UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA, for the
use and benefit of D'Elegance
Management Limited, Incorporated,
Plaintiff-Appellant,

v.

UNIVERSAL SURETY OF AMERICA,
                                                                       No. 99-2195
Defendant-Appellee,

and

ENVIRONMENTAL CORRECTIONS
CORPORATION, a/k/a Waste Control
Services,
Defendant.

Appeal from the United States District Court
for the Eastern District of North Carolina, at Wilmington.
James C. Fox, District Judge.
(CA-97-212-7-F)

Argued: May 3, 2000

Decided: August 29, 2000

Before WILKINSON, Chief Judge, and WILKINS and
WILLIAMS, Circuit Judges.

_________________________________________________________________

Affirmed in part, reversed in part, and remanded for futher proceed-
ings by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: Stanley Leigh Rodenbough, IV, BROOKS, PIERCE,
MCLENDON, HUMPHREY & LEONARD, Greensboro, North Car-
olina, for Appellant. Clyde Hamilton Jarrett, III, ELLZEY &
BROOKS, Raleigh, North Carolina, for Appellee. ON BRIEF: H.
Arthur Bolick, II, BROOKS, PIERCE, MCLENDON, HUMPHREY
& LEONARD, Greensboro, North Carolina; Charles D. Meier, MAR-
SHALL, WILLIAMS, GORHAM & BRAWLEY, Wilmington, North
Carolina, for Appellant. Terry L. Salazar, FORD, WHITE, WIELIN-
SKI & SALAZAR, P.C., Dallas, Texas, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

The United States, for the use and benefit of D'Elegance Manage-
ment Limited (D'Elegance),1 filed suit in the United States District
Court for the Eastern District of North Carolina against Universal
Surety of America (Universal) seeking payment from two payment
bonds issued by Universal to cover work performed by D'Elegance
on behalf of Waste Control Services (Waste Control) in Pender and
New Hanover Counties, North Carolina. The district court granted
summary judgment to Universal on the grounds that a one-year statute
of limitations barred D'Elegance's claims because the payment bonds
covered only the work that D'Elegance performed in Pender County
and D'Elegance did not file its claims within one year of the last work
_________________________________________________________________

1 D'Elegance originally asserted claims under the Miller Act, 40
U.S.C.A. §§ 270a-270d (West 1986 & Supp. 2000). Persons asserting
claims under the Miller Act must bring their claims in the name of the
United States "for the use of the person suing." 40 U.S.C.A. § 270b(b)
(West Supp. 2000).

                    2
that it performed in Pender County. The district court also ruled that
Waste Control had paid D'Elegance in full for its work in Pender
County. We conclude that the district court was correct to use extrin-
sic evidence to interpret the second of the payment bonds and to grant
summary judgment to Universal on the issues of whether the second
payment bond covered only the work performed in Pender County
and whether Waste Control paid D'Elegance in full for its work in
Pender County. We also conclude, however, that because the first of
the payment bonds unambiguously covers all work performed pursu-
ant to D'Elegance's agreement with Waste Control, and not just the
work performed in Pender County, the district court erred in granting
summary judgment to Universal as to that payment bond. We also
conclude that the district court erred in failing to grant D'Elegance's
motion for partial summary judgment as to the value of the first pay-
ment bond. We, therefore, affirm in part, reverse in part, and remand
for further proceedings consistent with this opinion.

I.

On September 18, 1996, the U.S. Army Corps of Engineers (the
Corps) awarded contract number DACW54-96-D-0049 (the Prime
Contract) to Waste Control for the removal of debris in eight counties
in North Carolina following Hurricane Fran. On September 19, 1996,
the Corps issued delivery order 0001, which was the purchase order
for Pender County. On September 23, 1996, the Corps issued delivery
order 0002, which was the purchase order for New Hanover County.2

Paragraph H.7 of the Prime Contract required Waste Control to
provide payment bond coverage for the protection of its subcontractors.3
As a result, on September 18 and 24, 1996, Waste Control executed
and delivered two payment bonds to the Corps, with Waste Control
_________________________________________________________________
2 Delivery Order 0002 also covered work in Onslow County, in addi-
tion to work in New Hanover County. It does not appear, however, that
D'Elegance performed any work in Onslow County.
3 Paragraph H.7 of the Prime Contract provides, in pertinent part, that
"[t]he Contractor must return executed performance and payment bonds
(Standard Forms 25 and 1416, Rev. 1-90, respectively) each with good
and sufficient surety or sureties acceptable to the Government." (J.A. at
88.)

