filed 1984-12-05

Upon a review of the record and the facts of this case, we cannot say that the trial court's determination that employer's refusal to pay employee's claim was not vexatious or without reasonable cause was clearly erroneous. We therefore affirm that portion of the trial court's judgment denying attorney fees under SDCL 58-12-3.

Section 58-12-3 does not make an insurer liable for attorney fees merely because it loses a coverage dispute; a reasonable factual dispute can justify its refusal to pay.

All Nation Insurance Co. v. Brown · filed 1985-02-20

Because the trial court found for the insured does not automatically brand the insurer's actions unreasonable and vexatious. We do not mean to imply in any way that an insurance company ipso facto subjects itself to liability for attorney's fees under SDCL 58-12-3 by reason of refusing to pay a claim by a policyholder, no matter how unfounded or unreasonable such claim may appear to be.

Section 58-12-3 permits attorney fees when an insurer refuses to pay the full loss vexatiously or without reasonable cause; whether the refusal meets that standard is a question of fact.

O'Neill v. Blue Cross of Western Iowa & South Dakota · filed 1985-04-17

SDCL 58-12-3 provides for a recovery of attorney fees from an insurance company when the company has refused to pay the full amount of loss and such refusal is "vexatious or without reasonable cause." The trial court found O'Neill failed to prove by a preponderance of the evidence that Blue Cross' refusal to pay the claim for Sherri was "vexatious or without reasonable cause." The question of "whether an insurer's refusal to pay is vexatious or without reasonable cause is necessarily one of fact[.]" Tracy v. T & B Construction Company, 85 S.D. 337, 343, 182 N.W.2d 320, 323 (1970); Wilson v. Allstate Insurance Company, 85 S.D. 553, 550, 186 N.W.2d 879, 883 (1971); All Nation Insurance, supra. We hold the decision of the trial court was not "clearly erroneous."

Section 58-12-3 permits attorney’s fees for a vexatious refusal to pay, but a defensible denial of coverage does not warrant fees.

Hot Stuff Foods, LLC v. Houston Casualty Company · filed 2014-11-17

Hot Stuff first argues that HCC’s persistent denial of coverage was a vexatious refusal to pay warranting an attorney’s fee award under § 58-12-3. We disagree. HCC consistently denied that Hot Stuff suffered a loss covered by the policy. As our reversal of summary judgment on this issue makes clear, HCC’s position was not indefensible.

Section 58-12-3 allows attorney fees for a vexatious or unreasonable refusal to pay a loss, but reasonable cause to defend the claim defeats a fee request.

Ewalt v. Mereen-Johnson MacHine Co. · filed 1987-10-14

On notice of review, Ewalts argue that the trial court erred by refusing to award them attorney fees pursuant to SDCL 58-12-3. The statute states that if there is a vexatious or unreasonable refusal by an insurance company to pay the full amount of a loss, the trial court shall allow the plaintiff a reasonable sum as attorney fees. ... After examining the record, we agree with the trial court that Employer had reasonable cause to defend the action brought by Ewalts. Therefore, the trial court’s findings on this issue are not clearly erroneous.

Section 58-12-3 does not require attorney fees when an insurer reasonably disputes coverage on an unsettled legal question.

American Family Mutual Insurance Co. v. Merrill · filed 1990-04-18

The trial court further found that American Family was not guilty of unreasonable or vexatious conduct in asserting and relying on its coverage defense and in seeking a determination of the coverage question in this declaratory judgment action. We agree.

Section 58-12-3 permits attorney’s fees when an insurer’s refusal to pay the full loss is vexatious or without reasonable cause; the trial court must make findings on that factual question.

Tri-State Insurance Co. of Minnesota v. Bollinger · filed 1991-10-16

To paraphrase SDCL 58-12-3, attorney's fees may be awarded if the insurance company has refused to pay the full amount of the loss, and that such refusal is vexatious or without reasonable cause. ... This being a factual question, we advise the trial court to enter findings of fact and conclusions of law at the appropriate time when the litigation has been tried in chief.

Section 58-12-3 permits attorney’s fees when an insurer refuses to pay the full loss vexatiously or without reasonable cause.

North Star Mutual Insurance Co. v. Kneen · filed 1992-05-06

To paraphrase SDCL 58-12-3, attorney’s fees may be awarded if the insurance company has refused to pay the full amount of the loss, and that such refusal is vexatious or without reasonable cause. ... It cannot be said that North Star has acted vexatiously or without reasonable cause in seeking a clarification and determination of its rights and obligations.

Section 58-12-3 allows attorney’s fees when an insurer refuses to pay the full amount of a loss and that refusal is vexatious or without reasonable cause.

Brooks v. Milbank Insurance Co. · filed 2000-02-02

Before a trial court can award attorney’s fees under this section it must find that the insurance company refused to pay the full amount of the insured’s loss and that said refusal was either vexatious or without reasonable cause.

Section 58-12-3 allows reasonable attorney’s fees as costs when an insurer refuses to pay a loss vexatiously or without reasonable cause; a sufficiently pleaded refusal can support a request for fees.

Berry v. Time Insurance · filed 2011-06-28

Berry has sufficiently pleaded the refusal to pay in this ease as “vexatious or without reasonable cause,” so the prayer for relief for attorney’s fees survives the motion to dismiss.

Section 58-12-3 permits an insured to recover attorney’s fees when an insurer refuses to pay the full loss vexatiously or without reasonable cause; a legitimate coverage dispute does not meet that standard.

