STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

2023 CA 0020

WHITNEY BANK

VERSUS

On Appeal from the Twenty -Second Judicial District Court

In and for the Parish of Washington

State of Louisiana

Docket No. 108044

Honorable August J. Hand, Judge Presiding

Clay Justin LeGros

Metairie, Louisiana

Counsel for Plaintiff/Appellee

Whitney Bank

Lillian M. Ratliff Counsel for Defendant/Third-Party Plaintiff/ 

Bogalusa, Louisiana Appellant

Henry Rayford

David Jefferson Dye Counsel Third -Party Defendant/Appellee

New Orleans, Louisiana Nobles Construction, L. L.C. 
McCLENDON,F J. 

The plaintiff appeals a trial court's judgment on his fraud claim raised in a third - 

party demand against a third -party defendant construction company. After a bench trial, 

the trial court found that the plaintiff failed to carry his burden of proof with regard to

the fraud allegations. Thereafter, the trial court sustained the third -party defendant's

peremptory exceptions raising the objections of peremption and prescription and

dismissed with prejudice the third -party plaintiff's claims against the third -party

defendant. For the reasons that follow, we affirm. 

FACTS AND PROCEDURAL HISTORY

This matter is before us for the third time and arises from the construction of three

houses for Henry Rayford by Nobles Construction, L.L.C. ( Nobles).' Mr. Rayford intended

to use the houses as rental properties. Nobles completed construction in early 2008. Mr. 

Rayford alleges that because of construction defects, the houses could not be used for

their intended purposes. Mr. Rayford defaulted on the promissory notes and Whitney

Bank filed the underlying SUit. 2

In 2016, Mr. Rayford asserted a third -party demand against Nobles. See Whitney

Bank v. Rayford, 2017- 1244 ( La. App. 1 Cir. 3/ 29/ 18), 247 So. 3d 733, 735 ( Whitney

Bank 1); Whitney Bank v. Rayford, 2021- 0406 ( La.App. 1 Cir. 12/ 9/ 21), 332 So -3d

1243, 1245 (Whitney Bank II). Therein, he alleged that Nobles failed to obtain required

building permits and inspections during construction and that Nobles' actions or failures

to act constituted fraud. Mr. Rayford further alleged that Nobles failed to comply with

building standards, failed to complete the job, and failed to rectify problems, resulting in

a breach of contract. Finally, Mr. Rayford alleged that Nobles performed defective work

or used defective materials, resulting in mold and mildew in the houses, rendering the

houses uninhabitable, and causing him irreparable financial, professional, and personal

I For a more complete recitation of the facts and procedural history, see Whitney Bank v. Rayford, 

2017- 1244 ( La.App. 1 Cir. 3/ 29/ 18), 247 So. 3d 733 ( Whitney Bank 1) and Whitney Bank v. Rayford, 

2021- 0406 ( La.App. I Cir. 12/ 9/ 21), 332 So. 3d 1243 (Whitney Bank II). 

2 Whitney Bank's claims against Mr. Rayford were resolved by summary judgment and are not at issue in

this latest appeal. 

2
harm. See Whitney Bank 1, 247 SO^3dEt735; Whitney Bank 1K332 Sn.3Hat 1245- 

TM response, Nobles filed peremptory exceptions raising the objections Of

peremption and prescription. Nobles argued that Mr. Rayford' s claims should be

dismissed pursuant to 9: 2772, which provides 8 r peremptive period

applicable to actions against contractors related to DOOStrUCtOO Of improvements OD

immovable property. 3 Nobles asserted that Mr. Rayford' s allegations of fraud, which

VVOU&d have provided for an exception to the D2rem[ tkv8 period, were unsubstantiated

and be found inappinapplicable. B. argued that Mr. C] ai00S

were prescribed pursuant to the OOe- V2B[ prescriptive period set forth in LSA-C. C. arts. 

