Court Opinion

ID: 2963906
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:17:12.448828+00
Date Added: 2024-06-11T11:42:48.326860
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 95-1053

                               BOSTON CHILDREN'S HEART
                                  FOUNDATION, INC.,

                                Plaintiff - Appellee,

                                          v.

                                BERNARDO NADAL-GINARD,

                                Defendant - Appellant.

                                 ____________________

          No. 95-1136

                               BOSTON CHILDREN'S HEART
                                  FOUNDATION, INC.,

                                Plaintiff - Appellant,

                                          v.

                                BERNARDO NADAL-GINARD,

                                Defendant - Appellee.

                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. Robert E. Keeton, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                          Selya and Boudin, Circuit Judges,
                                            ______________

                              and Lisi,* District Judge.
                                         ______________

                                _____________________
                              
          ____________________

          *  Of the District of Rhode Island, sitting by designation.

               Laura Steinberg,  with whom Cynthia M.  Clarke, Katherine J.
               _______________             __________________  ____________
          Ross, Lisa  F. Sherman and Sullivan & Worcester were on brief for
          ____  ________________     ____________________
          Bernardo Nadal-Ginard.
               Alexander H. Pratt, Jr.,  with whom Paul R. Devin,  James H.
               _______________________             _____________   ________
          Belanger, Robin E. Folsom, William M. Cowan and Peabody & Arnold,
          ________  _______________  ________________     ________________
          were on brief for Boston Children's Heart Foundation, Inc.

                                 ____________________

                                   January 12, 1996
                                 ____________________

                                         -2-

                    LISI, District Judge.
                    LISI, District Judge.
                          ______________

                                   I.  INTRODUCTION
                                   I.  INTRODUCTION

          These appeals present  us with  the classic tale  of a  corporate

          officer who, when caught using corporate funds for personal gain,

          resists  making amends for his  misdeeds.  In  this instance, Dr.

          Bernardo Nadal-Ginard  was alleged  to  have misappropriated  the

          funds of  the corporation  of  which he  had  served as  both  an

          officer  and director,  the  Boston  Children's Heart  Foundation

          ("BCHF").   Following an  eighteen-day bench trial,  the district

          court found  that Nadal-Ginard  violated his fiduciary  duties to

          BCHF,  and entered  judgment  in  its  favor  in  the  amount  of

          $6,562,283.02.   Notwithstanding  allegations  of error  by  both

          parties, we affirm the district court s decision.

                                   II.  BACKGROUND
                                   II.  BACKGROUND

          Plaintiff-appellee BCHF is a non-profit corporation organized for

          the  purposes  of conducting  medical  research in  the  field of

          cardiology and  providing medical services to  patients at Boston

          Children's Hospital ("Hospital"),  a teaching hospital affiliated

          with Harvard  Medical School ("Medical School").   The defendant-

          appellant, Nadal-Ginard,  was the president  and a member  of the

          Board  of Directors  of  BCHF ("Board").   Nadal-Ginard  was also

          Chairman of  the Department  of Cardiology ("Department")  at the

          Hospital,  as well  as a  member  of the  faculty of  the Medical

          School.

                    Nadal-Ginard   first   became  associated   with  these

          entities in 1982,  when he accepted the chairmanship  and faculty

                                         -3-

          position.   Approximately one year later, with  the assistance of

          Boston attorney Douglas Nadeau,  BCHF, a tax-exempt Massachusetts

          corporation   created  to   conduct  the   Department's  clinical

          activities,   was  organized.1     Like  the  other  departments'

          corporations, the  Operating Agreement between  the Hospital  and

          BCHF  explicitly  acknowledged  the  independent  status  of  the

          foundation.    Indeed, control  of  the foundation  was  given to

          BCHF's three directors:   Nadal-Ginard, Donald Fyler, and Michael

          Freed.2   Nadal-Ginard  also served  as president  of BCHF  until

          1993, when the circumstances leading to this litigation began  to

          surface.

                    In  addition to  his  duties at  the Hospital,  Medical

          School,  and  BCHF,  Nadal-Ginard   accepted  a  position  as  an

          investigator with the Howard Hughes Medical Institute ("HHMI") in

          1986.  In this position, he directed the activities of the Howard

          Hughes  Medical Institute  Laboratory of  Cellular and  Molecular

          Cardiology at the Hospital.   Nadal-Ginard received a substantial

          salary and some optional fringe  benefits as compensation for his

          services.
                              
          ____________________

          1  In 1980, the Hospital's Board of Trustees had  adopted a Group
          Practice   Policy  Statement   which  permitted   the  Hospital's
          individual  departments  to  conduct  their  clinical  activities
          through tax-exempt corporations  established pursuant to  chapter
          180 of  the Massachusetts General  Laws.   At the  time BCHF  was
          established in 1983, several  other corporations already had been
          formed,  all  with  the assistance  of  Nadeau.    Twelve of  the
          Hospital's fifteen departments ultimately established chapter 180
          corporations.

          2   Fyler served on the  Board until his retirement in  1989.  On
          December   31,  1989,  James   E.  Lock  was   named  as  Fyler's
          replacement.

                                         -4-

                    There  were never  any questions  as to  Nadal-Ginard's

          qualifications as a scientist and a physician.  Several questions

          did arise, however, with  respect to certain actions Nadal-Ginard

          took with respect to setting his salary, establishing a severance

          benefit plan, and  using BCHF  funds for personal  expenses.   On

          November  12, 1993,  BCHF filed  suit claiming  that Nadal-Ginard

          breached his fiduciary duties  to the corporation.3   Following a

          bench  trial, the district court found most of the allegations to

          be true and awarded damages to BCHF.

                    On appeal, Nadal-Ginard alleges that the district court

          committed  a plethora  of errors  in deciding  in favor  of BCHF.

          BCHF  cross-appeals on  several issues  which the  district court

          decided  in  favor of  Nadal-Ginard.   We  examine each  of these

          alleged errors in the context of their common factual bases.

                               III.  BCHF SALARY CLAIMS
                               III.  BCHF SALARY CLAIMS

                    Nadal-Ginard's first allegation of error relates to the

          district court's finding that he violated his fiduciary duties to

          BCHF  by setting his BCHF salary without making any disclosure to

          the Board of his receipt of an annual salary from HHMI.  The BCHF

          Articles of  Organization authorized  the  payment of  reasonable

          compensation to its employees and members.  The  Hospital's Group

          Practice Policy Statement  defined the procedures  to be used  in

          calculating  the compensation, delegating  exclusive authority to

          the BCHF  president to determine  the compensation levels  of all
                              
          ____________________

          3   BCHF  filed  its complaint  in Massachusetts  Superior Court.
          Pursuant  to Nadal-Ginard's motion,  the case was  removed to the
          United States District Court on November 29, 1993.

                                         -5-

          BCHF  members, including his or her own compensation.  During his

          tenure,  Nadal-Ginard acted  in  accordance  with the  provisions

          contained in these documents.

