Court reverses on restitution exception in case over mistaken payment

Trial Notebook

By Steven P. Garmisa

Hoey & Farina

Posted October 14, 2022 10:25 AM

Applying the discharge-for-value doctrine from Sec. 14 of the Restatement (First) of Restitution (1937) — a limited exception to the general rule that mistaken payments must be returned — a federal judge in Manhattan concluded that Revlon Inc.’s lenders were entitled to keep a $500 million repayment that Citibank wired by mistake on Aug. 11, 2020, when the loan wasn’t due. Section 14, adopted by the New York Court of Appeals in Banque Worms v. BankAmerica International, 570 N.E.2d 189 (1991), says:“A creditor of another or …

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