236 B.R. 914 (1999)
In re Dennis Robert MONTGOMERY and Marlys Joan Montgomery, Debtors.
E.W. Wylie Corporation, Plaintiff,
v.
Dennis Robert Montgomery, Defendant.
Bankruptcy No. 98-31995. Adversary No. 99-7007.
United States Bankruptcy Court, D. North Dakota.
July 9, 1999.
*915 *916 *917 Joseph A. Turman, Fargo, ND, for Debtors.
Kip M. Kaler, Fargo, ND, trustee.

MEMORANDUM OPINION AND ORDER
WILLIAM A. HILL, Bankruptcy Judge.
This matter arises by Complaint filed on February 1, 1999, by Plaintiff E.W. Wylie Corporation ("Wylie" or "plaintiff," alternatively), against Debtor-Defendant Dennis Robert Montgomery ("Montgomery"), alleging, inter alia, that Montgomery obtained the use of Wylie's property and services by means of false pretenses, false representations, and actual fraud; that he breached his fiduciary duty to Wylie; and that he converted its property in a knowing, willful, and malicious manner. As relief, Wylie seeks a judgment against Montgomery in the amount of $37,668.46; along with treble damages under North Dakota's RICO Act; a determination that the indebtedness is nondischargeable pursuant to 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(6); and its costs and disbursements incurred as a result of this action. Trial was conducted in this matter before the undersigned on May 26, 1999. From the evidence presented, the Court finds the following facts to be material to the issues raised, and makes the following conclusions of law:

I. FINDINGS OF FACT

i. General Background
Wylie is a corporation organized under the laws of the State of Minnesota, with its principal offices located in Fargo, North Dakota. It is involved in the business of transporting goods by truck in interstate *918 commerce. In this connection, Wylie both owns and leases transport vehicles.
Wylie requires that all of the owner-operators from whom it leases vehicles, and all of its employees who operate its own trucks, possess a commercial driver's licence ("CDL"). In furtherance of this requirement, Wylie, with the help and supervision of Montgomery, established a drivers' training course to qualify potential vehicle lessor-operators and its own employees for such licensing.
Montgomery, age 59, resides in the City of West Fargo, North Dakota. He began his employment with Wylie in 1980 as an over-the-road truck driver. In 1981, Wylie promoted him to the position of Driver Supervisor. In 1984, he assisted Wylie in the organization and commencement of its driver training program and, thereafter, recruited candidates for, and supervised, the training program.
However, Montgomery performed little, if any, actual student training; rather, that function was assigned to Robert Miller ("Miller"), who was hired specifically for the job. Miller was also hired to provide the program's written training materials. Another individual, Robert Kerr ("Kerr"), served as Miller's assistant in training students.
The training program was comprised of two phases. The first entailed classroom training and driving practice in Wylie's training yard. After completing this stage of the program, students tested for their CDLs. In the second phase, trainees were assigned to a driver-trainer, with whom they would spend between four and five weeks in a practicum of actual on-the-road driving. Upon completion of the entire program, the trainees were typically hired by Wylie as drivers.
Program participants were not charged an initial, upfront fee for their training, but, upon gaining employment with Wylie, were required to gradually repay the company for its cost, that is, the sum of $2,500.00 apiece. Company policy prohibited the training of any individuals other than the vehicle lessor-operators, Wylie employees, or prospective Wylie employees.

ii. Unauthorized Training
In Spring 1995, WDAY-TV ("WDAY"), through its General Sales Manager, Mark Von Bank ("Von Bank"), approached Montgomery to help it secure CDLs for several of its employees. Although Montgomery knew that such training was expressly prohibited by company policy, he nonetheless admitted six WDAY employees into the Wylie program, concealing this fact from Wylie management. To formalize their agreement, WDAY and Montgomery executed a contract on June 2, 1995, the terms of which provided, as follows:
As per our conversation, (6) WDAY-TV employees will go through a series of sessions with Bob Miller in order to receive proper training for a class A drivers [sic] license. The hourly rate to be paid to Mr. Miller will be $14.00 per hour. The total amount to be paid will be figured after the sessions have been completed.
Along with this training, these employees will be able to use the equipment, grounds, and educational aids provided them at no additional charge.
Tom Thompson at WDAY-TV will be responsible for the coordination of the employees with Bob Miller.
Montgomery and Von Bank both affixed their "authorized signatures" to the document. Thereafter, Montgomery provided Miller with a copy of the contract.
Pursuant to the contract, Montgomery understood that the WDAY employees would be using Wylie equipment for their training purposes. Moreover, he knew that Wylie would be liable in the event that a WDAY trainee became involved in an accident while driving Wylie equipment.
The training of the first four WDAY employees took place primarily between June 5, 1995 and August 29, 1995. The training of the remaining two WDAY employees *919 took place between August 28, 1996 and September 10, 1996. In all then, unauthorized WDAY employee training was conducted over an aggregate span of three and one-half months.
Montgomery neither received compensation nor derived other financial benefit from this unauthorized training. Miller received a total of $4,605.00 from WDAY for his services, that is, 255 of his training hours.
Yet, the training of non-Wylie employees did not end with those from WDAY. After completing the training of the WDAY employees, other non-Wylie individuals received training through the program between July 1995 and September 1996, although at an increased hourly rate. At least nine other individuals received such training, for which Miller received a minimum of $9,257.50 in compensation. Kerr, who also participated in the unauthorized training, received his compensation for the same from Miller.
In all their dealings, Miller never discussed his training of non-WDAY, non-Wylie individuals with Montgomery. For his part, Montgomery had no knowledge of, did not facilitate, took no part in, and derived no benefit from such additional training at the time that it was conducted.
The use value of Wylie's property, and the loss it suffered, aggregated $15,700.00 with respect to the WDAY trainees, and $29,925.00 with respect to the non-WDAY, non-Wylie trainees.[1] Wylie was not compensated for any unauthorized use of its property.

iii. Montgomery's Bankruptcy and the Instant Action
On November 24, 1998, Montgomery filed his voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq. ("Code"). In his Schedule F, entitled "Creditors Holding Unsecured Nonpriority Claims," he lists Wylie as holding a claim against him for conversion, the amount of which is contingent and disputed.
On February 1, 1999, Wylie filed its Complaint to Determine Dischargeability of Debt, alleging, inter alia, that Montgomery: (1) represented to one or more third parties that he was authorized by Wylie to set the terms and conditions for training to be provided to said parties and/or their employees; (2) executed one or more contracts on behalf of Wylie whereby unauthorized individuals would receive driver's training instruction utilizing Wylie's facilities and property; (3) arranged and conspired with other employees of Wylie to permit unauthorized individuals to receive driver's training instruction; and (4) permitted unauthorized individuals to receive driver's training instruction from Wylie's employees and through the use of Wylie's facilities and property without advising Wylie's management. The Complaint further states that Montgomery, by the above-described conduct, violated, in a knowing, willful, and malicious manner, his fiduciary duty to Wylie and converted property from Wylie with a fair market value of $37,668.46. Upon these bases, Wylie seeks a judgment in the amount of $37,668.46, along with "[treble damages] as permitted under North Dakota's RICO Statute, together with interest and punitive damages," and a determination that such indebtedness is nondischargeable pursuant to 11 U.S.C. § 523(a)(2)(A), (a)(4), and (a)(6).
Montgomery filed his Answer on February 25, 1999. In it, he generally denied the allegations made in the Complaint; moved for its dismissal for failure to state a cause of action upon which relief can be granted; and moved for his costs, disbursements, and attorney fees incurred in connection with this matter.