                    The  district court  found that  Nadal-Ginard's setting

          his own  salary constituted a  self-interested transaction  under

          Massachusetts law.  As such, the validity of this action depended

          on whether the  other Board  members had  approved the  corporate

          action after receiving all  information relevant to the decision.

          Finding that Nadal-Ginard  failed to disclose his  HHMI income to

          the other Board members, information the court found material  to

          any discussion by  the Board regarding the  appropriate amount of

          his BCHF compensation, the  court held that Nadal-Ginard violated

          his  fiduciary duties.   Accordingly,  the court  awarded damages

          equal  to  three years  of his  BCHF  salary, an  amount totaling

          $801,172.90.

                    Nadal-Ginard  alleges that the district court committed

          two errors relating to his BCHF salary.  First, he challenges the

          court s finding that he breached any fiduciary duties through his

          participation in the Board's salary decision.  Second, he  argues

          that  the district court erred in denying a quantum meruit offset
                                                      ______________

          to any  liability arising from  such participation.   We  address

          these contentions separately.

                             A.  Breach of Fiduciary Duty
                             A.  Breach of Fiduciary Duty
                                 ________________________

                    Nadal-Ginard contends  that the district  court ignored

          "well-established law  and stipulated  facts" in finding  that he

          breached  his fiduciary duties to  BCHF with respect  to his BCHF

                                         -6-

          salary.  Specifically, he argues that his compensation was at all

          times "fair and reasonable" in light of the services he rendered,

          precluding any such finding.  We disagree. 

                    The  basic standard  of care  of corporate  officers or

          directors  is  well-established  under  Massachusetts  law.    In

          essence,  it is  the "standard  of complete  good faith  plus the

          exercise  of  reasonable intelligence."    Murphy  v. Hanlon,  79
                                                     ______     ______

          N.E.2d 292, 293 (Mass.  1948).  Under this standard,  officers or

          directors are not responsible for mere errors of judgment or want

          of prudence in the performance of  their duties.  See Sagalyn  v.
                                                            ___ _______

          Meekins, Packard & Wheat,  Inc., 195 N.E. 769, 771  (Mass. 1935).
          _______________________________

          Further,  if officers  or  directors act  in  good faith,  albeit

          imprudently, they  are not  subject to personal  liability absent

          clear  and gross  negligence in  their conduct.   See  Spiegel v.
                                                            ___  _______

          Beacon Participations, Inc., 8 N.E.2d 895, 904 (Mass. 1937).
          ___________________________

                    This basic  standard of care is  enhanced in situations

          when an officer or director engages in self-dealing.  See Johnson
                                                                ___ _______

          v. Witkowski,  573 N.E.2d 513, 522 (Mass. App. Ct. 1991).  Courts
             _________

          subject these transactions to "vigorous scrutiny," obligating the

          officers or directors  to prove  two elements:   first, that  the

          officer  or  director acted  in good  faith  with respect  to the

          transaction; and, second, that the transaction is inherently fair

          from   the   corporation s   point   of  view.4      Crowley   v.
                                                               _______
                              
          ____________________

          4  We stop at this point to note the fact that the district court
          correctly found  that  corporate bylaws  permitting conflicts  of
          interest  by  its  officers  or  directors  do  not relieve  that
          individual  of his obligation to  act in good  faith.  See, e.g.,
                                                                 ___  ____
          Spiegel v. Beacon  Participations, Inc., 8 N.E.2d 895, 907 (Mass.
          _______    ____________________________

                                         -7-

          Communications for  Hospitals, Inc., 573 N.E.2d  996, 1000 (Mass.
          ___________________________________

          App. Ct. 1991);  see also  Winchell v. Plywood  Corp., 85  N.E.2d
                           ________  ________    ______________

          313, 317 (Mass. 1949).   The former element requires  a corporate

          officer to  fully and honestly disclose  any information relevant

          to the  transaction, thereby permitting  a disinterested decision

          maker  to exercise informed judgment.  See, e.g., Dynan v. Fritz,
                                                 ___  ____  _____    _____

          508 N.E.2d  1371, 1378 (Mass. 1987);  Cooke v. Lynn  Sand & Stone
                                                _____    __________________

          Co.,  640 N.E.2d  786, 791  (Mass. App.  Ct. 1994).   The  latter
          ___

          element emanates from the  officer's or director's responsibility

          "to refrain  from taking an undue advantage  of the corporation,"

          and gives rise  to a  fiduciary breach  in a  situation where  an

          officer  determines  his or  her  salary  when that  individual s

          salary exceeds the fair  value of services rendered.   Sagalyn v.
                                                                 _______

          Meekins, Packard & Wheat, Inc.,  195 N.E. at 771; see also  Heise
          ______________________________                    ________  _____

          v. Earnshaw Publications, 130 F. Supp. 38, 40 (D. Mass. 1955). 
             _____________________

                     The  district  court found  a  lack of  good  faith on

          Nadal-Ginard's  part as a result of two factual findings:  first,

          that Nadal-Ginard failed to disclose his HHMI salary and benefits

          to the  other BCHF directors; and, second,  that this information

          was  material to  any decision  concerning the  amount of  Nadal-

          Ginard's BCHF salary.   We accept the  former as true,  as Nadal-

                              
          ____________________

          1937) (stating  that organic documents which  create conflicts of
          interests for directors or officers provide no immunity  to those
          individuals for acting in  bad faith).  We need  not elaborate on
          this finding, as it is not challenged on appeal.

                                         -8-

          Ginard  alleges no error with  respect to this  finding.5  Nadal-

          Ginard  suggests  error  with  respect  to  the  latter  finding,

          however, arguing that the  district court reached this conclusion

          because it erroneously believed  that BCHF and HHMI paid  him for

          the same  or related  research activities.   Specifically, Nadal-

          Ginard  argues that the district court "grossly mischaracterized"

          the services  Nadal-Ginard rendered  to BCHF and  its affiliates.

          In so  doing, we  believe that  it is  Nadal-Ginard who  offers a

          mischaracterization.  

                    The  district court  found  only that  the HHMI  salary

          information  "was material  to  any decision  on the  appropriate

          compensation paid  by  BCHF  for  the same  or  related  research

          activities . . . ."  Trial Court Opinion, p. 32.   Nowhere in its

          opinion did the court conclude  that Nadal-Ginard engaged in  the

          same  or related  work  for both  BCHF  and HHMI.    Rather, this

          statement merely indicates that the court  believed that the BCHF

          Board,  armed with the  information about the  HHMI salary, might

          have  found  that  Nadal-Ginard  engaged in  similar  or  related

          research.  Indeed, in the succeeding paragraph, the court  stated
                              
          ____________________

          5  At one  point, Nadal-Ginard did suggest that  his relationship
          with  HHMI amounted to an outside business activity, one that did
          not constitute an usurpation of a BCHF corporate opportunity.  He
          argues that  the absence  of any  such usurpation eliminates  the
          need  for the disclosure of the  relationship.  We disagree.  The
          issue  at bar does  not concern  the propriety  of Nadal-Ginard's
          relationship  with HHMI.   Indeed, there  has been  no suggestion
          that Nadal-Ginard  entered this relationship in  violation of his
          agreement  with BCHF.  As a result, his disclosure obligation did
          not arise from the fact of his relationship with HHMI, but rather
          because of his involvement in a self-interested transaction.   We
          note,  however,  that  the  terms  of  his  agreement  with  HHMI
          precluded Nadal-Ginard from accepting his BCHF salary.

