Opinion ID: 196516
Heading Depth: 2
Heading Rank: 2

Heading: Misappropriated Checks

Text: 61 As we noted above, in 1993, the Board discovered that Nadal-Ginard had misappropriated a number of BCHF checks, each drafted between 1991 and 1992, for his personal use. The court found that Nadal-Ginard's actions with respect to these checks constituted breaches of his fiduciary duties. Notwithstanding the fact that Nadal-Ginard reimbursed BCHF for the principal amounts of these checks, the district court awarded BCHF damages for these breaches in an amount equivalent to the interest BCHF would have earned on the money between the time the checks were drafted and the time Nadal-Ginard reimbursed the funds. 62 In alleging error with respect to this damage award, Nadal-Ginard does not contest BCHF's right to recover an amount equal to the interest which it would have earned on the misappropriated funds. Rather, NadalGinard contends that BCHF failed to meet its burden of submitting evidence to prove the amount of its damages, as it introduced no evidence of what the prevailing market rate was during the time in question. Nadal-Ginard contends that the trial court erred by awarding damages in an amount equal to the market interest rate, which it calculated based on the auction prices of 52-week United States Treasury bills. 63 Interest is compensation fixed by law for the use of money or, alternatively, as damages for its detention. See Perkins School for the Blind v. Rate Setting Comm'n, 383 Mass. 825, 423 N.E.2d 765, 771-72 (1981); Begelfer v. Najarian, 381 Mass. 177, 409 N.E.2d 167, 170 (1980). Massachusetts law differentiates between two types of interest: interest reserved by the terms of a contract and interest awarded by law. See Perkins School for the Blind v. Rate Setting Comm'n, 423 N.E.2d at 772. The latter is traditionally seen in the context of prejudgment or postjudgment interest, the rate of which is traditionally fixed by statute and which is calculated based on the amount of damages that a party has sustained. 64 In this case, there is no question that BCHF bore its burden of proving it was injured in an amount equivalent to the interest it would have earned on the misappropriated funds. Indeed, it sought to recover damages in an amount based on the interest it would have received using the prejudgment rates provided by statute. See Mass.Gen.L. ch. 231, Sec. 6H. The application of that rate would have resulted in a windfall to BCHF, however. In light of the fact that the interest is awarded to ensure that a party is fully compensated for its injuries, the fact that the district court relied on the United States Treasury bill rates to determine the applicable interest rates did not prejudice either Nadal-Ginard or BCHF. 13 Therefore, we affirm the district court's ruling with respect this aspect of the damage award.