*920 II. CONCLUSIONS OF LAW

1. Racketeer Influenced and Corrupt Organizations Claim
North Dakota's Racketeer Influenced and Corrupt Organizations Act ("RICO") is found at North Dakota Century Code ("N.D.C.C.") § 12.1-06.1 et seq. In its current form, it is, in essence, a "little RICO" statute, that is, one patterned largely after its federal analogue.[2]See Burr v. Kulas, 564 N.W.2d 631, 635-36 (N.D.1997). While the federal RICO Act was codified in 1970, North Dakota enacted its version of the same in 1983.
Since this latter enactment, the North Dakota Supreme Court has had but few occasions to rule on the statute, having done so in only the following two cases: Burr, supra, and Rolin Manufacturing, Inc. v. Mosbrucker, 544 N.W.2d 132 (N.D. 1996). In both case opinions, the supreme court referred exclusively to the Federal Rules of Civil Procedure in defining the pleading requirements for RICO claims brought pursuant to the North Dakota Act, see Mosbrucker, 544 N.W.2d at 138, and referred almost exclusively to federal case law in interpreting the same, see Burr, 564 N.W.2d at 636; Mosbrucker, supra. Therefore, in its analysis of the state statute, this Court, in addition to referencing both Burr and Mosbrucker, will follow the same approach.
"A RICO claim must `be pled with the same particularity that is required in the pleading of fraud. Fed. R.Civ.P. 9(b).'" Mosbrucker, 544 N.W.2d at 138 (quoting Taylor v. Bear Stearns & Co., 572 F.Supp. 667, 682 (N.D.Ga.1983)). In this respect, Rule 9(b) of the Federal Rules of Civil Procedure provides that, "[i]n all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally." Fed. R.Civ.P. 9(b). "`Circumstances' include such matters as the time, place and contents of false representations, as well as the identity of the person making the misrepresentations and what was obtained or given up thereby." Murr Plumbing, Inc. v. Scherer Bros. Fin. Servs. Co., 48 F.3d 1066, 1069 (8th Cir.1995) (quoting Bennett v. Berg, 685 F.2d 1053, 1062 (8th Cir.1982), adhered to on reh'g, 710 F.2d 1361 (8th Cir.) (en banc), cert. denied, 464 U.S. 1008, 104 S.Ct. 527, 78 L.Ed.2d 710 (1983)) (internal quotation marks omitted); accord Mosbrucker, 544 N.W.2d at 138 ("[Y]ou must plead dates, times, and places of [] fraudulent statements, and who made them."); see also DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir.), cert. denied, 498 U.S. 941, 111 S.Ct. 347, 112 L.Ed.2d 312 (1990) ("`[C]ircumstances' must be pleaded in detail. This means the who, what, when, where, and how: the first paragraph of any newspaper story."); Melder v. Morris, 27 F.3d 1097, 1100 n. 5 (5th Cir.1994) (citing DiLeo, 901 F.2d at 627).
The purpose of this requirement, as enunciated in Rule 9(b), is to: "(1) protect[ ] a defendant's reputation from harm; (2) minimiz[e] `strike suits' and `fishing expeditions'; and (3) provid[e] notice of the claim to the adverse party." Jepson, Inc. v. Makita Corp., 34 F.3d 1321, 1327 (7th Cir.1994)) (quoting Vicom, Inc. v. Harbridge Merchant Servs., Inc., 20 F.3d 771, 777 (7th Cir.1994)) (internal quotation marks omitted). However, the details necessary to RICO claims are mandated not only by Rule 9(b), "but by the very nature of a RICO claim[,] [f]or `[w]ithout an adequately detailed description of the predicate acts . . ., a complaint does not provide either the defendant or the court with sufficient information to determine whether or not a pattern of racketeering activity has been established.'" Jepson, Inc., 34 F.3d at 1328 (7th Cir.1994); see DeWit v. *921 Firstar Corp., 879 F.Supp. 947, 972 (N.D.Iowa) (quoting same), modified, 904 F.Supp. 1476 (1995).
In Mosbrucker, the North Dakota Supreme Court discussed several of the elements required of a well-pleaded claim under the North Dakota RICO Act, as follows:
A necessary ingredient of every successful RICO claim is an element of criminal activity. Civil RICO requires that the defendant's state of mind be the same as that required in a criminal prosecution. The pattern of racketeering activity requires proof of two related predicate criminal acts.
544 N.W.2d at 138 (citations and internal quotation marks omitted). Thus, in light of the foregoing authority, "[a]ny predicate criminal act . . . must be alleged with particularity." Chicago Truck Drivers, Helpers & Warehouse Workers Union (Indep.) Pension Fund v. Brotherhood Labor Leasing, 950 F.Supp. 1454, 1463 (E.D.Mo.1996), amended by 974 F.Supp. 751 (1997), aff'd 141 F.3d 1167, 1998 WL 121398 (8th Cir. 1998); see Murr Plumbing, Inc., 48 F.3d at 1069 (8th Cir.1995) (applying particularity requirements to allegations of mail and wire fraud); accord Mosbrucker ("[P]redicate acts must be criminal acts. Characterizing some event as criminal does not make it so. . . . Therefore, it is necessary that either a prior conviction or probable cause be alleged with reference to the predicate acts.").
In the instant matter, Wylie, by only the vaguest reference in its Complaint, seeks treble damages against the debtor-defendant "as permitted under North Dakota's RICO Statute[.]" In none of the Complaint's nine counts does Wylie make mention of this aspect of its claim; rather, it does so only in its prayer for relief. Yet, even there, as quoted above, it fails to expressly assert detailed RICO violations and also neglects to properly cite to North Dakota's RICO Act itself or to any of its various provisions.
Accordingly, the basis for Wylie's claim, "as permitted under North Dakota's RICO Act," is insusceptible to precise identification or definition from its Complaint. Wylie's Complaint thus fails to satisfy the pleading requirements for a RICO claim in any conceivable way, and will, in this respect, be dismissed.

2. 11 U.S.C. § 523
Wylie draws upon three subparts of § 523(a) in making its claim that Montgomery's debt should be excepted from discharge, to wit, (a)(2), (a)(4), and (a)(6), all of which read, in pertinent part, as follows:
(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt
. . . .
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition;
. . . .
(4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;
. . . .
(6) for willful and malicious injury by the debtor to another entity or to the property of another entity[.]
11 U.S.C. § 523(a)(2)(A), (4), & (6). Exceptions to discharge must be strictly construed against the creditor, in furtherance of the policy of providing the debtor with a fresh start in bankruptcy. See Geiger v. Kawaauhau (In re Geiger), 113 F.3d 848, 853 (8th Cir.1997), aff'd, 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998); Werner v. Hofmann, 5 F.3d 1170, 1172 (8th Cir. 1993) (per curiam). Thus, the burden of proof in the instant matter is Wylie's, the standard for which is proof by a preponderance of the evidence. See Grogan v. *922 Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 661, 112 L.Ed.2d 755 (1991); In re Slominski, 229 B.R. 432, 435 (Bankr.D.N.D.1998) (creditor bears burden of proof by a preponderance of the evidence with regard to § 523(a)(2)(A) and (a)(6)); Werner v. Hofmann In re Hofmann, 144 B.R. 459, 463 (Bankr.D.N.D.1992) (preponderance of the evidence standard applied with respect to § 523(a)(4)), aff'd, 161 B.R. 998 (D.N.D. 1993), aff'd, 5 F.3d 1170 (8th Cir.1993).