                                         -9-

          that "[i]f the  defendant had disclosed  his salary from  [HHMI],

          BCHF may have determined"  that it could have used part of Nadal-
               ___________________

          Ginard's salary for other  purposes.  Trial Court Opinion,  p. 32

          (emphasis added).  Because we believe that the district court did

          not make the finding Nadal-Ginard suggests is  erroneous, we find

          no error on the part of the district court.

                    Notwithstanding  the district  court's  finding  of  an

          absence of good faith, Nadal-Ginard argues that he could not have

          breached his fiduciary duties  to BCHF because his salary  was at

          all  times fair  and reasonable.   In  so doing,  however, Nadal-

          Ginard  neglects to  address  the first  predicate  of the  legal

          analysis.  When,  as in this case, a court  finds that an officer

          failed  to act in good faith, it  follows that a fiduciary breach

          exists, and the  need to  determine whether or  not an  officer's

          salary is objectively reasonable is obviated.  

                              B.  Quantum Meruit Offset
                              B.  Quantum Meruit Offset
                                  _____________________

                    Nadal-Ginard next suggests  that, even if the  district

          court correctly found  that he breached his  fiduciary duties, it

          erroneously calculated his  liability for this  breach to be  the

          total  compensation  he received  from  BCHF  after November  12,

          1990.6    Nadal-Ginard  contends   that  principles  of   equity,

          specifically the theory of  quantum meruit, required the district
                                      ______________

                              
          ____________________

          6   BCHF  argues  in its  cross-appeal  that the  district  court
          incorrectly applied  a three-year  statute of limitations  on its
          cause  of  action,  and  therefore, its  damages  should  include
          amounts equal to the  compensation Nadal-Ginard received prior to
          November 12,  1990, as well.   We address this claim  below.  See
                                                                        ___
          infra part VII.A.
          _____

                                         -10-

          court  to  exclude from  BCHF's  damages that  portion  of Nadal-

          Ginard's  salary which  represented the  reasonable value  of the

          services he rendered to  BCHF.  Nadal-Ginard alleges two  ways in

          which the district court erred with respect this issue.  

                    First,  Nadal-Ginard  argues  that  the  district court

          erroneously decided that it  was precluded from applying such  an

          offset in cases in  which a defendant has committed  an unexcused

          fiduciary breach.  We dispense with this allegation forthwith, as

          even  a cursory review of  the district court's  opinion fails to

          reveal  such  a  pronouncement.     Indeed,  the  district  court

          expressly   assumed  that   it  was   permitted  to   weigh  such

          considerations:   "I assume, without  deciding, that a  court has

          authority when determining the appropriate measure of damages for

          breach of fiduciary duty, in a context such as this, to weigh the

          harm  caused by the defendant's  breach with the  benefits to the

          plaintiff  from  the  defendant s   overall  performance  of  his

          duties."  Trial Court Opinion, pp. 46-47. 

                    Nadal-Ginard next asserts that the district court erred

          in factoring the harm to BCHF's reputation that resulted from his

          fiduciary  breach into  its  damages equation.   Although  Nadal-

          Ginard couches this claim in terms  of a denial of what he refers

          to as a quantum meruit offset, in  reality, he is challenging the
                  ______________

          method  by which the  district court  applied the  quantum meruit
                                                             ______________

          analysis.   In whatever light this allegation is viewed, however,

          it must fail.

                                         -11-

                    Under Massachusetts  law, trial courts are  vested with

          the discretion to  determine the amount of  damages for fiduciary

          breaches  according to  the peculiar  factors of  each individual

          case.  See Chelsea  Industries, Inc. v. Gaffney, 449  N.E.2d 320,
                 ___ _________________________    _______

          327  (Mass.  1983); Lydia  E. Pinkham  Medicine  Co. v.  Gove, 20
                              ________________________________     ____

          N.E.2d 482, 486 (Mass.  1939).  Notwithstanding the existence  of

          this  discretion, courts  have  consistently  followed  the  same

          routine in determining whether  such an offset is warranted.   We

          examine  Nadal-Ginard's allegation  of  error after  synthesizing

          this routine.

                    Most courts  begin  their analyses  with  the  baseline

          proposition  that  a  court  can  require  a  corporate  officer,

          director,  or trust  agent or  employee to  forfeit the  right to

          retain  or  receive  his  or  her  compensation  for  conduct  in

          violation of his  or her  fiduciary duties.   See, e.g.,  Chelsea
                                                        ___  ____   _______

          Industries,  Inc.  v. Gaffney,  449  N.E.2d at  326-27;  Lydia E.
          _________________     _______                            ________

          Pinkham  Medicine  Co.  v.  Gove,  20  N.E.2d  at  486.   Such  a
          ______________________      ____

          forfeiture can be required even absent a showing of actual injury

          to  the employer.  See  Chelsea Industries, Inc.  v. Gaffney, 449
                             ___  ________________________     _______

          N.E.2d  at 327.   Indeed, "[a]  trustee who  commits a  breach of

          trust  or an  agent  who is  guilty  of disloyal  conduct  . .  .
                                                            _______

          imperils  his right to compensation."   Lydia E. Pinkham Medicine
                                                  _________________________

          Co. v. Gove, 20 N.E.2d at 486 (emphasis added).
          ___    ____

                    The  courts  next  proceed  to determine  whether  they

          should stray from the baseline and require a disloyal employee to

          repay  only that portion of  his or her  compensation, if any, in

                                         -12-

          excess of the value  of his or her service to the employer.  See,
                                                                       ___

          e.g., Chelsea  Industries, Inc.  v. Gaffney,  449 N.E.2d  at 327;
          ____  _________________________     _______

          Anderson Corp. v. Blanch, 162 N.E.2d 825, 830 (Mass. 1959); Lydia
          ______________    ______                                    _____

          E. Pinkham Medicine Co. v. Gove, 20 N.E.2d at 486.   Courts weigh
          _______________________    ____

          two  factors  when  contemplating  whether such  a  deviation  is

          warranted:    first, whether  the defendant  has  met his  or her

          burden of establishing  the value of  the services rendered,  see
                                                                        ___

          Chelsea Industries, Inc.  v.   Gaffney, 449 N.E.2d  at 327;  and,
          ________________________     _________

          second,  the  nature  of  the  defendant's  conduct,  see,  e.g.,
                                                                ___   ____

          Production Mach. Co. v. Howe, 99 N.E.2d at 36.  It is only when a
          ____________________    ____

          court  is satisfied that a defendant has established the value of

          his services, and that his or her conduct was not egregious, that

          such an offset is factored into the damage equation.

                     Nadal-Ginard asserts  that the district court erred in

          examining the  harm to the reputation, services, and functions of

          BCHF  that  would naturally  flow from  the public  disclosure of

          Nadal-Ginard's conduct because the plaintiff failed to prove such

          harm.   In so asserting,  Nadal-Ginard has the  right church, but

          wrong pew.