                    3
as principal and Universal as surety. Both payment bonds were exe-
cuted using Standard Form 25-A, although the parties now assert that
Form 1416 was actually the form that the parties should have used.
Form 1416 contains a one-year statute of limitations for claims
brought under the bond, beginning on the last date upon which the
claimant performed the last of the work, or on the last date upon
which it furnished the last of the materials for which the suit is brought.4
Form 25-A, which is the form that the parties actually used, does not
explicitly contain a limitations period, although it does reference the
Miller Act, which has a similar one-year limitations period.5

In September 1996, D'Elegance began work as a subcontractor for
Waste Control under an oral agreement. On October 7, 1996,
D'Elegance entered into a written subcontract with Waste Control,
under which D'Elegance agreed to furnish labor and equipment for
debris removal in support of Waste Control's obligations under the
Prime Contract. The written agreement also required D'Elegance to
work at times and locations directed by Waste Control. As a result of
this agreement, D'Elegance performed work in both Pender and New
Hanover Counties.

D'Elegance invoiced Waste Control for $2,752,684 for work per-
formed under the subcontract in Pender and New Hanover counties.
Waste Control did not pay the full amount of D'Elegance's invoice,
however, allegedly leaving a balance of at least $369,623.23.
D'Elegance last performed work in New Hanover County under the
subcontract on December 12, 1996. It last performed work in Pender
County on October 28, 1996.
_________________________________________________________________
4 Form 1416 provides that "the claimant . . . may not bring a suit or any
action . . . [a]fter the expiration of one (1) year following the date on
which claimant did or performed the last of the work or labor, or fur-
nished or supplied the last of the materials for which the suit is brought."
(J.A. at 1604.)
5 Form 25-A provides that "[t]his form, for the protection of persons
supplying labor and material, is used when a payment bond is required
under the [Miller Act]." (J.A. at 130.) The Miller Act provides that "no
such suit shall be commenced after the expiration of one year after the
day on which the last of the labor was performed or material was sup-
plied by him." 40 U.S.C.A. § 270b(b) (West Supp. 2000). It is undis-
puted that the Miller Act does not apply to the present case.

                     4
On December 3, 1997, D'Elegance filed suit against Waste Control
and Universal. Before trial, the district court concluded that Universal
was bound by an earlier inadvertent admission that the payment bonds
covered all work performed under the Prime Contract. Consequently,
the case proceeded to trial only on the issue of the amount due under
the bonds. D'Elegance argued that Universal owed $462,000, while
Universal argued that D'Elegance was entitled to only $369,623.23.
During trial, however, the district court heard testimony from Alan
Dodd, a D'Elegance witness, which the district court believed was
consistent with Universal's argument that the payment bonds covered
only the work performed in Pender County.6 Although the district
court allowed the case to go to the jury, it cautioned the parties that
Dodd's testimony undermined Universal's admission, and, therefore,
that the district court was contemplating a mistrial. On August 17,
1998, the jury entered a verdict of $369,623.23 in favor of
D'Elegance.

After the jury's verdict, the district court informed the parties that
they would have ten days to agree upon a method by which to con-
duct a hearing to determine the actual scope of the work covered by
the payment bonds, and that if the parties could not agree upon a
method, the district court would declare a mistrial. On November 2,
1998, the district court declared a mistrial.7 The parties conducted fur-
ther discovery, and D'Elegance and Universal each filed cross-
motions for summary judgment. On August 5, 1999, the district court
granted Universal's motion for summary judgment and denied
_________________________________________________________________
6 Dodd, a Waste Control project manager, testified that he and Kevin
McQuain, a surety agent for Universal, had approached the Corps and
requested the Corps's consent to roll-over the initial bond amounts to
cover subsequent delivery orders. The district court believed that Dodd's
testimony supported Universal's argument that Waste Control and Uni-
versal intended that the payment bonds cover only Pender County, and
not all work covered under the Prime Contract.

