### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-50675 Summary Calendar

HYDE & HYDE, INCORPORATED; TIMOTHY HYDE, Plaintiffs–Appellants
v. MOUNT FRANKLIN FOODS, L.L.C.; SUNRISE CANDY, L.L.C.; ELAMEX USA CORPORATION, Defendants–Appellees

Appeal from the United States District Court for the Western District of Texas USDC No. 3:11-cv-00008-FM

Before SMITH, PRADO, and HIGGINSON, Circuit Judges. PER CURIAM: * This case centers on a dispute over p a ckaging equipment that Appellants leased and subsequently t ransferred to a third party. The equipment w as then re-transferred multiple times befor e being r e turned y ears l ater. Appellants brought suit alleging, inter alia , conversi o n
. T h e d i s trict court granted summary judgment against A ppellants, who now appeal. For the reasons discussed below, U n i t e d S t a te s C o u r t o f A p p e al s

F i f t h C i rc u i t 

### F I L E D April 15, 2013 Ly l e W . Cay ce Clerk

* Purs uant to 5 T H C I R

. R. 47. 5, the court has determ ined that this op inion s hould not be p ublis hed and is not p reced ent excep t und er the lim ited circum s tances s et forth in 5 T H C I R

. R. 47. 5. 4. Case: 12-50675 Document: 00512208719 Page: 1 Date Filed: 04/15/2013No. 12-50675

we deny Appellants’ motion to expand the record and affirm the district court’s summary judgment determination. I The facts of this case are mostly u n disputed. In 2002, General Electric Capital ( “GE Capital”), the original owner of the packaging e quipment a t issue, leased the equipment to Hyde & Hyde, Inc., with Timothy Hyde (collectivel y “Appellants”) personally guaranteeing the lease. In 20 0 5 , w i t h GE Capital’s consent, Appellants transfer r e d t heir interest i n the lease to Sweet Ventures, LLC (“Sweet Ventures”), while still remaining liable to GE Cap i t a l f or any underlying breach of t he lease agreement. In 2007, Sweet Ventures reorganized

as Simply Goodies, LLP (“Simply Goodies”) and took possession of the packaging equi p m e n t without the a pproval of GE Capital o r Appellants. Bridge Finance G r o u p (“Bridge”) financed the reorganization and took a security i nterest in Simply Goodies’ assets. When Simply Goodies b r e a c h e d i t s obligations to Bridge, Bridge foreclosed

on Simply Goodies’ assets. Bridge sold Simply G o o d i e s’ assets to a separate
company, Sunrise, and directed Simply Goodies to d eliver its a ssets to Sunrise. Simply G oodies included GE Capital’s equipment in its asset d elivery, and Sunrise took possessi o n o f i t. There r emains a dispute whether Sunrise knew it was taking possession of property subject to Appellants’ l ease, b ut the dispute is immaterial t o the issues p resented here. After Sunrise t o ok possession of the equipment, the equipment was transferred to Mexico. In 2009, GE Capital brought a suit for default and b reach of contract against Appellants, Sweet Ventures, and Sunrise, among others. I n December 2010, G E Capital and A ppellants entered i nto a set t l e m e n t a greement (“2010 settlement”) to resolve the case. T he 2010 settlement included a quitclaim deed to the equipment and assigned to Appellants “ a l l of [GE C apital’s] rights and interests, if any, in the Equipment.”

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Appellants thereafter filed suit, alleging c onversion and fraud against Appellees. As part of t heir case-in-chief, A p p e l l a n t s o ffered a d o cument intended to clarify the s cope of the 2010 s e ttlement. The parties cross-moved for

su m m a r y j udgment, and t he district court granted summary j udgment in A p p ellees’ favor. Appellants filed a timely appeal and moved to expand t he record on appeal t o include yet another supplement to the 2 010 settlement. This second d ocument purports to amend the 2 0 1 0 s e t tlement, whereas the first document merely s ought to clarify the settlement. T his opinion addresses both Appellants’ motion to expand the record and the merits of the appeal. II The district court entered final judgment on April 30, 2012 and denied Appellants’ motion for reconsideration on June 4, 2012. A p p e llants f iled their notice of appeal on July 5, 2 012. Therefore, we have jurisd i c t i o n p ursuant to 28 U.S.C. § 1291. III In addition t o appealing the district court’s grant of summary judgment, Appell a nts h ave m oved to expand the r e cord o n appeal t o include a new agreeme n t b etween A ppellants a nd GE Capital that a ttempts to resolve the shortcomings in the 2 010 s ettlement identified by the district court. Unlike Appellants’ prior attempt, which was s t y l e d a s a mere clarification, this document purp o rts to amend the 2010 settlement to specifically i nclude an assignment of c laims. The amendment was e xecuted after the d i strict court granted summary j udgment and after the d i s t r ict court d e nied Appellants’ motion for reconsideration. 1 A s such, the amendment did not constitute a part of the record o n appeal. I t does, however, constitute part of A p p ellants’ case-in1 In f act, the am end ment w as executed the s am e d ay as the d is trict court’s d enial of the
m otion f or recons id eration. 3 Case: 12-50675 Document: 00512208719 Page: 3 Date Filed: 04/15/2013No. 12-50675

