UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

LORD INDUSTRIES, INCORPORATED,
Plaintiff-Appellant,

and

REPUBLIC WESTERN INSURANCE
COMPANY,
Third Party Defendant-Appellant,                            No. 97-2174

v.

INSURANCE COMPANY OF NORTH
AMERICA,
Defendant & Third Party
Plaintiff-Appellee.

LORD INDUSTRIES, INCORPORATED,
Plaintiff-Appellee,

and

REPUBLIC WESTERN INSURANCE
COMPANY,
Third Party Defendant-Appellee,                             No. 97-2239

v.

INSURANCE COMPANY OF NORTH
AMERICA,
Defendant & Third Party
Plaintiff-Appellant.

Appeals from the United States District Court
for the Western District of North Carolina, at Charlotte.
Carl Horn, III, Chief Magistrate Judge.
(CA-95-200)
Argued: May 6, 1998

Decided: July 6, 1998

Before WILKINSON, Chief Judge, LUTTIG, Circuit Judge, and
BEEZER, Senior Circuit Judge of the
United States Court of Appeals for the Ninth Circuit,
sitting by designation.

_________________________________________________________________

Affirmed in part, reversed in part and remanded by unpublished per
curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Wayne Paul Huckel, KENNEDY, COVINGTON, LOB-
DELL & HICKMAN, Charlotte, North Carolina, for Appellants. Wil-
liam Eric Freeman, MOORE & VAN ALLEN, Durham, North
Carolina, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit.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

_________________________________________________________________

OPINION

PER CURIAM:

Plaintiff Lord Industries, Inc. ("Lord"), and third party defendant
Republic Western Insurance Company ("Republic") appeal the district
court's grant of summary judgment in favor of defendant and third
party plaintiff Insurance Company of North America ("INA"). INA
cross-appeals, seeking prejudgment interest pursuant to North Caro-
lina General Statutes § 24-5. We have jurisdiction pursuant to 28
U.S.C. § 1291, and we affirm in part, reverse in part and remand.

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I

In 1992 Della construction of North Carolina, Inc. ("Della"), con-
tracted to construct roads and bridges for the North Carolina Depart-
ment of Transportation ("NCDOT"). INA served as Della's
compensated surety and issued performance and payment bonds to
guarantee completion of the NCDOT construction projects. In June
1993 Della informed INA that it could not finish the physical work
or perform the administrative tasks required to complete the NCDOT
contracts. Acting as a surety, INA assumed the contractual obligations
for the NCDOT projects.

INA hired Alled Construction Company, Inc. ("Alled"), a corpora-
tion recently formed by Della's owner Steve Dellaquila, to complete
the remaining work on the NCDOT projects. By late 1993, however,
it had become clear that Alled would not be able to complete the
NCDOT projects. In January 1994, INA contracted with Lord, a cor-
poration owned by Dellaquila's wife Donna Lord Dellaquila, for the
completion of the construction on NCDOT projects 108, 117 and 118
and the administrative work on nine other NCDOT projects.

Lord's obligations to INA for these projects were established in
four separate contracts ("the Lord Agreements"). The Lord Agree-
ments incorporated Lord's unit pricing schedule and January 12,
1994, proposal for the completion of each project, which the parties
referred to as "Exhibit C." To guarantee completion of the projects,
Republic executed performance and payment bonds as Lord's surety.

During construction, a dispute arose over the meaning of several
provisions of the Lord Agreements. Lord claimed that the language
in Exhibit C required INA to pay for the actual costs incurred in com-
pleting certain contract line items, even if Della and Alled had been
fully compensated for unfinished work on those line items. INA
maintained that the contract was for a fixed price and that Lord's
compensation was limited to the sums listed in the contract. INA
refused to pay the invoices for actual costs submitted by Lord after
the completion of the NCDOT projects.

Lord filed suit in state court, alleging that INA breached the Lord
Agreements by refusing to compensate Lord for the actual costs

                    3
incurred in completing the NCDOT projects. Lord also claimed that
representations made by INA constituted fraud and violated North
Carolina's unfair and deceptive trade practices statute. INA removed
the action to federal court on the basis of diversity jurisdiction. INA
cross-claimed against Lord and filed a third party suit against Repub-
lic. Among other things, INA sought reimbursement from Republic
for Lord's failure to pay four subcontractors who recovered
$482,850.41 in claims made against INA's payment bond.

INA moved for summary judgment on all claims. The district court
held that the Lord Agreements were clear and unambiguous fixed
price contracts and that Lord was not entitled to recover actual costs.
The district court also found no support for Lord's fraud and unfair
and deceptive trade practice claims and held Lord and Republic
jointly and severally liable for the amount that subcontractors recov-
ered from INA's payment bond.

Lord timely appealed. INA cross-appealed, seeking prejudgment
interest from the date that the contract was breached.

II

We review the district court's grant of summary judgment de novo,
construing the facts in the light most favorable to the nonmoving
party. See Bullard v. Dalkon Shield Claimants Trust, 74 F.3d 531, 533
(4th Cir. 1996). Summary judgment is appropriate if the dispute does
not involve a genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. United States v. Ringley, 985
F.2d 185, 186 (4th Cir. 1993).

