Court Opinion

ID: 2963654
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Date Created: 2015-09-21 21:13:32.011662+00
Date Added: 2024-06-11T11:37:21.804836
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USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                                     
                                 ____________________
        No. 94-2290

                                  MARK A. MARCUCCI,

                                 Plaintiff, Appellee,

                                          v.

                                   MARION J. HARDY,

                                Defendant, Appellant.

                                                     
                                 ____________________
        No. 95-1005
                                  MARK A. MARCUCCI,

                                Plaintiff, Appellant,

                                          v.

                                   MARION J. HARDY,

                                 Defendant, Appellee.

                                                     
                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF NEW HAMPSHIRE

                [Hon. Martin F. Loughlin, Senior U.S. District Judge]
                                          __________________________

                                                     
                                 ____________________

                                Selya, Cyr and Boudin,

                                   Circuit Judges.
                                   ______________

                                                     
                                 ____________________

             John R. Harrington, with whom David F. Conley and Sulloway &
             __________________            _______________     __________
        Hollis were on brief for defendant.
        ______
             Charles A. Szypszak, with whom Laura E. Tobin and Orr and Reno,
             ___________________            ______________     _____________
        P.A. were on brief for plaintiff.
        ____

                                                     
                                 ____________________

                                  September 20, 1995
                                                     
                                 ____________________

                    CYR, Circuit  Judge.   Mark A. Marcucci  initiated this
                    CYR, Circuit  Judge.
                         ______________

          diversity  action in  the United  States District  Court for  the

          District of  New Hampshire in  December 1993,  alleging that  his

          daughter, Marion  J.  Hardy,  had appropriated  to  her  own  use

          approximately $550,000 held in trust  for Marcucci.  Following  a

          bench trial, the district  court imposed a constructive trust  on

          the proceeds Hardy received  from the sale of the  Marcucci home-

          stead and awarded $36,097.54 in attorney fees to Marcucci.  Hardy

          appealed.   Marcucci cross-appealed  from a district  court order

          rejecting  his claims  to joint  accounts managed  by Hardy.   We

          affirm the district court judgment, in part, and reverse in part.

                                          I
                                          I

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                    In the  late 1950s, Marcucci,  owner of a  plumbing and

          fuel oil  business, conveyed  the Marcucci "family  homestead" in

          Waterbury, Connecticut, and other assets, to his wife, Angela, in

          order to insulate their holdings from potential business liabili-

          ty claims.  In the  early 1980s, as Marcucci and Angela  advanced

          in  years,  they caused  the name  of  their daughter,  Marion J.

          Hardy, to be added  to their joint bank and  investment accounts.

          Aside from  an $18,000 deposit  by Hardy  in 1987,  all funds  in

          these joint accounts derived from Marcucci.  

                    Although Marcucci,  Angela, and  Hardy continued to  be

          listed as  "joint owners," Hardy  took charge  of most  disburse-

          ments.  The Marcuccis retained the ability to withdraw funds from

                                          2

          the joint accounts, but rarely did so.  From time to time, Angela

          told  Hardy, in Marcucci's presence,  that some of  the monies in

          these  joint accounts  were  intended for  Hardy's personal  use.

          When Angela died  in October 1988,  the joint accounts  contained

          $364,663. 

                    Angela left $50,000 in  cash to Constance Waterman, her

          other daughter, but the Marcucci homestead and the residue of her

          estate went to  Hardy.  Hardy invited Marcucci to  live with her,

          first in  Colorado and later in  her New Hampshire home.   All of

          Marcucci's  expenses  were  defrayed  by Hardy  with  his  social

          security income and with funds disbursed from the joint accounts.

          The  DeFeo family,  Hardy's neighbors,  helped care  for Marcucci

          while  Hardy was away from  New Hampshire for approximately eigh-

          teen months  during Operation  Desert Storm and  while performing

          her other military duties.  

