Metropolitan Life Ins. Co. v. Kinsman
| Citation | 2009 SD 53,768 N.W.2d 540 |
| Decision Date | 01 July 2009 |
| Docket Number | No. 25085.,25085. |
| Court | Supreme Court of South Dakota |
| Parties | METROPOLITAN LIFE INSURANCE COMPANY; Metropolitan Insurance & Annuity Company; New England Life Insurance Company; MetLife Investors USA Insurance Company; General American Life Insurance Company; Paragon Life Insurance Company; MetLife Investors Insurance Company; Metropolitan Property & Casualty Insurance Company; Metropolitan Group Property & Casualty Company; Economy Premier Assurance Company; and Metropolitan Direct Property & Casualty Insurance Company, Plaintiffs and Appellants, v. Paul KINSMAN, Secretary of the South Dakota Department of Revenue and Regulation; Merle Scheiber, Director of the South Dakota Division of Insurance and the State of South Dakota, Defendants and Appellees. |
Ronald G. Schmidt of Schmidt, Schroyer, Moreno, Lee & Bachand, P.C., Rapid City, SD, for plaintiffs and appellants.
Timothy M. Gebhart of Davenport, Evans, Hurwitz and Smith, L.L.P., Sioux Falls, SD, for defendants and appellees.
[¶ 1.] In early 1981, Metropolitan Life and other foreign insurance companies (collectively MetLife) notified the South Dakota Department of Revenue and Regulation that they believed that certain provisions of the tax code were unconstitutional and that they were paying these taxes in protest. At an administrative hearing on this matter, MetLife's claims were found to be barred due to its failure to comply with procedural notice requirements in the "protest and suit" tax statutes.
[¶ 2.] In 2004, MetLife sought to revive its claims and appealed from the holding of the administrative hearing. Without considering other preliminary matters, the circuit court ruled that the taxing provisions were unconstitutional. On appeal to this Court, the circuit court was reversed and the matter remanded. This Court concluded that the preliminary matters had not been resolved by the circuit court, thus rendering the constitutionality issue non-justiciable. On remand, the circuit court granted summary judgment against MetLife on numerous bases. MetLife appeals. We affirm.
[¶ 3.] This appeal arises from the remanded proceedings held as a result of Metropolitan Life Ins. Co., et al. v. Kinsman, 2008 SD 24, 747 N.W.2d 653 (MetLife I). The underlying factual circumstances are identical.
Metropolitan Life Insurance Company, et al. (MetLife) brought suit against the Secretary of the South Dakota Department of Revenue and Regulation, the Director of the South Dakota Division of Insurance, and the State of South Dakota (collectively the State or South Dakota), asserting that the State's tax structure on insurance premiums and annuity considerations has been and is unconstitutional. According to MetLife, from 1970 to the present, SDCL 10-44-2 and SDCL 10-44-4 through SDCL 10-44-6 violate the equal protection clause of the United States and South Dakota constitutions.
In 1981, MetLife filed an administrative claim for a refund of its premium taxes paid. The claim was denied because of MetLife's failure to comply with certain statutory requirements. The parties agreed to stay all appeals while the United States Supreme Court considered the constitutionality of state insurance tax structures. The Supreme Court answered the question in 1982, but the parties continued to agree to stay all appeals. Ultimately, in 2004, on appeal to the circuit court, MetLife's administrative claim was consolidated with its constitutional challenge. The State and MetLife stipulated that the circuit court should only consider whether South Dakota's insurance premium and annuity tax structure violated the equal protection clause in the constitutions of the United States and South Dakota. After a trial to the court in 2007, findings of fact and conclusions of law and a judgment were entered declaring SDCL 10-44-2, and SDCL 10-44-4 through SDCL 10-44-6 unconstitutional from 1970 to the present.
Id. ¶¶ 2-3, 747 N.W.2d at 655. As to the tax payments made from 1970 to 1981, this Court reversed and remanded to the circuit court. The Court held that, as presented, the constitutionality of these statutes was non-justiciable. Id. ¶ 10, 747 N.W.2d at 658. The Court observed, "[i]f MetLife fails to overcome all preliminary issues yet to be decided by the circuit court, its constitutional challenge may never come before us." Id.
