In the
 United States Court of Appeals
               For the Seventh Circuit
                         ____________

No. 06-3430
CSX TRANSPORTATION, INC.,
                                             Plaintiff-Appellant,
                                v.

APPALACHIAN RAILCAR SERVICES, INC.,
                                            Defendant-Appellee.
                         ____________
           Appeal from the United States District Court
    for the Southern District of Indiana, Indianapolis Division.
           No. 04-CV-1741—David F. Hamilton, Judge.
                         ____________
 ARGUED FEBRUARY 16, 2007—DECIDED DECEMBER 5, 2007
                   ____________


 Before FLAUM, RIPPLE, and ROVNER, Circuit Judges.
  ROVNER, Circuit Judge. In April 2004, for reasons still
unknown, thirteen railcars derailed in Evansville, Indiana.
CSX Transportation determined that the railcars, which
belonged to Appalachian Railcar Services (“ARS”), had
derailed on CSX-owned track and, therefore, that CSX
was liable for the damage. Some time after paying ARS
for the damaged railcars, CSX concluded that the derail-
ment had actually occurred on track that it did not own.
Believing that its payment to ARS was based on a mistake,
CSX brought this suit to recover the payment. The dis-
trict court granted summary judgment to ARS based on
the voluntary-payment doctrine, which precludes a claim
2                                            No. 06-3430

for restitution on a voluntary payment made with full
knowledge of the relevant facts. Because we believe
that the voluntary-payment doctrine does not apply to
the facts of this case, we vacate and remand for further
proceedings.


                           I.
  In February 2002 ARS agreed to buy 80 railcars from
Alliance Coal for $304,000, or $3,800 per car. While the
transfer of title was pending, the railcars were stored on
a rail spur in Evansville, Indiana. This seven-and-a-half
mile spur provides a rail link between track belonging to
CSX and a coal power plant owned by the Southern
Indiana Gas and Electric Company (“SIGECO”). According
to the affidavit of a CSX Roadmaster, the portion of the
spur owned by CSX measures only 165 feet. The remain-
der, on which the eighty railcars were stored, is owned
by SIGECO.
  On April 1, 2002, local police contacted CSX to report
that several cars had derailed near its main line probably
as the result of vandalism. That same day, a CSX general
foreman investigated the derailment and reported to
CSX headquarters a mile marker number on CSX-owned
track where he believed that the derailment had occurred.
It is not clear from the record, but it is likely that the
derailment actually occurred on part of the spur owned
by SIGECO at a derailment device meant to prevent
runaway cars. CSX contends that the foreman mistakenly
reported the location on CSX track because, after derail-
ing, the cars came to rest near CSX’s main line.
  On the same day that police notified CSX of the derail-
ment and CSX’s foreman investigated it, CSX sent thirteen
letters—one for each destroyed railcar—to Alliance Coal,
which was still the registered owner of the railcars. CSX
No. 06-3430                                               3

took this action pursuant to the rules of the Association
of American Railroads (“AAR”), a railroad industry asso-
ciation to which CSX and ARS belong. The letters, which
Alliance Coal forwarded to ARS, notified the owner of
the railcars that they were destroyed “on CSX line” and
asked for a statement of their value. On April 4, 2002,
ARS replied with a statement of value for the railcars
calculated under AAR rules. On May 2, 2002, CSX
sent ARS an authority-to-bill letter and ARS responded
with an invoice on May 20. Before paying, CSX informed
ARS that, in fact, one of the thirteen cars was not com-
pletely destroyed and could be repaired. ARS then sub-
mitted a corrected invoice and in July 2002 received
CSX’s payment of $344,590.20 for twelve destroyed cars,
or $28,715.85 per car.1 In February 2003 CSX paid
$9,810.60 to repair the thirteenth car.
  Some time later, CSX reviewed the payments it made
to ARS and determined that the derailment had actu-
ally occurred on the section of the rail spur owned by
SIGECO. Under its interpretation of AAR Rule 99, then,
CSX believed that it should not have paid for the damage
to the cars. In October 2004, thirty months after the
derailment, CSX filed this lawsuit to recover the pay-
ments it made to ARS. CSX contended that the pay-
ments constituted unjust enrichment because they were
made on the basis of a mistake of fact. After discovery,
both sides moved for summary judgment and the district
court granted ARS’s motion and denied CSX’s motion
based on the voluntary-payment doctrine. CSX appeals.