chief in a second, separate lawsuit undertaken in part to re-litigate i s sues raised before the district court. Rule 10(e ) ( 2 ) ( C ) o f the Federal Rules of Appellate Procedure allows the Court to supplement t he record on appeal “[i]f a nything m aterial to either party is o mitted from or misstated in t he record by error or accident[.]” Fed. R. App. P. 10(e)(2)(C). The courts of appeal rarely exercise this a u t h o r i t y , and the determ ination to d o so is made on a c ase-by-case basis. See Dickerson v. Alabama , 667 F.2d 1364, 1367 (11th Cir. 1982). Attempts to supplement the record with new evidence that was n ot before the d istrict court and that is part of a related, pending c ase are especi a l l y disfavored. Karaha Bodas Co. v. Perusahaan Perambangan Minyak Dan Gas Bumi Negara , No. 02-20042, 2003 WL 21027134, at *3 (5th Cir. Mar. 5, 2003) (per curiam) (unpublished); Kemlon Prods & Dev. Co. v. United States , 646 F.2d 223, 224 (5th Cir. 1981). We deny Appellan t s ’ m o t i o n b e c a u s e the d ocument offered was not omitted from the record by error or accident, as Rule 10(e)(2) r e quires. The amendment

was e xecuted a fter the district court issued its final de t e r m i n a t ion, and it amounts to a new factual basis for pursuing a claim already d ecid e d b y t he district court b ased on the record then before it. Moreover, this document is part of the record in a related, pending case. The Court of Appeals is not the venue for instituting parallel proceedings o r attempting to re-litigate claims b ased on a newly-executed agreement. Therefore, Appellants’ motion is denied. IV “W e r e v i e w a grant o f summary judgment de novo, applying the same standard as the district c ourt.” N ickell v. Beau View of Biloxi, L.L.C. , 636 F.3d 752, 754 (5th Cir. 2011). Summary judgment is proper only where “there is no genuine dispute as t o any material fact and t he movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A dispute is genuine if the summary judgment evidence i s such that a reasonable jury could return a verdict for the

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n o n-movant. Anderson v
. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). Here, Appellants challenge the district court’s grant of s u m m a ry judgment in Appellee’s favor on their conversion claim. This argument takes two forms: first, Appellants argue t hat t hey presented a triable c onversion claim on t h e basis of the assignment of rights received from GE Capital in the 2010 settlement; and second, Appellants clai m that they presented a t riable c o nversion claim regardless of whether the 2 010 settlement assigned GE Capital’s cause of action. To facilitate our analysis, we address Appellants’ claims in reverse order. A Under Texas law, 2 a conversion is t he “unauthorized and w rong f ul assumption and e xercise of dominion and control over t he personal p roperty of another, to the exclusion of or inconsistent with the owner’s r ights[.]” Waisath

v. L ack’s Stores, Inc. , 474 S.W.2d 444, 447 (Tex. 1971). “The plaintiff must prove that: ( 1) he legally possessed the property or was entitled to i t; (2) t h e defendant wrongfully exercised dominion and control o ver the p roperty, excluding the plaintiff; (3) the plaintiff demanded the property’s return; and (4) t h e defendant refused.” Arthur W. Tifford, PA v. Tandem E nergy Corp. , 5 62 F .3d 699, 705 (5th Cir. 2 009) (citing Small v. Small , 216 S.W.3d 872, 877 (Tex. App.—Beaumont 2007, pet. denied)). Regarding the first prong, in order to recover o n a theory of conversion, at the time of the c onversion, “one must

. . . e i t h e r h a v e some character o f ownership interest in the specific property converted or be in legal

2 Accord ing to Eri e R. Co. v
. Tom p ki ns , 304 U

. S. 64 ( 1938) , w e m us t ap p ly the
s ubs tantive law of the f orum state— includ ing choice- of

- law rules , w hich m ay d ictate ap p lying another s tate’s law s
. A rthur W. Ti f f ord, P A v
. Ta ndem Energy Corp

. , 562 F. 3d 699, 705 n. 2 ( 5th Cir. 2009)

