Court Opinion

ID: 9584888
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:53:38.595274+00
Date Added: 2024-06-11T15:20:39.425681
License: Public Domain

HUNTER, Judge
dissenting.
I respectfully dissent from the majority opinion, as the terms of the employment agreement were sufficient to permit collection of the *511overpayment found by both the trial court and the administrative law judge. Having so concluded, I would reverse the portion of the trial court’s order that estopped respondent from collection of the overpayment, and affirm the portion of the order allowing respondent to retain funds already collected towards the debt.
Petitioner alleges, and the majority agrees, that respondent is prevented from collecting the overpayment in salary made in July and August of 2001 under the terms of the contract. The majority concludes that as the specifics of the fiscal year were not explicitly set out in the faculty handbook, so as to indicate that such payments were in fact prepayments for the upcoming academic year, the contract fails for lack of certainty.
As the majority correctly notes, personal service contracts are enforceable if certain as to “the nature and extent of the services to be performed, the place where and the person to whom services are to be rendered, and the compensation to be paid.” Humphrey v. Hill, 55 N.C. App. 359, 361, 285 S.E.2d 293, 295 (1982). Such certainty does not, however, require intricacy of detail to enforce an employment contract. “The specifics of where and when the services were to be performed, the nature of the services and how compensation was to be made do not make the contract fail for lack of certainty[.]” Humphrey, 55 N.C. App. at 361, 285 S.E.2d at 295 (emphasis added).
Here, however, sufficient evidence is present in the record to find with certainty the terms of petitioner’s compensation. Expressly included in his employment agreement were petitioner’s yearly salary increase letters. Each of these letters, sent in August, September, or October after the academic year began, stated that petitioner’s salary-increase for that academic year would be retroactive to 1 July of the respective year. Petitioner’s last salary increase letter for the academic year in question, dated 14 August 2000, stated that once approved by the Board of Governors, petitioner would receive an increase of .5.6%, resulting in a “2000-2001 salary of $71,719[,]” and that “[s]alary increases would then be reflected in the August 2000 paychecks, retroactive to July 1, 2000.” In conjunction with the terms of the faculty handbook, which stated that “academic-year (9-month) appointments are payable in 12 equal monthly installments[,]” this letter provided petitioner notice that his salary for the 2000-2001 academic year would be paid in full as of June 2001, when the twelve monthly installments begun in July 2000 were complete. The terms of the contract *512for petitioner’s employment for the academic term were therefore certain enough to permit enforcement.4
■ Respondent contends that, payments made to petitioner in July and August were due to a mistake of fact, and are therefore recoverable. Our courts have held that “ ‘money paid to another under the influence of a mistake of fact . . . may be recovered, provided the payment has not caused such a change in the position of the payee that it would be unjust to require a refund.’ ” Bank v. McManus, 29 N.C. App. 65, 70, 223 S.E.2d 554, 557 (1976) (citations omitted). This “rule is bottomed on the equitable doctrine that an action will lie for the recovery of money received by one to whom it does not in good conscience belong, the law presuming a promise to pay.” Guaranty Co. v. Reagan, 256 N.C. 1, 9, 122 S.E.2d 774, 780 (1961). As our Supreme Court noted in Guaranty Co., “ ‘[a]s a general rule, it is no defense to an action for the recovery of a payment made under mistake of fact that the money or property has been paid over to another or spent by the payee.’ ” Guaranty Co., 256 N.C. at 10, 122 S.E.2d at 781 (citation omitted).
Here, it is uncontested that petitioner resigned from respondent in August 2001 and served only a two-week period of the 2001-2002 academic year- in August. Further, although petitioner notified his supervisor of his intent to resign in July 2001, his supervisor did not inform the payroll division until after petitioner’s actual separation from respondent. As a result, petitioner was paid two months salary in July and August of 2001. Based on the evidence presented, the administrative law judge concluded:
[W]hen Dr. Mayo resigned his position with the University on August 31, 2001, he had been paid his annual rate of salary for July and August 2001, which was a prepayment for work to be performed for the upcoming academic year, which began on August 16, 2001. Dr. Mayo was only due compensation for the twelve workdays in the Fall Semester for the period beginning August 16, 2001 through August 31, 2001.
My determination is that the debt owed to the [UJniversity by Dr. Mayo for overpayment of salary is valid.
*513The trial court affirmed the finding of overpayment, stating that: “Under the undisputed facts of this case, the University is estopped to claim the overpayment of salary as a debt to the State.” (Emphasis added.)