3492 and 3493. 5 After ahearing, the trial court sustained the exceptions, dismissed the

third -party demand, and Mr. Rayford appealed. Whitney Bank 1 247 So3d at 735; 

Whitney Bank H, 332 Sn.3M8t1246, 

On appeal, this court reversed the trial COU[ f"sjudgment sustaining the exceptions

and remanded the matter for further proceedings, finding that Nobles failed to carry its

burden as it failed to introduce any evidence at the hearing to establish the dates on

s Louisiana Revised Statutes 9: 2772(A)( 1)( b) provides: 

Except asotherwise provided inthis Subsection, no action, whether ex contractu ex

delicto, or otherwise, including but not limited toanaction for failure towarn, torecover

on a contract, or to recover damageor otherwise arising out of an engagement of

planning, construction, design, or building immovable ormovable property which may

include, without limitation, consultation, planning, designs, drawings, specification, 

investigation, evaluation, measuring, or administration related to any building, 

construction, demolition, or work, shall be brought against any person performing or

furnishing land surveying services, assuch term is defined in R. S. 37: 682, including but

not limited to those services preparatory to construction, or against any person performing

or furnishing the design, planning, supervision, inspection, or observation of construction

orthe construction of immovables, or improvement to immovable property, including but

not limited to residential building contractor as defined in R. S. 37: 2150. 1: 

1)( a) More than five years after the date of registry in the mortgage office of acceptance

ofthe work bvowner. 

b) If no such acceptance is recorded within six months from the date the owner has

occupied or taken possession of the improvement, in whole or in part, more than five years

after the improvement has been thus occupied bythe owner. 

Louisiana Revised Statute 9: 2772( H)( 1) provides, in pertinent part that "[ t]he peremptive period

provided by this Section shall not apply to an action to recover on a contract or to recover damages against

any person enumerated inSubsection Aofthis Section, whose fraud has caused the breach ofcontract or

damages sued upon." 

s Louisiana Civil Code art. ] 492 provides, in relevant part, that "[d] elictua| actions are subject toaUberative

prescription of one year." Additiona|ky, LSA-C.C. art. 3493 provides that"[ vv] han damage is caused to

immovable property, the one year prescription commences to run from the day the owner of the immovable

acquired, orshould have acquired, knowledge ofthe darnage." 
which the peremptive or prescriptive periods commenced. The issue of whether Mr. 

Rayford' s allegations of fraud would exempt his claims from the peremptive period set

forth in LSA- R.S. 9: 2772 was pretermitted. Whitney Bank 1, 247 So. 3d at 737- 38. 

Further litigation ensued following remand, including Nobles again seeking

dismissal of Mr. Rayford's third -party demand by filing exceptions raising the objections

of peremption and prescription. At the hearing on these exceptions, Nobles introduced

into evidence numerous exhibits. Mr. Rayford did not offer any evidence, but opposed

the exceptions by arguing, in part, that LSA- R.S. 9: 2772( H)( 2) requires a separate

hearing regarding the allegations of fraud before the trial " of any or all other issues.'16

Following the parties' arguments, the trial court again granted the exceptions and

dismissed Mr. Rayford' s claims. Noting Mr. Rayford' s objection to the ruling, the trial

court stated that, if necessary, any issues regarding fraud or attorney fees would be

handled at a future date. The trial court signed a judgment on January 10, 2019, in

conformity with its ruling and dismissed Mr. Rayford' s third -party demand against Nobles

with prejudice. Mr. Rayford again appealed. Whitney Bank 11, 332 So. 3d at 1246- 47. 

On December 9, 2021, this court held that the provisions of LSA- R.S. 9: 2772( H) 

are clear and unambiguous and required that " Mr. Rayford' s allegations of fraud shall be

tried, separate from and prior to the trial of any and all other matters." Whitney Bank

11, 332 So.3d at 1251. Thus, this court determined that the trial court legally erred in

sustaining Nobles' exceptions while deferring the issue of fraud. Accordingly, this court

vacated the January 10, 2019 judgment and remanded the matter to the trial court. Id. 

On April 8, 2022, the trial court held a trial on Mr. Rayford' s allegations of fraud in

his third -party demand against Nobles. The parties stipulated to the introduction of all

exhibits into evidence, and both parties presented witness testimony. Thereafter, the

trial court took the matter under advisement, and the parties submitted post -trial briefs. 

On May 24, 2022, the trial court issued Reasons for Judgment, finding that Mr. Rayford

failed to carry his burden of proving fraud in the construction project as alleged by Mr. 

Rayford in his third -party demand against Nobles. Thereafter, the trial court determined

6 Louisiana Revised Statutes 9: 2772( H)( 2) provides, in pertinent part, that "[ i] n any action in which fraud

is alleged, that issue shall be decided by trial separate from and prior to the trial of any or all other issues." 