7 This case had previously been consolidated with a related case at trial.
See United States for the Use and Benefit of S&D Land Clearing, Inc.
& Mike Mitchell, d/b/a Malaco v. Environmental Corrections Corp.,
a/k/a Waste Control Serv.; D'Elegance Management Ltd., Inc., and Uni-
versal Surety of America, No. 7:97-CV-49-F. After the district court
declared a mistrial, however, it deconsolidated these cases.

                    5
D'Elegance's motion for partial summary judgment. The district court
concluded that the payment bonds were ambiguous, and, after consid-
ering extrinsic evidence, held that the payment bonds covered only
the work performed in Pender County. The district court then rea-
soned that, under either Form 25-A or Form 1416, D'Elegance had to
file its claim within one year of the date that D'Elegance performed
its last work in Pender County.8 The district court concluded that
because D'Elegance filed its claim more than a year after its last work
in Pender County -- even though it performed work in New Hanover
County within a year of filing its claim -- the statute of limitations
barred D'Elegance's claim. The district court also held that Universal
had paid D'Elegance in full for all of its work in Pender County. On
August 27, 1999, D'Elegance timely filed its notice of appeal.

II.

On appeal, D'Elegance raises several issues. It argues that the pay-
ment bonds are unambiguous, and, therefore, the district court on
summary judgment should not have considered extrinsic evidence in
determining the scope of the bonds. D'Elegance also asserts that even
if the district court properly considered extrinsic evidence in deter-
mining the scope of the payment bonds, it erred in concluding that
there is no genuine issue of material fact as to the scope of the bonds.
D'Elegance also argues that even if the payment bonds covered only
work performed in Pender County, the district court erred in deter-
mining that there is no triable issue of fact as to whether Waste Con-
trol paid D'Elegance in full for its work in Pender County and that
the district court also erred in concluding that a one-year statute of
limitations barred D'Elegance's claim. Finally, D'Elegance argues
that the district court erred in failing to grant D'Elegance's motion for
partial summary judgment on the basis that Universal has not dis-
puted, and, indeed, had conceded during the initial trial, that it owed
D'Elegance at least $369,623.23 if it was deemed liable under the
payment bonds.
_________________________________________________________________
8 The district court recognized that if the payment bonds also covered
the work performed in New Hanover County, then the one-year statute
of limitations would not be relevant because D'Elegance filed its claim
within one year of its last work in New Hanover County.

                    6
To succeed on a motion for summary judgment, the moving party
must show that there is no genuine issue of material fact and that it
is entitled to judgment as a matter of law. See Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). The "mere existence of some
alleged factual dispute between the parties will not defeat an other-
wise properly supported motion for summary judgment; the require-
ment is that there be no genuine issue of material fact." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). If the moving party
has supported its motion with depositions or affidavits, then the non-
moving party cannot rely upon mere allegations in its response, and
it instead must provide specific facts demonstrating that there is a
genuine issue for trial. See id. at 250. The non-moving party cannot
manufacture a genuine issue of material fact through mere specula-
tion, or by simply building one inference upon another. See Beale v.
Hardy, 769 F.2d 213, 214 (4th Cir. 1985). We review the district
court's grant of summary judgment de novo, viewing the facts and
inferences in the light most favorable to the nonmoving party. See
Food Lion, Inc. v. S.L. Nusbaum Ins. Agency, 202 F.3d 223, 227 (4th
Cir. 2000).

III.

D'Elegance first argues that the district court erred in granting Uni-
versal's motion for summary judgment based upon its finding that the
payment bonds are ambiguous, thus requiring consideration of extrin-
sic evidence in determining the scope of the payment bonds.
D'Elegance argues that, on their faces, the payment bonds clearly
cover all work performed under the Prime Contract and there is no
indication that the bonds are limited in scope. Universal responds that
although the payment bonds list the same contract number as the
Prime Contract, the two bonds have different contract dates, including
one that has a date that corresponds to the date of the award for the
Prime Contract (the first payment bond)9 and another that has a date
_________________________________________________________________
9 The first payment bond, which was executed on September 18, 1996,
lists the contract date as "9/18/96," which is the date of the Prime Con-
tract, (J.A. at 129, 1546), and it also lists the contract number as
"DACW54-96-D-0049," which is the contract number of the Prime Con-
tract. (J.A. at 257-59, 1546.) The first payment bond has a value of
$250,000.

                    7
that corresponds to the date of delivery order 0001 (the second pay-
ment bond), which covered the work performed in Pender County.10
Universal argues that no contract date corresponds with delivery order
0002, which encompassed D'Elegance's work in New Hanover
County.