                    Nadal-Ginard   is  correct  in  his  assertion  that  a

          plaintiff normally can recover only those damages which he or she

          has proven to  have incurred.  See  Hendricks & Assocs., Inc.  v.
                                         ___  _________________________

          Daewoo  Corp.,  923 F.2d  209, 217  (1st  Cir. 1991);  Snelling &
          _____________                                          __________

          Snelling  of  Mass., Inc.  v. Wall,  189  N.E.2d 231,  232 (Mass.
          _________________________     ____

          1963).  In  this instance,  however, the district  court was  not

          factoring  the reputational  harm  into its  damage calculations.

                                         -13-

          Rather,  the court considered this  harm only in  its analysis of

          whether  an equitable  offset to  the damages  to which  BCHF was

          entitled  was warranted.  The  court committed no  error in doing

          so.7

                    In charging  that  BCHF failed  to meet  its burden  in

          proving damages,  Nadal-Ginard overlooks  the fact that  the main

          reason the district court denied the offset was because he failed

          to meet his.  That  is, the district court found the  evidence he

          presented  with  respect  to the  value  of  his  services to  be

          "conflicting and  speculative at best."  Trial  Court Opinion, p.

          33.  Close examination of the record evidences nothing to suggest

          that  the district  court  erred in  reaching such  a conclusion.

          Nowhere in the record is there any evidence of the specific value

          of Nadal-Ginard's services.   Indeed, Nadal-Ginard relies only on

          broad, self-aggrandizing statements in support of his argument.

                    Having addressed all  of Nadal-Ginard's allegations  of

          error relating to his BCHF salary, we turn our sights to the next

          area in  which he  alleges error,  that is, with  respect to  his

          claim of entitlement to indemnification from BCHF.

                              IV.  INDEMNIFICATION CLAIM
                              IV.  INDEMNIFICATION CLAIM

                    Nadal-Ginard contends  that the  district court, "in  a

          rush to judgment,"  failed to thoroughly  address his claims  for
                              
          ____________________

          7  Even if the court's actions could be construed as invoking the
          general damages rule, the  exception to the rule is at work here.
          That  is, a  plaintiff  whose  cause of  action  is  based on  an
          officer s  fiduciary  breach  is not  required  to  show that  it
          suffered   any  injury   in  order   to  recover   the  officer's
          compensation.    See Chelsea  Industries,  Inc.  v. Gaffney,  449
                           ___ __________________________     _______
          N.E.2d at 328.

                                         -14-

          indemnification by BCHF.  Specifically, he argues that the  court

          neglected to review the facts underlying two BCHF decisions, both

          instances in which  the court found Nadal-Ginard's  participation

          to  amount to fiduciary breaches.   Accordingly, he requests that

          this   court  reverse   the  district   court's  denial   of  his

          indemnification  claims  with  respect  to each  decision.    For

          several reasons, we decline the invitation.

                    A thorough examination of  the district court's opinion

          does not bear out Nadal-Ginard's  main contention.  Indeed, while

          the  district court  did not  include a  recitation of  the facts

          underlying these decisions in its indemnification  discussion, it

          had no reason to do so,  as it had examined both circumstances in

          great detail in previous  sections of the opinion.  The fact that

          it   incorporated  these   findings   by   reference   into   the

          indemnification discussion  does not constitute error.   As such,

          we  turn  to  examine  the  validity   of  the  district  court's

          conclusions.

                    We begin our  analysis by examining the  two grounds on

          which Nadal-Ginard  asserts his entitlement.   Nadal-Ginard first

          claims a right to indemnification from BCHF based on Article VIII

          of  the BCHF  Bylaws.8   This provision  provides that  BCHF will
                              
          ____________________

          8  Article VIII of the BCHF Bylaws provides, in pertinent part:

                      Any  person threatened  with  or  made  a
                      party  to  any   action,  suit  or  other
                      proceeding by  reason of the fact that he
                      .  . .  is  or was  a Director,  officer,
                      employee   or   other   agent    of   the
                      Corporation . . . shall be indemnified by
                      the  Corporation against  all liabilities

                                         -15-

          indemnify any liabilities and expenses incurred by an officer  or

          director  because of the  position he or  she holds.   There is a

          prerequisite  that must be satisfied  in order to  be entitled to

          indemnification,  however:    the  BCHF  director,   officer,  or

          employee must have acted  in good faith in the  reasonable belief

          that his or her action was in the best interests of BCHF.  

                    Nadal-Ginard turns  to Chapter 180, Section  6C, of the

          Massachusetts   General  Laws   for   further   support  of   his

          indemnification claim.   This statute provides that  a officer or

          director  of a  corporation  shall not  be  held liable  for  the

          performance of his or her duties if  performed "in good faith and

          in a manner he reasonably believes to be in the best interests of

          the  corporation, and  with such  care as  an  ordinarily prudent

          person  in  a  like  position  .  .  . would  use  under  similar

          circumstances."   Mass.  Gen.  L. ch.  180,    6C.    The statute

          provides  that an  officer or  director acts  in good  faith when

          acting on,  inter  alia,  the  advice  or  opinions  of  counsel,
                      ___________

          providing  the  officer  or   director  did  not  have  knowledge

          regarding his or her actions that would cause such reliance to be

          unwarranted.  See id.  
                        ___ ___

                              
          ____________________

                      and  expenses,  .  .  .  except  that  no
                                               ________________
                      indemnification shall be provided for any
                      _________________________________________
                      person with  respect to any matter  as to
                      _________________________________________
                      which he shall  have been adjudicated  in
                      _________________________________________
                      any proceeding not to have  acted in good
                      _________________________________________
                      faith  in the reasonable  belief that his
                      _________________________________________
                      action  was in the  best interests of the
                      _________________________________________
                      Corporation . . . .  
                      ___________

          Plaintiff's Exhibit #4, p. 17 (emphasis added).

                                         -16-

                    It is  the latter portion of  the Massachusetts statute

          on which Nadal-Ginard relies  in asserting his claim.   He argues

          that BCHF should  indemnify him  for damages arising  out of  two

          transactions, as,  in both cases,  he acted on  the advice of  an

          attorney.   We  examine the  merits of  these claims  after first

          reviewing the underpinnings of the transactions in question.  

                    The first fiduciary breach arose out of his involvement

          in determining his  BCHF salary.  We need not  tarry in reviewing

          the circumstances underlying this transaction, as we have already

          devoted a good  portion of the  opinion to doing  so.  See  supra
                                                                 ___  _____

          part III.  We need only make note of the new wrinkle that  Nadal-

          Ginard  adds  in  his  effort  to  obtain  indemnification:   his

          contention  that he acted as he did because Nadeau represented to

          him that to do so was legal.

