#25085-a-DG 

2009 SD 53

IN THE SUPREME COURT 

OF THE 

STATE OF SOUTH DAKOTA 

* * * * 

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 

* * * * 

CONSIDERED ON BRIEFS 

ON MAY 26, 2009 

 OPINION FILED 07/01/09
RONALD G. SCHMIDT of 

Schmidt, Schroyer, Moreno, 

 Lee & Bachand, PC 

Rapid City, South Dakota Attorneys for plaintiffs 

and appellants. 

TIMOTHY M. GEBHART of 

Davenport, Evans, Hurwitz and Smith, LLP 

Sioux Falls, South Dakota Attorneys for defendants 

and appellees. 
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#25085 

GILBERTSON, Chief Justice 

[¶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 
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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. 
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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 782, 784) (additional 

citations omitted). 

ISSUE 

Whether the grant of summary judgment was proper in this case.1

1. The issue statement has been rephrased. MetLife presents a variety of 

arguments to show that its declaratory judgment action is a viable claim. 

Many of these arguments simply address the constitutionality of the tax 

statutes, rather than the preliminary issues remanded to the circuit court by 

MetLife I. Because that case held that the preliminary matters must be 

resolved before the constitutional claims are justiciable, some of MetLife’s 

arguments simply seek to circumvent or retry the holding of MetLife I. Those 

arguments are premature and are not considered in this opinion. 

For some of MetLife’s other arguments to succeed, such as the mootness 

issue, this Court would be required to overturn the holding in MetLife I that 

found the 1982 tax revisions constitutional. See MetLife I, 2008 SD 24, ¶21, 

747 NW2d at 661. MetLife recognizes this requirement, but only directly 

addresses the issue by way of a footnote. (Appellant’s Br. 35-36, n6.) This 

Court denied MetLife’s petition for rehearing on this matter. 
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ANALYSIS 

[¶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. 

Appeal from the Administrative Proceeding 

[¶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 
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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 

2. The predecessor statute, SL 1915, Ch. 289, § 1, had slightly different 

language. 
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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 NW2d 896, 898 (“[Plaintiff], 

however, has failed to brief this issue and therefore we need not consider it because 

‘[a]n assignment of error not briefed and argued is deemed abandoned.’”) (quoting 

State v. Macy, 403 NW2d 743, 745 (SD 1987)). 

[¶12.] The circuit court did not err by upholding the administrative ruling 

and granting summary judgment on MetLife’s failure to comply with the procedural 

requirements. 

Declaratory Judgment as a Separate Action 

[¶13.] MetLife asserts that its declaratory judgment claims should not have 

been subject to summary judgment because it does not request a refund of taxes 

paid, but only to have the tax statutes in effect from 1970 to 1981 declared 

unconstitutional. Therefore, it argues, the procedural requirements of SDCL 10-27-

2 and SDCL Ch. 10-55 are irrelevant to these claims. 
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[¶14.] MetLife goes to great lengths to suggest that it requests no refund as a 

result of its declaratory judgment action. However, MetLife’s filings to the circuit 

court and the Appellant’s Brief to this Court belie this position and its intent to use 

such a declaration to permit a later refund. (See Am. Compl., Count III ¶57 

(Seeking a declaratory judgment on the basis of the SD Constitution, seeking “such 

other and further relief as the Court may deem just and proper”); Count IV ¶59 

(Same, United States Constitution); Count V ¶61 (Protest and Suit, stating 

“Plaintiffs are aggrieved . . . and are entitled to refunds thereof together with 

interest thereon. . .” and “if the relevant [taxes] are declared unconstitutional 

pursuant to Plaintiffs’ third and/or fourth causes of action, Plaintiffs pray for the 

judgment of this Court for the refund of their premium taxes pursuant to the 

protest and suit statutes. . .”); MetLife’s Mot. on Remand for Summ. J. ¶35 (“. . . 

MetLife respectfully petitions this Court pursuant to SDCL 21-24-12 for further 

relief in the form of tax refunds . . .”)) 

[¶15.] MetLife attempts to liken its claims to those of the plaintiffs in Dakota

Systems, Inc. v. Viken, 2005 SD 27, 694 NW2d 23, and Dan Nelson Automotive, Inc. 

v. Viken, 2005 SD 109, 706 NW2d 239. It maintains that its complaint was 

“essentially identical” to Dakota Systems’. However, the plaintiff in Dakota 

Systems had complied with the “protest and suit” statutes of SDCL 10-27-2 in 

seeking a refund and had not requested a refund pursuant to its declaratory 

judgment claim. 2005 SD 27, ¶3, 694 NW2d at 26. Unlike the plaintiff in Dan 

Nelson, who “only sought a prospective interpretation of the excise tax statutes” and 

did not seek a refund, MetLife seeks a retrospective negation of these statutes and 
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also suggests that a refund is available to it in a second, subsequent action. See 

Dan Nelson, 2005 SD 109, ¶¶15-16, 706 NW2d at 244-45 (emphasis added). 