We conclude that the first payment bond is unambiguous. The first
payment bond refers to the contract number of the Prime Contract and
it also lists the contract date as September 18, 1996, which is the date
of award of the Prime Contract. There are no limitations on the face
of the first payment bond as to the scope of its coverage. The first
payment bond, therefore, unambiguously covers the Prime Contract
as a whole, and not just work performed in Pender County. Accord-
ingly, we reverse the district court's grant of summary judgment with
respect to Universal's obligations under the first payment bond.

We agree with the district court, however, that the second payment
bond is ambiguous. Although the second payment bond lists the con-
tract number of the Prime Contract, the second payment bond specifi-
cally refers to the contract date as September 19, 1996 -- the date of
delivery order 0001, which corresponds to the work performed in
Pender County. Because the second payment bond is ambiguous, the
district court did not err in considering extrinsic evidence as to that
bond. See New Hanover Rent-A-Car, Inc. v. Martinez, 525 S.E.2d
487, 490 (N.C. Ct. App. 2000) (stating that extrinsic evidence is
admissible to explain an ambiguous contract).

IV.

D'Elegance next argues that the district court erred in concluding
that there is no triable issue of fact as to the scope of the second pay-
ment bond. The district court, after considering extrinsic evidence,
_________________________________________________________________
10 The second payment bond, which was executed on September 24,
1996, lists the contract number as "DACW54-96-D-0049," which is the
contract number of the Prime Contract, (J.A. at 264, 1546), and it lists
the contract date as "9/19/96," which is the date of delivery order 0001.
(J.A. at 264, 1607.) Delivery order 0001 covers"[t]he work areas [of] all
of Pender County." (J.A. at 1607.) The second payment bond has a value
of $800,000.

                    8
concluded that the scope of the second payment bond covers only
work performed in Pender County. Viewing the facts and the infer-
ences in the light most favorable to D'Elegance, we agree with the
district court that D'Elegance has failed to raise a triable issue of fact
concerning whether the second payment bond covers work performed
in New Hanover County.

D'Elegance's most direct evidence in favor of its position is the
testimony of Shirley Lambert, a contracting officer, who, according
to D'Elegance, "testified at her deposition that the Payment Bonds
issued by Universal covered all work to be performed under the con-
tract, and was not limited to one delivery order." (Appellant's Br. at
21.) It is true that Lambert, after being shown"Exhibit Numbers 2
and 3," (J.A. at 163), testified that she understood those exhibits to
reference the Prime Contract as a whole, and that they would cover
work issued under the contract "whether one was issued or ten or
whatever number." (J.A. at 163-64.) Our review of the record, how-
ever, reveals that Exhibits 2 and 3, upon which Lambert based her tes-
timony, refer only to the first payment bond, and not the second
payment bond. Thus, although Lambert's testimony is consistent with
our conclusion above that the first payment bond covers all work per-
formed under the Prime Contract, see supra Part III, it does not
address the scope of the second payment bond.

By contrast, Shelly Bolender, who worked on Universal's behalf in
issuing the bonds, testified that she understood the scope of the bonds
to cover only Pender County. Likewise, Alan Dodd, who testified on
behalf of D'Elegance, stated that he and Kevin McQuain, a surety
agent for Universal, approached the Corps

          with the idea of rolling over the bond that we had in place
          originally to cover some of the other contract amounts, on
          the basis that at any given time, any given day, any given
          week, we would not have more tha[n] two million dollars of
          performance work going on at any one time.

(J.A. at 2084.) The district court relied upon this testimony to con-
clude that Waste Control and Universal understood that the bonds
covered only Pender County, and that it was necessary to roll over the
bond for Pender County to cover the other delivery orders. We have

                     9
no difficulty agreeing with the district court that, based upon the
extrinsic evidence in the record, D'Elegance has failed to raise a tri-
able issue of fact as to the scope of the second payment bond.11

V.

D'Elegance next argues that the district court erred in concluding
that there is no triable issue of fact as to whether Waste Control paid
D'Elegance in full for its work in Pender County. We disagree.