                    The  second  fiduciary  breach for  which  Nadal-Ginard

          claims a right  to indemnification  arose out of  his actions  in

          directing BCHF  funds  to  be  deposited  into  a  Guardian  Life

          Insurance Escrow  Account, established for the  purpose of paying

          premiums to  the Guardian Life Insurance Company  on a $6,000,000

          life insurance policy  in Nadal-Ginard's name.9   The court found

          that Nadal-Ginard did not, at any time, disclose the existence of

          the Escrow Account  to the other BCHF  Board members, nor did  he

          obtain  authorization  to  make  payments  to  such  an  account.
                              
          ____________________

          9   In its opinion,  the district  court noted that  the evidence
          showed that, in addition  to being used to make  premium payments
          for  the life insurance policy,  the funds in  the Escrow Account
          were used to  pay Nadal-Ginard's federal and state  income taxes,
          as well Nadal-Ginard's personal mortgage loan application fee.

                                         -17-

          Because this  transaction was clearly self-interested,  the court

          held  that  the  payment of  BCHF  funds  to  the Escrow  Account

          amounted to a  breach by  Nadal-Ginard of his  fiduciary duty  of

          loyalty,  and therefore included the sum total of the payments in

          its judgment for BCHF.

                      The basis for Nadal-Ginard's indemnification argument

          for the Escrow Account  damages mirrors that with respect  to his

          compensation.   He argues  that the Guardian  Escrow Account  was

          "the brainchild" of Gary Banks,  an attorney to whom Nadal-Ginard

          turned for  advice in  1987.   Nadal-Ginard  claims that  because

          Banks  created the  Guardian  Life Insurance  Escrow Account,  he

          should  have  been  able to  assume  that  it  was structured  in

          conformity  with the  law.   As a  result, he  argues that  he is

          entitled  to  indemnification  for  the portion  of  the  damages

          equaling the BCHF payments to the Escrow Account.  

                    At  trial,  Nadal-Ginard  did  not  prevail  on  either

          argument.  First,  the district court discredited  Nadal-Ginard's

          contention  that he  relied  upon the  advice  of the  attorneys.

          Second,  the  district court  found  that  neither attorney  ever

          affirmatively  advised Nadal-Ginard  as  to the  legality of  his

          actions in either transaction.  On appeal, Nadal-Ginard  does not

          challenge the district court's  interpretation of either the BCHF

          Bylaw  or the Massachusetts  statute.  Instead,  he contends that

          there was insufficient evidence  on which to support the  court's

          conclusions.

                                         -18-

                    In reviewing this claim, we are mindful that we  review

          findings  of fact for clear error.   See Texaco Puerto Rico, Inc.
                                               ___ ________________________

          v. Department of  Consumer Affairs,  60 F.3d 867,  875 (1st  Cir.
             _______________________________

          1995).   When those findings of fact are based on the credibility

          of  witnesses, great deference  is given to  the district court's

          findings.   See Maness v. Star-Kist  Foods, Inc., 7 F.3d 704, 708
                      ___ ______    ______________________

          (8th Cir. 1993), cert. denied, 114 S. Ct. 2678 (1994); cf. Inwood
                           ____________                          ___ ______

          Lab., Inc. v. Ives Lab., Inc., 456 U.S. 844, 855 (1982).  Indeed,
          __________    _______________

          "[i]n  the absence  of  egregious lapses  in  such a  perception,

          appellate courts leave it undisturbed."  Charves v. Western Union
                                                   _______    _____________

          Telegraph Co., 711 F.2d 462, 464-65 (1st Cir. 1983).  
          _____________

                    Here, we find no error.  Nadal-Ginard points to nothing

          in the record,  nor do we  find anything on  our own, to  suggest

          that   the  district   court's  discrediting   of  Nadal-Ginard's

          testimony is egregious.   Indeed, the district court pointed  out

          that Nadal-Ginard failed to  comply with the requirements  in the

          documents  as   he  understood  them,  never   mind  comply  with

          interpretations  offered by  counsel.   Further,  there is  ample

          evidence  in the  record  unrelated to  these transactions  which

          lends support to the district court's findings.

                    Even assuming  that Nadal-Ginard's credibility  was not

          at issue, Nadal-Ginard fails to clear the  next hurdle.  That is,

          Nadal-Ginard  fails  to direct  this court  to  any place  in the

          record evidencing  the fact  that either attorney  advised Nadal-

          Ginard  that  he was  legally  entitled to  act  as he  did.   An
                                                      ___

          attorney's  representation as  to  the legality  of a  particular

                                         -19-

          corporate structure does not mean that an officer or director can

          act in any manner he  or she chooses within the confines  of that

          structure.  Indeed, an  officer is bound further by  the confines

          of the law.  So it  is here: the fact that both Nadeau  and Banks

          advised Nadal-Ginard  that the corporate  structures in  question

          were legally  valid does not absolve  Nadal-Ginard from liability

          incurred  by his improper actions.  Accordingly, we find no error

          on the  part of the  district court,  and now proceed  to address

          Nadal-Ginard's two remaining allegations of error.

                                  V.  THE BANKS PLAN
                                  V.  THE BANKS PLAN

                    In 1985 or early 1986, the Board of Directors adopted a

          severance  benefit plan,  referred  to as  the "Nadeau  Plan," by

          written  consent.10   In early  1987, Nadal-Ginard  presented the

          Board  with what  he claims  was a  reconstruction of  the Nadeau

          Plan, a document that he contends  was lost.  In so doing, Nadal-

          Ginard did not inform the Board  that the Banks Plan provided far

          more  in benefits for Nadal-Ginard than  the Nadeau Plan had.  In

          1992,   upon  Nadal-Ginard's  initiative,   the  Banks  Plan  was

          terminated and Nadal-Ginard received benefits in the form of cash

          and securities valued at over $4,000,000. 

                    The district court made  several findings with  respect

          to the creation and adoption of the Banks Plan.   First, it found

          the terms of the plan to be so markedly different from the Nadeau

                              
          ____________________

          10  The district court found no evidence as to the exact date the
          directors adopted  this plan.   However, it  did find  sufficient
          evidence to conclude that  it was legally adopted.   This finding
          is not challenged on appeal.

                                         -20-

          Plan that  Nadal-Ginard's actions  could  not be  construed as  a

          genuine  effort to  reconstruct  the Nadeau  Plan.   Second,  the

          district court found that Nadal-Ginard's benefits under the Banks

          Plan were of such a magnitude, and structured in such a way, that

          had they been disclosed at the time the plan was presented to the

          Board, the plan  would not have been approved by  the Board.  The

          district court concluded that Nadal-Ginard breached his fiduciary

          duties to BCHF with respect to his involvement in the creation of

          the plan and  its presentation  to the Board.   Accordingly,  the

          court awarded damages to BCHF in the amount of $4,082,273.50.

                    While  Nadal-Ginard  disputes   the  district   court's

          factual  findings, he does not challenge them on appeal.  Rather,

          Nadal-Ginard contends that  ERISA explicitly exempts  these types

          of severance  benefit plans  from its fiduciary  duty provisions.

          Further, he alleges that 29 U.S.C.   1144, which provides for the

          preemption of state  law by  ERISA, precludes  the evaluation  of

          Nadal-Ginard's actions  in  light of  fiduciary  responsibilities

          defined by state law.