i. Section 523(a)(4): Fiduciary Status
To prevent the discharge of Montgomery's debt under the first prong of § 523(a)(4), it was incumbent upon Wylie to establish the following two elements by a preponderance of the evidence: (1) that a fiduciary relationship existed between Montgomery and Wylie; and (2) that Montgomery committed fraud or defalcation in the course of that fiduciary relationship. See Werner v. Hofmann (In re Hofmann), 144 B.R. 459, 463 (Bankr.D.N.D. 1992), aff'd, 161 B.R. 998 (D.N.D.1993), aff'd, 5 F.3d 1170 (8th Cir.1993).
Under the first element, the definition of "fiduciary," for purposes of § 523(a)(4), is a question of federal law. See Tudor Oaks Ltd. Partnership v. Cochrane (In re Cochrane), 124 F.3d 978, 984 (8th Cir.1997); cert. denied, ___ U.S. ___, 118 S.Ct. 1044, 140 L.Ed.2d 109 (1998); accord Mills v. Gergely (In re Gergely), 110 F.3d 1448, 1450 (9th Cir.1997). Within this confine, the term is limited to instances involving express or technical trusts, and, thus, is more narrowly defined than it is under the general common law. See In re Cochrane, 124 F.3d at 984; Barclays Am./Bus. Credit, Inc. v. Long (In re Long), 774 F.2d 875, 878 (8th Cir.1985); Bollinger v. Polk (In re Polk), 183 B.R. 1020, 1022 (Bankr.E.D.Mo.1995); ITT Life Ins. Corp. v. Haakenson (In re Haakenson), 159 B.R. 875, 887 (Bankr.D.N.D. 1993); accord Miller v. J.D. Abrams Inc. (In re Miller), 156 F.3d 598, 602 (5th Cir.1998), cert. denied, ___ U.S. ___, 119 S.Ct. 1250, 143 L.Ed.2d 347 (1999); see also 4 Collier on Bankruptcy ¶ 523.10[1][C], at 523-73 (Lawrence P. King ed., 15th ed. rev. 1999) ("[S]ection 523(a)(4), as it relates to a debtor acting in a fiduciary capacity, does not generally apply to frauds of agents, bailees, brokers, factors, and partners, and other persons similarly situated.") (footnotes omitted). Indeed, a fiduciary relationship can only arise from an express or technical trust "imposed before and without reference to the wrongdoing that caused the debt." In re Cochrane, 124 F.3d at 984 (quoting Lewis v. Scott (In re Lewis), 97 F.3d 1182, 1185 (9th Cir.1996)) (internal quotation marks omitted); accord In re Gergely, 110 F.3d at 1451.
With respect to the characteristics of such trusts, this Court previously observed, in In re Hofmann, as follows:
Generally, an express trust is created by an agreement between two parties to impose a trust relationship. The typical characteristics of an express trust generally include an explicit declaration of a trust with a trust res, and an intent to create a trust relationship. . . . [C]ourts have even acknowledged the existence of a technical trust where a statute imposes fiduciary obligations on a party. . . . [A merely contractual relationship] is less than what is required to establish the existence of a fiduciary relationship. Where no fiduciary relationship exists, no fraud or defalcation can arise from the nonexisting fiduciary relationship as mandated under [§] 523(a)(4).
144 B.R. at 463 (citations omitted). Thus, "[t]he broad, general definition of fiduciary  a relationship involving confidence, trust, and good faith  is inapplicable." In re Gergely, 110 F.3d at 1450 (quoting Ragsdale v. Haller, 780 F.2d 794, 796 (9th Cir.1986)); see also In re Long, 774 F.2d at 878 ("The Code does not reach constructive trustees, designated as such because of misconduct.").
As to the provision's second element, the United States Court of Appeals *923 for the Eighth Circuit recently adopted the following definition of the term "defalcation" in In re Cochrane:
Defalcation is defined as the "misappropriation of trust funds or money held in any fiduciary capacity; [the] failure to properly account for such funds." Under [§ ] 523(a)(4), defalcation "includes the innocent default of a fiduciary who fails to account fully for money received." . . . An individual may be liable for defalcation without having the intent to defraud.
124 F.3d at 984 (quoting Lewis v. Scott, 97 F.3d 1182, 1186 (9th Cir.1996)) (internal quotation marks omitted).
In the instant matter, Wylie has not established the applicability of the fiduciary prong of § 523(a)(4) to Montgomery's actions  no express or technical trust has been demonstrated between Montgomery and Wylie. Rather, and to borrow from the language of In re Long, their relationship has been shown to be "intrinsically more contractual than fiduciary," and thus, Wylie "cannot soundly invoke the fiduciary bar against discharge of [Montgomery's] obligation." In re Long, 774 F.2d at 879. This does not end the Court's inquiry, however.

ii. Section 523(a)(4): Embezzlement and Larceny
Two alternate prongs remain under § 523(a)(4), those of "embezzlement" and "larceny," either of which, once established, would operate to bar the discharge of Montgomery's debt to Wylie, the amount of which will be later discussed. Because Montgomery's possession and control of Wylie's property  that is, its training program, materials, yard, and vehicles  was lawful and derived from his supervisory position over the same, embezzlement, rather than larceny, is the appropriate context for this next inquiry. See Miller v. J.D. Abrams Inc. (In re Miller), 156 F.3d 598, 602 (5th Cir.1998), cert. denied, ___ U.S. ___, 119 S.Ct. 1250, 143 L.Ed.2d 347 (1999); Werner v. Hofmann (In re Hofmann), 144 B.R. 459, 464 (Bankr.D.N.D.1992), aff'd, 161 B.R. 998 (D.N.D.1993), aff'd, 5 F.3d 1170 (8th Cir. 1993), see also 9B Am.Jur.2d Bankruptcy § 3117 (1991) ("Larceny differs from embezzlement in that larceny requires that the original taking of the property be unlawful, whereas with embezzlement the initial taking of the property is lawful but the subsequent possession becomes unlawful.").
For purposes of § 523(a)(4), the Eighth Circuit has defined embezzlement to mean, "the `fraudulent appropriation of property of another by a person to whom such property has been entrusted or into whose hands it has lawfully come.'" Belfry v. Cardozo (In re Belfry), 862 F.2d 661, 662 (8th Cir.1988); see First Nat'l Bank v. Phillips (In re Phillips), 882 F.2d 302, 304 (8th Cir.1989) (quoting Belfry); accord In re Hofmann, 144 B.R. at 464 (citing Belfry and Phillips); see also 9B Am.Jur.2d Bankruptcy § 3117 (1991) ("Embezzlement, for purposes of 11 USCA § 523(a)(4), is the fraudulent appropriation of property of another by a person to whom such property has been entrusted or into whose hands it has lawfully come."). "Implicit in a claim of `embezzlement' . . . under § 523(a)(4) is a degree of malevolent intent." Neff v. Knodle (In re Knodle), 187 B.R. 660, 664 (Bankr.D.N.D.1995); cf. In re Miller, 156 F.3d at 602 ("To meet the definition of `embezzlement,' there must be proof of the debtor's fraudulent intent in taking the property."). Thus, "[a] creditor proves embezzlement by showing that he entrusted his property to the debtor, the debtor appropriated the property for a use other than that for which it was entrusted, and the circumstances indicate fraud." Brady v. McAllister (In re Brady), 101 F.3d 1165, 1173 (6th Cir.1996); see also In re Belfry, 862 F.2d at 663 ("Obligations sufficient to support a claim of embezzlement are ones which make the debtor's discretionary use of the [property], prior to complying with the obligations, improper."); *924 In re Hofmann, 144 B.R. at 464 (quoting Belfry).
In the instant matter, Wylie has satisfied its burden of proof as to one portion of its claim against Montgomery, by demonstrating that he fraudulently appropriated property owned by Wylie and to which he was entrusted, or of which he was lawfully possessed, in connection with the training of the WDAY employees. Specifically, and in this respect, Montgomery appropriated Wylie's training program, facility, and vehicles for a use contrary to that for which they were intended  and, moreover, for which they were entrusted to him  under circumstances indicating fraud.
In this last respect, on the element of fraud, Montgomery himself conceded that at the time he allowed the appropriation to the WDAY employees, he was aware that such action was contrary to Wylie's company policy. He was also aware that Wylie would be liable for any accident sustained during the course of the unauthorized training. Moreover, the contract which Montgomery entered into with WDAY specifically contemplates the conversion, waste and consumption of various Wylie assets in connection with training the WDAY employees  indeed, the contract is substantially premised upon these misappropriations. Yet, Wylie received no reimbursement for these misappropriations of its assets. Instead, the loss to the company served as a boon to the unauthorized trainees and their trainers  to wit, Miller and Kerr  alike, with the former, WDAY, paying only an hourly wage to the trainers and avoiding the costs of vehicle rental, fuel, mileage, and insurance, and the latter deriving considerable income from the same. Finally, Montgomery concealed the unauthorized activities from Wylie. Thus, in sum, the Court finds that Wylie has met its burden of proof in its action against Montgomery under § 523(a)(4) insofar as it pertains to Montgomery's liability for Wylie's losses  that is Montgomery's debt  connected with the training of WDAY employees.
However, the losses Wylie sustained as a result of the training of non-Wylie, non-WDAY individuals cannot be ascribed to Montgomery. In this connection, the evidence supports this Court's determination that Montgomery was not even aware of this training, and that it was undertaken, at great profit, by others than himself. This lack of nexus runs through each of Wylie's claims under § 523(a), proving fatal to each in the same manner. Therefore, in light of this, and having already determined that Montgomery's debt to Wylie for the training-related losses it sustained in connection with his misappropriations of its property for WDAY employees is nondischargeable pursuant to § 523(a)(4), this Court's inquiry need proceed no further on this subject.

