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Metropolitan Life Insurance Co. v. Kinsman

July 1, 2009

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.



APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT HUGHES COUNTY, SOUTH DAKOTA HONORABLE KATHLEEN F. TRANDAHL Judge.

The opinion of the court was delivered by: Gilbertson, Chief Justice

CONSIDERED ON BRIEFS ON MAY 26, 2009

[¶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.

BACKGROUND

[¶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 NW2d 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 NW2d 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 NW2d 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.

STANDARD OF REVIEW

[¶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 NW2d 626, 631 (quoting Read v. McKennan Hosp., 2000 SD 66, ¶8, 610 NW2d ...


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