S-17-0057 John H. Albin, Nebraska Commissioner of Labor (Appellant) v. Troy McCoy
Sarpy County District Court, Judge William B. Zastera
Attorneys: Katie S. Thurber, Thomas A. Ukinski, & Dale M. Shotkoski (Department of Labor) (Appellant) --- Troy McCoy (Pro se)
Civil: Unemployment benefit overpayment; setoff interception of income tax refund
Proceedings below: The district court affirmed the decision of the Nebraska Appeal Tribunal finding the Nebraska Department of Labor was precluded from intercepting a state income tax refund as part of its effort to recover an overpayment of unemployment insurance benefits to Appellee in 1994.
Issues: Whether the Court 1) failed to properly consider Neb. Rev. Stat. §48-665(1)(c) (Cum. Supp. 2014), which does not provide a limitations period for recovery of erroneous benefit payments by setoff against any state income tax refund due to the claimant, 2) failed to properly consider that the legislative amendment to § 48-665, which added collection by setoff of income tax refunds, specifically did not contain a statute of limitations, whereas the provisions for the two other collection methods implicate or state limitations periods, which indicates that the intent of the Legislature was not to provide a time limitation for setoff, 3) failed to properly consider Neb. Rev. Stat. §§77-27,197 (Reissue 2016) to 77-27,209 (Reissue 2009), which do not provide a limitations period for setoffs for “any debt” owed to the Department of Labor as a result of an individual’s liability for the repayment of unemployment insurance benefits that is determined to be an overpayment, 4) failed to properly consider decisions of courts in other states in which a limitations period for collection of overpayments was not found, 5) properly construed Neb. Rev. Stat. §25-206 (Reissue 2008), which provides that an action upon a liability created by statute can only be brought within four years, where “action” specifically means a civil action in a Nebraska court law and not an administrative action by an agency, 6) failed to properly consider the comparable Treasury Offset Program (TOP) in which the limitations period for recovery of benefit overpayments by offset against any federal income tax refund due to the claimant was removed from the controlling law [26 U.S.C. 6402(f)(5)], 7) failed to properly consider 224 NAC 1 §003(A), which provides that a Notice of Appeal filed by a claimant must specifically state reasons for the appeal of a finding of an overpayment of unemployment benefits, and that failure to state the basis for the appeal of an overpayment shall act as a waiver of the right to appeal that issue, when McCoy did not include a statute of limitations issue in his appeal, 8) failed to properly consider that McCoy did not plead a statute of limitations defense in his appeal to the Nebraska Appeal Tribunal, and that under Nebraska common law, a limitation defense is waived if not pleaded, 9) failed to properly consider Albin v. Lobo-Honey, CI 16-1766, District
Court of Lancaster County, Nebraska (2016), in which the Court held that the failure of the claimant to raise a statute of limitations defense in her appeal of the interception of a state income tax refund constituted a waiver of that defense, 10) failed to properly consider the error of the Appeal Tribunal in raising the issue of statute of limitations sua sponte and in violating its duty of neutrality by acting as an advocate for McCoy, 11) failed to properly consider that McCoy’s failure to appeal the Overpayment determination in 1995 rendered the determination a final judgment and entitled it to res judicata effect as if it were a judgment of a court, and the Department’s interception action was a method of collection of the judgment, for which the dormancy provision for execution on a judgment by a court of record does not apply, 12) erred in affirming the Decision of the Appeal Tribunal that reversed the Department’s “Notice of Intercepted Nebraska Income Tax Refund” and found that the Department was precluded from intercepting McCoy’s tax refund in order to set off against the tax refund the overpayment of unemployment benefits that he received in 1994, and 13) erred in holding that any debt owed by McCoy to the Department on an overpayment of unemployment benefits is no longer subject to collection.