                    The  district court  did not address  the issue  of the

          whether the  fiduciary provisions of  ERISA applied to  the Banks

          Plan or whether  it fell  within the category  of unfunded  plans

          which  are excluded from the  scope of those fiduciary standards.

          The court did find that  the fiduciary obligations created  under

          Massachusetts law were more  favorable to Nadal-Ginard than those

          imposed by ERISA, and,  therefore, that a fiduciary  breach under

          Massachusetts law  would necessarily  constitute a breach  of the

                                         -21-

          ERISA  fiduciary obligations,  if applicable.   As  neither party

          challenges  the conclusion  that the  Banks plan  is exempt  from

          ERISA's fiduciary provisions,  we concentrate  solely on  whether

          ERISA preempts the application of state law in this instance.

                    "'ERISA is a comprehensive statute designed to  promote

          the interests  of employees  and their beneficiaries  in employee

          benefit plans.'"  Ingersoll-Rand Co. v.  McClendon, 498 U.S. 133,
                            __________________     _________

          137 (1990) (quoting  Shaw v. Delta Air Lines, Inc.,  463 U.S. 85,
                               ____    _____________________

          90  (1983)).    In  vast  detail,  ERISA  imposes  participation,

          funding,  and  vesting requirements  on  such plans,  as  well as

          establishes uniform  standards  for pension  and  welfare  plans,

          including rules  concerning reporting, disclosure,  and fiduciary

          responsibility.   See id.   An  inherent part  of this system  is
                            ___ __

          section 514(a), which provides that ERISA supersedes "any and all

          State laws  insofar as they  may now or  hereafter relate to  any

          employee benefit plan  . . .  ."  29  U.S.C.   1144(a); see  also
                                                                  _________

          Ingersoll-Rand  Co. v. McClendon, 498  U.S. at 137.   The statute
          ___________________    _________

          defines the  term "State  law" to  include "all  laws, decisions,

          rules, regulations, or  other State action  having the effect  of

          law, of  any State."  29  U.S.C.   1144(c)(1); see  also Carlo v.
                                                         _________ _____

          Reed Rolled  Thread Die  Co., 49 F.3d  790, 793 (1st  Cir. 1995).
          ____________________________

          Congress  included   514(a) to ensure uniformity in such plans by

          preventing states from imposing  divergent obligations upon them.

          See Simas v.  Quaker Fabric Corp. of Fall River,  6 F.3d 849, 852
          ___ _____     _________________________________

          (1st Cir. 1993).

                                         -22-

                    The   Supreme  Court  has  repeatedly  interpreted  the

          preemption  provision  to  cover  any   state  law  that  "has  a

          connection  with or  reference to"  an ERISA  plan.   District of
                                                                ___________

          Columbia v. Greater Washington Board of Trade, 506 U.S. 125,    ,
          ________    _________________________________                ___

          113 S. Ct. 580, 583 (1992);  see also Mackey v. Lanier Collection
                                       ________ ______    _________________

          Agency  & Service, Inc., 486 U.S.  825, 829 (1988); Shaw v. Delta
          _______________________                             ____    _____

          Air  Lines,  Inc.,  463 U.S.  85,  96-97  (1983).   Indeed,  this
          _________________

          provision  is  to be  read  expansively,  see Rosario-Cordero  v.
                                                    ___ _______________

          Crowley Towing  & Transp. Co., 46 F.3d  120, 122 (1st Cir. 1995),
          _____________________________

          and has the effect of preempting any state law that refers to, or

          has a connection with, covered benefit plans, "even if the law is

          not  specifically designed to affect such plans, or the effect is

          only indirect."  District of Columbia v. Greater Washington Board
                           ____________________    ________________________

          of Trade, 506  U.S. at      , 113  S. Ct. at  583 (citations  and
          ________                ____

          internal  quotation marks  omitted).   Such a preemption  is also

          worked "regardless of whether there is a 'comfortable fit between

          a  state statute  and ERISA's  overall aims.'"   Simas  v. Quaker
                                                           _____     ______

          Fabric Corp. of Fall River, 6  F.3d at 852 (quoting McCoy v. MIT,
          __________________________                          _____    ___

          950  F.2d 13,  18 (1st  Cir. 1991),  cert. denied,  504 U.S.  910
                                               ____________

          (1992)).

                    State  laws that  have  merely a  "tenuous, remote,  or

          peripheral connection  with a  covered benefit  plan" may not  be

          preempted by ERISA.  Rosario-Cordero v. Crowley  Towing & Transp.
                               _______________    _________________________

          Co.,  46  F.3d  at 123  (citation  and  internal  quotation marks
          ___

          omitted).   Such is  normally the  case with  respect to  laws of

          general  applicability.   See  District  of  Columbia v.  Greater
                                    ___  ______________________     _______

                                         -23-

          Washington Board of Trade, 506 U.S. at     n.1, 113 S. Ct. at 583
          _________________________              ___

          n.1;  Rosario-Cordero v. Crowley Towing & Transp. Co., 46 F.3d at
                _______________    ____________________________

          123; Combined  Mgt,  Inc.  v.  Superintendent of  the  Bureau  of
               ____________________      __________________________________

          Insurance, 22 F.3d 1, 3 (1st Cir.), cert. denied, 115  S. Ct. 350
          _________                           ____________

          (1994).   A  court cannot  conclude that  a state  law is  one of

          general  applicability, and  as such  is not preempted  by ERISA,

          based on the  form or label  of the law,  however.  See Carlo  v.
                                                              ___ _____

          Reed Rolled  Thread Die Co., 49  F.3d at 794 n.3;  Zuniga v. Blue
          ___________________________                        ______    ____

          Cross and  Blue Shield of Michigan, 52  F.3d 1395, 1401 (6th Cir.
          __________________________________

          1995).   Absent  precedent  on  a  closely related  problem,  the

          inquiry into whether a state law "relates to" an ERISA plan or is

          merely "tenuous, remote, or peripheral" requires a court  to look

          at  the facts of particular case.  See Rosario-Cordero v. Crowley
                                             ___ _______________    _______

          Towing & Transp. Co., 46 F.3d at 125 n.2.
          ____________________

                    Here, the  alleged breach of fiduciary  duty relates to

          Nadal-Ginard's  action in  establishing  the  Banks Plan  without

          disclosing information that a self-interested  fiduciary would be

          required  to  reveal to  his  fellow  directors.   Nadal-Ginard's

          misconduct preceded the formal  adoption of the plan.   The legal

          determination that Nadal-Ginard's conduct constitutes a fiduciary

          breach does not require  the resolution of any dispute  about the

          interpretation  or  administration of  the  plan.   Further,  the

          application of state law in this instance does not raise the core

          concern  underlying  ERISA preemption.    Indeed,  the fact  that

          Nadal-Ginard chose an ERISA  plan rather than some other  form of

                                         -24-

          compensation is  peripheral to  the underlying claim  that Nadal-

          Ginard breached his corporate responsibilities.

                    This   being  the   case,  it   cannot  be   said  that

          Massachusetts fiduciary  law must be preempted  in this instance.