[¶ 4.] On remand, the circuit court considered these preliminary issues and granted the State's motion for summary judgment on the bases of non-compliance with SDCL 10-27-2, SDCL Ch. 10-55, sovereign immunity, mootness, and laches. MetLife appeals.
[¶ 5.] Our standard of review of a circuit court's grant of summary judgment is well settled:
[W]e must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.
Wojewski v. Rapid City Reg'l Hosp., Inc., 2007 SD 33, ¶ 12, 730 N.W.2d 626, 631 (quoting Read v. McKennan Hosp., 2000 SD 66, ¶ 8, 610 N.W.2d 782, 784) (additional citations omitted).
Whether the grant of summary judgment was proper in this case.1
[¶ 6.] MetLife presents a variety of arguments that the grant of summary judgment was inappropriate. However, many of these arguments do not address the "preliminary matters" which provided the basis of the circuit court's grant of summary judgment. Instead, MetLife focuses on its request to have the taxing scheme declared unconstitutional. MetLife suggests that its claims have two aspects. First, as an appeal from the administrative proceeding. Second, as a constitutional challenge to the taxing statutes in effect from 1970-1981.
[¶ 7.] MetLife's claims arise as an appeal from the findings of fact and conclusions of law resulting from the 1981 administrative decision. MetLife's claims were dismissed because it was concluded:
IV. That [MetLife's] claims for refund of taxes paid in South Dakota for the years 1970 through 1980, inclusive, are barred by its failure to comply with the requirements of SDCL 10-27-2.
V. That [MetLife's] claims for refund of taxes paid prior to March 19, 1981, is barred by its failure to comply with SDCL Ch. 10-55.
(Findings of Fact, Conclusions of Law, and Order Op., Dated March 8, 1982.) In essence, the administrative determination concluded that MetLife had not properly availed itself to the remedies for tax refunds provided by these "protest and suit" statutes.
[¶ 8.] SDCL 10-27-2 provides:
Any person against whom any tax is levied or who may be required to pay the same, who pays the same under protest to the treasurer authorized to collect the same, giving notice at the time of payment of the reasons for such protest may, at any time within thirty days thereafter, commence an action against such treasurer for the recovery thereof in any court of competent jurisdiction, and if the court determines that the same was wrongfully collected, in whole or in part, for any reason going to the merits of the tax, it shall enter judgment accordingly, and such judgment shall be paid in preference to any other claim against the county, upon the final determination of the action; and the pro rata share of the money so refunded shall be charged to the state and each taxing district which may have received any part of such tax. The right of appeal shall exist for both parties as in other civil actions.
(Emphasis added.)
[¶ 9.] MetLife argued to the circuit court that "[t]here was no requirement to pay premium taxes under a written Notice of Protest as a condition precedent to the filing of a refund claim prior to the effective date of Session Laws 1981, Ch. 10-55, and MetLife did not pay its premium taxes for tax years 1970 through 1980 under any written Notice of Protest." (MetLife's Br. in Supp. of Mot. on Remand for Summ. J. 11 (emphasis added))
[¶ 10.] The emphasized section in the passage above expressly concedes that MetLife had not timely availed itself of the remedies contained in SDCL 10-27-2. The language of this statute has existed, as written, since the Revised Code of 1919, § 6826.2 As a matter of an appeal from the administrative determination, MetLife's "no conditions precedent" argument is without merit.
[¶ 11.] The circuit court also found that MetLife did not comply with the procedural requirements of Ch. 10-55. For taxes paid from March 19, 1981, until June 30, 1982, including some taxes incurred in late 1980, SDCL 10-55-3 required a notice of protest that "shall be in writing and shall accompany the payment of the tax." SDCL 10-55-4 required service of a petition upon the agency within thirty days of such a notice. The circuit court found that MetLife failed to comply with these statutorily prescribed procedural requirements for payments made during this period. MetLife has not challenged this finding or asserted that it complied with these procedures. Instead, it argues that its compliance with these statutes is irrelevant to its declaratory judgment claim, and, if the tax scheme is declared unconstitutional, such procedural barriers should not impede a refund. This argument is considered in the next section of this opinion. Because no challenge has been raised as to the timeliness of compliance, any challenge to this finding has been abandoned. Ray v. Downes, 1998 SD 40, ¶ 8, 576 N.W.2d 896, 898 ...
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