                    In  the summer of 1990,  prior to the  final probate of

          Angela's will,  Marcucci learned that the  joint account balances

          were  substantially less  than  $364,663.   At  about this  time,

          Constance told  Marcucci that  Hardy  was claiming  the right  to

          withdraw  funds  from  the  joint accounts.    Although  Marcucci

          commented at the time that he would be without substantial assets

          unless he contested  Angela's will, he  decided against doing  so

          after obtaining legal advice, and the will became final in August

          1990.1 
                              
          ____________________

               1Marcucci  admits he  knew  the homestead  had been  left to
          Hardy by  Angela.  An  April 1989 letter,  which Hardy wrote  for
          Marcucci and signed  "Dad," stated that the homestead belonged to

                                          3

                    Meanwhile, in July 1990,  Hardy had created a revocable

          trust  ("Marcucci Family  Trust"), with  $173,801 from  the joint

          accounts, retaining sole discretion to make inter vivos distribu-
                                                      _____ _____

          tions  to Marcucci, the only  beneficiary.  She  showed the trust

          instrument  to  Marcucci  and,  with  his  encouragement,  loaned

          $150,000  of the trust corpus  to the DeFeo  family, to alleviate

          their serious financial  problems.   Six weeks  later the  DeFeos

          filed petitions in  bankruptcy and the $150,000 loan  is presumed

          uncollectible.   No trust  distributions were either  promised or

          made to Marcucci.  

                    By November 1992, the relationship between Marcucci and

          Hardy had deteriorated.  With assistance from Constance, Marcucci

          moved  to  a Connecticut  retirement  home and  Hardy  refused to

          contribute to his  support until  he returned to  live with  her.

          Marcucci,  95 years  old  and virtually  indigent,  is unable  to

          afford the retirement home  accommodations.  In July  1993, Hardy

          sold the Marcucci homestead, applying the net proceeds ($108,000)

          to the mortgage on her New Hampshire home.

                                          II
                                          II

                                      DISCUSSION
                                      DISCUSSION
                                      __________

          A.   The Hardy Appeal
          A.   The Hardy Appeal
               ________________
                              
          ____________________

          Hardy.  Marcucci's daughter,  Constance, and her husband, advised
          Marcucci  that "the house and cars are [Hardy's]" and that Angela
          had  left everything  to Hardy  except for  the $50,000  given to
          Constance.  The district  court found that Marcucci knew,  by the
          summer of 1990, that substantial amounts  had been withdrawn from
          the  joint accounts by Hardy, and that by September 1990 Marcucci
          "believed that unless he contested his wife's will, he would have
          no substantial assets."  

                                          4

               1.   Constructive Trust
               1.   Constructive Trust
                    __________________

                    Hardy  asserts  three  challenges  to  the constructive

          trust imposed on the  homestead proceeds.  First, she  claims the

          district court erred in  rejecting her affirmative defenses based

          on the statute  of limitations  and laches.   Second, she  argues

          that  Marcucci  expressly withdrew  his  claim  to the  homestead

          proceeds at trial.   Finally, she contends that  the constructive

          trust  ruling was either  based on clearly  erroneous findings of

          fact or erroneous conclusions of law. 

                    a)   Affirmative Defenses
                    a)   Affirmative Defenses
                         ____________________

                    Hardy moved for judgment on  the pleadings, see Fed. R.
                                                                ___

          Civ.  P. 12(c), on the alternative  grounds that the constructive

          trust  claim was barred by  New Hampshire's three-year statute of

          limitations,  N.H. Rev. Stat. Ann.    508:4, I  (Supp. 1994); see
                                                                        ___

          Sullivan v. Marshall,  44 A.2d  433, 434 (N.H.  1945) (claim  for
          ________    ________

          restitution  against constructive  trustee  time-barred),  or  by

          laches.2   The  district court  denied the  motion on  the ground

          that Marcucci had no  knowledge, prior to March 1993,  that Hardy

          had mishandled or misapplied either joint account funds or  other

          Marcucci assets.   Although  the district  court opinion  did not

                              
          ____________________

               2At oral argument, Hardy suggested for the first time that a
          Connecticut statute  of limitations applies  to the  constructive
          trust  claim.  As this  contention was neither  raised below, nor
          seasonably broached on appeal, we deem it waived.  See Clauson v.
                                                             ___ _______
          Smith, 823 F.2d  660, 666 (1st Cir. 1987).  In  all events, it is
          _____
          unavailing.  In diversity cases, the federal courts normally look
          to the choice-of-law rules of  the forum state, in this case  New
          Hampshire.   As  a general  rule, New  Hampshire applies  its own
          statute of limitations.  See Keeton v. Hustler Magazine, 549 A.2d
                                   ___ ______    ________________
          1187, 1191-92 (N.H. 1988).  We believe it would do so here.  