1
  It is notable, although not legally significant, that when
compared to ARS’s purchase price per car, $3,800, this pay-
ment represented a substantial windfall. Without more than
signing a sale contract, ARS seems to have gained about
$300,000.
4                                               No. 06-3430

                             II.
  On appeal CSX argues that the voluntary-payment
doctrine should not bar its claim because the payment
was not the result of a negotiation or a compromise re-
garding an uncertain liability. ARS asks that we affirm
based on the voluntary-payment doctrine, but offers
alternative grounds on which, it contends, we may also
affirm.
  We review de novo the district court’s grant of sum-
mary judgment, viewing the facts and all reasonable
inferences in the light most favorable to the party opposing
judgment, in this case CSX. Nissan N. Am., Inc. v. Jim
M’Lady Oldsmobile, Inc., 

, 994 (7th Cir. 2007).


        A. The Voluntary-Payment Doctrine
  Under Indiana law, which we must apply in this diver-
sity action, Erie R.R. Co. v. Tompkins, 

(1938),
the voluntary-payment doctrine holds that “money volun-
tarily paid in the face of a recognized uncertainty as to the
existence or extent of the payor’s obligation to the recipient
may not be recovered, on the ground of ‘mistake,’ merely
because the payment is subsequently revealed to have
exceeded the true amount of the underlying obligation.”
Time Warner Ent. Co. v. Whiteman, 

, 892
(Ind. 2004) (quoting Restatement (Third) of Restitution &
Unjust Enrichment § 6 cmt. e (Tentative Draft No. 1,
2001)) (emphasis in original); see also Randazzo v. Harris
Bank Palatine, N.A., 

, 667-68 (7th Cir. 2001)
(discussing the doctrine’s application in Illinois). The
district court held that the voluntary-payment doctrine
barred recovery by CSX because it paid ARS in the face of
a recognized uncertainty, the amount of liability owed. As
the district court read the record, if there had been
certainty as to the amount of liability, CSX would have
No. 06-3430                                              5

simply sent ARS a check rather than asking ARS the value
of the damaged railcars.
  The district court’s argument is somewhat attractive,
but ultimately it is flawed; just because one party must
ask another for a piece of information does not mean that
that information is uncertain. For the voluntary-payment
doctrine to apply there must be a recognized uncertainty
as to the existence or extent of liability, but read in the
light most favorable to CSX, the record suggests that
neither party recognized any uncertainty. They both
believed that CSX was liable and never disagreed as to
the extent of that liability.
  The point of the voluntary-payment doctrine is to
prevent recovery when a transfer was made pursuant to
an agreement of the parties that allocated between them
the risk of any later-discovered mistake. Restatement
(Third) of Restitution & Unjust Enrichment § 6 cmt. d
(Tentative Draft No. 1, 2001). But when the mistake
relates to a contingency not contemplated by the parties
at the time of the voluntary payment, a claim for restitu-
tion exists. 

Thus, “the voluntary-payment rule
has no application to the payment of a claim that neither
party regards as doubtful.” 

district court
called a “negotiated settlement” between CSX and ARS
may have placed upon CSX the risk that ARS set the
value of its railcars too high, but it seems unlikely that
CSX’s payment took into account the possibility that the
derailment actually occurred on track that CSX did not
own. Since there is no evidence that CSX or ARS regarded
CSX’s responsibility for the derailment as doubtful,
whether the payment embodied the possibility that CSX
did not own the track is, at best, a fact question that
precludes summary judgment on the basis of the
voluntary-payment doctrine.
6                                               No. 06-3430

                 B. Unjust Enrichment
  Because it rested its decision on the voluntary-payment
doctrine, the district court did not formally consider the
merits of additional arguments raised by CSX and ARS.
CSX’s claim is based on the general rule that “money
paid under a mistake of fact, and which the payor was
under no legal obligation to make, may be recovered back,
notwithstanding a failure to employ the means of knowl-
edge which would disclose a mistake.” Time 

