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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Hillsborough County Probate Court No. 2007-031 IN RE GUARDIANSHIP OF ROBERT D. DORSON Argued: September 13, 2007 Opinion Issued: October 31, 2007 Nicholas R. Aeschliman, of Portsmouth, by brief and orally, for the petitioners. Sulloway & Hollis, P.L.L.C., of Concord (James E. Owers and Kelly Ovitt Puc on the brief, and Mr. Owers orally), for the respondent. DALIANIS, J. The respondent, Peerless Insurance Company/Liberty Mutual Surety (Peerless), appeals an order of the Hillsborough County Probate Court (Cassavechia, J.) requiring Peerless to reimburse the estate of Robert D. Dorson $25,988.48, which represents the surcharge the court imposed upon the ward's prior guardian, Nelson Dorson. We affirm. The record supports the following: The probate court appointed Nelson guardian over Robert's person and estate; Nelson obtained a surety bond from Peerless. In June 2004, Nelson sought permission from the court to relocate Robert to American Samoa and to borrow $90,000 from the estate; both requests were denied. Thereafter the court terminated Nelson's authority as guardian, ordered him to relinquish the estate assets to a successor guardian and directed him to file a final account within thirty days. Nelson failed to file a final account and was found in default. He departed the United States after

misappropriating $137,206.11 from Robert's estate. This amount included $112,906.11 that Nelson unlawfully withdrew from one of the funds in which Robert's Hartford Life Annuity was invested. In January 2005, the court appointed the petitioners, Gertrude Edmunds and Nicholas R. Aeschliman, successor guardians over the estate. In December 2005, the petitioners asked the probate court to surcharge Nelson "for all amounts he . . . improperly withdr[ew] from guardianship accounts, plus all damages resulting from said withdrawals," including "lost income from the amounts improperly withdrawn." In October 2006, the parties entered into a partial settlement, which the probate court approved, pursuant to which Peerless paid the estate $137,206.11. The parties submitted a single question for the probate court's review: What is the correct amount of interest and/or lost appreciation that Peerless should pay on the funds Nelson misappropriated from the Hartford Life Annuity? While the petitioners argued that Peerless should pay the appreciation lost on the misappropriated funds between the date Nelson took them and the date they were repaid, Peerless contended that the estate was entitled only to interest at the statutory rate. See RSA 336:1, II (Supp. 2007). The probate court ruled in favor of the petitioners, surcharging Nelson and requiring Peerless to pay $25,988.48, which represented the difference in the value of the annuity units when Nelson unlawfully liquidated them ($112,906.11) and when the probate court approved the partial settlement ($138,894.59). This appeal followed. Our standard of review is statutory: "The findings of fact of the judge of probate are final unless they are so plainly erroneous that such findings could not be reasonably made." RSA 567-A:4 (2007). "Consequently, we will not disturb the probate court's decree unless it is unsupported by the evidence or plainly erroneous as a matter of law." In re Estate of Treloar, 151 N.H. 460, 462 (2004) (quotation omitted). Peerless first argues that RSA 524:1-b (2007) required the trial court to award interest at the legal rate between December 2005, when the petitioners filed their petition, and October 2006, when the court approved the partial settlement. RSA 524:1-b provides: In all other civil proceedings at law or in equity in which a verdict is rendered or a finding is made for pecuniary damages to any party . . . there shall be added . . . to the amount of damages interest thereon from the date of the writ or the filing of the petition to the date of judgment . . . .

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Peerless asserts that RSA 524:1-b applies because the probate court, in this equity proceeding, made a finding of pecuniary damages to a party. Peerless contends that "[u]nder RSA 524:1-b and [RSA] 336:1, application of the statutory rate of interest to the post-writ, prejudgment loss of the use of money is mandatory." To the contrary, any surcharge imposed by the probate court, regardless of whether it took the form of interest or lost appreciation, was part of the debt or loss to the estate and did not constitute prejudgment interest governed by RSA 524:1-a (2007) (pertaining to actions on debt) or RSA 524:1-b. In re Estate of Ward, 129 N.H. 4, 12-13 (1986). Our decision in In re Estate of Ward is instructive. In that case, the executor of an estate took $116,820 from the decedent's bank accounts and converted the funds to his own use. In re Estate of Ward, 129 N.H. at 6-7. The executor first argued that the probate court lacked jurisdiction because the money he took did not constitute a debt to the estate and, thus, was not subject to probate court jurisdiction. Id. at 7-8. We held, to the contrary, that the executor's unexplained withdrawals from the estate constituted a debt of the executor to the estate. Id. at 9. The executor also asserted that the interest on the funds he misappropriated constituted prejudgment interest and, therefore, the probate court erred when it calculated interest from the date the funds were misappropriated instead of from the date upon which demand was first made for their repayment. Id. at 12. We disagreed: The question, however, is whether the charge of interest on misappropriated funds can properly be considered pre-judgment interest added onto a claim, or as part of the debt itself. We favor the latter construction. In situations involving tort claims, for example, interest accrues from the date of the suit in order to compensate the plaintiff for loss of the use of damage money while a lawsuit is pending. The dispositive factor is that the prejudgment sum represents the initial loss that constitutes the claim. In the context of the instant case, we are presented with a different situation. Here, the misappropriated funds were already in [the decedent's] bank accounts and earning interest. When [the executor] withdrew those funds he also withdrew the ability of the money to earn interest. By misappropriating the $116,820, [the executor] also misappropriated the interest thereon. Thus, the lost interest was just as much a debt as the actual funds. Id. (citation omitted). Thus, we held that the probate court did not err by calculating interest from the date of the misappropriation. Id. at 6, 12-13.

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Similarly, here, the funds that Nelson unlawfully withdrew from the Hartford Life Annuity were debts that he owed the estate and any surcharge that the probate court decided to impose upon Nelson, whether it took the form of interest or lost appreciation, was part of this debt, and not an award of prejudgment interest. Accordingly, Peerless' reliance upon RSA 524:1-b is mistaken. Peerless next asserts that the trial court unsustainably exercised its discretion by assessing a surcharge that represented the difference in the value of the units of the annuity from the date upon which they were liquidated to the date the court approved the partial settlement. We disagree. "A surcharge is the equitable penalty imposed when a trustee fails to exercise the requisite standard of care and the trust suffers thereby." In re Scheidmantel, 868 A.2d 464, 492-93 (Pa. Super. Ct. 2005). It "is the penalty for failure to exercise common prudence, common skill and common caution in the performance of the fiduciary's duty and is imposed to compensate beneficiaries for loss caused by the fiduciary's want of due care." In re Estate of McCool, 131 N.H. 340, 346 (1988) (quotation omitted) (adopting Pennsylvania law). Equitable remedies are particularly within the sound discretion of the trial court. See LaMontagne Builders v. Bowman Brook Purchase Group, 150 N.H. 270, 274 (2003). We assume, without deciding, that, as Peerless contends, we review the probate court's imposition of a surcharge under our unsustainable exercise of discretion standard. Cf. Mooney v. Nationwide Mut. Ins. Co., 149 N.H. 355, 357 (2003) (reviewing trial court decision to impose equitable remedy of recission and restitution under unsustainable exercise of discretion standard). We hold that the trial court did not unsustainably exercise its discretion. Contrary to Peerless' assertions, when crafting a remedy for a trustee's breach of trust and breach of loyalty, "[t]he court is not confined to a limited list of remedies but rather will mold the relief to protect the rights of the beneficiary according to the situation involved." G. G. Bogert & G. T. Bogert, The Law of Trusts and Trustees

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