III. CONCLUSION
Accordingly, and for the foregoing reasons, IT IS ORDERED THAT Plaintiff E.W. Wylie Corporation is awarded judgment in its favor and against Debtor-Defendant Dennis Robert Montgomery in the amount of $15,700.00. IT IS FURTHER ORDERED THAT the debtor is DENIED a discharge in bankruptcy pursuant to 11 U.S.C. § 523(a)(4) for the amount of this indebtedness. Additionally, Plaintiff's claim for RICO damages under the North Dakota RICO Act is DISMISSED. All other requests in this matter, including requests for costs and attorney fees, are DENIED.
JUDGMENT MAY BE ENTERED ACCORDINGLY.
SO ORDERED.
NOTES
[1]  At trial, Wylie based these uncontroverted figures upon average truck and trailer rental rates, and fuel rates, over the period of time measured in days that each group of non-Wylie individuals was trained.
[2]  The Organized Crime Control Act of 1970, also popularly known as "RICO," is found at 18 U.S.C. §§ 1961-1968.


Case: 19-10183        Document: 00515539941             Page: 1      Date Filed: 08/25/2020

             United States Court of Appeals
                  for the Fifth Circuit                                       United States Court of Appeals
                                                                                Fifth Circuit

                                                                                FILED
                                                                               August 25, 2020
                                    No. 19-10183                                Lyle W. Cayce
                                  Summary Calendar                                   Clerk

 In the Matter of: William Paul Burch,

                                                                                Debtor,

 William Paul Burch,

                                                                              Appellant,

                                          versus

 Areya Holder Aurzada,

                                                                                Appellee.

                  Appeal from the United States District Court
                      for the Northern District of Texas
                            USDC No. 4:18-CV-611

 Before Clement, Elrod, and Haynes, Circuit Judges.
 Per Curiam:*

         *
          Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should
 not be published and is not precedent except under the limited circumstances set forth in
 5TH CIR. R. 47.5.4.
Case: 19-10183      Document: 00515539941         Page: 2     Date Filed: 08/25/2020

                                   No. 19-10183

        William Paul Burch moves for leave to proceed in forma pauperis
 (IFP) from the district court’s denial of his appeal from the denial of a motion
 to recuse filed in a bankruptcy proceeding. He challenges the determination
 that the bankruptcy court judge was not biased and prejudiced. He also
 contests the district court’s decision to permit the Trustee to intervene and
 oppose his appeal from the denial of his recusal motion.
        Typically, to obtain leave to proceed IFP on appeal, a movant must
 show financial eligibility and the existence of a nonfrivolous appellate issue.
 28 U.S.C. § 1915(a)(1); see Carson v. Polley, 689 F.2d 562, 586 (5th Cir. 1982).
 To establish that there is a nonfrivolous issue for appeal, a movant must show
 that the appeal “involves legal points arguable on their merits (and therefore
 not frivolous).” Howard v. King, 707 F.2d 215, 220 (5th Cir. 1983) (internal
 quotation marks and citation omitted). We need not decide the financial
 circumstances, because we conclude that Burch fails to raise a nonfrivolous
 argument on appeal.
        Burch argues that the district court incorrectly affirmed the denial of
 his motion to recuse the bankruptcy court judge. We review the denial of a
 recusal motion for abuse of discretion. United States v. Anderson, 160 F.3d
 231, 233 (5th Cir. 1998).
        Under 28 U.S.C. § 455(a), a federal judge must disqualify himself in
 any proceeding where his impartiality might reasonably be questioned. §
 455(a); Anderson, 160 F.3d at 233. Moreover, under § 455(b)(1), a judge must
 recuse himself where he has “a personal bias or prejudice concerning a party,
 or personal knowledge of disputed evidentiary facts concerning the
 proceeding.” § 455(b)(1); United States v. Mizell, 88 F.3d 288, 299 (5th Cir.
 1996). While the subsections are similar, § 455(a) regards the general
 appearance of impartiality, whereas § 455(b)(1) concerns specific cases of
 conflict of interest and requires a showing of actual personal bias. See Liteky

                                        2
Case: 19-10183      Document: 00515539941        Page: 3     Date Filed: 08/25/2020

                                  No. 19-10183

 v. United States, 510 U.S. 540, 548 (1994); Patterson v. Mobile Oil Corp., 335
 F.3d 476, 484 (5th Cir. 2003). Bankruptcy judges are governed by § 455. See
 Fed. R. Bankr. P. 5004.
        Burch has not shown that the impartiality of the judge reasonably
 might be questioned or that the judge had an actual personal bias against him.
 See § 455(a) & (b); Patterson, 335 F.3d at 484; Mizell, 88 F.3d at 299. Thus,
 he has not demonstrated that the disposition of his recusal motion gives rise
 to a nonfrivolous appellate issue.
        He also challenges the Trustee’s intervention. His contention that
 the Trustee intervened to protect her interests and conceal her misdeeds is
 conclusory, unsupported, and speculative. Thus, he has not presented a
 nonfrivolous appellate issue as to the intervention of the Trustee.
        Accordingly, the motion for IFP is DENIED, and this case is
 DISMISSED as frivolous.

                                       3


546 F.Supp. 314 (1982)
FORMS, INC.
v.
AMERICAN STANDARD, INC.
Civ. A. No. 81-4933.
United States District Court, E. D. Pennsylvania.
August 23, 1982.
*315 Jay Barsky, Sharlyn Cohen, Philadelphia, Pa., for plaintiff.
Steven L. Friedman and Daniel F. Ryan, III, Philadelphia, Pa., for defendant.