. But the district court did not determine
whether CSX actually made its payment under a mistake
of fact. ARS contends that CSX cannot prove it was
mistaken because the owner of the track where the
derailment occurred is still unknown. Furthermore, under
ARS’s preferred interpretation of the rules governing
the railroad industry, CSX would have been under a
legal obligation to pay for the damage even if it did occur
on track owned by SIGECO. We make no ruling on the
merits of CSX’s claim or of ARS’s defenses, leaving that
task for the district court on remand.
  We do, however, note the potential merit of one other
defense to CSX’s claim: ARS may have been unfairly
prejudiced by CSX’s failure to timely point out its error. By
the time CSX brought this suit, the two-year statute of
limitations had run on any claim that ARS might have
had against SIGECO or any other third party for the
destruction of its railcars. The remedy for unjust enrich-
ment on the basis of a mistake is an equitable one and, as
such, it is not available when it would be inequitable to
the defendant. More specifically, courts have recognized
a laches-like exception to the general rule allowing recov-
ery of money paid on the basis of a mistake when the
party that received the money by mistake so changed its
position that repaying it would be inequitable. St. Mary’s
Med. Ctr., Inc. v. United Farm Bureau Family Life Ins.
Co., 

, 941 (Ind. Ct. App. 1993); Monroe Fin.
No. 06-3430                                                      7

Corp. v. DiSilvestro, 

, 384 (Ind. Ct. App.
1988); Restatement (First) of Restitution § 69 (1937).
Simply spending the mistakenly paid money is not enough
to preclude restitution. E.g., Monroe Financial 

(mistakenly paid party that used money
on home improvement required to repay). But when the
receiving party has so changed its position that it cannot
be returned to the status quo without being prejudiced,
restitution will not be allowed. E.g., Hullet v. Cadick
Milling Co., 

, 611 (Ind. Ct. App. 1929) (mis-
takenly paid party that used money to pay debts of
third party from whom it reasonably believed money
mistakenly paid was due not required to repay).
  The changed-position exception might bar CSX from
recovering its payment to ARS because, as the district
court observed, the two-year statute of limitations for
injury to personal property had already run by the time
CSX filed its complaint.2 Because ARS reasonably be-
lieved that CSX was to blame for the damaged railcars,
it took no action to investigate the accident and, quite
sensibly, allowed the statute of limitations to run on any



2
   CSX disputes this point by contending that the correct limita-
tions period is not Indiana’s two-year period for destruction
of property, but the six-year period for claims arising out of
unwritten contracts. In the alternative, it contends that a
discovery rule would apply to toll the statute of limitations until
the moment that ARS discovered that CSX did not think itself
liable for the damaged railcars. Neither argument is convinc-
ing. The first has, as CSX acknowledges, been rejected by an
Indiana court of appeals, French v. Hickman Moving & Storage,

, 1391 (Ind. Ct. App. 1980), and the second
ignores that the discovery in discovery rule refers to discovery
of the injury and not to the discovery of the source of the injury,
see Wehling v. Citizens Nat’l Bank, 

, 843 (Ind.
1992).
8                                            No. 06-3430

claim that it might have had against any third party. In
other words, ARS may have changed its position in
reliance on CSX by losing its right to a remedy against
SIGECO or any other third party that might be liable
for the damaged railcars. If so, it would be inequitable
to now punish ARS for its reliance. But this conclusion
only follows if ARS actually had a right to a remedy
against SIGECO or another third party. If ARS had no
such right then the money paid by CSX was truly a
windfall and must be repaid. See Monroe Fin. 

(repayment ordered where stockbroker
mistakenly overpaid customer on sale of stock). On the
current record, we cannot determine if ARS was entitled to
the payment, whether from CSX or some other third party.
We also cannot determine whether ARS’s reasonable
reliance on CSX caused ARS to forego the opportu-
nity to investigate the accident and discover for itself
whether it was entitled to payment from CSX or some
other third party. We leave those determinations, as well
as examinations of the other claims and defenses raised
but not decided, to the district court on remand.


                           III.
  For the reasons stated above, the judgment of the
district court is VACATED and the case REMANDED for
proceedings consistent with this opinion.

A true Copy:
      Teste:

                      ________________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit

                  USCA-02-C-0072—12-5-07