In support of its motion for summary judgment, Universal offered
evidence that D'Elegance regularly submitted invoices to Waste Con-
trol and that Waste Control regularly paid those invoices, although
Waste Control apparently did not specify in each case whether its
payments were for work performed in Pender County or work per-
formed in New Hanover County. Universal offered evidence that
between October 7, 1996 and October 28, 1996, the time period in
which D'Elegance was performing work in Pender County,
D'Elegance's total invoices equaled $1,685,057 and D'Elegance's
total invoices for the work it performed in Pender County totaled only
$356,092. Universal paid a total of $2,359,317.60 out of
D'Elegance's total invoices of $2,752,684 for the work that
D'Elegance performed in Pender and New Hanover Counties. Univer-
sal argues that under the "first in/first out" (FIFO) method of account-
ing, under which the first items withdrawn from an inventory are the
oldest and under which we would assume that D'Elegance credited
Waste Control's payments in the order that the work was performed,
it is clear that Waste Control paid D'Elegance in full for its work in
Pender County because "[w]hen th[e amount of total payment] is
applied to the work in the order in which it was performed, all work
performed on or before December 5, 1996 has been paid for.
D'Elegance finished work in Pender County on October 28, 1996."
_________________________________________________________________
11 Notably, the Reinsurance Agreement, which was issued to cover the
excess above Universal's Treasury Limit, refers to the second payment
bond and it specifically describes the scope of coverage as Pender
County. The reinsurance agreement lists the bond number as TX 091-
6475, which is the bond number of the second payment bond. It also lists
the bond issuance date as September 24, 1996, which is the execution
date of the second payment bond.

                     10
(J.A. at 478 (Universal's memorandum in support of summary judg-
ment, at 29).) D'Elegance responds that there is no evidence that it
used the FIFO method of accounting and that it is impossible to deter-
mine whether the payments were for Pender County or New Hanover
County because the payments were received from Waste Control
without regard to whether the payments were for work performed in
Pender County or New Hanover County.

In attempting to raise a triable issue of fact as to this issue,
D'Elegance faced an easy task; it simply had to produce an affidavit
or testimony stating that D'Elegance, in fact, does not use the FIFO
method of accounting. D'Elegance also could have produced bills or
statements or some other evidence showing that Waste Control paid
some of its New Hanover County bills before it paid all of its Pender
County bills. But D'Elegance has failed to produce this evidence.
Instead, D'Elegance has responded with arguments suggesting that it
may or may not have been paid in full for its work in Pender County,
and that it may or may not use the FIFO accounting system. This
speculation is not enough to defeat summary judgment. See Beale v.
Hardy, 769 F.2d 213, 214 (4th Cir. 1985) (stating that the non-
moving party cannot manufacture a genuine issue of material fact
through mere speculation). Although Metra Hughes, D'Elegance's
president, stated in an affidavit that Waste Control told her that it
would make only estimated payments for D'Elegance's Pender
County work until all of the records for that work could be reconciled,
Hughes's affidavit fails to articulate how much was held back or how
much Waste Control still owes, or, for that matter, whether Waste
Control subsequently reconciled the records and fully paid the Pender
County bills.12 Viewing the facts and inferences in the light most
favorable to D'Elegance, it has shown, at most, that D'Elegance is
uncertain whether Waste Control paid for all of its work in Pender Coun-
ty.13 For that reason, we agree with the district court that D'Elegance
_________________________________________________________________
12 Hughes also agreed at deposition that "D'Elegance would submit a
billing statement . . . [s]ometime thereafter it would receive a check, but
in many or all cases the check they received did not reflect all of the tick-
ets that had been billed." (J.A. at 1651.) Hughes does not, however, indi-
cate whether the unpaid tickets were from Pender County or New
Hanover County.
13 As D'Elegance correctly notes,"[t]o force a particular accounting
practice upon D'Elegance, after the fact and without either statutory or

                    11
has failed to raise a triable issue of fact to defeat summary judgment
on this issue.14

VI.

Finally, D'Elegance argues that the district court erred in failing to
grant partial summary judgment in D'Elegance's favor. We agree that
the district court erred in failing to grant D'Elegance's motion for par-
tial summary judgment as to the $250,000 value of the first payment
bond.