III

Lord argues that the district court erred in holding that the Lord
Agreements constituted clear and unambiguous fixed price contracts.
Lord also contends that summary judgment was improper because the
Lord Agreements are reasonably susceptible to more than one rational
interpretation. See Glover v. First Union National Bank of North
Carolina, 428 S.E.2d 206, 209 (N.C. Ct. App. 1993).

                    4
In construing a contract, our primary goal is "to ascertain the inten-
tion of the parties." See id. We consider the language of the entire
contract, see Yates v. Brown, 170 S.E.2d 477, 481 (N.C. 1969), as
well as the language of all documents expressly incorporated into the
contract, see Martin County v. R.K. Stewart & Son, Inc., 306 S.E.2d
118, 119 (N.C. Ct. App. 1983). Where contractual language is clear
and unambiguous, we interpret the contract as a matter of law. See
Runyon v. Paley, 416 S.E.2d 177, 186 (N.C. 1992).

Lord argues that the language of Exhibit C entitled Lord to recover
the actual costs incurred in completing the NCDOT projects. In perti-
nent part, page 3 of Exhibit C provides:

          INA shall pay Lord Industries the total sum of $1,181,500
          subject to adjustments as to the actual work performed in
          accordance with the actual Quantities and Unit Prices, and
          also subject to additions and deletions of Work Items and
          Supplemental Agreements, as made necessary by NCDOT,
          as well as any other Work Items deemed necessary by
          NCDOT for the completion of the Work.

Lord maintains that the phrase "any other Work Items deemed neces-
sary by NCDOT for the completion of the Work" was intended to
include the actual costs of completing contract line items for which
Della and Alled had already received full compensation even though
the work had not been completed.

Lord's proposed interpretation of this language cannot be recon-
ciled with the other provisions of the Lord Agreements. Each of the
four agreements contains an article titled "Fixed Price" that estab-
lishes Lord's compensation. The contract for the completion of the
administrative work on nine NCDOT projects states that "INA agrees
to pay Lord the sum of $57,098.12 as compensation for the services
of Lord." The three contracts for the completion of physical work on
NCDOT projects 108, 117 and 118 provide that the"`Fixed Price'
shall consist of: The amount set forth in Exhibit C . . . plus that
amount specified in any Change Orders initiated by[NCDOT] or
Lord." Page 5 of Exhibit C lists the fixed prices for each contract as
follows:

                    5
          CONTRACT #1 (administrative work) $ 57,098.12
          CONTRACT #2 (Project # 108) $711,000.00
          CONTRACT #3 (Project # 117) $320,306.18
          CONTRACT #4 (Project # 118) $ 93,095.70
          TOTAL FOR LORD AGREEMENTS $1,181,500.00

Page 5 of Exhibit C clearly establishes the sum $1,181,500.00 as the
total fixed price of the Lord Agreements. This figure is also given in
paragraph on Page 3 of Exhibit C on which Lord relies. None of the
"Fixed Price" articles authorizes Lord to recover actual costs in addi-
tion to the fixed price of the contract.

The Termination and Requisition provisions confirm that the Lord
Agreements were unambiguous fixed price contracts. The Termina-
tion provisions of the Lord Agreements provide that"INA shall reim-
burse Lord for any unpaid Fixed Price due Lord" if INA elects to
terminate the contracts. The Termination provisions do not authorize
recovery of actual costs incurred by Lord in the event of termination.

Moreover, the Requisition provisions of the Lord Agreements
clearly limit Lord's compensation to the amount of revenue that INA
receives from NCDOT. The three contracts requiring the completion
of construction work on NCDOT projects 108, 117 and 118 provide
that "INA will adjust payment to Lord, either upward or downward,
to ensure that payments to Lord for work performed are in the same
amount, and percentages, as payment from [NCDOT] to INA." These
provision do not authorize Lord to recover additional costs incurred
while completing the NCDOT projects.

It is clear from the Fixed Price, Termination and Requisition provi-
sions of the Lord Agreements that the parties entered into contracts
for a fixed price. The phrase "any other Work Items deemed neces-
sary by NCDOT for the completion of the Work" in Exhibit C fails
to transform these unambiguous contracts into obligations for addi-
tional costs. Instead, the quoted language merely accounts for addi-
tional line items not covered by the Lord Agreements. The district
court correctly determined that the Lord Agreements constituted clear
and unambiguous fixed price contracts.

                    6
IV

Lord argues that the district court erred in granting summary judg-
ment on Lord's claim for fraud. To demonstrate fraud under North
Carolina law, a plaintiff must show (1) a false representation, (2) rea-
sonably calculated to deceive, (3) made with intent to deceive, (4)
which does in fact deceive,(5) and results in damages. See Myers &
Chapman, Inc. v. Thomas G. Evans, Inc., 374 S.E.2d 385, 391 (N.C.
1988) (quoting Ragsdale v. Kennedy, 209 S.E.2d 494, 500 (N.C.
1974)). The Federal Rules of Civil Procedure require that allegations
of fraud be stated with particularity. Fed. R. Civ. P. 9(b). North Caro-
lina law similarly recognizes that "[m]ere generalities and conclusory
allegations of fraud will not suffice" to state a claim. Moore v.
Wachovia Bank & Trust Co., 226 S.E.2d 833, 835 (N.C. Ct. App.
1976).

