McCoy v. Albin
298 Neb. 297
| Neb. | 2017Background
- In 1995 the Nebraska Department of Labor mailed Troy McCoy a notice that he had been overpaid $850 in unemployment benefits; no appeal was filed and no repayment occurred at that time.
- In 2016 the Department intercepted McCoy’s Nebraska income tax refund ($293) to apply toward the 1995 overpayment; McCoy appealed the interception pro se.
- An appeal tribunal found the interception time-barred under Nebraska statutes of limitations (§§ 25-206 and 25-218) and also noted § 25-1515 (dormant judgments) might bar recovery of a 1997 interception.
- The Department appealed to the Sarpy County District Court, which affirmed the tribunal; the Department then appealed to the Nebraska Supreme Court.
- The statutory collection mechanism at issue is Neb. Rev. Stat. § 48-665(1)(c), which authorizes setoff against any state income tax refund; related collection procedures are in Neb. Rev. Stat. §§ 77-27,197 to 77-27,209.
Issues
| Issue | Plaintiff's Argument (McCoy) | Defendant's Argument (Dept. of Labor) | Held |
|---|---|---|---|
| Whether a statute of limitations bars the Department from setting off a state income tax refund to collect an unemployment overpayment | The Department’s setoff is barred by the statute of limitations for liabilities created by statute (§§ 25-206/25-218) | No limitations period applies to the setoff authorized by § 48-665(1)(c); setoff is not an "action" subject to those statutes; any limitations defense is affirmative and was waived | The Supreme Court held no statute of limitations applies to state-tax-refund setoffs under § 48-665(1)(c); reversal of lower courts’ decisions |
| Whether § 25-1515 (dormant judgments) prevents the Department from intercepting a refund based on the 1995 notice/administrative determination | § 25-1515 should render recovery time-barred because more than 5 years passed since any execution | The notice of overpayment is not a court judgment and thus § 25-1515 does not apply | Court held § 25-1515 inapplicable because the overpayment notice is administrative, not a judgment rendered by a court |
Key Cases Cited
- Marion’s v. Nebraska Dept. of Health & Human Servs., 289 Neb. 982, 858 N.W.2d 178 (2015) (standards for judicial review of administrative actions)
- ML Manager v. Jensen, 287 Neb. 171, 842 N.W.2d 566 (2014) (statutory interpretation is a question of law)
- Arthur v. Microsoft Corp., 267 Neb. 586, 676 N.W.2d 29 (2004) (methodology for determining legislative intent and statutory construction)
- Tiedtke v. Whalen, 133 Neb. 301, 275 N.W. 79 (1937) (definition of when a civil action is commenced)