Sapienza v. Liberty Mutual Fire Insurance Company · filed 2022-03-18

Section 58-12-3 allows an insured to recover attorney’s fees if the insurer “refused to pay the full amount of [the] loss,” and the refusal was “vexatious or without reasonable cause.” Liberty Mutual did not act vexatiously or unreasonably by refusing to indemnify the Sapienzas for all the losses they claimed.

Section 58-12-3 does not require attorney fees when an insurer has reasonable factual grounds to seek a hearing over disputed benefits.

Howie v. Pennington County · filed 1997-04-23

Insurers had a reasonable basis on which to request a hearing, including factual disputes regarding the permanency of Howie’s injuries. ... Having found substantial evidence to support the trial court’s conclusion that Insurers were not vexatious or unreasonable in having a hearing in this case, we affirm.

An insurer’s refusal to pay after an inadequate claim investigation can be without reasonable cause under § 58-12-3, supporting an award of attorney fees.

Fiechtner v. American West Ins. · filed 2025-11-05

Based on the evidence in the record, the circuit court did not clearly err when it found that American West’s denial of UIM benefits was vexatious or without reasonable cause.

Section 58-12-3 permits attorney fees when an insurer brings a declaratory judgment action against its insured and its refusal to pay under the policy is vexatious or without reasonable cause.

All Nation Insurance Co. v. Brown · filed 1984-02-22

Taking the initiative to have liability determined does not occlude an insurer's responsibility to pay attorney's fees when its refusal to pay according to the policy is found to be vexatious or without reasonable cause. That the pleadings for declaratory judgment did not contain a specific allegation of the Company's refusal to pay is likewise insufficient to negate an attorney's fees award under SDCL 58-12-3.

Section 58-12-3 allows attorney's fees in certain circumstances and does not bar an insured's other remedies in tort or contract for an insurer's refusal to pay.

Matter of Cert. of a Question of Law · filed 1987-01-07

SDCL 58-12-3, while not expressly authorizing a cause of action for bad faith failure to pay, acknowledges that such a cause of action may exist. That statute allows the award of attorney's fees against an insurance company under certain circumstances but specifically says that the statute "shall not be construed to bar any other remedy, whether in tort or contract, that an insured may have against the same insurance company arising out of its refusal to pay such loss." SDCL 58-12-3 (emphasis added).

Section 58-12-3 does not expressly authorize a claim for an insurer’s bad-faith failure to pay, but acknowledges that such a claim may exist.

Champion v. United States Fidelity & Guaranty Co. · filed 1987-01-07

SDCL 58-12-3, while not expressly authorizing a cause of action for bad faith failure to pay, acknowledges that such a cause of action may exist.

Section 58-12-3 allows attorney's fees when an insurer's refusal to pay was vexatious or without reasonable cause, even if a jury rejected a bad faith claim.

Bjornestad v. Progressive Northern Insurance · filed 2011-12-29

First, we address Progressive's legal argument that a defense verdict on a plaintiff's bad faith claim necessarily precludes a trial court from finding the insurer's conduct was "vexatious or without reasonable cause" under § 58-12-3. ... We therefore conclude the district court did not err when it determined it could consider whether Bjornestad was entitled to attorney's fees on her successful contract claim, notwithstanding the defense verdict on the bad faith claim.

Section 58-12-3 permits attorney's fees for an insurer's vexatious or unreasonable refusal to pay even when a jury rejects a separate bad faith claim.

Tripp v. Western National Mutual Ins. · filed 2011-12-29

We now conclude expressly what Brooks necessarily implies: a jury's adverse finding on a bad faith claim does not, as a matter of law, preclude a trial court from awarding attorney's fees under § 58-12-3.

Section 58-12-3 preserves an insured’s other tort and contract remedies against an insurer; an injured third party is not an insured under that provision.

Johnson v. Viking Insurance Co. of Wisconsin · filed 1989-02-07

That statute states in part that it “shall not be construed to bar any other remedy, whether in tort or contract, that an insured may have against the same insurance company arising out of its refusal to pay such loss.” (Emphasis added.) Considering the unique provisions of South Dakota’s workers’ compensation laws, it is obvious that in the employment setting, the employee is considered the insured rather than a third party beneficiary of the policy as is the plaintiff in. the present action.

Section 58-12-3 allows reasonable appellate attorney fees when a court affirms a finding that an insurer refused to pay the insured’s full loss vexatiously or without reasonable cause.

Biegler v. American Family Mutual Insurance Co. · filed 2001-01-24

SDCL 58-12-3 does allow this Court to award reasonable attorney fees when we affirm a trial court’s finding that an insurer has refused to pay the full amount of an insured’s loss and that the refusal was vexatious or without reasonable cause. Since we have upheld the trial court’s insurance and attorney fee rulings, we will grant Biegler reasonable appellate attorney fees pertaining to the insurance coverage issues in the amount of $2,750.

Section 58-12-3 does not authorize attorney fees for a tort claim challenging an insurer’s handling of an insurance claim.

Zebrowski v. American Standard Insurance Company of Wisconsin · filed 2017-09-21

This is a tort action because the court dismissed plaintiff’s breach of contract claim. ... Under Kirchoff, the court must dismiss the third count in plaintiff’s complaint for attorney’s fees pursuant to SDCL § 58-12-3.

Section 58-12-3 requires a judgment or award in the insured’s favor on the underlying claim before attorney’s fees may be awarded.

Johnson v. Acuity Mutual Insurance Company · filed 2020-03-25

Without a judgment or award in his favor on the merits of the claim, plaintiff is not entitled to attorney’s fees under § 58-12-3.