STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)


In the Matter of Notice of Intent to Certify Debt of

JULIANNA WOLTER, Debtor

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 99-DOR-02


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

On July 18, 1980, the Department of Workforce Development issued an appeal tribunal decision which held that the debtor's discharge from employment at Cray Research, Inc. had been for misconduct for unemployment insurance purposes. That decision also held that the debtor had been overpaid unemployment insurance in the amount of $1134, an amount the debtor was to repay to the department. In August of 1998, the department initiated attempts to collect this debt from the debtor, culminating in a January 21, 1999 Notice of Intent to Certify Debt to the Wisconsin Department of Revenue. The issue before the commission is whether the department may use a certification of debt mechanism 18 years after the decision creating the overpayment in question. The commission concludes that, based upon the general statute of limitation of actions in favor of the state, the department may not do so. The commission therefore reverses the appeal tribunal decision and dismisses the department's certification proceedings.

The statutory authority for the department's certification of debt proceedings is Wis. Stat. § 71.93, which authorizes the department to certify debts to the Wisconsin Department of Revenue for offset against tax refunds due the debtor. Wisconsin statute § 71.93 (1)(a)1 defines a debt to include an amount owed to a state agency that has been reduced to a judgment. No other § 71.93 (1)(a) definitions of debt are applicable. To proceed under this statutory section, therefore, the department must first reduce the debt in question to judgment. It is for this reason that the department, before proceeding with the certification of debt to the Department of Revenue, must obtain a warrant from the circuit court of the county of the employe's residence.

Wisconsin statute § 893.03 governs the disposition of this matter. It states: "The presentation of any claim, in cases where by law such presentment is required, to the circuit court shall be deemed the commencement of an action within the meaning of any law limiting the time for the commencement of an action thereon." In this kind of case, the department cannot proceed to the Department of Revenue until it has reduced the debt in question to judgment. It can do that, though only by going to the circuit court of the debtor's residence and obtaining a warrant from that court. That makes the warrant proceeding the presentation of a claim to the circuit court which, as such, falls within the § 893.03 definition of the commencement of an action.

The relevant statute of limitations is Wis. Stat. § 893.87, which is the general limitation of action in favor of the state. It states that any action in favor of the state, if no other limitation is prescribed in Chapter 893 (and none is, in this case) shall be commenced within ten years after the cause of action accrues or be barred. There is an exception to this length of time, not applicable here, when fraud is involved. The Wisconsin statute of limitations for such actions therefore is ten years. A ten-year ceiling is also suggested by the United States Department of Labor, in its Overpayment Recovery Technical Assistance Guide.

The commission therefore finds that the department's certification of debt proceedings in this case are barred by statute of limitations.

DECISION

The appeal tribunal decision in this case is reversed and the department's certification of debt proceeding is dismissed. The department may not use certification of debt proceedings to recover the 1980 overpayment in this case.

Dated and mailed July 15, 1999
wolteju.urr : 105 : 3 BR 320

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner


NOTE: The commission did not confer with the administrative law judge before determining to reverse the appeal tribunal decision in this case. There was no hearing, given the nature of the proceedings, so the commission's reversal of the appeal tribunal decision of course was not based upon a differing credibility assessment from that made by the administrative law judge. Rather, the commission's reversal is based upon what appears to be the initial consideration in this case of the debtor's statute of limitations argument.


This decision was amended by the Commission by a  subsequent decision  issued on November 24, 1999.

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