## Facts

- A corporate pension plan trustee miscalculated a retiree’s lump-sum pension distribution due to a clerical error.
- The correct payout was $3,376.10, but the trustee paid $21,944.65 (an overpayment of $18,568.55).
- The retiree accepted the funds in good faith, paid income taxes on the full amount, and invested the remainder in a business.
- The invested funds were commingled in the business and not kept separately traceable to the trustee.
- After discovering the mistake, the trustee demanded repayment and sued for restitution based on money paid under a mistake of fact and unjust enrichment.

## Issues

1. Whether an overpayment caused by a clerical mistake of fact is presumptively recoverable in restitution.
2. Whether the payor’s negligence and the payee’s good faith, standing alone, bar restitution.
3. Whether the payee’s payment of taxes, payment of fees, and investment/commingling of the funds established, as a matter of law on summary judgment, a change of position making repayment unjust.

## Decision

- The Court of Appeals reversed the summary judgment for the retiree and remanded.
- The overpayment was a payment made under a mistake of fact, supporting a restitution claim.
- Any negligence by the trustee and the retiree’s good faith were not, by themselves, sufficient defenses.
- On the summary-judgment record, the retiree did not establish a change-of-position defense as a matter of law; the equities required factual development at trial.

## Legal Principles

- Money paid under a mistake of fact may be recovered in restitution unless the payment caused a change in the payee’s position such that it would be unjust to require a refund.
- The payor’s negligence and the payee’s good faith, without more, do not defeat a restitution claim for mistaken payment.
- The change-of-position defense is equitable and fact-dependent; spending, investing, or commingling funds does not automatically bar restitution on summary judgment.
- Summary judgment is improper where the record does not conclusively establish that the payee’s reliance and resulting detriment make repayment unjust.

## Conclusion

The court held that a mistaken pension overpayment was subject to restitution and that the retiree’s asserted reliance did not conclusively bar repayment on summary judgment; the case was remanded for fact-finding on whether a detrimental change of position made restitution unjust.


First Nat'l City Bank v. McManus, 223 S.E.2d 554 (N.C. Ct. App. 1976)