McCoy v. Albin , 298 Neb. 297 ( 2017 )


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  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    01/19/2018 08:13 AM CST
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    Nebraska Supreme Court A dvance Sheets
    298 Nebraska R eports
    McCOY v. ALBIN
    Cite as 
    298 Neb. 297
    Troy McCoy, appellee, v. John H.
    A lbin, Nebraska Commissioner
    of Labor, appellant.
    ___ N.W.2d ___
    Filed December 1, 2017.   No. S-17-057.
    1.	 Administrative Law: Judgments: Appeal and Error. When review-
    ing an order of a district court under the Administrative Procedure Act
    for errors appearing on the record, the inquiry is whether the decision
    conforms to the law, is supported by competent evidence, and is neither
    arbitrary, capricious, nor unreasonable.
    2.	 Statutes: Appeal and Error. Statutory interpretation is a question of
    law that an appellate court resolves independently of the trial court.
    3.	 Statutes: Legislature: Intent. When asked to interpret a statute, a
    court must determine and give effect to the purpose and intent of the
    Legislature as ascertained from the entire language of the statute consid-
    ered in its plain, ordinary, and popular sense.
    4.	 Statutes: Intent. In construing a statute, a court must look at the statu-
    tory objective to be accomplished, the problem to be remedied, or the
    purpose to be served, and then place on the statute a reasonable con-
    struction which best achieves the purpose of the statute, rather than a
    construction defeating the statutory purpose.
    5.	 Actions: Service of Process. A civil action is commenced by filing in
    the proper court a petition and causing a summons to be issued.
    Appeal from the District Court for Sarpy County: William
    B. Zastera, Judge. Reversed with directions.
    Katie S. Thurber, Thomas A. Ukinski, and Dale M. Shotkoski
    for appellant.
    Troy McCoy, pro se.
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    McCOY v. ALBIN
    Cite as 
    298 Neb. 297
    Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy,
    K elch, and Funke, JJ.
    Heavican, C.J.
    INTRODUCTION
    In 1995, the Nebraska Department of Labor (Department)
    issued a “Notice of Deputy’s Overpayment Determination”
    to Troy McCoy, informing McCoy that he had been over-
    paid $850 for unemployment benefits. In 2016, his income
    tax refund from the State of Nebraska in the amount of $293
    was intercepted to partially pay the overpayment judgment,
    as authorized by 
    Neb. Rev. Stat. § 48-665
    (1)(c) (Cum. Supp.
    2016). McCoy appealed from that action.
    Following a hearing, an appeal tribunal, citing 
    Neb. Rev. Stat. § 25-218
     (Reissue 2016), concluded that the Department’s
    action was barred by a 4-year statute of limitations. The
    Department petitioned the Sarpy County District Court for
    review of the tribunal’s determination. The district court
    affirmed, and the Department appeals. We conclude there is no
    time limitation to the interception of a state tax refund under
    § 48-665(1)(c), and accordingly, we reverse the decision of
    the district court with directions to reverse the decision of the
    appeal tribunal.
    FACTUAL BACKGROUND
    On October 25, 1995, notice was mailed to McCoy indicat-
    ing that he had been overpaid unemployment benefits in the
    amount of $850 and that he was liable for repayment of that
    amount. No appeal was taken, and no funds were repaid at
    that time.
    On February 22, 2016, McCoy received notice that his
    income tax refund totaling $293 had been intercepted and
    applied to his overpayment of unemployment benefits. McCoy,
    acting pro se, appealed, contending that the Department should
    not have intercepted his 2015 refund of $293. He also took
    issue with the Department’s interception of his 1997 income
    tax refund in the amount of $217.
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    McCOY v. ALBIN
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    A hearing was held before an appeal tribunal. That tri-
    bunal found in McCoy’s favor, holding that the Department
    was barred by the statute of limitations from intercepting the
    2015 refund. The Department appealed to the district court,
    arguing that the statute providing for the authority to inter-
    cept tax refunds to apply against unemployment benefits did
    not include a statute of limitations and that, in any case, a
    statute of limitations is an affirmative defense that was not
    raised by McCoy and thus was waived. The district court
    affirmed.
    ASSIGNMENT OF ERROR
    The Department assigns, restated and consolidated, that the
    district court erred in affirming the appeal tribunal’s decision
    that the Department was barred from intercepting McCoy’s
    refund by the statute of limitations set forth in § 25-218.
    STANDARD OF REVIEW
    [1] When the petition instituting proceedings for review is
    filed in the district court on or after July 1, 1989, the appeal
    shall be taken in the manner provided by law for appeals in
    civil cases. The judgment rendered or final order made by the
    district court may be reversed, vacated, or modified for errors
    appearing on the record.1 When reviewing an order of a dis-
    trict court under the Administrative Procedure Act for errors
    appearing on the record, the inquiry is whether the decision
    conforms to the law, is supported by competent evidence, and
    is neither arbitrary, capricious, nor unreasonable.2
    [2] Statutory interpretation is a question of law that an
    appellate court resolves independently of the trial court.3
    1
    