. For convers ion, the p arties agree that Texas law ap p lies , and Texas ind eed has the m os t s ignif

icant relations hip to the conv e r s i o n a l l eged s ince the cond uct giving ris e to Ap p ellants ’ claim took p lace in T exas
. C f

. Torri ngton Co. v
. Stutz m a n , 46 S. W. 3d 829, 848 ( Tex. 2000) (hold ing that T exas us es the m os t s ignif icant relations hip tes t to decid e choice- of

law is s ues )

. Theref

ore, w e ap p ly the law of T exas to Ap p ellants ’ convers ion claim

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possession of it or then entitled to i ts p o ssession.” Mack v. N e w ton , 737 F.2d 1343, 1355 (5th Cir. 1984). Here, A ppellants c annot maintain an outright conversion claim because they fail the f

irst element o f conversion: possession or the right to it. Appellants

c a n not satisfy t he first prong of the conversion test because, at the r el e v a n t times—namely, when Simply Goodies wrongly delivered the equipment to S u n r i s e and when the equipme n t w a s t h e r e a f t e r t r a n s f

e r r e d t o Mexico—Appellants had already surrendered b oth actual possession and their right to p ossession. They did so through the transfer of their l ea s e t o S weet Ventures i n 2005. T he transfer o f interest to Sweet Ventures meant that Appellants n o l onger h ad a ctual posse s s i o n of the equipment o r the right to possess it when subsequent transfers were made in 2007 and 2008. In their brief, Appellants make no effort to dispute this una v oidable conclusion. Instead, their brief focuses on inapposite statements of l a w a n d intimations regarding what the district court did and did not d etermine. 3 Since transferring their interest in the lease transferred actual possession and the legal right to p ossess the packaging equipment, Appellants did not a ccrue an

o u t r i g h t c o n version claim w hen the equipment was subsequently re-transferr e d

. There being no dispute of material fact, Appellees are entitled t o j udgment as a matter of law o n Appellants’ outright conversion claim. See Fed. R. Civ. P. 56(a).

3 For ins tance, Ap p ellants ins inuate that the d is trict court held that c o n v e r s i on only
occurs through a tak ing, rather than includ ing ins tances of wrongf ul p os s es sion. The d is trict court m ad e no s uch p ronouncem ent. Ap p ellants als o vaguely sugges t that the d is trict court incorrectly s tated that only one act of convers ion occurred

. This is als o not the cas e. See H yde & Hyde, Inc. v
. M

ount F ra nkl i n Food, LLC , N o. EP–11–CA–08–FM , 2012 WL 7062626, at *4 ( W. D. Tex. Ap r. 30, 2012) ( “[ Ap p ellants ] contend that the convers ion occ u r r e d w h e n Sim p ly G ood ies w rongly d elivered the equip m ent to d ef end ant Sunris e and w hen the equip m ent w as s ubs equently trans f

erred to M exico. ” ( em p has is ad d ed ) )

.

6 Case: 12-50675 Document: 00512208719 Page: 6 Date Filed: 04/15/2013No. 12-50675 B Since Appellants did not have actual possession or the right to possession at the time Simply Goodies deliver e d t he equipment to Sunrise or when the equipmen t w a s t hen transferred to Mexico, their conversion claim can only survive summary judgment if they acquired GE Capital’s conversion claim when the t wo companies executed the 2010 s ettlement, since GE Capital owned t h e equipment when Simply G oodies wrongly delivered it to Sunrise and when the equipment was then m oved to Mexico. While the parties’ arguments before the district court relied on Texas law regarding assignment of claims, the district court ultimately a nalyzed Appellants’ assignment claim u nder Connecticut law since t h e 2010 settlement contained a choice-of-law provision stating that Connecticut law would control the agreement. In Texas, under the c oncept of “party autonomy,” the Court “respect[s] the parties’ choice of law unless the chosen law has n o relation to t he parties or the agreement, o r their choice would offend the public policy of the state whose laws otherwise ought t o apply.” Salazar v. Coastal Corp. , 928 S.W.2d 162, 166 (Tex. App.—Houston [14th Dist.] 1996, n o w r i t). G E C apital’s headquarters are located i n Norwalk, Connectic u t , thus the chosen law has a r elation to the parties. Because this choice of law d oes not offend the public policies of Texas, 4

we turn to Connecticut law in deciding whether the 2 010 s ettlement assigned to Appellants GE Capital’s conversion cause of action. As the district court correctly noted, this question involves t wo inquiries: first, whether Connecticut law permi t s the assignment of a c onversion claim; and second, if s o , whether the 2010 settlement agreement b etween Appellants