                                          5

          revisit the matter, there can be no doubt that the court rejected

          Hardy's affirmative defenses, as the constructive trust claim was

          allowed to proceed.3  

                    Under N.H. Rev. Stat. Ann.   508:4, I (Supp. 1994), the

          three-year  limitations  period  commences  when  the  "plaintiff

          discovers, or in the exercise of reasonable diligence should have

          discovered, the injury or  its causal relationship to the  act or

          omission  complained  of."   Whether  a  claimant discovered  the

          injury, or  in the exercise  of reasonable diligence  should have

          discovered it,  is a  question of fact.   French v.  R.S. Audley,
                                                    ______     ____________

          Inc., 464 A.2d 279, 282 (N.H. 1983).   Accordingly, we review for
          ____

          clear  error.  Reilly  v. United States,  863 F.2d 149,  163 (1st
                         ______     _____________

          Cir. 1988).  

                    There  is undisputed  evidence that  Constance Waterman

          informed  Marcucci in the summer  of 1990 that  Hardy claimed the

          right  to withdraw funds from the joint accounts, and that Marcu-

          cci  knew that Angela had  left the Marcucci  homestead to Hardy.

          Nevertheless,  in the circumstances  presented here     including

          the close family relationship,  Marcucci's age and dependency, as

          well as the  nature and  purpose of Marcucci's  transfers of  the

          homestead  and the joint accounts     Hardy's assertion of rights

          in these assets  was not tantamount to  knowledge on the part  of
                              
          ____________________

               3Hardy contends that the failure to make express findings on
          her affirmative  defenses necessitates remand.   See, e.g., Touch
                                                           ___  ____  _____
          v. Master  Unit Die Prods., Inc.,  43 F.3d 754, 757-59  (1st Cir.
             _____________________________
          1995)  (finding district court  decision "insufficiently clear to
          enable  effective  appellate  review").    Unlike  the  situation
          presented in Touch,  however, the import of the  district court's
                       _____
          factual findings in this case plainly signaled its rationale.  

                                          6

          Marcucci that his  daughter was refusing  to recognize and  honor

          his  own beneficial  interest in  the assets.   Further,  Hardy's

          conduct  served to toll the limitations  period by engendering in

          Marcucci  a reasonable  sense of  confidence which  disguised the

          need for  any legal action.   See New Hampshire Donuts  v. Skipi-
                                        ___ ____________________     ______

          taris, 533 A.2d 351, 356 (N.H. 1987).   
          _____

                    For more than  four years     October 1988 to  November

          1992     Hardy  took care  of Marcucci  in her  Colorado and  New

          Hampshire homes.  She  informed him that she had  established the

          "Marcucci Family  Trust," with Marcucci as  its sole beneficiary,

          and  consulted with him before  making the DeFeo  loan from trust

          monies.   These actions were  entirely consistent with  an extant

          trustee-beneficiary  relationship,  and, whether  so  intended or

          not,  sufficed  to  provide  a reasonable  basis  for  rekindling

          Marcucci's confidence  in Hardy, especially in light of the close

          family  relationship and  his advanced  age and  highly dependent

          state.   Thus,  the district  court  record clearly  warrants the

          conclusion that  Marcucci neither knew, nor  should he reasonably

          have believed,  that his  daughter claimed outright  ownership of

          the Marcucci homestead.  

                    In July  1993, however,  Hardy sold the  Marcucci home-

          stead and applied  the proceeds  toward the mortgage  on her  New

          Hampshire  residence, conduct  which unequivocally  announced her

          open, adverse claim to the entire Marcucci homestead.  Within six

          months  thereafter,  Marcucci   initiated  the  present   action.

          Accordingly, we agree with the district court that the action was

                                          7

          not time-barred,  either by the New Hampshire  statute of limita-

          tions or laches.4 

                    b)   Withdrawal of Homestead Claim
                    b)   Withdrawal of Homestead Claim
                         _____________________________

                    During  closing  argument,  Marcucci's   trial  counsel

          stated:   "we are not asking in this proceeding for return of the

          home."  Hardy frivolously contends that Marcucci thereby withdrew

          his claim to the  homestead proceeds.  Construed in  context, the
                                      ________

          language employed  by counsel  simply reflected the  reality that

          the homestead had been sold to a third party; thus, a claim could

          only be asserted against the sale proceeds.5

                    c)   The Merits
                    c)   The Merits
                         __________