M
that the third -party demand of Mr. Rayford against Nobles regarding the construction of

the rental houses, filed eight years after Mr. Rayford took possession of the three rental

houses and rented them out, was perempted pursuant to the five-year peremptive period

set forth in LSA- R.S. 9: 2772(A). 7 Asa result, the trial court sustained Nobles' peremptory

exceptions raising the objections of peremption and prescription. The trial court signed

a judgment in conformity with its ruling on May 24, 2022, and dismissed with prejudice

Mr. Rayford' s third -party claims against Nobles. On February 2, 2023, the trial court

amended the May 24, 2022 judgment to clarify that the judgment is a final and appealable

judgment. Mr. Rayford now appeals, raising several assignments of error. 

13 &* 6111: 1-3

On appeal, Mr. Rayford argues that Nobles failed to obtain any permit for the

construction project, failed to complete the necessary inspections in accordance with

permit scheduling, failed to maintain insurance, and failed to finish the work in a

workmanlike manner. He asserts that Nobles' actions constituted fraud, committed by

using various forms of misrepresentation and suppressing the truth in order to gain an

unjust advantage over him. Therefore, according to Mr. Rayford, the fraud exception in

LSA- R.S. 9: 2772 applies. 

Louisiana Revised Statutes 9: 2772( H)( 1) provides that the five-year peremptive

period set forth in LSA- R.S. 9: 2772(A) " shall not apply to an action to recover on a

contract or to recover damages against any person ... whose fraud has caused the breach

of contract or damages sued upon." Fraud, as used in LSA- R.S. 9: 2772 " shall have the

same meaning as provided in Civil Code Article 1953." LSA-R.S. 9: 2772( H)( 3). Fraud as

defined in LSA-C.C. art. 1953 is a misrepresentation or a suppression of the truth made

with the intention either to obtain an unjust advantage for one party or to cause a loss

or inconvenience to the other. Fraud need only be proved by a preponderance of the

evidence and may be established by circumstantial evidence. LSA- C. C. art. 1957. 

While fraud may result from silence or inaction, mere silence or inaction without

fraudulent intent does not constitute fraud. LSA-C. C. art. 1953; Schilling v. Bernhard

7 We note that Mr. Rayford has not assigned as error the trial court's decision to rule on the exceptions

raising the objections of peremption and prescription at the same hearing and immediately following having

ruled on the issue of fraud. Accordingly, we do not consider same. 

5
Brothers Mechanical Contractors LLC., 2012-2105 ( La.App. 1 Cir. 9/ 13/ 13), 186

So. 3d 658, 665, writ denied, 2013- 2378 ( La. 12/ 6/ 13), 129 So. 3d 537. Fraudulent intent, 

or the intent to deceive, is a necessary and inherent element of fraud. Fraud cannot be

predicated upon mistake or negligence, no matter how gross. Id. 

There are three basic elements to an action for fraud against a party to a contract: 

1) a misrepresentation, suppression, or omission of true information; ( 2) the intent to

obtain an unjust advantage or to cause damage or inconvenience to another; and ( 3) the

error induced by a fraudulent act must relate to a circumstance substantially influencing

the victim's consent to (a cause of) the contract. Minton v. Acosta, 2021- 1180 ( La.App. 

1 Cir. 6/ 3/ 22), 343 So. 3d 721, 730- 31. A trial court's determination of the existence or

absence of fraud is a question of fact that will not be disturbed on appeal absent manifest

error. Id. 

Thus, appellate courts are required to review the entire record to ascertain

whether manifest error has occurred. Where the standard of review is manifest error, 

the issue before an appellate court is not whether the trier of fact was right or wrong, 

but whether the factfinder's conclusion was a reasonable one. See Jones v. Market

Basket Stores, Inc., 2022-00841 ( La. 3/ 17/ 23), 359 So. 3d 452, 463. Where findings

are based on determinations regarding the credibility of witnesses, the manifest error

standard demands great deference to the trial court's findings of fact. LeBlanc v. Elam, 

2022- 0105 ( La.App. 1 Cir. 11/ 4/ 22), 355 So. 3d 21, 27, writ denied, 2022-01714 ( La. 