4 Although not w ithout lim it, “Texas law favors f ree as s ignm ent of claim s
. Ind eed , f or over 100 y ears the Texas Legis lature has exp res s ly recognized that the s ale of claim s in Texas is p erm is s ible. ” Ma l l i os v. Ba ker , 11 S. W. 3d 157, 172 ( Tex. 2000) ( Enoch, J. , concurring) ( em p has is om itted )

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and G E Capital e ffected such a transfer. An assignment is a contract between the assignor and assignee that is interpreted according to the rules of contract construction. Schoonmaker v. Lawrence B runoli, Inc. , 828 A .2d 64, 79 (Conn. 2003). Connecticut allows the assignment of c a uses of a ction , s e e C onn. Gen. Stat

. § 5 2–118, 5 b ut only within the limits of p u blic policy, see Gurski v. Rosenblum & Filan, LLC , 885 A.2d 164, 167–71 (Conn. 2005). In any event, the parties must intend to assign the cause of action, and the assignment “must be described with such particularity a s to render it capable of i dentif i c a t i on.” Dysart Corp. v. Seaboard Sur. Co. , 688 A.2d 306, 310 (Conn. 1997). While Connectic u t b r oadly permits the assignment of contract rights, Connecticut courts closely s crutinize the a ttempted assignment of t ort claims. Gurski , 885 A.2d at 167–68. The r eluctance to p ermit the assignment of tort claims st e m s from well-settled common-law precedent as well as public policy

concerns. Id. at 168; D odd v. Middlesex Mut. Assurance Co. , 698 A.2d 859, 864 (Conn. 1997). Th e s e concerns include discouraging “ unscrupulous interlopers and litigious persons
. . . f r om purchasing claims f or pain and suffering and prosecuting them in court a s assignees[,]” a s well a s the “too personal

. . . nature” o f claims f

or i njuries sustained by deceased plaintiffs. Dodd , 698 A.2d at 864. However, these p ublic policy concerns are not implicated by the assignment of tort claims involving property instead of people. When a t o r t is committed against a person, t h e i n jury is f ixed t o that individual; when a tort involving p roperty occurs, the harm is c l aimed by w h o ever owns or has the right to the property at issue. This position finds support in C onnecticut S upreme

5 Section 52–118 p rovid es in f ull: “The as s ignee and equitable and bona fid e ow ner of any chos e in action, not negotiable, m ay s ue thereon in his ow n nam e. Such a p laintif f s hall
a l l e ge in his com p laint that he is the actual bona fid e ow ner of the chos e in action, a n d s e t f orth w hen and how he acquired title. ” 8 Case: 12-50675 Document: 00512208719 Page: 8 Date Filed: 04/15/2013No. 12-50675

Court precedent. In Dodd , the Connecticut Supreme Cou r t e n dorsed a Restatement p rovision t h at carves a specific exception for the a ssignment of tort claims involving property. The C onnect icut Supreme Court cited the Restatement for the proposition that, “[a]n assignment of a claim against a third
person
. . . is illegal and ineffective if the claim is for

. . . d amages for an injury the gist o f which i s to the person rather than to proper t y
. . . . ” Restatement (First) of Contracts § 547 ( 1 9 3 2 ) (quoted in Dodd , 6 98 A.2d a t 8 64) (emphasis added). This provision explicitly states that the broad proh i b i t i o n on assignment

o f tort claims is specific to personal injury t o rts, rather than torts involvi n g property. On this basis, we c onclude t hat Connecticut law per m i t s t h e assignment of c onversion claims. We now t u r n to whether GE Capital in fact assigned its conversion claim to Appellants. Connecticut case law makes clea r t h a t a n a s s i g n m e nt—whether o f a thing, debt, o r cause of action—“must be described with such particularity as to render it capable of identification.” Schoonmaker , 828 A.2d a t 7 9. O n t his basis alone, it w ould seem that Appellants’ 2010 settlement with GE Capital did not convey GE Capital’s conversion claim. The agreement itself makes no reference at all to c o nveying GE C apital’s claims. Admittedly, as Appellants point out, the agreement uses broad langua g e , referring to “all” of GE Capital’s rights and interests in the equipment. C onnecticut l aw, however, requires more. It is not enough t hat the lan g u a g e of an assignment conceptually encompass whatever

c l a i m i s at issue. Rather, Connecticut law requires s pecificity. B r o a d pronouncements d o not describe the assignment of claims “with such particularity as to render [them] capable of identification.” Schoonmaker , 828 A.2d at 79. Moreover, two 19th-century Connecticut cases discussed by the district

c o u r t and the parties suggest that a ssignments of claims require specific, identifiable references to the claims b e ing a ssigned. The first case, W hitaker v.
9 Case: 12-50675 Document: 00512208719 Page: 9 Date Filed: 04/15/2013No. 12-50675