MEMORANDUM
NEWCOMER, District Judge.
Before me are cross-motions for summary judgment. Plaintiff Forms, Inc. ("Forms") by its owner Laurence Weiss, has brought this action alleging in four counts fraudulent misrepresentation in the sale of Forms to Weiss by the defendant American Standard, Inc. ("American Standard"). In Count I ("Inventory Revaluation Claim"), the plaintiff alleges that the defendant fraudulently failed to disclose the post-closing adjustment of Forms' inventory. Plaintiff in Count II ("Computer Documents Claim") alleges that the American Standard fraudulently misstated in the post-closing adjustment the nature and amount of an outstanding claim by a company called Computer Documents against Forms. In Count III plaintiff alleges that the defendant fraudulently misrepresented to Weiss that all accounts receivable on the closing balance sheet were collectible in full ("Account Receivable Claim"). Forms alleges in Count IV ("David Kercher Claim") that it was fraudulently induced to exempt David Kercher, the General Manager of Forms when it was owned by American Standard, from the employment restriction clause of the agreement of sale ("Agreement"). The defendant seeks summary judgment on all four courts; plaintiff seeks summary judgment on counts II and IV. For the reasons set forth below, I will grant the defendant's motion for summary judgment on the first four substantive counts, as well as Count V (Breach of Contract) and Count VI (Punitive Damages), and enter judgment for the defendant.

I. The Facts

The record in this case is somewhat complicated and it deserves an extended recitation. The undisputed facts, drawn from the opposing briefs and the depositions, are as follows.
*316 Laurence Weiss, C.P.A., learned in the summer of 1979 that American Standard was interested in selling the assets of an unincorporated division in its Business Forms Group, known as Forms Inc. Weiss entered into negotiations that continued throughout the summer and fall with James Sears, Vice President of Corporate Development for American Standard, and James Sinclair, then President of American Standard's Business Forms Group. Weiss offered to purchase Forms for book value plus $500,000 on December 3, 1979 (Exhibit "D", Defendant's Motion for Summary Judgment). Three weeks later, on December 26, 1979, Weiss made a second offer of book value plus $600,000 and American Standard agreed to negotiate solely with Weiss (Exhibit "E", Defendant's Motion for Summary Judgment). Eight draft agreements were made between January 1980 and March 12, 1980, the date the final agreement was executed.
On November 12, 1979 James Sinclair wrote a letter to David Kercher in which Sinclair promised that Kercher would remain with Forms until it was sold, and further provided that should Kercher leave Forms at the sale, American Standard would keep him on the payroll for up to one year or such earlier time as Kercher was able to locate employment elsewhere (Exhibit "C", Plaintiff's Motion for Summary Judgment). Kercher, in a letter dated January 14, 1980, sought similar assurances from Gerald Tonges, who had replaced Sinclair as President of the Business Forms Group (Exhibit "D", Plaintiff's Motion for Summary Judgment). Two days later Tonges confirmed the offer in a letter to Kercher (Exhibit "E", Plaintiff's Motion for Summary Judgment). Laurence Weiss sent a letter to Kercher on February 7, 1980 outlining Kercher's compensation package should he remain with Forms (Exhibit "G", Defendant's Motion for Summary Judgment). This was followed by a conversation in which Weiss offered a higher base salary (Deposition of Weiss April 19, 1982, at 111). Kercher did not tell Weiss what he planned to do after the settlement. Sometime in mid-February Weiss called Kercher and asked permission to speak with a particular Forms salesman. Kercher thought this improper and refused, but Weiss contacted the salesman anyway (Deposition of Kercher, at 155-157A). On February 19, 1980 a side letter to the Agreement was drafted by American Standard exempting Kercher from the employment restriction that prohibited American Standard from offering employment to any Forms employees at or above their salary for one year after the settlement (paragraph 10(a)(ii) of the Agreement). The side letter appeared in several drafts and was signed by Weiss at the closing on March 12, 1980 (Exhibit "N", Defendant's Motion for Summary Judgment).
The sale of Forms to Laurence Weiss was consummated on March 12, 1980. There is conflicting evidence about who informed whom of the Computer Documents claim. Charles Gordon, counsel for American Standard, said that he was informed by Weiss (Deposition of Gordon, at 57-58). Weiss recalls being informed at the closing by Gordon or by an unnamed third person (Deposition of Weiss, April 30, 1982 at 62-63). A side letter written by Weiss and executed as part of the Agreement stated that American Standard informed Forms of the claim (Exhibit "V", Plaintiff's Response to Defendant's Motion for Summary Judgment). The account executive who handled the claim for Forms, Thomas Reeve, stated that he discussed the claim several times with Kercher and told him that it was in excess of $31,000. (Affidavit of Reeve, Plaintiff's Response to Defendant's Motion for Summary Judgment). Kercher recalls discussing the dollar amount of the claim with Gordon before the closing but did not mention the figure in his deposition (Deposition of Kercher, at 134). Kercher stated, in a February 25, 1980 memorandum to James Sears that he believed the potential liability to be approximately $25,000.00 (Exhibit "P", Plaintiff's Motion for Summary Judgment). Gordon also recalled that amount as the figure discussed in his conversation with Kercher (Deposition of Gordon, at 57-58). Gordon next spoke to *317 Kercher about the Computer Documents claim on the closing date. Gordon stated that Weiss mentioned the figure of $22,205 and that he then called Kercher to corroborate the figure (Deposition of Gordon at 57-58). American Standard agreed to assume liability for claims up to $22,205 in a side letter that became part 1 of the agreement (Exhibit "J", Defendant's Motion for Summary Judgment).[1]
On the afternoon of the settlement Kercher sent a letter of resignation to Weiss, stating his intention to remain with Forms until at least April 30th (Exhibit "F", Plaintiff's Motion for Summary Judgment). Kercher's decision to leave Forms was apparently based on his belief, grounded in his experience with Mr. Weiss in the weeks before the closing, that he could not work effectively with Weiss (Deposition of Kercher, at 157-158). Later the same day Kercher sent a letter to Gerald Tonges of the Business Forms Group of American Standard informing Tonges of his resignation and invoking American Standard's one-year employment commitment (Exhibit "G", Plaintiff's Motion for Summary Judgment). Kercher did not tell Weiss before the closing that he planned to stay with Forms (Deposition of Weiss, April 19, 1982, at 115), nor was Kercher offered a specific position with American Standard (Deposition of Kercher, at 154), nor did Kercher reveal to anyone at American Standard his intention to leave Forms (Deposition of Kercher, at 68-72). The next day, March 13, American Standard transferred Kercher to its Business Forms Group with the proposed status of Assistant General Manager, retroactively effective as of March 10, 1980 (Exhibit "J", Plaintiff's Motion for Summary Judgment).
Several times after the closing, Kercher discussed a transfer to another division of American Standard with Gerald Tonges, and from April 2-8 Kercher travelled to Dallas, Texas to inspect a facility newly acquired by American Standard (Deposition of Kercher at 88-89). Because Kercher was frequently absent or late for work, he was fired by Weiss on April 11th, with an effective date of April 2nd. (Deposition of Weiss, at 143-146; Exhibit "H", Plaintiff's Motion for Summary Judgment). In mid-April Kercher was offered and accepted a job as President and General Manager of American Standard's Woehrmyer Business Forms in Denver, Colorado. He assumed his new position in late April (Deposition of Kercher, at 87-97).
Weiss and American Standard provided in the Agreement that their respective accountants would meet within 60 days of the closing to negotiate any post-closing adjustments. (Agreement, Paragraph 4(d), Exhibit "L", Defendant's Motion for Summary Judgment). The provision also included a procedure in which any unresolved disputes between the accounting firms would be submitted to a third independent accounting firm whose decision would be binding. On July 27, 1980 Forms' accountants (Coopers and Lybrand) submitted a list of post-closing adjustments to American Standard's accountants (Arthur Young) (Exhibit "P", Defendant's Motion for Summary Judgment). The accountants met on July 21, 1980 and resolved some disagreements, but left unresolved Forms' claims for inventory revaluation, additional credits on the Computer Documents account, and compensation for uncollectable accounts receivable (Counts I, II, and III of this suit). On February 4, 1981 Jay Barsky, attorney for Forms, wrote a letter to Charles Gordon, attorney for American Standard, in which he characterized the claims as part of the post-closing adjustment but suggested that the matter be resolved by the lawyers (Exhibit "R", Defendant's Motion for Summary Judgment). The issues were not resolved and Forms filed this suit on December 2, 1981.