Lord alleges that INA committed fraud by removing a page from
Exhibit C and substituting a different page after Donna Lord Del-
laquila had signed the Lord Agreements. Even if the contract was
altered, however, Lord does not claim that it was deceived by the sub-
stitution. Cf. McGahren v. Saenger, 456 S.E.2d 852, 855 (N.C. Ct.
App. 1995). Moreover, INA has never attempted to rely on the provi-
sions of the substituted page in construing the contract. Instead, INA
acknowledges that all of Exhibit C, including the removed page, was
expressly incorporated into the Lord Agreements. Finally, Lord has
not alleged that it was damaged by the substitution.

Lord also claims that INA committed fraud by promising to pay
Lord's actual construction costs. Lord does not identify any specific
misrepresentations made by INA or a particular time and place where
such misrepresentations were made. See Claggett v. Wake Forest
University, 486 S.E.2d 443, 447 (N.C. Ct. App. 1997); Trull v. Cen-
tral Carolina Bank & Trust Co., 450 S.E.2d 542, 545 (N.C. Ct. App.
1994). Moreover, because the contracts unambiguously limited
Lord's compensation to the fixed price in Exhibit C, reliance on con-
trary statements or actions by INA's agents was not justified. See
Helms v. Holland, 478 S.E.2d 513, 517 (N.C. Ct. App. 1996)
("Justifiable reliance is an essential element of. . . fraud."). Finally,
Lord has not shown that any statements by INA's agents were made
with intent to deceive. See Strum v. Exxon Co. , 15 F.3d 327, 331 (4th

                    7
Cir. 1994); see also Claggett, 486 S.E.2d at 447. Under these circum-
stances, Lord's mere allegations of fraud are insufficient to withstand
a motion for summary judgment.

V

Lord contends that the district court erred in granting INA's motion
for summary judgment on Lord's unfair and deceptive trade practices
claim. North Carolina General Statutes § 75-1.1 prohibits "unfair or
deceptive acts or practices in or affecting commerce." To prevail
under § 75-1.1, Lord must show "(1) an unfair or deceptive act or
practice, . . . (2) in or affecting commerce, (3) which proximately
caused actual injury." Spartan Leasing, Inc. v. Pollard, 400 S.E.2d
476, 482 (N.C. Ct. App. 1991). Under North Carolina law, a practice
is unfair "if it offends the established public policy as well as when
the practice is immoral, unethical, oppressive, unscrupulous, or sub-
stantially injurious to consumers." Jennings Glass Co., Inc. v.
Brummer, 362 S.E.2d 578, 584 (N.C. Ct. App. 1987). The concept of
unfairness also "includes the concept of `deception.'" Id. Section 75-
1.1 cannot be used "to reform or avoid what [plaintiffs] consider a bad
contract," however. Pappas v. NCNB National Bank of North
Carolina, 653 F. Supp. 699, 707 (M.D.N.C. 1987); see also United
Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d 985, 992 (4th Cir.
1981).

Lord alleges that INA engaged in unfair and deceptive trade prac-
tices by removing a page from Exhibit C of the Lord Agreements
after Donna Lord Dellaquila had already signed the contracts and by
promising to pay the actual costs of completing the NCDOT projects.
As discussed above, Lord was not deceived by the removal or substi-
tution of a page in Exhibit C. Moreover, the Lord Agreements clearly
limited Lord's compensation to the fixed price contained in Exhibit
C. In light of these facts, Lord has not explained how INA's actions
were deceptive, immoral, unethical, oppressive, unscrupulous, injuri-
ous to consumers or violative of public policy. The district court cor-
rectly granted summary judgment on this issue.

VI

Lord and Republic contend that the district court erred in granting
summary judgment on INA's counterclaim for reimbursement of

                    8
amounts paid to subcontractors. Lord and Republic waived this argu-
ment by failing to raise it in the district court. See Karpel v. Inova
Health System Services, 134 F.3d 1222, 1227 (4th Cir. 1998). Also,
throughout the course of this litigation, Lord and Republic have
repeatedly admitted that INA was entitled to prevail on this issue. The
summary judgment order which was entered on INA's counterclaim
was proper.

VII

In the cross-appeal, INA argues that the district court erred by fail-
ing to award prejudgment interest on INA's counterclaim from the
date that the contract was breached. North Carolina General Statutes
§ 24-5 unambiguously provides that the amount awarded for a breach
of contract "bears interest from the date of the breach." N.C. Gen.
Stat. § 24-5 (1997); see also Noland Co., Inc. v. Poovey, 295 S.E.2d
238, 239 (N.C. Ct. App. 1982). We reverse the district court's denial
of prejudgment interest on INA's counterclaim because the statute is
mandatory. We remand for the calculation of interest.

The judgment of the district court is

AFFIRMED IN PART, REVERSED IN PART AND REMANDED .

                    9