Gavit , 18 Conn. 522 (1847), involved a claim for damage to a p ropeller o wned by

an i nsolvent individual. T he o wner of the property assigned property and rights for the benefit of his creditors, but the owner’s claim regarding the propeller was deemed not assigned because it was e rroneously left out of t h e assignment. Wh i t a k e r , 18 Conn. at 526 (Since the assignment did not, “by any general or parti c u l a r d e s criptive language, includ[e] this claim

. . . [the c laim w as] not assigned

. . . The court c a n n o t make an a ssignment for [a party], whether the omission is attributable to design or mistake.”). As the Supreme Court of Errors of Connecticut—the p recursor t o the C o n n ecticut Supreme Court—held, the claim was entirely assignable, b u t t h e failure t o specifically i nclude it in the assignment proved fatal: “[T]his claim might have been assigned, had it been specific in the agreement.” I d

. Tort c laims involving property can be assigned, but only if “specified in the agreement.” Id. at 526. The second case, H

artford & Salisbury Ore Co. v
. Mill e r , 4 1 Conn. 112 (1874), involved a quitclaim conveyance of l a nd and the attempt to a ssign a

cause of action related t o the land. In that case, the court held that quitclaim deeds are capable of a s s igning claims, but only if the claim is specifically described. Miller , 41 C onn. at 129 (“[The landowner] conveyed t h e l a n d b y a quitclaim d e ed in the ordinary form, but h e did not a ssign or a ttempt to assign

a chose in action. H ad h e done so,
. . . [the plaintiffs] claim in t his respect might h a v e b e e n s u s t a ined.”). While Appellants spend many pages recounting t h e f a c t s of Whitaker and M

iller , they do not refute the b lack letter law described therein. Under Connecticut law, an assignment o f a cause of action can only be perfected if the cause of action is described with s pecificity. Schoonmaker , 828 A.2d at 79. Having failed to do so in their 2010 settlement, Appellants did not acquire GE Capital’s conversion c laim. 6 There being no dispute of m aterial fact, A ppellees

6 In ad d ition to the am end m ent p rof f ered in an attem pt to overco m e s um m ary jud gm ent, see sup ra Part I II, Ap p ellants of f e r e d a s ep arate d ocum ent to the dis trict court 10 Case: 12-50675 Document: 00512208719 Page: 10 Date Filed: 04/15/2013No. 12-50675

are entitled t o judgment as a matter of law. Fed. R. Civ. P. 56(a). The district court correctly granted summary judgment, and we affirm. V For the r easons d iscussed abov e , w e h o ld that no genuine d ispute of material fact exists and Appellees are entitled to judgment as a matter of law. Fed. R. Civ. P

. 56(a). W e also hold that expansion of the record on appeal is not warranted given the facts. F ed. R. App. P

. 10(e)(2)(C)

. T h e r e f o r e, we DENY Appellants’ motion t o expand the record and AFFIRM the district court’s grant of summary judgment. 7

intend ed to “clarif

y” the term s of the 2010 s ettlem ent. We hold , as the d is trict court d id , that this s ep arate docum ent has no bearing on our interp retation of the 2010 settlem ent. Firs t, the 2010 s ettlem ent contains a m erger claus e; and Connecticut law obs erves the “general rule of contract law ” that m erger claus es lik ely s ignif y the com p lete integration of a c ontract. Ta l lm a dge Bros. , I

nc. v
. Iroquoi s G a s T

r a n s m i s s i on S

ys. , L. P. , 746 A. 2d 1277, 1291 ( Conn. 2000)

. Second , none of the excep tions to the bar of parol evid ence ap p ly: the p arties had equal bargaining p ow er, the s ettlem ent ap p ears ad equately negotiated , no allegations of f raud exis t, and the s ettlem en t i s unam biguous

. See A l stom P ow er, Inc. v
. Ba l cke–D urr, Inc. , 849 A. 2d 804, 811 ( Conn. 2004) ; Ta l lm adge Bros. , 746 A. 2d a t 1 2 9 1 –92. Theref ore, our s um m ary jud gm ent d eterm ination is res tricted to the term s of the 2010 s ettlem ent.

7 Becaus e we deny Ap p ellants ’ m otio n t o exp and the record , w e D EN Y Ap p ellees ’
m otion to s trik e a p ortion of Ap p ellants ’ rep ly brief as moot. 11 Case: 12-50675 Document: 00512208719 Page: 11 Date Filed: 04/15/2013