Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
01/26/2018 01:12 AM CST




                                                         - 297 -
                                  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.
                              - 298 -
           Nebraska Supreme Court A dvance Sheets
                   298 Nebraska R eports
                         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.
                                    - 299 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                               McCOY v. ALBIN
                              Cite as 298 Neb. 297

   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).
                              - 300 -
           Nebraska Supreme Court A dvance Sheets
                   298 Nebraska R eports
                         McCOY v. ALBIN
                        Cite as 298 Neb. 297

                            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
                                      - 301 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                                 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 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).
                                     - 302 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                                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 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.
                                      - 303 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                                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 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.
                                      - 304 -
                Nebraska Supreme Court A dvance Sheets
                        298 Nebraska R eports
                                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 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).
                               - 305 -
           Nebraska Supreme Court A dvance Sheets
                   298 Nebraska R eports
                          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 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.