    Neb. Rev. Stat. § 84-918
    (3) (Reissue 2014).
    2
    Marion’s v. Nebraska Dept. of Health & Human Servs., 
    289 Neb. 982
    , 
    858 N.W.2d 178
     (2015).
    3
    ML Manager v. Jensen, 
    287 Neb. 171
    , 
    842 N.W.2d 566
     (2014).
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    McCOY v. ALBIN
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    ANALYSIS
    Introduction
    The issue on appeal is whether the Department’s inter-
    ception of a state income tax refund in order to repay an
    unemployment benefit overpayment is subject to a statute of
    limitations.
    It is undisputed that the statutes providing for this right to
    setoff do not include a statute of limitations. The appeal tribu-
    nal found, and the district court agreed, that the 4-year limita-
    tions period in 
    Neb. Rev. Stat. § 25-206
     (Reissue 2016) (read
    in conjunction with § 25-218), dealing with an action on lia-
    bility created by a statute, barred the recovery. Alternatively,
    the appeal tribunal noted that 
    Neb. Rev. Stat. § 25-1515
    (Reissue 2016), which limits the execution of a judgment to
    a time period of 5 years from the date rendered or last execu-
    tion date, would prevent the Department from intercepting
    the refund, because it had been more than 5 years since the
    Department had intercepted McCoy’s 1997 refund.
    The Department disputes that §§ 25-206, 25-218, and
    25-1515 are applicable and argues that the plain meaning of
    the statutes, read as a whole, clearly indicate that no statute of
    limitations was intended, noting that this result is consistent
    with the availability of setoff against a federal tax refund. The
    Department also argues that the statute of limitations was an
    affirmative defense, which McCoy did not allege, and states
    that the possibility that a statute of limitations would bar a
    setoff was initially raised by the appeal tribunal, which was not
    acting in a neutral capacity.
    R elevant Statutes
    Section 48-665(1) provides that “[a]ny person who has
    received any sum as benefits under the Employment Security
    Law to which he or she was not entitled shall be liable to
    repay such sum to the commissioner for the fund.” That sec-
    tion sets forth four ways in which repayment might be sought:
    “without interest by civil action,” “by offset against any future
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    benefits payable to the claimant with respect to the benefit
    year current at the time of such receipt or any benefit year
    which may commence within three years after the end of such
    current benefit year,” “by setoff against any state income tax
    refund,” and by setoff against a federal income tax refund.
    The procedure to be followed for the Department to recover
    such a setoff is encompassed in 
    Neb. Rev. Stat. §§ 77-27
    ,197
    to 77-27,209 (Reissue 2009) and in the Department’s regula-
    tions found at 219 Neb. Admin. Code, ch. 16 (2012). Section
    77-27,197 provides that the Legislature’s intent was “to estab-
    lish and maintain a procedure to set off against a debtor’s