          Therefore,  we turn to address the merits of the district court's

          conclusion  that Nadal-Ginard's  actions  violated his  fiduciary

          duties.

                    As Nadal-Ginard  does not allege error  with respect to

          the  law  which  the  district  court  applied  in  reaching  its

          conclusion, we need not revisit the duties of good faith and full

          disclosure  arising in self-interested  transactions.   See supra
                                                                  ___ _____

          part  III.A.    Instead, we  turn  without  delay  to review  the

          validity of the district court's factual findings which served as

          the  basis for its legal conclusion, keeping in mind, once again,

          that we  do so in light  of the clearly erroneous  standard.  See
                                                                        ___

          Texaco Puerto Rico,  Inc. v. Department  of Consumer Affairs,  60
          _________________________    _______________________________

          F.3d at 874.

                    The  district court  made several  findings of  fact on

          which it  grounded its conclusion that  Nadal-Ginard breached his

          fiduciary  duties.    Chief  among these  was  that  Nadal-Ginard

          intentionally  had the Banks plan  drafted in two  parts in order

          that  the  other Board  members  might  enact  the  plan  without

          learning of the magnitude of his blatantly disproportionate share

          of the benefits.   The court determined that this effort met with

          success, as it found that  the other Board members did not  learn

          all the  terms of  the Banks plan  until the fall  of 1993.   The

                                         -25-

          court  reached  these factual  conclusions  on the  basis  of the

          testimony of the witnesses and an examination of the plan itself.

          Further,   the   court   expressly   discredited   Nadal-Ginard's

          assertions.

                    In reviewing  the vast record from  the district court,

          we  find that Nadal-Ginard fails  to meet the  heavy burden which

          the law  places on him.  That is, Nadal-Ginard offers no evidence

          to suggest  that the  district court's findings  were clearly  in

          error.  As much of the court's findings are based  on credibility

          determinations  of  the  witnesses  who testified  at  trial,  we

          decline to reverse the conclusions reached below.

                               VI.  DAMAGE CALCULATIONS
                               VI.  DAMAGE CALCULATIONS

                    In the fall of 1993, additional misdeeds on the part of

          Nadal-Ginard were  discovered.   Four  checks made  out to  third

          parties bore  questionable endorsements,  each of which  had been

          deposited  into Nadal-Ginard's  personal bank  accounts.   Nadal-

          Ginard  thereafter wrote checks to BCHF to replace the funds that

          had been traced to his accounts.   On October 22, 1993, the Board

          met  to discuss  this situation.   At this  meeting, Nadal-Ginard

          allegedly informed the Board  of his intention to seek  a medical

          leave of  absence from his  various Hospital  and Medical  School

          positions, as well as from his duties  as BCHF president.  Nadal-

          Ginard  alleges that the Board approved this request, and that he

          was subsequently hospitalized for treatment of acute depression.

                    Nadal-Ginard's final two  allegations of error  concern

          the  methods employed by the district court in calculating BCHF's

                                         -26-

          damages arising out of these facts.  First, Nadal-Ginard  alleges

          that  the  district court  erred in  denying  his request  for an

          offset in an amount equal to the disability  payments to which he

          claims  he  was entitled  under the  Nadeau  Plan because  of his

          medical  condition.    Second,  Nadal-Ginard  contends  that  the

          district   court  impermissibly  awarded  damages  in  an  amount

          equivalent  to  the  interest  BCHF  would  have  earned  on  the

          misappropriated funds absent Nadal-Ginard's  actions.  We address

          each of these allegations in turn.

                               A.  Disability Benefits
                               A.  Disability Benefits
                                   ___________________

                    At trial, Nadal-Ginard argued that because the district

          court  nullified  the Banks  Plan,  it  implicitly confirmed  the

          existence  of the  Nadeau plan.11   Nadal-Ginard  further claimed

          that,  as a  result  of his  medical  condition, he  was  totally

          disabled and therefore eligible  for severance benefits under the

          terms of the  Nadeau plan.   Accordingly, Nadal-Ginard sought  to

          reduce  the  amount  of   damages  attributed  to  his  fiduciary

          transgressions  with respect to the Banks plan in an amount equal

          to the Nadeau plan severance benefits.

                              
          ____________________

          11   As BCHF  notes  in its  brief, the  district  court did  not
          definitively establish the existence of the Nadeau plan.  Rather,
          the court prefaced its analysis  of the merits of  Nadal-Ginard's
          claim  by stating merely that "[a] plausible argument can be made
          that the Nadeau plan is in effect . . . ."  Because neither party
          explicitly addresses the validity of  such an assumption, as well
          as  the fact  that we  agree with  the district  court's ultimate
          finding that Nadal-Ginard is not entitled to such benefits, we do
          not  address the issues  surrounding the viability  of the Nadeau
          plan.

                                         -27-

                    The district  court denied Nadal-Ginard's claim  on two

          grounds.   First, it  found evidence  that suggested  that Nadal-

          Ginard's  BCHF employment  was involuntarily  terminated, thereby

          working  a forfeiture of any benefits to which he otherwise would

          have been eligible.  Second, the district court found that Nadal-

          Ginard  had failed to prove  that he was  "totally disabled," and

          therefore was not  eligible to receive  benefits under the  plan.

          Nadal-Ginard  challenges both findings  on appeal.   We begin our

          analysis  by detailing  the  severance benefit  framework of  the

          Nadeau plan.

                    Under  section  4.1  of  this plan,  a  participant  is

          eligible for  severance benefits  upon "Total Disability."   This
          ________

          condition is defined in section 2.13 of the plan as an "inability

          to perform usual and customary duties for [BCHF] as a result of a

          medically  determinable physical  or mental  impairment . .  . ."

          Section  2.13   further  provides   that  "[t]he  receipt   by  a

          Participant  of payments  under any  long term  disability income

          insurance policy . . .  shall be deemed to  be . . . prima  facie

          evidence  of such Total Disability  in the absence  of a contrary

          finding by [a] physician."

                    The mere fact that an individual is eligible to receive

          severance benefits as a result of a disability does not necessary

          entitle him to those  benefits, however.  Indeed, section  4.2 of
          _______

          the  plan   provides  for  the  forfeiture  of  all  benefits  by

          participants   in   certain   circumstances,   including   BCHF's

          termination of a participant's employment. 

                                         -28-

                    The   district  court   found  that   Nadal-Ginard  was

          involuntarily  terminated  from  his  position  at  BCHF.12    As

          section  4.2 contains no language limiting  the time frame during

          which this  provision applies,  we find  that the district  court

          correctly interpreted the provision as barring the receipt of any

          benefits  by Nadal-Ginard.  As  such, we need  not address Nadal-

          Ginard's claim of eligibility for the benefits as a result of his

          medical condition, and we turn to address his final allegation of

          error.

                              B.  Misappropriated Checks
                              B.  Misappropriated Checks
                                  ______________________

                    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.  

                    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, Nadal-Ginard contends that  BCHF

          failed to meet  its burden  of submitting evidence  to prove  the
                              
          ____________________

          12  Nadal-Ginard does not challenge this finding on appeal. 

                                         -29-

          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.