2/ 24/ 23), 356 So.3d 335. Indeed, where the factfinder's determination is based on its

decision to credit the testimony of one of two or more witnesses, that finding can virtually

never be manifestly erroneous. Id. 

In its thorough written reasons, the trial court discussed the evidence offered and

testimony presented and made several findings of fact. With regard to the permitting for

the construction project, the trial court found that the testimony established that Mr. 

Rayford obtained a building permit from the City of Bogalusa on December 28, 2006, and

obtained an expansion and extension of his permit from James Hall, the former Public

Works director for the City of Bogalusa. The trial court specifically found that " the

expansion and extension of the permit was consistent with the manner in which

A
permitting was handled by the City of Bogalusa in the years immediately after Hurricane

Katrina" and that "the three rental houses were built by Nobles under the authority of the

As to Mr. Rayford' s claim that necessary inspections were not conducted on the

construction project, the trial court found that "there was more than sufficient evidence

to find that such inspections were performed." The trial court referred to Mr. Hall' s

testimony that he was involved in the various inspections conducted on the houses that

Nobles built, including plumbing, building, and air conditioning inspections; that the bank

that financed the project also conducted its own inspections on each phase of the project; 

that Mr. Hall conducted the final inspection on the three rental houses and found no

deficiencies in the construction; that the City inspected the construction throughout the

project; and that the three houses were built in accordance with the applicable building

code. Addressing Mr. Rayford's argument that Mr. Hall was not a certified building

inspector, the trial court determined that Mr. Hall' s employment and experience satisfied

the temporary exemption in effect at the time Mr. Hall inspected the three houses

completed by Nobles at the end of February and early March of 2008.8

Mr. Rayford also asserted that there was a lapse in insurance coverage by Nobles

during the time the three houses were being built, which failed to protect his interests. 

The trial court pointed out, however, that William McGehee, a commercial insurance

broker who had insured Nobles for approximately twenty years, testified that Nobles had

no lapse in coverage for the time period at issue. The trial court specifically found the

testimony of Mr. McGehee to be credible and determined that there was no lapse in

insurance coverage for Nobles during the construction project. 

After considering the exhibits and testimony presented at trial on the issue of fraud

in the third -party demand, the trial court concluded that Mr. Rayford failed to carry his

burden of proving that Nobles made any misrepresentation or suppression of the truth

with regard to the obtaining of the building permits, with regard to the conducting of

8 Mr. Hall testified that before Hurricane Katrina, the City of Bogalusa and the Parish of Washington each

had their own separate permitting procedures; however, in July of 2008, an ordinance was passed creating

an intergovernmental agreement where the parish handled the permitting process. Certification as a

building inspector was required, but the ordinance included an exemption regarding certification for prior

inspections based on the experience of the inspector. 

N
proper inspections, or with regard to maintaining the proper insurance on the construction

project, which might have led to a breach of contract or damages. Additionally, the trial

court found that Mr. Rayford failed to show that Nobles had the intention to obtain an

unjust advantage over him or that Nobles intended for Mr. Rayford to suffer a loss or

inconvenience. To the contrary, the trial court found that Mr. Rayford and Nobles had a

long- standing business relationship on multiple construction projects. Accordingly, the

trial court found no evidence of fraud as alleged by Mr. Rayford. 9

Considering our own thorough review, we find that the trial court's factual findings

as to the issue of fraud are reasonably supported by the record. Mr. Hall, a twenty -fiveyear employee of the City of Bogalusa, confirmed the validity and applicability of the

building permit to Mr. Rayford' s construction project. The evidence also showed that

when construction on the project began, Nobles confirmed with Mr. Hall that the permit

was extended and authorized the construction of the three houses. Further, Mr. Hall

testified all scheduled inspections took place, including the final one, at which time he

found no deficiencies in the construction. Additionally, Mr. McGehee presented

uncontroverted testimony that there was never a lapse in insurance coverage by Nobles

during Mr. Rayford's construction project. 

Based on the evidence offered and testimony presented, Mr. Rayford failed to

show that Nobles misrepresented or suppressed the truth with the intention to obtain an

unjust advantage for Nobles or cause a loss or inconvenience to Mr. Rayford. Moreover, 

we will not disturb the findings of the trial court as the factfinder, who listened to the

testimony of the witnesses and has vast discretion in determining the weight and

credibility of each witness. Therefore, considering that a reasonable factual basis exists

for the trial court's determinations, we find no error in the trial court's conclusion that Mr. 

