This dischargeability action came before the court for trial on January 18, 1991. The plaintiff seeks a judgment of non-dischargeability of certain liabilities on grounds of fraud and wilful and malicious injury. The plaintiff suffered no compensable damages. Therefore, judgment for the defendant is appropriate.

Facts.

        Plaintiff Scott Walker (Walker) and defendant William Blachman (Blachman) began negotiating for the sale of a wrecked Cessna 206 in the spring of 1987. Blachman was a shareholder and officer of Big Red's Flying Service, Inc. (Big Red's), the owner of the plane. Walker took possession of the wrecked plane in the summer of 1987 and began rebuilding it. The plane was encumbered        1 ABR 312  to the Small Business Administration for some $300,000.00. Blachman gave Walker a bill of sale from Big Red's on September 1, 1987. Walker paid $16,240.00 for the plane on November 25, 1987. After the bill of sale was issued, but prior to payment, Big Red's encumbered the 206 for another $500,000.00 pursuant to an S.B.A. disaster loan.

        Blachman did not advise Walker of the new encumbrance. Walker only knew of the original encumbrance. Blachman told Walker that his $16,240.00 check would be paid to the S.B.A. for a lien release. Big Red's was in financial difficulty. Blachman placed the money in the firm's general account and used it for operations, not for the release. After numerous phone calls and a lot of frustration, Walker filed suit against Blachman for the lien releases. Blachman obtained the releases on May 23, 1989. He agreed to give them to Walker in exchange for a dismissal of the state court action. Walker initially agreed, but wanted to discuss the matter with his attorney. He subsequently refused the settlement offer.

        The plane has been airworthy since June of 1988. Walker never insured it, or attempted to lease it to third parties. He has put ten hours on the plane. The plane has appreciated from a value of approximately $57,500.00 in 1989 to $67,500.00 now. Walker may have incurred attorney's fees in his state court action but vigorously denied owing the $5,000.00 to $6,000.00 he stated in         1 ABR 313  his deposition. Walker failed to introduce any evidence showing the actual amount of any attorney's fees, if any, incurred in the state court proceeding. Walker Claims damages for mental anguish and marital difficulties arising from Blachman's actions.

Fraud.

        The elements of fraud found in 11 U.S.C. § 523(a)(2) are determined by referring to state law. Alaska's supreme court has not issued a definitive opinion upon its elements, but has referred to the Restatement (Second) of the Law of Torts, with approval regarding fraud issues. Bubbel v. Wien Air Alaska, Inc., 682 P.2d 374, 381 (Alaska 1984). The elements of fraud, paraphrased from the Restatement, are:

1.	A misrepresentation made for purpose of inducing another to act;
2.	Justifiable reliance upon misrepresentation;
3.	A pecuniary loss arising from misrepresentation.

        Nothing in the Restatement indicated that a party may recover damages for "mental anguish" or "stress" for fraud. Section 549, the damage section of the Restatement,does not allow such damages. While not specifically ruling on the issue of mental anguish, the Alaska supreme court has consistently ruled that "In actions based on misrepresentation, damages must be established         1 ABR 314  with reasonable certainty. They may not be speculative or contingent." Alaska Ins. Co. v. Movin' On Const., Inc., 718 P.2d 472, 474 (Alaska 1986). Prosser does not include mental anguish as a compensable damage item for misrepresentation. Prosser and Keeton on Torts, 5th Ed., § 110.

Conclusion.

        Walker has not suffered any actual pecuniary damages. The plane has appreciated in value. The liens have been released. The plane was leasable at all times. Walker may have incurred some state court attorney's fees but he failed to submit any evidence of them. Walker has failed to meet his burden of proving pecuniary losses by a preponderance of the evidence. Grogan v. Garner, ___ U.S. ___ , 111 S.Ct. 654, 1991 WL 1760. His mental anguish damages are not allowable as a matter of law on the fraud count.

        The plaintiff's claims for willful and malicious injury have also been reviewed by the court. There was no extreme and outrageous conduct entitling Walker to relief for intentional infliction of emotional distress. There was no conversion which damaged Walker. Plaintiff's section 523(a) (6) claims have no merit.

        Therefore, it is ordered that the complaint in this action be dismissed with prejudice, with costs to the defendant. Judgment shall be entered accordingly.

        1 ABR 315 
       DATED:    January 23, 1991.

DONALD MACDONALD IV
United States Bankruptcy Judge