                    Hardy next  contends that the  district court misinter-

          preted New  Hampshire  law  as permitting  the  imposition  of  a

          constructive  trust in these  circumstances.  She  argues that it

          was error to do so absent an express promise by Hardy to reconvey
                                       _______

          the homestead  to Marcucci.  We  do not agree.   There was suffi-
                              
          ____________________

               4Under  the doctrine of laches,  a limitations period may be
          foreshortened  if "unreasonable" and  unexplained delay in filing
          an  equitable claim has prejudiced  the defendant.   See Jenot v.
                                                               ___ _____
          White Mountain Acceptance Corp., 474 A.2d 1382, 1387 (N.H. 1984);
          _______________________________
          O'Grady v.  Deery,  45 A.2d  295, 297  (N.H. 1946).   The  laches
          _______     _____
          defense  does not lie, however,  if the defendant  has "caused or
          contributed" to the delay.  See New Hampshire Donuts, 533 A.2d at
                                      ___ ____________________
          356.  

               5The  cases  cited by  Hardy  are totally  inapposite.   See
                                                                        ___
          Hoffer v. Morrow, 797 F.2d 348, 350 (7th Cir.  1986) (noting that
          ______    ______
          a  criminal defendant may waive a double jeopardy claim by plead-
          ing guilty); Flannery  v. Carroll,  676 F.2d 126,  132 (5th  Cir.
                       ________     _______
          1982) (observing  that plaintiff may waive a particular theory of
          liability by choosing  not to plead it);  American Locomotive Co.
                                                    _______________________
          v. Gyro Process Co., 185 F.2d 316, 318-19 (6th Cir. 1950) (noting
             ________________
          that  defendant may  waive  contractual right  to arbitration  by
          failing,  for seven-year  period, to  move  for stay  of judicial
          proceedings to permit arbitration).  

                                          8

          cient  circumstantial  evidence  alone to  support  a  reasonable

          inference that  there had  been an  implicit promise  to reconvey

          based on the intra-family nature of the transfer from Marcucci to

          his wife, Angela.  See Pleakas v. Juris, 224 A.2d 74, 78-79 (N.H.
                             ___ _______    _____

          1966) (the promise to reconvey may be inferred from the surround-

          ing circumstances, including the relationship between the parties

          and the  potential for  unjust enrichment).6   Moreover, Angela's

          devise of the  homestead to  Hardy remained subject  to the  con-

          structive trust impressed  upon it at the  time Marcucci conveyed

          it to Angela.7   Angela therefore held the homestead in trust for

          Marcucci, and it was devised to Hardy subject to that trust.  See
                                                _______ __ ____ _____   ___

          generally  4 Austin W.  Scott & William  F. Fratcher, The  Law of
          _________                                             ___________

          Trusts   289.1  (4th ed.  1989) [hereinafter:   Scott on  Trusts]
          ______                                          ________________

          (noting  that "[d]evisee takes subject to a trust because one who

                              
          ____________________

               6We likewise  reject Hardy's  contention that  the homestead
          was  not impressed with a constructive trust when she received it
          from her mother,  because the  reason for its  conveyance to  her
          mother    Marcucci's desire to insulate it from business liabili-
          ty claims    ceased when Marcucci retired.  First, the premise is
          dubious, since it is  by no means clear that  Marcucci's business
          liability exposure would  cease at retirement,  at least as  con-
          cerns pre-retirement  activity.  Second, it  seems more consonant
          with the  intent of  the  parties that  once the  reason for  the
          transfer  no  longer remained  viable,  reconveyance  to Marcucci
          should obtain,  particularly since unjust enrichment  is the core
          ______
          consideration  in the  constructive trust  analysis.   See, e.g.,
                                                                 ___  ____
          Cornwell v. Cornwell, 356 A.2d 683, 686 (N.H. 1976).
          ________    ________

               7Hardy maintains  that  Marcucci subsequently  released  her
          from any obligation  to reconvey.   She points  to his  testimony
          that, "as  long as [the house]  was given to Marion,  I say [sic]
          it's okay  as long as Marion's going to  take care of me the rest
          of  my life."    On the  contrary,  this testimony  bolsters  the
          district court finding that Marcucci was prepared to permit Hardy
          to  retain title to  the homestead in  trust only as  long as she
          continued to care for him.