    income tax refund any debt owed to the Department . . . which
    has accrued as a result of an individual’s liability for the
    repayment of unemployment insurance benefits determined to
    be in overpayment.” Nebraska law further provides that this
    “collection remedy . . . shall be in addition to and not in sub-
    stitution for any other remedy available at law.”4
    The setoff provided by state law is similar to the one pro-
    vided by federal law. The federal “Treasury Offset Program”
    allows covered unemployment compensation debt to be recov-
    ered through the offset of federal income tax.5 There is no time
    limitation in federal law.
    As noted above, several more general statutes of limitations
    are relevant here. Section 25-206 provides: “An action upon
    a contract, not in writing, expressed or implied, or an action
    upon a liability created by statute, other than a forfeiture or
    penalty, can only be brought within four years.”
    Section § 25-218 provides:
    Every claim and demand against the state shall be for-
    ever barred unless action is brought thereon within two
    years after the claim arose. Every claim and demand on
    behalf of the state, except for revenue, or upon official
    4
    § 77-27,200.
    5
    I.R.C. § 6402(f)(5) (2012).
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    bonds, or for loans or money belonging to the school
    funds, or loans of school or other trust funds, or to lands
    or interest in lands thereto belonging, shall be barred by
    the same lapse of time as is provided by the law in case of
    like demands between private parties. This section shall
    not apply to any claim or demand against the state regard-
    ing property taxes.
    Finally, § 25-1515 provides:
    If execution is not sued out within five years after
    the date of entry of any judgment that now is or may
    hereafter be rendered in any court of record in this state,
    or if five years have intervened between the date of the
    last execution issues on such judgment and the time of
    suing out another writ of execution thereon, such judg-
    ment, and all taxable costs in the action in which such
    judgment was obtained, shall become dormant and shall
    cease to operate as a lien on the estate of the judg-
    ment debtor.
    A pplicability of Limitations Period
    [3,4] When asked to interpret a statute, a court must deter-
    mine and give effect to the purpose and intent of the Legislature
    as ascertained from the entire language of the statute consid-
    ered in its plain, ordinary, and popular sense.6 It is the court’s
    duty to discover, if possible, legislative intent from the statute
    itself.7 In construing a statute, a court must look at the statu-
    tory objective to be accomplished, the problem to be remedied,
    or the purpose to be served, and then place on the statute
    a reasonable construction which best achieves the purpose
    of the statute, rather than a construction defeating the statu-
    tory purpose.8
    6
    See Arthur v. Microsoft Corp., 
    267 Neb. 586
    , 
    676 N.W.2d 29
     (2004).
    7
    