                    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,  423 N.E.2d
          _____________________________    ___________________

          765, 771-72  (Mass. 1981); Begelfer v. Najarian,  409 N.E.2d 167,
                                     ________    ________

          170 (Mass.  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.

                    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,    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

                                         -30-

          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. 

                              VII.  BCHF'S CROSS-APPEAL
                              VII.  BCHF'S CROSS-APPEAL

                    Notwithstanding its agreement with most of the district

          court's findings and conclusions, BCHF  raises a number of errors

          it alleges the  court committed.  We  note that BCHF  raises four

          issues  in  its cross-appeal.   Based  on the  fact that  we have

          already addressed  the appropriate interest  rate to  be used  in

          calculating its damages for the misappropriated checks, see supra
                                                                  ___ _____

          part VI.B, as well as the fact that in its brief it concedes that

          this  court need  not address  the circumstances  surrounding Dr.

          Freed's testimony  if we find  in its  favor with respect  to the

          Banks plan, we address its two remaining claims below.

                              A.  Statute of Limitations
                              A.  Statute of Limitations
                                  ______________________

                    BCHF first challenges the  manner in which the district

          court applied  the Massachusetts statute of  limitations to limit

          its  damages arising out of Nadal-Ginard's  breaches.  While BCHF

          does  not challenge  the court's  finding that  Massachusetts law

          imposes a  three  year limitation  on  breach of  fiduciary  duty

          claims, see  Mass. Gen. L. ch.  260,   2A, BCHF  alleges that the
                  ___
                              
          ____________________

          13   BCHF, in its  cross-appeal, alleges that  the district court
          erred  in not  applying  the prejudgment  interest rate  provided
          under Massachusetts law with respect to these funds.

                                         -31-

          district  court should have found the statute to have been tolled

          because Nadal-Ginard concealed his misdeeds.   As such, BCHF asks

          this court to reverse the district court's judgment insofar as it

          precludes the  recovery of  damages arising  from its salary  and

          Escrow Account claims prior to November 12, 1990.  We decline.

                    The general  rule in Massachusetts  is that a  cause of

          action in tort, in this case a claim based on the violation  of a

          fiduciary  duty, must be commenced within three years of the time

          the breach  occurs.  See  id.  As  with any rule,  however, there
                               ___  __

          exists at least one exception, which, in this case, is defined by

          statute:

                      If a  person liable to  a personal action
                      fraudulently conceals the  cause of  such
                      action from the  knowledge of the  person
                      entitled to bring it, the period prior to
                      the discovery of his  cause of action  by
                      the  person so entitled shall be excluded
                      in determining  the time limited  for the
                      commencement of the action.

          Mass. Gen. L. ch. 260,   12.  

                    In general, this statute  "requires a plaintiff to show

          an affirmative act of  fraudulent concealment on the part  of the

          defendant."   Maggio v.  Gerard Freezer & Ice  Co., 824 F.2d 123,
                        ______     _________________________

          130  (1st Cir. 1987).  Once again, however,  a relevant exception

          exists.   In cases where "a fiduciary relationship exists between

          plaintiff  and defendant  .  . .  [the]  mere failure  to  reveal

          information  may be  sufficient to constitute  fraudulent conduct
                       ___

          . . .  ."  Id. (emphasis added); see also Puritan Medical Center,
                     __                    ________ _______________________

          Inc. v. Cashman, 596 N.E.2d 1004, 1010 (Mass. 1992).
          ____    _______

                                         -32-

                    The district court applied  both the statutory language

          and the relevant case  law to the facts at hand.   That is, while

          it  recognized  that  Massachusetts  law  no  longer  required  a

          plaintiff to show active concealment on the part of the defendant

          in order  to toll the statute  of limitations, it found  that the

          law did  not require a  tolling per se  when the cause  of action
                                          ______

          concerned  the   breach  of  a  fiduciary   duty  of  disclosure.

          Concluding that the facts below differed from those in Puritan in
                                                                 _______

          that the information in question  was either of general knowledge

          or easily accessible to  the other Board members, it  declined to

          apply the statute's tolling provisions.

                    We find no error in the district court's interpretation

          of the  applicable Massachusetts tolling provisions.   Indeed, as

          the court pointed out below, the cases hold  only that the breach

          of a  duty to disclose  may be sufficient  to invoke the  tolling
                                  ___

          provisions.  See  Puritan Medical  Center, Inc.  v. Cashman,  596
                       ___  _____________________________     _______

          N.E.2d at 1010; Maggio v.  Gerard Freezer & Ice Co., 824  F.2d at
                          ______     ________________________

          130.   There is  no suggestion  that such a  breach requires  the

          tolling provisions  to be applied in  all cases.  Indeed,  such a

          conclusion would be counterintuitive.14

                    An examination of the record reveals nothing to suggest

          that the district  court erred  in refusing to  find the  statute

                              
          ____________________

          14  This would be  so in a case in which Board members learned of
          the non-disclosed information on their own, yet chose not to act.
          In that case,  they would be  able to recover damages  beyond the
          traditional  statute of limitations  period notwithstanding their
          inaction.

                                         -33-

          tolled.  As such, we turn to address the final  issue BCHF raises

          in its cross-appeal.

                               B.  BCHF Fringe Benefits
                               B.  BCHF Fringe Benefits
                                   ____________________

                    BCHF's  second allegation  of error  arises out  of the

          district court's  findings that Nadal-Ginard  failed to  disclose

          his HHMI employment to the Board.  Specifically, BCHF argues that

          the  district  court  erred  by  not  finding  that  Nadal-Ginard

          breached his fiduciary duties by failing to disclose to the Board

          the fact that  he was  receiving a fringe  benefits package  from

          HHMI.  Once again, we find  no error on the part of the  district

          court.

                    The district court,  applying the principles underlying

          fiduciary obligations  that we  have already detailed,  see supra
                                                                  ___ _____

          part  III.A,  found  that BCHF  failed  to  prove  what the  HHMI

          benefits were  and whether they were comparable to those provided

          by  BCHF.   Thus, the  court found  nothing to  suggest the  HHMI

          benefit  information  would  have  affected the  outcome  of  the

          Board's  determination  of  Nadal-Ginard's BCHF  fringe  benefits

          package.   Therefore,  it concluded  that there  was insufficient

          evidence  to find that Nadal-Ginard  failed to act  in good faith

          with  respect to  the  fringe benefits,  and  thus no  basis  for

          finding he breached his fiduciary duties in this regard.

                    Having found nothing in the record to  suggest that the

          district court's factual finding  with respect to the sufficiency

          of  the fringe benefit evidence was clearly erroneous, we find no

          need to disrupt the district court's finding.

                                         -34-

                                  VIII.  CONCLUSION
                                  VIII.  CONCLUSION

                    For the foregoing reasons, the judgment of the district

          court is affirmed.  Two-thirds costs in favor of BCHF.
                   affirmed.  Two-thirds costs in favor of BCHF
                   ____________________________________________

                                         -35-