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; McCoy did not appeal and made no repayments.
- In 2016 the Department intercepted McCoy’s Nebraska income tax refund ($293) and applied it toward the 1995 overpayment; McCoy appealed the interception pro se.
- An appeal tribunal ruled for McCoy, concluding the Department was barred by a statute of limitations (relying on §§ 25-206/25-218 and alternatively § 25-1515) from intercepting the 2015 refund; the Department appealed to district court.
- The Sarpy County District Court affirmed the tribunal’s decision; the Department appealed to the Nebraska Supreme Court.
- The central statutory provision at issue was Neb. Rev. Stat. § 48-665(1), which authorizes collection of unemployment overpayments by (a) civil action, (b) offset of future benefits (with a 3-year limit), (c) setoff against state income tax refunds, and (d) setoff against federal income tax refunds.
- The Supreme Court considered whether general statutes of limitations (§§ 25-206, 25-218) or the dormant-judgment statute (§ 25-1515) limit the Department’s authority to set off state income tax refunds under § 48-665(1)(c).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether general statutes of limitations (§ 25-206/§ 25-218) bar setoff of a state tax refund under § 48-665(1)(c) | McCoy: limitations apply; the Department waited too long to collect by setoff | Department: § 48-665(1)(c) contains no limitations; statutes of limitation apply only to "actions" and were not intended to restrict setoff | Court held no statute of limitations applies to state-refund setoff under § 48-665(1)(c) |
| Whether § 25-1515 (dormant-judgment statute) prevents setoff because prior execution occurred in 1997 | McCoy: prior execution/dormancy rules make the overpayment collection dormant | Department: notice of overpayment is administrative, not a court judgment, so § 25-1515 is inapplicable | Court held § 25-1515 does not apply because the overpayment notice is not a judgment of a court of record |
| Whether the statute-of-limitations defense was waived for failure to plead it | McCoy: (did not assert defense below) | Department: limitations is an affirmative defense and was not pleaded, so waived | Court did not decide waiver because it resolved the case on the merits (no limitations applicable) |
Key Cases Cited
- Marion’s v. Nebraska Dept. of Health & Human Servs., 289 Neb. 982 (interpretation of administrative-review standards under APA)
- ML Manager v. Jensen, 287 Neb. 171 (statutory interpretation is a question of law reviewed de novo)
- Arthur v. Microsoft Corp., 267 Neb. 586 (principles for construing legislative intent and statutory purpose)
- Tiedtke v. Whalen, 133 Neb. 301 (definition of commencement of a civil action)
Holding (concise)
The Nebraska Supreme Court reversed the district court: the Department may intercept a state income tax refund under § 48-665(1)(c) to recoup unemployment overpayments without being subject to the general statutes of limitations or the dormant-judgment statute on these facts.