D'Elegance argued in its motion for partial summary judgment that
Universal owes at least $369,623.23 under the payment bonds. In
response to D'Elegance's motion for partial summary judgment, Uni-
versal made three arguments: (1) that there was a genuine issue of
material fact as to whether D'Elegance owed $108,000 to Universal
for various offsets related to costs, expenses, and damages caused by
D'Elegance; (2) that both payment bonds covered only work per-
formed in Pender County; and (3) that D'Elegance could not recover
_________________________________________________________________
contractual support, would be wholly inappropriate." (Appellant's Reply
Br. at 22.) To defeat summary judgment, however, D'Elegance only had
to produce some evidence that it did not use the FIFO accounting system,
or produce some evidence, beyond mere speculation or argument, that
Waste Control's unpaid bills related to Pender County rather than New
Hanover County. It failed to do so. Notably, D'Elegance does not argue
that it does not actually use the FIFO accounting system. It simply argues
that we cannot assume that D'Elegance uses the FIFO accounting sys-
tem. That assertion is not enough to raise a triable issue of fact.

14 D'Elegance also argues that the district court erred in concluding that
a one-year statute of limitations applies to the payment bonds because
the Miller Act applies only to construction contracts and Form 25-A does
not contain a one-year statute of limitations. In light of our agreement
with the district court that D'Elegance has failed to raise a triable issue
of fact as to whether Waste Control paid D'Elegance in full for its work
in Pender County, as well as our conclusion above that the first payment
bond covers work performed in both New Hanover County and Pender
County, see supra Part III, we need not address this argument. It is undis-
puted that D'Elegance filed its claim within a year of its last work in
New Hanover County.

                     12
under the payment bonds because Waste Control paid D'Elegance in
full for its work in Pender County and the statute of limitations barred
D'Elegance's claim as it related to Pender County. Notably, Universal
did not assert that it paid D'Elegance in full for its work in New Han-
over County or that D'Elegance was not entitled to compensation for
its work in New Hanover County. Indeed, except for the alleged
$108,000 offset, Universal has not contested D'Elegance's entitle-
ment to at least $369,623.23 for its unpaid work in New Hanover
County, at least to the extent that the payment bonds cover that work.
As noted above, we have concluded that the first payment bond cov-
ers D'Elegance's work in New Hanover County. See supra Part III.
Consequently, even if we assume that D'Elegance owes $108,000 to
Universal in offsets, it is still undisputed that Universal owes
D'Elegance the difference between the $108,000 offset and the
$369,623.23 that is otherwise not in dispute. Consequently, even if
Universal is entitled to a $108,000 offset, D'Elegance is still entitled
to at least $261,623.23 under the payment bonds. Because this
amount is more than the $250,000 value of the first payment bond,
we conclude that D'Elegance is entitled to partial summary judgment
as to the $250,000 value of the first payment bond. 15

VII.

In conclusion, the first payment bond unambiguously covers the
work performed under the Prime Contract, including the work per-
formed in New Hanover County. Thus, the district court erred in con-
sidering extrinsic evidence with respect to the first payment bond and
_________________________________________________________________
15 D'Elegance maintains that Universal is bound by its concession at
the initial trial that it owed D'Elegance at least $369,623.23 in the event
that Universal was found liable under the payment bonds. At trial, Uni-
versal argued that D'Elegance was entitled to $369,623.23 rather than the
$462,000 that Universal sought. Although the district court granted a
mistrial after the jury's verdict, D'Elegance maintains that Universal is
bound by its concession, and, therefore, that the district court should
have granted partial summary judgment in D'Elegance's favor. Universal
responds that because the district court declared a mistrial, Universal's
prior position at trial is no longer in the record. In light of our disposition
above, we need not address whether Universal's prior position is binding
as a judicial admission.

                    13
in granting Universal's motion for summary judgment with respect to
the first payment bond. We agree with the district court, however, that
the second payment bond is ambiguous and that it was appropriate for
the district court to consider extrinsic evidence as to the scope of the
second payment bond. We also agree that the district court did not err
in granting Universal's motion for summary judgment as to the sec-
ond payment bond because the second payment bond covers only the
work performed in Pender County and because D'Elegance has failed
to raise a triable issue of fact to dispute Universal's contention that
it paid D'Elegance in full for the work in Pender County. Finally, we
conclude that D'Elegance is entitled to partial summary judgment as
to the $250,000 value of the first payment bond. We, therefore, affirm
in part and reverse in part the district court's judgment below, and
remand for further proceedings consistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED FOR FURTHER PROCEEDINGS

                    14