II. Procedural Posture

Plaintiff Forms states four counts of fraudulent misrepresentation, a fifth count for breach of contract based on facts alleged in the first four counts, and a sixth count for punitive damages. Forms seeks *318 relief of $43,000.00 in Count I (Inventory Revaluation Claim), $11,198.00 in Count II (Computer Documents Claim), $38,979.00 in Count III (Accounts Receivable Claim), $300,000.00 in Count IV (David Kercher Claim), $378,177.00 in Count V (Breach of Contract Claim which incorporates first four counts), and $1,134,531.00 in Count VI (Punitive Damages Claim).
Defendant American Standard has moved for summary judgment on the first four counts. Forms has responded first by alleging that Counts I and III present genuine issues of material fact for which it would be improper to grant summary judgment, and second by filing its own motion for summary judgment on Counts II and IV. Defendant has answered plaintiff's motion for summary judgment, and has realleged his own grounds for summary judgment.

III. Count I: Inventory Revaluation

Plaintiff alleges that the defendant misrepresented the value of Forms' inventory in violation of the good faith provision of the Uniform Commercial Code, Pa. Stat. Ann. tit. 12 § 1-203 (Purdon 1980), by using an accounting sleight-of-hand in which the plaintiff paid an inflated price for the inventory. Under the Agreement the price Weiss was to pay for the inventory was established by the Forms closing balance sheet for 1979. The closing balance sheet included the 1980 announced price increases, while the prior year's standard cost had been utilized in the interim monthly financial statements. Plaintiff admits that he was put on notice that the closing balance sheet was subject to year-end adjustments, but complains that defendant did not act in good faith because (1) the closing balance sheet used a different standard cost; (2) no explanation was given indicating what method was used to determine the new standard; (3) the use of the January 1980 announced price increase clouded the meaning of year-end adjustments; and (4) the inconsistent accounting methods required plaintiff to make a good faith effort to disclose them. The effect of the alleged misrepresentation, according to the plaintiff, was to make Weiss pay for inventory valued at a price in effect after the effective date of sale (December 31, 1979). In other words, Forms claims that American Standard made Weiss pay an inflated price for the inventory.
Defendant, in its motion for summary judgment, maintains that there are no triable issues of material fact and that as a matter of law plaintiff has no action on this record. The revaluation of the inventory was provided for in the Agreement and the method used was a generally accepted accounting procedure.[2] Defendant maintains that paragraph 6(e) of the Agreement put plaintiff on notice that the closing balance sheet was not prepared in the same manner as the 1979 unaudited financial statements. The method used was the "standard cost" method of valuing inventories, a generally accepted accounting procedure that revalues the inventory on the basis of the standard cost for the up-coming year. The plaintiff was provided with closing financial statements for the years 1976, 1977, 1978, each of which revealed a similar year-end inventory revaluation (Exhibits "A", "B", "C", Defendant's Motion for Summary Judgment, Deposition of Weiss, April 19, 1982 at 82). Plaintiff was also provided in January 1980 with the December 31, 1979 monthly statement, which included the revaluation (Exhibit "T", Defendant's Motion for Summary Judgment). Defendant maintains that the aggregate effect of these actions by American Standard *319 was to put plaintiff on notice that the inventory would be revalued.[3]
Plaintiff at one point characterizes American Standard's alleged failure to fully disclose the method used to revalue the inventory as a violation of the good faith provision of the Uniform Commercial Code. 13 Pa. Cons. Stat. Ann. § 1203 (Purdon 1980). "Good Faith" is elsewhere defined in Article one as "honesty in fact is the conduct or transaction concerned." 13 Pa. Cons. Stat. Ann. § 1201 (Purdon 1980). This good faith provision proscribes a standard of conduct, not a cause of action. This is because good faith like the truth has been torn in thousand pieces, and the law has yet to reassemble them all. See J. Milton, Aereopagitica. Therefore the law has developed a more humble, but more substantive, standard by which to measure good faith, the tort if misrepresentation.
An action for misrepresentation requires the plaintiff to plead and prove (1) a misrepresentation, (2) a fraudulent utterance thereof, (3) an intention by the maker that the recipient will thereby be induced to act, (4) justifiable reliance by the recipient upon the misrepresentation, (5) damage to the recipient as the proximate result. Scaife Company v. Rockwell-Standard Corporations, 446 Pa. 280, 285, 285 A.2d 451, 454 (1972); Neuman v. Corn Exchange National Bank & Trust Company, 356 Pa. 442, 450, 51 A.2d 759, 763 (1947). The Parol Evidence Rule does not bar extrinsic evidence to show fraud or misrepresentation. Betz Laboratories, Inc. v. Hines, 647 F.2d 402 (3d Cir. 1981); Shulman v. Continental Bank, 513 F.Supp. 979, (E.D. Pa. 1981).
The issue then is whether plaintiff has submitted any evidence showing fraud or misrepresentation. If not, then the complaint has not stated a cause of action and summary judgment is appropriate. Hubicki v. ACF Industries, 484 F.2d 519, 522 (3d Cir. 1973). I conclude that there is no record evidence for misrepresentation or fraud and will therefore grant defendant's motion for summary judgment as to this count. American Standard used a standard accounting procedure that it had used in the past. It made this information available to Weiss several months before the closing. Moreover, the Agreement provided that the closing balance sheet would reflect year-end adjustments which were prepared in a manner "consistent with that of the previous year." (Paragraph 6(e), see footnote 2 supra). Mr. Weiss was therefore placed on both real and constructive notice that the inventory would be revalued on the basis of the subsequent year's costs. Even if there had been an inconsistency, the fact that plaintiff is dissatisfied with the revaluation does not oblige me to rewrite the contract to ameliorate his mistake. "A misrepresentation as to the subject of a proposed sale will not support an action for deceit if the subject be open to the buyer's observation." Scaife Company, 446 Pa. at 287, 285 A.2d 451 (quoting Emery v. Third Nat'l Bank, 308 Pa. 504, 162 A. 281 (1932).

