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 or repay then.
- In 1997 the Department intercepted a $217 Nebraska income tax refund from McCoy; in 2016 it intercepted a $293 refund for the same overpayment.
- McCoy appealed the 2015/2016 interception, arguing the Department was time-barred from offsetting his state tax refunds.
- An appeal tribunal found the Department barred by Nebraska statutes of limitations (§§ 25-206 and 25-218 and alternatively § 25-1515); the Sarpy County District Court affirmed.
- The Nebraska Supreme Court reviewed whether the statutory refund setoff under Neb. Rev. Stat. § 48-665(1)(c) is subject to general statutes-of-limitations applicable to civil actions or dormant judgments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether interception of a Nebraska income tax refund under § 48-665(1)(c) is barred by general statutes of limitations (e.g., §§ 25-206, 25-218). | McCoy: general statutes of limitations bar the Department from intercepting his 2015 refund. | Department: § 48-665(1)(c) includes no limitation; statutory collection options are distinct and offsets are not actions subject to those limitations. | Held: No statute of limitations applies to state-refund setoff under § 48-665(1)(c); the interception was permissible. |
| Whether § 25-1515 (dormant-judgment rule) prevents setoff against a refund based on an administrative overpayment notice. | McCoy: the 1997 interception and passage of time invoke § 25-1515. | Department: § 25-1515 applies only to court judgments; the overpayment notice is administrative, not a judgment. | Held: § 25-1515 does not apply because the overpayment notice is not a court judgment. |
| Whether the appeal tribunal’s sua sponte invocation of statutes of limitation was procedurally improper or waived. | McCoy: (relied on tribunal ruling) | Department: statute-of-limitations is an affirmative defense and not pled by McCoy; waiver argument raised. | Held: Court did not need to decide waiver because on the merits no limitation applies. |
| Whether federal practice supports interpreting state setoff as having no limitation. | McCoy: argued state law controls. | Department: federal Treasury Offset Program has no current limitations; consistency supports no state limit. | Held: Federal practice is consistent and supports conclusion that no limitation was intended for setoff. |
Key Cases Cited
- Marion’s v. Nebraska Dept. of Health & Human Servs., 289 Neb. 982 (discussing standard for judicial review of administrative decisions)
- ML Manager v. Jensen, 287 Neb. 171 (statutory interpretation is a question of law reviewed de novo)
- Arthur v. Microsoft Corp., 267 Neb. 586 (court must ascertain legislative intent from statute language and purpose)
- Tiedtke v. Whalen, 133 Neb. 301 (defining when an action is commenced for statute-of-limitations purposes)