                                          9

          pays no value for  the trust property would be  unjustly enriched

          at the  beneficiary's expense  if the  trustee were  permitted to

          keep  it");  see also  Herman v.  Edington,  118 N.E.2d  865, 869
                       ___ ____  ______     ________

          (Mass.  1954) (holding that one  who takes trust property without

          consideration,  and  either with  or  without  notice, becomes  a

          trustee herself).8   The court  did not abuse  its discretion  in

          imposing a constructive trust on the homestead proceeds.

               2.   Attorney Fees 
               2.   Attorney Fees
                    _____________

                    Marcucci  asserted a  demand for  attorney fees  in the

          complaint,  which Hardy  opposed in her  answer.   Hardy contends

          that  the  district court  improperly  awarded  attorney fees  to

          Marcucci  since her defenses were  not frivolous and  she did not

          litigate in  bad faith.   The  appellate record discloses  little

          insight  into the rationale for the district court award, nor did

          Hardy  request elucidation  or  reconsideration  by the  district

          court.  

                    The  district court cited to Harkeem v. Adams, 377 A.2d
                                                 _______    _____

          617, 619-20 (N.H. 1977),  which held that unreasonable litigation

          tactics which unnecessarily prolong litigation can constitute bad

          faith  even  though  the  litigation position  was  not  entirely

          frivolous.   See Marcucci v. Hardy, No. C-93-645-L, at 14 (D.N.H.
                       ___ ________    _____

                              
          ____________________

               8Hardy attempts to challenge  two district court findings of
          fact:  (1) that the threat of liability suits was the impetus for
          the  transfer of the homestead  from Marcucci to  Angela; and (2)
          the  entire  homestead (rather  than  a  mere half-interest)  was
          transferred.   Although  Hardy asserts,  conclusorily,  that  she
          challenged these  findings below, the appellate  record indicates
          otherwise.  Thus,  these claims  were waived.   See Clauson,  823
                                                          ___ _______
          F.2d at 666.

                                          10

          Nov.16,  1994).  Hardy's failure  to challenge the  ruling in the

          district court deprives us of the benefit of the district court's

          rationale.  Nonetheless, absent district  court findings suggest-

          ing any adequate  basis for departing from the so-called American

          Rule, BTZ, Inc. v. Great Northern Nekoosa Corp., 47 F.3d 463, 465
                _________    ____________________________

          (1st Cir. 1995) (noting,  as a general rule, that  litigants must

          bear  their  own attorney  fees  absent  statutory authority,  or

          agreement, to the contrary), and since we are unable to discern a

          sufficient basis for doing so on the present record, the attorney

          fee award must be vacated.9

          B.   Marcucci Cross-Appeal
          B.   Marcucci Cross-Appeal
               _____________________

               1.   Joint Accounts
               1.   Joint Accounts
                    ______________

                    Marcucci  cross-appeals from  the district  court order

          disallowing his claims to  the joint accounts.  He  contends that

          he  established exclusive  title to  the accounts  "converted" by

          Hardy,  and, alternatively, that he  was entitled to  have a con-

          structive trust imposed  on the accounts, lest Hardy  be unjustly

          enriched.10

                    a)   Conversion Claim
                    a)   Conversion Claim
                         ________________
                              
          ____________________

               9The citation  to Harkeem, supra, cannot  suffice, since the
                                 _______  _____
          district court articulated no basis upon which Hardy's litigation
          tactics could  be found impermissibly obdurate,  noting only that
          _______
          the  lawsuit should never have "wended its way to federal court."
               _______
          See also Touch, 43 F.3d at 757-59 (discussed supra note 3).  This
          ___ ____ _____                               _____
          seems  to us  altogether inadequate  to take  this case  out from
          under the American Rule.  On this record, therefore, the attorney
          fee award must be vacated.

               10Marcucci's  alternative  "claim" to  an  accounting fails,
          since  the district court supportably found  that Hardy had exer-
          cised due  diligence in  reconstructing the relevant  activity in
          the joint accounts.