A review of the whole record for competent evidence, as required under the appropriate standard of review, see Capital Outdoor, Inc. v. Guilford Cty. Bd. of Adjust., 152 N.C. App. 474, 475, 567 S.E.2d 440, 441 (2002), supports the finding of an overpayment made by both the administrative law judge and trial court. Petitioner’s supervisor testified he was unaware of the- prepayment policy and had delayed reporting petitioner’s resignation for internal departmental reasons related to graduate students within the program. As a result, payroll was not informed of petitioner’s separation from respondent until after petitioner officially left on 31 August 2001. Payroll had began prepaying petitioner his 2001-2002 salary, as specified in the faculty handbook, under the mistaken belief that petitioner would be continuing as a faculty member in the upcoming academic year. Further, petitioner failed to present sufficient evidence that recovery of the overpayment had caused him to change his position to such an extent that recovery would be unjust, arguing at the administrative hearing only that it was a penalty to require repayment of money which was already spent. This provides no defense to respondent’s action. See Guaranty Co., 256 N.C. at 10, 122 S.E.2d at 781.
Therefore, unlike the majority, I would find that petitioner’s contract with respondent was enforceable. As a result, an uncontested mistake of fact, as shown by respondent, as to payment under the terms of the contract created a recoverable debt. As petitioner did not demonstrate that such recovery would be unjust, the administrative law judge properly found that respondent could collect the debt created by the mistake of fact.
Petitioner contends that the trial court correctly ruled that collection of the overpayment was barred by estoppel. I disagree.
The essential elements of estoppel are (1) conduct on the part of the party sought to be estopped which amounts to a false representation or concealment of material facts; (2) the intention that such conduct will be acted on by the other party; and (3) knowledge, actual or constructive, of the real facts.
State ex rel. Easley v. Rich Food Servs., Inc., 139 N.C. App. 691, 703, 535 S.E.2d 84, 92 (2000). Although our courts have found that *514“[a] governmental agency is not subject to an estoppel claim to the same extent as an individual or a private corporation[,]” Kings Mountain Bd. of Educ. v. N.C. State Bd. of Educ., 159 N.C. App. 568, 577, 583 S.E.2d 629, 636 (2003), here, even under the lower standard applied to a private corporation, the essential elements of estop-pel are not present.
In this case, no evidence has been presented that respondent made a false representation to petitioner to induce his reliance on the overpayments. Rather, as discussed supra, the evidence presented at the hearing showed that there was a mutual mistake, as both petitioner’s supervisor and petitioner were unaware at the time of petitioner’s resignation that continued payments would result in overpayment. Thus, respondent’s actions demonstrate a regrettable misunderstanding rather than an attempt to induce petitioner’s reliance on the actions. Therefore, the trial court erred in concluding estoppel barred respondent from collecting the debt created by the overpayment.
Finally, I would affirm the trial court’s holding that respondent had no obligation to return either the money garnished from petitioner’s income tax return or petitioner’s voluntary payment towards his debt. The North Carolina Constitution mandates that “[n]o person or set of persons is entitled to exclusive or separate emoluments or privileges from the community but in consideration of public services.” N.C. Const, art. I, § 32. Our courts have construed this provision to prevent gifts or gratuities of public money and have held that “additional compensation . . . beyond that due for services rendered” is not constitutionally permissible. Leete v. County of Warren, 341 N.C. 116, 121, 462 S.E.2d 476, 479 (1995). Further, our statutes require that money due to a state agency, including overpay-ments, must be “promptly billed, collected and deposited.” N.C. Gen. Stat. § 147-86.11(e)(3) (2003), see also N.C. Gen. Stat. §§ 147-86.21 and 147-86.20 (2003). As respondent had both a constitutional and statutory obligation to recoup the overpayment of salary to petitioner, the trial court correctly found that retention of funds already collected was proper.
For the above reasons, I respectfully dissent from the majority and would reverse the portion of the trial court’s order estopping respondent from collection of the overpayment, and affirm the portion of the order permitting respondent to retain such monies as have already been collected.

. We note that although some issues were raised in the administrative law hearing regarding petitioner’s work as director of graduate admissions during July and August 2001, the evidence of record demonstrated that petitioner was paid in full the agreed upon compensation for that additional duty in May and June of 2001, and that the issue of overpayment is solely with regards to petitioner’s salary for his academic appointment.