IV. Count II: Computer Documents

Both plaintiff and defendant seek summary judgment on this count. Forms alleges in its complaint that American Standard knew that the full amount of the Computer Documents claim was $33,403.00 but that it deliberately misrepresented the claim as being only $22,205.00. The plaintiff avers that it relied on American Standard's good faith and it did so because the negotiations on the claim occurred during the hectic closing proceedings.
*320 Defendant's motion for summary judgment is based on the language in a side letter, executed as part of the Agreement, that limited American Standard's liability for the Computer Document claim for any amount "up to $22,205" (Exhibit "O", Plaintiff's Motion for Summary Judgment). Defendant argues that this wording written by Weiss, anticipated a higher claim and expressly limited defendant's liability. Defendant further argues that plaintiff's allegation of fraud is no more than a bold allegation, unsupported by the facts. Moreover, any reliance on a representation contrary to the Agreement's side letter is unjustifiable as a matter of law. Since the wording of the side letter is clear, there is no issue of material fact and defendant therefore maintains that it is entitled to summary judgment.
In its response and in its own motion for summary judgment, plaintiff admits that the side letter is clear on its face, but seeks to introduce parol evidence to show that American Standard knew the Computer Documents claim would significantly exceed $23,205.00 and that it fraudulently undervalued the figure. Forms alleges that both Kercher and Gordon knew the liability would exceed $31,000.00; Kercher because he was told by Thomas Reeve, who handled the account, and Gordon because Reeve had discussed it with him prior to the closing (Reeve Affidavit, Plaintiff's Response to Defendant's Motion for Summary Judgment; Kercher Deposition, at 134). Kercher also sent a memorandum to Sears on February 25, 1980 informing him that the liability would be approximately $25,000.00 (Exhibit "P", Plaintiff's Motion for Summary Judgment). Forms's allegation that American Standard deliberately suppressed the truth is based first on the putative inconsistent statements of Gordon (who maintains he had no knowledge of the higher figure, Gordon Deposition at 57-60) and those of Reeve and Kercher, and second on American Standard's failure to include the claim on the closing balance sheet, which under the Agreement's paragraph 2(a)(i) determines who assumes liability. Forms argues that its reliance on the lower figure was justified because American Standard brought up the claim and readily assumed liability, and because the hectic activity of closing precluded an accurate check of the claim.
American Standard argues in response that it is entitled to summary judgment on any one of three grounds. First, Forms violated the Arbitration Clause of the Agreement, which obliges the parties to submit disputed claims to binding arbitration by independent accountants.[4] Second, the Agreement unambiguously limits American Standard's liability to $22,205.00. American Standard points out that its agreement to pay this amount was gratuitous, since it was required to accept liability for goods shipped before December 31, 1979 only when the aggregate claims exceeded $50,000 (Agreement paragraph 13(a)). Third, the misrepresentation claim must fail, because even if a factual misrepresentation did occur, Weiss could not justifiably rely on such a misrepresentation since it was contrary to the plain language of the letter.
I have been directed to no record evidence of fraud and will therefore grant defendant's motion for summary judgment. Forms has not met the burden mandated by the Federal Rules of setting forth specific facts showing that there is a genuine issue for trial: "When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." Fed. R. Civ. P. 56(e). The initial burden of support under the Federal Rules is upon the movant, who must show that the facts which would warrant summary judgment in his favor are indisputable with the opposing party *321 given the benefit of any favorable inferences. See 6 Moore's Federal Practice ¶ 56.15[1] at 56-344. But the burden shifts to the opposing party when the movant presents evidence which would require a directed verdict in his favor at trial. Cousins v. Yeager, 394 F.Supp. 595 (E.D.Pa. 1975); 6 Moore's Federal Practice, ¶ 56.11[3]. "The party resisting a motion for summary judgment may not rest upon the mere allegations of his pleading; his response must set forth specific facts showing that a genuine issue for trial exists." Wire Mesh Products, Inc. v. Wire Belting Association, 520 F.Supp. 1004, 1005 (E.D. Pa. 1981).
Forms has not met the burden of setting forth specific facts showing that there is a genuine issue for trial, so summary judgment is appropriate. The mere assertion that a genuine issue exists, without any showing of evidence, would defeat the whole purpose of summary judgment. The web of facts Forms spins will not support the weight of its allegation. There is nothing in the record to indicate that American Standard knowingly and willfully misrepresented the amount of the Computer Documents claim. Kercher in his deposition said only that he had a conversation with Gordon about the amount of the Computer Document claim, not what the amount was. Kercher's memorandum to Sears is equivocal about the amount of the claim, stating only that "there may be a potential liability claim of approximately $25,000..." (Exhibit "P", Plaintiff's Motion for Summary Judgment). Finally, there is no evidence, parol or otherwise, that Gordon knew the amount was greater than the $23,205 figure agreed upon at the closing. An argument based upon what Gordon may have known or should have known does not meet the threshold scienter requirement for fraudulent misrepresentation.
Again this Court is being asked to rewrite the contract to ameliorate plaintiff's mistake. American Standard agreed at closing to assume liability for up to $22,205 in a letter Mr. Weiss later admitted was poorly drafted (Deposition of Weiss, April 30, 1982 at 70). American Standard was already obliged to assume liability for any claims exceeding $50,000.00. Finally, plaintiff admits to making a mistake of judgment by not requiring further documentation of the Computer Document claim. (Deposition of Weiss, April 30, 1982, at 69-70). This being the case, plaintiff will not now be permitted to use an allegation of fraud to restructure the agreement.

V. Count III: Accounts Receivable Claim

Forms alleges in this count that American Standard fraudulently misrepresented that all accounts receivable on the closing balance sheet were collectible, while knowing that a number of them were in fact bad debts. As a result, plaintiff claims damages of $23,979.00.
Defendant's motion for summary judgment is based on the wording of the Agreement. Weiss requested an absolute warranty of collectibility on accounts receivable during the negotiations, and American Standard repeatedly rejected the request (Exhibit "K", Defendant's Motion for Summary Judgment). The final agreement reflects this position by requiring American Standard to provide a warranty for "all receivables in the closing balance sheet ... [that] are collectible ... in the ordinary course of business." (Agreement, paragraph 6(n)). Accounts receivable on the closing balance sheet were $1,392,041.00. Forms failed to collect $23,979.00. This means that Forms collected over 99% of accounts receivable. Defendant maintains that a 99.4% collection rate on accounts receivable comports with the Agreement's terms of collectible "in the ordinary course of business."
On September 11, 1979 American Standard discontinued, retroactive to August 31, 1979, the reserve fund it had maintained to cover bad debts. The customer credit allowances were thereafter charged directly to the profit and loss account as incurred. (Exhibits "F" and "G", Plaintiff's Response to Defendant's Motion for Summary Judgment). Plaintiff's theory is that American Standard's failure to disclose the termination of the bad debt fund, coupled with its *322 knowledge that all of the bad debts could not be collected, constitutes a fraudulent misrepresentation designed to induce Weiss to purchase Forms. Plaintiff maintains that these allegations raise genuine issues of material fact that make summary judgment inappropriate.
Again I am obliged to rule in favor of the defendant and grant its motion for summary judgment. Forms has failed to meet its burden of submitting issues of material fact that would justify a trial. The party opposing summary judgment must set forth in its reply specific facts showing there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Wire Mesh Products, Inc. v. Wire Belting Association, 520 F.Supp. 1004 (E.D. Pa. 1981). Forms merely alleges fraud, and this is insufficient to overcome a motion for summary judgment. First, American Standard did not misrepresent the warranty of collection when it eliminated the bad debt reserve since it would still have remained liable for whatever was collectible in the ordinary course of business. Moreover, the elimination of the bad debt reserve in August occurred long before American Standard agreed to negotiate solely with Weiss and therefore can in no way be said to have fraudulently induced the sale. Second, the record evidence clearly shows that there was no fraud in the execution of the contract, since an absolute warranty was discussed and rejected in favor of collectibility in the ordinary course of business. (Exhibit "K", Point 27; Exhibit "S", Point 27; Agreement, paragraph 6(h), Defendant's Exhibits in Support of Motion for Summary Judgment).
The problem, then, is not at bottom one of fraud but of the construction and legal effect of the contract, and this is an issue properly within the purview of the court. Holmes v. Chartiers Oil Co., 138 Pa. 546, 21 A. 231 (1891). "Summary judgment is properly used for interpreting a contract whose terms are considered by opposing parties to be clear and unambiguous, despite the parties' divergent views of what the agreement provided." Goldinger v. Boron Oil Company, 375 F.Supp. 400, 413 (W.D. Pa. 1974); Trans-Fuel Inc. v. Saylor, 440 Pa. 51, 269 A.2d 718 (1970). Summary judgment for defendant is proper on this count because of the evidence that an absolute warranty of collection was repeatedly rejected during the negotiations by American Standard and because the Agreement explicitly limits the warranty to accounts receivable "in the ordinary course of business."
One final point remains to be considered: whether the percentage of uncollected bad debts falls within the definition of "collectible ... in the ordinary course of business." This issue would appear to be one of material fact, thus precluding summary judgment for American Standard. However, the party opposing summary judgment, Forms, must do more than rely on contrary and conclusory allegations in a well-pleaded complaint. It must set forth specific facts showing that there is a genuinely disputed factual issue for trial. Fed. R. Civ. P. 56(e); see Tunnell v. Wiley, 514 F.2d 971, 976 (1975). Summary Judgment for the movant who has carried his burden of proof is appropriate if the opposing party does not supplement the record. Fed. R. Civ. P. 56(e); See First National Bank v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968); Tripoli Co., Inc. v. Wella Corp., 425 F.2d 932 (3d Cir. 1970). Summary judgment is granted on this count because Forms failed to direct my attention to any evidence to support its claim that the percentage of uncollected accounts receivable exceeded the industry standard for collectibility in the ordinary course of business.

