

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

                        MARK A. MARCUCCI,

                       Plaintiff, Appellee,

                                v.

                         MARION J. HARDY,

                      Defendant, Appellant.

                                                                                                
No. 95-1005
                        MARK A. MARCUCCI,

                      Plaintiff, Appellant,

                                v.

                         MARION J. HARDY,

                       Defendant, Appellee.

                                                                                                

          APPEALS FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF NEW HAMPSHIRE

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

                                                                                                

                      Selya, Cyr and Boudin,

                         Circuit Judges.                                                 

                                                                                                

   John R. Harrington, with whom David F. Conley and Sulloway &amp;                                                                         
Hollis were on brief for defendant.              
   Charles A. Szypszak, with whom Laura E. Tobin and Orr and Reno,                                                                            
P.A. were on brief for plaintiff.            

                                                                                                

                        September 20, 1995
                                                                                                

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

diversity  action in  the United  States District  Court for  the

District of  New Hampshire in  December 1993,  alleging that  his

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

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

bench trial, the district  court imposed a constructive trust  on

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

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

appealed.   Marcucci cross-appealed  from a district  court order

rejecting  his claims  to joint  accounts managed  by Hardy.   We

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

                                I                                          I

                            BACKGROUND                                      BACKGROUND                                                

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

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

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

order to insulate their holdings from potential business liabili-

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

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

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

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

these joint accounts derived from Marcucci.  

          Although Marcucci,  Angela, and  Hardy continued to  be

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

ments.  The Marcuccis retained the ability to withdraw funds from

                                2

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

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

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

When Angela died  in October 1988,  the joint accounts  contained

$364,663. 

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

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

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

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

Marcucci's  expenses  were  defrayed  by Hardy  with  his  social

security income and with funds disbursed from the joint accounts.

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

while  Hardy was away from  New Hampshire for approximately eigh-

teen months  during Operation  Desert Storm and  while performing

her other military duties.  

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

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

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

Constance told  Marcucci that  Hardy  was claiming  the right  to

withdraw  funds  from  the  joint accounts.    Although  Marcucci

commented at the time that he would be without substantial assets

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

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

1990.1 
                                                  

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

                                3

          Meanwhile, in July 1990,  Hardy had created a revocable

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

accounts, retaining sole discretion to make inter vivos distribu-                                                                 

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

instrument  to  Marcucci  and,  with  his  encouragement,  loaned

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

their serious financial  problems.   Six weeks  later the  DeFeos

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

uncollectible.   No trust  distributions were either  promised or

made to Marcucci.  

          By November 1992, the relationship between Marcucci and

Hardy had deteriorated.  With assistance from Constance, Marcucci

moved  to  a Connecticut  retirement  home and  Hardy  refused to

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

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

afford the retirement home  accommodations.  In July  1993, Hardy

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

to the mortgage on her New Hampshire home.

                                II                                          II

                            DISCUSSION                                      DISCUSSION                                                

A.   The Hardy Appeal          A.   The Hardy Appeal                               
                                                  

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

                                4

     1.   Constructive Trust               1.   Constructive Trust                                      

          Hardy  asserts  three  challenges  to  the constructive

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

district court erred in  rejecting her affirmative defenses based

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

that  Marcucci  expressly withdrew  his  claim  to the  homestead

proceeds at trial.   Finally, she contends that  the constructive

trust  ruling was either  based on clearly  erroneous findings of

fact or erroneous conclusions of law. 

          a)   Affirmative Defenses                    a)   Affirmative Defenses                                             

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

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

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

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

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

restitution  against constructive  trustee  time-barred),  or  by

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

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

had mishandled or misapplied either joint account funds or  other

Marcucci assets.   Although  the district  court opinion  did not

                                                  

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

                                5

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

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

allowed to proceed.3  

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

three-year  limitations  period  commences  when  the  "plaintiff

discovers, or in the exercise of reasonable diligence should have

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

omission  complained  of."   Whether  a  claimant discovered  the

injury, or  in the exercise  of reasonable diligence  should have

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

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

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

Cir. 1988).  

          There  is undisputed  evidence that  Constance Waterman

informed  Marcucci in the summer  of 1990 that  Hardy claimed the

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

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

Nevertheless,  in the circumstances  presented here     including

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

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

homestead  and the joint accounts     Hardy's assertion of rights

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

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

                                6

Marcucci that his  daughter was refusing  to recognize and  honor

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

conduct  served to toll the limitations  period by engendering in

Marcucci  a reasonable  sense of  confidence which  disguised the

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

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

          For more than  four years     October 1988 to  November

1992     Hardy  took care  of Marcucci  in her  Colorado and  New

Hampshire homes.  She  informed him that she had  established the

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

and  consulted with him before  making the DeFeo  loan from trust

monies.   These actions were  entirely consistent with  an extant

trustee-beneficiary  relationship,  and, whether  so  intended or

not,  sufficed  to  provide  a reasonable  basis  for  rekindling

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

family  relationship and  his advanced  age and  highly dependent

state.   Thus,  the district  court  record clearly  warrants the

conclusion that  Marcucci neither knew, nor  should he reasonably

have believed,  that his  daughter claimed outright  ownership of

the Marcucci homestead.  

