
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-
