- 297 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

Troy McCoy, appellee, v. John H. 

Albin, Nebraska Commissioner

of Labor, appellant.

___ N.W.2d ___

Filed December 1, 2017. No. S-17-057.

1. Administrative Law: Judgments: Appeal and Error. When reviewing 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 considered in its plain, ordinary, and popular sense.

4. Statutes: Intent. In construing a statute, a court must look at the statutory 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 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.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

12/22/2017 01:10 AM CST
- 298 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, 

Kelch, 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 overpaid $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 indicating 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.
- 299 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

A hearing was held before an appeal tribunal. That tribunal 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 intercept 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 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

[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).
- 300 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

ANALYSIS

Introduction

The issue on appeal is whether the Department’s interception 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 tribunal found, and the district court agreed, that the 4-year limitations period in Neb. Rev. Stat. § 25-206 (Reissue 2016) (read 

in conjunction with § 25-218), dealing with an action on liability 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 execution 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.

Relevant 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 section sets forth four ways in which repayment might be sought: 

“without interest by civil action,” “by offset against any future 
- 301 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

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 regulations found at 219 Neb. Admin. Code, ch. 16 (2012). Section 

77-27,197 provides that the Legislature’s intent was “to establish 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 substitution for any other remedy available at law.”4

The setoff provided by state law is similar to the one provided by federal law. The federal “Treasury Offset Program” 

allows covered unemployment compensation debt to be recovered 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 forever 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).
- 302 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

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 regarding 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 judgment, 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 judgment debtor.

Applicability of Limitations Period

[3,4] 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 considered 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 statutory 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 statutory purpose.8

6 See Arthur v. Microsoft Corp., 267 Neb. 586, 676 N.W.2d 29 (2004).

7 Id.

8 Id.
- 303 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

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 commenced 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 federal 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 without 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.
- 304 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

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 applicable 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 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 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 overpayment 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 procedure 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).
- 305 -

Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

McCOY v. ALBIN

Cite as 298 Neb. 297

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 applicable procedure.

We reject the appeal tribunal’s reliance upon § 25-1515. 

Section 25-1515 deals with dormant judgments and specifically 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 overpayment 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 decision of the appeal tribunal.

Reversed with directions.

Wright, J., not participating in the decision.