VI. Count IV: David Kercher Claim

Plaintiff claims that it was fraudulently induced to exempt David Kercher, the General Manager of Forms, from the employment restriction clause of the Agreement. Both Forms and American Standard have moved for summary judgment.
Forms alleges that Kercher and American Standard concocted a "sweetheart deal" in which American Standard surreptitiously agreed to retain Kercher after the sale of Forms and then induced an exemption letter from Weiss in order to invoke it after *323 the closing. Plaintiff contends that American Standard indicated to Weiss that it would offer Kercher a position only if a deal with the new Forms management could not be worked out, and that on the basis of this false representation, Weiss executed the side letter exempting Kercher. In support of its claim plaintiff points to several documents. The first is the letter of November 12, 1979 in which American Standard offered to keep Kercher on the payroll for one year if he chose not to remain with Forms after its sale (Exhibit "C", Plaintiff's Motion for Summary Judgment). Plaintiff maintains that Kercher's level of performance declined markedly from this date. Second, there is the personnel transfer order, which assigned Kercher to the Business Forms Group retroactive to March 10, 1980 (Exhibit "J", Plaintiff's Motion for Summary Judgment). This transfer was written on March 13, 1980, one day after the sale of Forms and the resignation of Kercher. Plaintiff believes that these two events, the one year payroll extension promise and the act retroactively triggering the promise, sufficiently demonstrate that American Standard misrepresented to Weiss that it would not offer an employment contract to Kercher and that by this misrepresentation Weiss was induced to exempt Kercher from the employment restriction. Plaintiff now seeks summary judgment and relief of $300,000.00. The figure is based on damages allegedly caused by Kercher's diminished performance from November 12, 1980 and by the delay caused by the sweetheart deal in hiring a replacement.
American Standard has also moved for summary judgment. It contends that plaintiff has failed to set forth a precise misrepresentation, and it specifically denies plaintiff's two general allegations that it misrepresented to Weiss that it would not offer a position to Kercher or that it offered Kercher a position before the closing. The first allegation is based upon a statement allegedly made by Sears to Weiss in which Sears said "[w]e're not going to take David Kercher away from Forms. We're not going to offer him employment, but should he come to us, you know, we might  we would be obligated to do something for him." (Deposition of Weiss, April 19, 1982, at 103). Defendant maintains that, assuming this statement was made it misrepresents no statement of fact. The uncontroverted evidence is that American Standard first learned of Kercher's decision to leave Forms on the closing date March 12, and offered him a job a month later, sometime in mid-April.[5] Second, American Standard contends that the one-year transition agreement of November 12, 1979 was a courtesy to a long-time employee and not a job offer. Finally, American Standard argues that given the unequivocal language of the side letter exempting Kercher from the employment restriction, any reliance on a contrary representation would be unjustified as a matter of law. (Exhibit "N", Defendant's Motion for Summary Judgment). Under the explicit terms of the Agreement American Standard was free to negotiate with Kercher at any time. Therefore no misrepresentation occurred and summary judgment must be awarded to the defendant.
I agree with the defendant's argument and will therefore grant its motion for summary judgment on this count. Proof in a fraud action in Pennsylvania law must be "clear, precise, and indubitable." Kaufman v. Mellon National Bank and Trust Co., 366 F.2d 326, 330 (3d Cir. 1966), and must provide evidence satisfying the elements of misrepresentation: a material representation was made that was known to be false, the maker intended the representation to be relied upon to the listener's detriment, there was justifiable reliance, and resulting damages. Edelson v. Bernstein, 382 Pa. 392, 115 A.2d 382 (1955); Girard Bank v. John Hancock Mut. Life Ins. Co., 524 F.Supp. 884, 894 (E.D. Pa. 1981). Plaintiff has failed to show that there was a false representation that was known to be *324 false and was uttered with the intent to induce reliance. No possible construction could be placed upon Mr. Sears's comment to Mr. Weiss to bring it within the ambit of tortious misrepresentation. Moreover the November 12, 1979 letter promising Kercher a one year transition salary must be read as defendant describes it: as an accommodation to a long-time employee. In any case, the promise was made almost a month before Weiss's initial offer and a month and a half before American Standard agreed to negotiate solely with Weiss. Since no false representation was made, I am left with the plain language of the agreement, which unambiguously permitted American Standard to offer Kercher a job. Therefore plaintiff has failed to demonstrate an issue for trial and summary judgment must be granted for defendant. Goldinger v. Boron Oil Co., 375 F.Supp. 400, 413 (1974).

VII. Counts V & VI: Breach of Contract and Punitive Damages

Although not specifically mentioned in defendant's motion for summary judgment, I have decided to enter judgment for the defendant on these counts for the reasons cited above in the discussion of the substantive counts. An appropriate order will be entered.
NOTES
[1]  The final claim of $31,902.74, plus a $1,500 letter of credit, was eventually settled as a credit on the Computer Documents account after the sale of Forms to Weiss.
[2]  Paragraph 6(e) of the Agreement provides in relevant part that

[t]he Closing Balance Sheet was prepared by seller in accordance with generally accepted accounting principles, and except for normal year-end adjustments, in a manner consistent with that employed in the preparation of the unaudited balance sheets of Forms as of August 31, 1979, September 30, 1979, October 31, 1979, and November 30, 1979, copies of which have been previously delivered to Buyer and Seller has delivered to Buyer a letter from Arthur Young & Company [American Standard's accounting firm] to the effect that the closing balance sheet was prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceeding year.
[3]  I note at the outset that plaintiff is correct in arguing that the arbitration clause does not apply to this or any other claim made in this lawsuit. Paragraph 8(a) of the Agreement specifically restricts the arbitration to cash activities and post-closing adjustments for the period from the effective date of sale (December 31, 1979) to the closing date (March 12, 1980). The Inventory Revaluation Claim (Count I) relates to the standard cost measure on the closing balance sheet for 1979. The Computer Documents Claim (Count II) is based on a claim for defective goods shipped prior to the effective date. The Accounts Receivable Claim (Count III) relates to uncollected accounts prior to December 31, 1979. The David Kercher claim (Count IV) does not relate to cash activities but to Kercher's exemption from the employment restriction clause.
[4]  See footnote 3 supra.
[5]  The precise date is unclear but, given the exemption addendum, is irrelevant for the purpose of this case.


740 F.2d 965
*Curtisv.Procunier
83-1913
United States Court of Appeals,Fifth Circuit.
7/31/84

1
N.D.Tex.

AFFIRMED

2
---------------

* Fed.R.App.P. 34(a);  5th Cir.R. 34.2.