McCoy v. Albin
298 Neb. 297
| Neb. | 2017Background
- In 1995, the Nebraska Department of Labor (Department) mailed Troy McCoy a notice that he had been overpaid $850 in unemployment benefits; McCoy did not appeal then and made no repayments.
- In 2016 the Department intercepted McCoy’s Nebraska income tax refund ($293) to apply toward the 1995 overpayment; McCoy appealed pro se, also challenging a 1997 interception ($217).
- An appeal tribunal concluded the Department was time‑barred from intercepting the 2015 refund under Nebraska statutes of limitation (§§ 25‑206, 25‑218, and alternatively § 25‑1515). The Department sought district court review.
- The Sarpy County District Court affirmed the tribunal; the Department appealed to the Nebraska Supreme Court.
- Central statutory scheme: Neb. Rev. Stat. § 48‑665(1) authorizes four recovery methods for unemployment overpayments—civil action, offset against future benefits (limited to 3 years for certain benefit years), setoff against state income tax refunds, and setoff against federal refunds. The setoff statutes (§§ 77‑27,197–77‑27,209) implement state refund interception.
- The Supreme Court considered whether general limitations statutes apply to administrative tax‑refund setoffs under § 48‑665(1)(c) and whether a notice of overpayment is a judgment for purposes of § 25‑1515.
Issues
| Issue | McCoy's Argument | Department's Argument | Held |
|---|---|---|---|
| Whether setoff of a state income tax refund under § 48‑665(1)(c) is barred by general statutes of limitation (e.g., §§ 25‑206, 25‑218). | The general statutory limitations (4 years/2 years) bar the Department from intercepting the 2015 refund. | § 48‑665(1)(c) and implementing setoff statutes contain no limitations; the Legislature intended no time bar for refund setoffs. | No statute of limitations applies to state refund setoffs under § 48‑665(1)(c); interception permissible. |
| Whether § 25‑1515 (dormant judgment rule, 5 years) prevents setoff because the notice of overpayment is a judgment. | The Department’s prior setoff activity was over 5 years ago, so § 25‑1515 makes the notice dormant and bars further interception. | The notice of overpayment is administrative, not a court judgment; § 25‑1515 does not apply. | § 25‑1515 does not apply because the notice is not a court judgment. |
| Whether limitations defenses were waived by McCoy’s failure to plead them. | (Implicit) McCoy relied on tribunal’s finding; he did not assert waiver. | Waiver: statute of limitations is an affirmative defense that could be waived if not raised. | Court did not need to reach waiver because it held no limitations period applies. |
| Whether federal law comparators affect interpretation. | (Implicit) Not directly argued by McCoy. | Federal Treasury Offset has no current limitations; analogous treatment supports no state limitation. | Federal practice supports the conclusion that setoff need not have a time limitation. |
Key Cases Cited
- Marion’s v. Nebraska Dept. of Health & Human Servs., 289 Neb. 982 (statutory interpretation and APA review framework)
- ML Manager v. Jensen, 287 Neb. 171 (statutory interpretation is a question of law)
- Arthur v. Microsoft Corp., 267 Neb. 586 (principles for ascertaining legislative intent and construing statutes)
- Tiedtke v. Whalen, 133 Neb. 301 (what constitutes commencement of a civil action)
Outcome
The Nebraska Supreme Court reversed the district court and the appeal tribunal, holding that no statute of limitations bars the Department’s interception of McCoy’s state income tax refund under § 48‑665(1)(c), and directing reversal of the tribunal’s decision.