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

stead and applied  the proceeds  toward the mortgage  on her  New

Hampshire  residence, conduct  which unequivocally  announced her

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

months  thereafter,  Marcucci   initiated  the  present   action.

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

                                7

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

tions or laches.4 

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

          During  closing  argument,  Marcucci's   trial  counsel

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

home."  Hardy frivolously contends that Marcucci thereby withdrew

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

language employed  by counsel  simply reflected the  reality that

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

only be asserted against the sale proceeds.5

          c)   The Merits                    c)   The Merits                                   

          Hardy next  contends that the  district court misinter-

preted New  Hampshire  law  as permitting  the  imposition  of  a

constructive  trust in these  circumstances.  She  argues that it

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

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

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

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

                                8

cient  circumstantial  evidence  alone to  support  a  reasonable

inference that  there had  been an  implicit promise  to reconvey

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

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

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

ing circumstances, including the relationship between the parties

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

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

structive trust impressed  upon it at the  time Marcucci conveyed

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

Marcucci, and it was devised to Hardy subject to that trust.  See                                                                           

generally  4 Austin W.  Scott &amp; William  F. Fratcher, The  Law of                                                                           

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

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

                                                  

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

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

                                9

pays no value for  the trust property would be  unjustly enriched

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

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

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

consideration,  and  either with  or  without  notice, becomes  a

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

imposing a constructive trust on the homestead proceeds.

     2.   Attorney Fees                2.   Attorney Fees                                 

          Marcucci  asserted a  demand for  attorney fees  in the

complaint,  which Hardy  opposed in her  answer.   Hardy contends

that  the  district court  improperly  awarded  attorney fees  to

Marcucci  since her defenses were  not frivolous and  she did not

litigate in  bad faith.   The  appellate record discloses  little

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

Hardy  request elucidation  or  reconsideration  by the  district

court.  

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

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

tactics which unnecessarily prolong litigation can constitute bad

faith  even  though  the  litigation position  was  not  entirely

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

                                                  

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

                                10

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

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

rationale.  Nonetheless, absent district  court findings suggest-

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

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

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

bear  their  own attorney  fees  absent  statutory authority,  or

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

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

fee award must be vacated.9

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

     1.   Joint Accounts               1.   Joint Accounts                                  

          Marcucci  cross-appeals from  the district  court order

disallowing his claims to  the joint accounts.  He  contends that

he  established exclusive  title to  the accounts  "converted" by

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

structive trust imposed  on the accounts, lest Hardy  be unjustly

enriched.10

          a)   Conversion Claim                    a)   Conversion Claim                                         
                                                  

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

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

                                11

          Although the  district court did not  state its grounds

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

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

dominion or  control over  goods which  is inconsistent with  the

rights of the person entitled  to immediate possession."   Rinden                                                                           

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

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

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

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

property  allegedly  converted, plaintiff  had burden  of proving

title).11

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

tions  advanced by both parties    that each held exclusive title

to the accounts notwithstanding their  joint status.12  It  found
                                                  

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

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

                                12

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

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

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

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

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

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

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

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

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

found that he failed  to show that any ascertainable  portion had                                                                           

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

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

supportable findings,  we cannot fault the  district court ruling

that  it may well have been speculative to conclude that Marcucci

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

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

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

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

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

err in dismissing the conversion claim.
                                                  

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

                                13

          b)   Constructive Trust                    b)   Constructive Trust                                           

          Alternatively,  Marcucci  claims  that  a  constructive

trust should have been impressed to preclude unjust enrichment of

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

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

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

that  the district  court's rejection  of the  constructive trust

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

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

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

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

Moreover,  the  district  court  supportably  found  that  Angela

intended to  give  Hardy  an unspecified  portion  of  the  joint                                                           

accounts for her exclusive use, Marcucci was  present when Angela

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

the joint accounts.  

          A constructive trust may  be created where the particu-

lar confidential or  fiduciary relationship would give  rise to a

significant  potential for  unjust  enrichment  absent  equitable

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

The district court supportably found that Hardy used approximate-

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

record  would support findings  that Angela  had given  Hardy the

money for the house and that Marcucci derived benefit from living

there with Hardy.   Since a substantial portion of  the remainder

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

                                14

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

tled to receive, we find no abuse of discretion.  

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

          Finally,   Marcucci  argues  that  Hardy  breached  her

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

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

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

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

withdrawal of  funds from  a revocable  trust constituted  a con-

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

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

and did not violate the "prudent man" standard.

          We need  not consider whether Hardy  violated the "pru-

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

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

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

beneficiary  consented to  the action.   Restatement  (Second) of

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

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

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

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

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

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

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

estopped  from challenging  Hardy's  decision to  make the  DeFeo

loans.  

                                15

                               III                                         III

                            CONCLUSION                                      CONCLUSION                                                

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

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

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

                                16
