C & B Sales & Service, Inc. v. McDonald

• Decision Date: 14 April 1997
• Docket Number: No. 95-30550,95-30550
• Citation: 111 F.3d 27
• Parties: C & B SALES & SERVICE, INC., Plaintiff--Counter Defendant--Appellant-Cross-Appellee, v. Maxwell C. McDONALD, Jr., Defendant--Appellee-Cross-Appellant, v. Robert L. HUMPHREY, Compressor Operating Inc., Defendants--Counter Claimants--Appellees, Compressor Components Corp., Compression Components Corp., erroneously referred to as Compressor Components Corp., Defendants--Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 27

111 F.3d 27

C & B SALES & SERVICE, INC., Plaintiff--Counter Defendant--Appellant-Cross-Appellee, v. Maxwell C. McDONALD, Jr., Defendant--Appellee-Cross-Appellant, v. Robert L. HUMPHREY, Compressor Operating Inc.,

Defendants--Counter Claimants--Appellees,

Compressor Components Corp., Compression Components Corp.,

erroneously referred to as Compressor Components

Corp., Defendants--Appellees.

No. 95-30550.

United States Court of Appeals Fifth Circuit.

April 14, 1997.

Appeal from the United States District Court for the Western District of Louisiana.

Steven G. Durio, Durio, McGoffin & Stagg, Lafayette, LA, Carter O. Bise, Floyd J. Logan, Logan & Bise, Gulfport, MS, William E. Logan, Jr., Gregory Jesse Logan, William E. Logan Jr. & Associates, Lafayette, LA, for C & B Sales & Service, Inc.

Robert L. Cabes, Karen Theresa Bordelon, Milling Benson, Woodward, Hillyer, Pierson & Miller, Lafayette, LA, James K. Irvin, Milling, Benson, Woodward, Hillyer, Pierson & Miller, New Orleans, LA, for McDonald.

Kenneth M. Henke, Philip E. Roberts, Roy, Bivins, Judice & Henke, Lafayette, LA, for Robert L. Humphrey, Compressor Operating Inc., Compressor Components Corp., and Compression Components Corp.

Before JONES, SMITH and STEWART, Circuit Judges.

OPINION ON PETITION FOR REHEARING

(Opinion Sept. 12, 1996, 5th Cir.1996, 95 F.3d 1308)

STEWART, Circuit Judge:

The petition for rehearing is DENIED. However, Section II of our prior opinion discussing civil law fraud in Louisiana is modified to read as follows:

C & B contends that the district court erred in dismissing its fraud claim because (1) self-dealing raises a presumption of fraud; and (2) deception with intent to benefit personally amounts to fraud. In support it cites Louisiana Civil Code Article 1953 which provides:

Fraud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one part or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction.

Louisiana Civil Code Article 1957 defines the standard of proof required to prove fraud, and it provides: "Fraud need only be proved by a preponderance of the evidence and may be established by circumstantial evidence." See Ballard's Inc. v. North American Land Development Corp., 677 So.2d 648, 650-51 (La.Ct.App. 2d Cir.1996). ¹

C & B argues that it need not show specific intent by McDonald to cause loss, only that he intended to benefit personally. The district court rejected C & B's contention that McDonald was liable for civil fraud and in doing so, made the following findings: (1) there was insufficient evidence to find that McDonald misrepresented or suppressed the truth either to obtain an unjust advantage, cause a loss to C & B, or to inconvenience C & B; (2) McDonald did not intend to damage C & B, obtain an unjust advantage over C & B, or intend to cause a loss or inconvenience C & B; and (3) the more credible testimony established that McDonald intended for C & B to grow as a result of his actions, particularly in light of the constraints under which McDonald felt that he was operating. Our review of the district court's analysis persuades us that the district court applied the standard of proof required by Article 1957 of the Louisiana Civil Code and concluded that C & B did not prove civil fraud by a preponderance of the evidence.

Accordingly, we do not find that the district court's understanding of Louisiana law was error. Nor do we find that the district court erred in its factual determinations. We have carefully reviewed the record and conclude that the district court did not clearly err when it dismissed C & B's...