                                          11

                    Although the  district court did not  state its grounds

          for  rejecting the conversion claim, the rationale is clear.  "An

          action for  conversion is based  on the  defendant's exercise  of

          dominion or  control over  goods which  is inconsistent with  the

          rights of the person entitled  to immediate possession."   Rinden
                                                                     ______

          v. Hicks, 408 A.2d 417, 418 (N.H. 1979).  The right to possession
             _____

          is a key element, see,  e.g., McGranahan v. Dahar, 408  A.2d 121,
                            ___   ____  __________    _____

          126 (N.H. 1979), which  the claimant must establish.   See Wujno-
                                                                 ___ ______

          vich  v. Colcord,  202  A.2d 484,  485  (N.H. 1964)  (to  recover
          ________________

          property  allegedly  converted, plaintiff  had burden  of proving

          title).11

                    The  district court  rejected the  all-or-nothing posi-

          tions  advanced by both parties    that each held exclusive title

          to the accounts notwithstanding their  joint status.12  It  found
                              
          ____________________

               11Under  the  law  of  all  three  jurisdictions conceivably
          applicable  to this claim, intent is the central factor in deter-
                                     ______
          mining  entitlement  to  funds  held  in  joint  accounts.    See
                                                                        ___
          Grodzicki v. Grodzicki, 226 A.2d 656, 657 (Conn. 1967) (intent of
          _________    _________
          original owner  of  mutual  account is  an  essential  factor  in
          determining rights  to  account); Blanchette  v. Blanchette,  287
                                            __________     __________
          N.E.2d  459, 461 (Mass.  1972) ("In  disputes arising  while both
          parties to a joint bank account are still alive we have frequent-
          ly  upheld allegations or findings that there was no donative in-
          tent."); In re Wszolek Estate, 295 A.2d 444, 447 (N.H.  1972) (to
                   ____________________
          establish  inter vivos  gift  of joint  accounts, plaintiff  must
                     _____ _____
          prove donative intent and delivery of accounts).

               12Although Marcucci notes that his business was the original
          "source" of  most of these  funds, he cites no  authority for the
          view that  this conclusively  established his entitlement  to all
          the funds  once the joint accounts  had been placed  in all three
          names.   On the other hand,  Hardy argued that the  mere fact the
          funds were  held in three names  entitled her to withdraw  all of
          the funds, foreclosing  any possibility of  conversion.  But  the
          form of the accounts  is not conclusive evidence of  their owner-
          ship where, as here,  there is evidence of contrary  intent.  See
                                                                        ___
          New Hampshire Sav. Bank v. McMullen, 185 A. 158, 160 (N.H. 1936).
          _______________________    ________

                                          12

          that "Mrs.  Marcucci stated  repeatedly and openly,  sometimes in

          [Marcucci's] presence,  that she had  given money to  [Hardy] and

          that  she  wanted  [Hardy] to  use  it  for  her own  enjoyment."

          Marcucci, order at 5-6;  see Dover Coop. Bank v.  Tobin's Estate,
          ________                 ___ ________________     ______________

          166 A.  247 (N.H.  1933) (noting  that gift  of bank  accounts is

          established by  proof of donor's manifest intent to make uncondi-

          tional delivery, and donee's acceptance).   Not only did Marcucci

          fail to  establish his ownership  of all  the funds in  the joint
                                               ___

          accounts,  Wujnovich, 202  A.2d at  485, but  the district  court
                     _________

          found that he failed  to show that any ascertainable  portion had
                                                 _____________  _______ ___

          not been intended  as a gift to  Hardy.  Further, Hardy  expended
          ___ ____ ________

          "substantial  amounts" for  Marcucci's  benefit.13   Given  these

          supportable findings,  we cannot fault the  district court ruling

          that  it may well have been speculative to conclude that Marcucci

          sustained any damages; and  that the amount of any  damages could
                                               ______

          only  have  been arrived  at through  conjecture.   See  Robie v.
                                                              ___  _____

          Ofgant, 306 F.2d  656, 660  (1st Cir. 1962)  ("[D]amages must  be
          ______

          proven, that  is, they must  not be speculative,  and [plaintiff]

          must not be made more than whole.").  The district  court did not

          err in dismissing the conversion claim.
                              
          ____________________

               13The  district court  found  that the  joint accounts  held
          $364,663  at  the time  of Angela's  death  in October  1988; the
          $150,000 loan to the  DeFeos was motivated in part  by Marcucci's
          gratitude  to the  people who  had cared  for him  during Hardy's
          absence; Hardy "paid all common  living expenses and all particu-
          lar living  expenses" not  covered by Marcucci's  social security
          benefits.  Hardy also used $173,000 from a joint account to buy a
          home in Colorado,  where Marcucci lived until Hardy  and Marcucci
          relocated to New Hampshire.  