    Id.
    8
    
    Id.
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    Section 48-665 provides four ways for the Department to
    collect an overpayment. One way includes an explicit time
    limitation. As relevant, subsection (1)(b) states that for an
    offset against future unemployment benefits payable to the
    claimant with respect to the benefit year current at the time
    of such receipt of any benefit year, such offset may be com-
    menced within 3 years after the end of such current benefit
    year. Another option is recovery by a civil action as provided
    for by subsection (1)(a) and provides for an implicit time
    limitation—specifically, the statute of limitations for a civil
    action as set forth in chapter 25 of the Nebraska Revised
    Statutes.
    The third and fourth collection options are offsets against
    either federal or state income tax refunds. Neither option
    explicitly states a limitations period, nor does either implicitly
    include a limitations period. Federal law previously prescribed
    a 10-year limitations period to offset overpayments against a
    federal income tax refund. However, that limitations period
    was apparently removed in 2010 and there is currently no
    limitations period for the offset of overpayment against a fed-
    eral refund.9
    Applying the usual standards of statutory application to the
    language of § 48-665, we hold that the Legislature did not
    intend for the time limitations provided for in §§ 25-206 and
    25-218 to infringe upon the Department’s ability to collect an
    overpayment by setoff. The statutory language provides for
    different methods of collection—some with and others with-
    out time limitations—lending support to the conclusion that
    the lack of a limitation for an offset against a state tax refund
    is meaningful.
    Moreover, the language employed by the Legislature, even
    beyond the failure to include an explicit limitation, does
    not suggest any limitation. Section 48-665(1)(c) provides
    9
    See Pub. L. 111-291, § 801(a)(4), 
    124 Stat. 3157
    .
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    that a setoff may be made “against any state income tax
    refund due the claimant pursuant to sections 77-27,197 to
    77-27,209.” (Emphasis supplied.) And “[r]efund” is defined
    by § 77-27,199(2) as “any Nebraska state income tax refund.”
    (Emphasis supplied.)
    That the plain language of the statute supports the
    Department’s position that no statute of limitations is appli-
    cable to a setoff against a state income tax refund is further
    supported by an examination of the Legislature’s intent:
    It is the intent of the Legislature to establish and main-
    tain a procedure to set off against a debtor’s income tax
    refund any debt owed to the Department . . . which has
    accrued as a result of an individual’s liability for the
    repayment of unemployment insurance benefits deter-
    mined to be in overpayment pursuant to sections 48-665
    and 48-665.01 . . . .10
    [5] The plain language of §§ 25-206 and 25-218 states that
    the limitations period provided by each statute is applicable
    to an action. A civil action is commenced by filing in the
    proper court a petition and causing a summons to be issued.11
    A setoff is not an action in the traditional sense, and were it
    to be treated as such, it would be duplicative to the collection
    procedure set forth in § 48-665(1)(a) allowing an overpay-
    ment to be collected by a civil action filed in the name of
    the commissioner.
    This result is consistent with federal law. As explained
    above, federal law previously provided a 10-year limitations
    period, but no longer has such a limitation. Because the pro-
    cedure for a federal refund offset is similar to the procedure
    for a state refund offset under § 48-665(1)(c), it would make
    sense to have the same limitations period, or none at all, for
    10
    § 77-27,197 (emphasis supplied).
    11
    Tiedtke v. Whalen, 
    133 Neb. 301
    , 
    275 N.W. 79
     (1937). See, also, 
    Neb. Rev. Stat. § 25-501
     (Reissue 2016).
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    each mechanism. We further observe that even if we were to
    conclude that the Department was unable to recover a setoff
    from McCoy’s state income tax refund, it would be able to
    obtain a setoff from any federal refund by following the appli-
    cable procedure.
    We reject the appeal tribunal’s reliance upon § 25-1515.
    Section 25-1515 deals with dormant judgments and specifi-
    cally provides that a judgment is dormant 5 years after it was
    recorded if never executed upon; otherwise, it is dormant 5
    years after its last execution, which in this case was in 1997.
    But the plain language of § 25-1515 supports the conclusion
    that the notice of overpayment is not a judgment. Section
    25-1515 states in relevant part that it applies to “any judgment
    . . . rendered in any court of record in this state.” The notice
    of overpayment at issue in this case was not rendered by any
    court of record—it was entered by an administrative agency.
    We therefore conclude that on these facts, such notice of over-
    payment is not a judgment for purposes of § 25-1515.
    Having concluded that there is no statute of limitations
    applicable to the procedure set forth in § 48-665(1), we need
    not address the Department’s waiver argument.
    CONCLUSION
    There is no statute of limitations barring the Department’s
    interception of McCoy’s state income tax refund to offset his
    unemployment benefit overpayment. We therefore reverse the
    decision of the district court with directions to reverse the deci-
    sion of the appeal tribunal.
    R eversed with directions.
    Wright, J., not participating in the decision.
    

Document Info

Docket Number: S-17-057

Citation Numbers: 298 Neb. 297

Filed Date: 12/1/2017

Precedential Status: Precedential

Modified Date: 3/30/2018