[¶16.] MetLife argues that a successful declaratory judgment action allows 

for a refund of taxes, based on the Due Process Clause. MetLife relies on McKesson 

Corp. v. Div of Alcoholic Beverages & Tobacco, Dep’t of Business Regulation for this 

proposition. 496 US 18, 110 SCt 2238, 110 LEd2d 17 (1990). In McKesson, the 

Supreme Court assumed that the plaintiff had properly complied with statutory 

requisites for preserving a claim for a refund and noted that the taxes were “timely 

challenged,” before it granted relief to the plaintiffs. See id., 496 US at 24-25, 110 

SCt at 2243-44. Here, MetLife had a meaningful opportunity to challenge the 

payments at the time they were made, but did not comply with the statutorily 

required procedures. MetLife simply did not “pay under protest” as did the 

plaintiffs in McKesson or any of the cases discussed in that opinion. Therefore, the 

McKesson authority is inapplicable.3 

[¶17.] The McKesson Court expressly addressed the validity of statutory 

limitations on tax refunds: 

The State might, for example, provide by statute that refunds 

will be available only to those taxpayers paying under protest 

or providing some other timely notice of complaint; . . . enforce 

relatively short statutes of limitations applicable to such 

actions; FN 28 . . . such that the State can predict with greater 

accuracy the availability of undisputed treasury funds. The 

State’s ability in the future to invoke such procedural 

protections suffices to secure the State’s interest in stable fiscal 

planning when weighed against its constitutional obligation to 

provide relief for an unlawful tax. 

3. Reich v. Collins, 513 US 106, 115 SCt 547, 130 LEd2d 454 (1994), also cited 

by MetLife, is inapplicable for the same reasons. 
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FN 28: See Ward v. Love County Board of Comm’rs, 253 

US [17], 25, 40 SCt [419,] 422 (recognizing refund claim 

could be barred if there was “any valid local [limitations] 

law in force when the claim was filed”) . . . 

McKesson, 496 US at 45, 110 SCt at 2254-55. See also id., 496 US at 50, 110 SCt at 

2257. Such methods were not utilized by the defendant State in McKesson. 

[¶18.] South Dakota has enacted such procedural limitations. As recognized 

by the Court in Agar School Dist. No. 58-1 v. McGee, 

In Lick v. Dahl, 285 NW2d 594, 599 (SD 1979), this Court 

unanimously held: 

There are two exclusive methods by which an aggrieved 

taxpayer may seek recovery for alleged illegal taxes paid. 

They are the Refund and Abatement Statute, SDCL 10-

18-1, and the Protest and Suit Statute, SDCL 10-27-2. 

Recently in discussing the scope of SDCL 10-27-2, we stated that 

“[w]hile we agree that this does indeed place an additional 

burden on a taxpayer seeking recovery and repayment of 

overpaid taxes, we do not believe that the statutes provide for 

any other remedy.” Riverview Prop. v. Bd. of Equalization, 439 

NW2d 820, 823 (SD 1989). 

Agar School Dist. No. 58-1 v. McGee, 1997 SD 31, ¶14, 561 NW2d 318, 322. To the 

extent Arneson v. Baker, 76 SD 262, 77 NW2d 325 (1956), suggests that a 

declaratory judgment action permits a refund of taxes in the absence of one of these 

“exclusive” methods, it has been overruled by Lick v. Dahl. See Agar, 1997 SD 31, 

¶¶16-17, 561 NW2d at 323. Therefore, no refund is available to MetLife via its 

declaratory judgment claims. 

[¶19.] As the exclusive methods for receiving a refund were not complied 

with, no refund is available to MetLife. Because no refund is available to MetLife, 

the declaratory judgment claims seek only the bare relief of having the tax statutes 
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declared unconstitutional. As the tax statutes have been ineffective for nearly 

thirty years, there is no live or ongoing controversy. Thus, in the absence of a live 

controversy, these claims are moot. The circuit court properly granted summary 

judgment on this basis. 

[¶20.] MetLife has failed to satisfy the preliminary matters concerning the 

justiciability of the constitutional question; therefore, we do not reach the 

constitutionality of the tax scheme. 

[¶21.] Affirmed. 

[¶22.] KONENKAMP, ZINTER, and SEVERSON, Justices, concur. 

[¶23.] MEIERHENRY, Justice, deeming herself disqualified, did not 

participate.