                                          13

                    b)   Constructive Trust
                    b)   Constructive Trust
                         __________________

                    Alternatively,  Marcucci  claims  that  a  constructive

          trust should have been impressed to preclude unjust enrichment of

          Hardy.  We review  for abuse of discretion.   Texaco Puerto Rico,
                                                        ___________________

          Inc.,  v. Department of Consumer  Affairs, 60 F.3d  867, 874 (1st
          ____      _______________________________

          Cir.  1995) (citations  omitted).   Marcucci therefore  must show

          that  the district  court's rejection  of the  constructive trust

          claim constituted "a serious lapse in judgment."  Id. at 875.  
                                                            ___

                    Although the  record reflects  that all but  $18,000 in

          the joint accounts (deposited by Hardy) derived from Marcucci, it

          is equally clear that  large sums were expended for  his benefit.

          Moreover,  the  district  court  supportably  found  that  Angela

          intended to  give  Hardy  an unspecified  portion  of  the  joint
                                       ___________  _______

          accounts for her exclusive use, Marcucci was  present when Angela

          declared her donative intent, and he knew that Hardy was handling

          the joint accounts.  

                    A constructive trust may  be created where the particu-

          lar confidential or  fiduciary relationship would give  rise to a

          significant  potential for  unjust  enrichment  absent  equitable

          relief.  See  Carroll v. Daigle,  463 A.2d 885, 888  (N.H. 1983).
                   ___  _______    ______

          The district court supportably found that Hardy used approximate-

          ly  $173,000 to purchase property for herself in Colorado and the

          record  would support findings  that Angela  had given  Hardy the

          money for the house and that Marcucci derived benefit from living

          there with Hardy.   Since a substantial portion of  the remainder

          had been used for  Marcucci's own benefit, or their  mutual bene-

                                          14

          fit, and it  was impossible to determine how  much each was enti-

          tled to receive, we find no abuse of discretion.  

               2.   "Marcucci Family Trust" 
               2.   "Marcucci Family Trust"
                     _____________________

                    Finally,   Marcucci  argues  that  Hardy  breached  her

          fiduciary duty,  under the so-called "prudent  man" standard, see
                                                                        ___

          N.H.  Rev. Stat.  Ann. 564-A:3,  I (1974), by  improperly lending

          $150,000  from the Marcucci Family Trust to the DeFeo family, and

          that she  is chargeable with the  loss.  Hardy responds  that her

          withdrawal of  funds from  a revocable  trust constituted  a con-

          structive revocation of the trust, (2) Marcucci consented to this

          allocation of trust funds, and  (3) the allocation was reasonable

          and did not violate the "prudent man" standard.

                    We need  not consider whether Hardy  violated the "pru-

          dent man" standard, because the district court  found that Marcu-

          cci  actively  encouraged the  $150,000 loan  to  the DeFeos.   A

          trustee is not liable to a beneficiary for breach of trust if the

          beneficiary  consented to  the action.   Restatement  (Second) of

          Trusts    216(1) (1957) (endorsing estoppel  rationale); Mahle v.
                                                                   _____

          First Nat'l Bank of Peoria, 610 N.E.2d 115, 116-17  (Ill.App.3d.)
          __________________________

          (beneficiary consented  to risky  loan to nephew),  cert. denied,
                                                              _____ ______

          622 N.E.2d 1209  (Ill. 1993).  There is ample evidence to support

          the finding that  Marcucci consented to  the $150,000 loan,  with

          the knowledge that  the DeFeos were about to  lose their own home

          due  to financial  problems.   Thus,  we  find that  Marcucci  is

          estopped  from challenging  Hardy's  decision to  make the  DeFeo

          loans.  

                                          15

                                         III
                                         III

                                      CONCLUSION
                                      CONCLUSION
                                      __________

                    The district court judgment is affirmed, except for the
                    The district court judgment is affirmed, except for the
                    _______________________________________________________

          attorney fee award, which  is vacated.  Costs are  awarded to the
          attorney fee award, which  is vacated.  Costs are  awarded to the
          _____________________________________   _________________________

          respective appellees in Nos. 94-2290 and 95-1005.  So ordered. 
          respective appellees in Nos. 94-2290 and 95-1005.  So ordered. 
          ________________________________________________   __________

                                          16