Rayford failed to present sufficient evidence to establish that any actions or failures to

act by Nobles constituted fraud as alleged by Mr. Rayford. 

After finding that Mr. Rayford failed in his burden of establishing the fraud

exception set forth in LSA- R.S. 9: 2772( H)( 1), the trial court considered the peremptory

9 The trial court also stated that it had therefore satisfied the requirements of LSA- R.S. 9: 2772( H)( 2), 

having held a separate trial on the issue of fraud. 
exceptions raising the objections of peremption and prescription filed by Nobles, stating

that this court in Whitney Bank II remanded the determination of the objections back

to the trial court. The trial court found that the construction of the three rental houses

by Nobles on behalf of Mr. Rayford was completed by late February or early March of

2008 and that Mr. Rayford did not file his third -party demand against Nobles regarding

the construction of the houses until July 14, 2016, more than eight years later. 

Peremption may be raised by a peremptory exception. See LSA- C.C. P. art. 

927(A)( 2). Peremption has been likened to the objection of prescription and the rules

governing the burden of proof as to prescription also apply to peremption. See LSA- C. C. 

art. 3459; Nixon v. Nixon, 2020-0694 ( La.App. 1 Cir. 12/ 30/ 20), 319 So. 3d 315, 318. 

At the hearing on the exception of peremption, evidence may be introduced to support

or controvert the exception. See LSA-C. C. P. art. 931. If evidence is introduced at the

hearing on the peremptory exception, the trial court's findings of fact are reviewed under

the manifest error -clearly wrong standard of review. Rando v. Anco Insulations,, Inc., 

2008- 1163 ( La. 5/ 22/ 09), 16 So.3d 1065, 1082. 

Louisiana Revised Statutes 9: 2772(A)( 1)( b) provides that no action, whether

arising in contract, tort, or otherwise, shall be brought against any person for the

construction of immovables, or improvement to immovable property, more than five years

after the owner has occupied or taken possession of the improvement, in whole or in

part. Having found the fraud exception in LSA- R.S. 9: 2772( H)( 1) inapplicable, the trial

court concluded that Mr. Rayford's third -party demand against Nobles, filed

approximately eight years after Mr. Rayford took possession of the three rental houses

and rented them out, was perempted under LSA-R.S. 9: 2772(A). The trial court sustained

the exceptions filed by Nobles in response to Mr. Rayford' s third -party demand and

dismissed with prejudice the claims of Mr. Rayford in his third -party demand against

The Louisiana Legislature enacted LSA- R.S. 9: 2772 in 1964 to protect building

contractors from liability for past construction projects that could extend for an indefinite

period of time. Whitney Bank 1, 247 So.3d at 736- 37. This statute provides that if an

acceptance of the construction or improvements is recorded within six months of

0
occupancy, the peremptive period begins on the date the acceptance is recorded; if no

is recorded within six months of occupancy, the peremptive period begins on

the date of occupancy. LSA- R.S. 9: 2772(A)( 1); Whitney an 1, 247 So. 3d at 737. 

In': this matter, no evidence was presented indicating that an acceptance of

was recorded. However, Mr. Rayford testified at the hearing that the houses

were constructed between September of 2007 and April 30, 2008. He further testified

that within a few months after completion of construction, the homes were leased and

occupied. Therefore, the testimony of Mr. Rayford established that sometime before the

end of 2008, the houses were occupied. However, Mr. Rayford' s third -party demand was

not filed until 2016, approximately eight years later. Because Mr. Rayford filed his third - 

party den

error by

objection! 

prejudice

iand more than five years after he took possession of the houses, we find no

he trial court in sustaining Nobles' peremptory exceptions, which raised the

of peremption and prescription, and dismissing Mr. Rayford' s claims with

asserted in his third -party demand against Nobles. 

CONCLUSION

For the above reasons, we affirm the February 2, 2023 judgment of the trial court

that dismissed with prejudice the claims filed by Henry Rayford in his third -party demand

against Nobles Construction, L. L.C. All costs of this appeal are assessed to Henry Rayford. 

AFFIRMED. 

10