Jerry Grisaffi v. Rocky Mountain High Brands, Inc. F/K/A Republic of Texas Brands, Inc., 05-18-01020-CV

Jerry Grisaffi, a former officer/director of Rocky Mountain High Brands, caused issuance of 10,000,000 shares of Series A Preferred Stock to Hilltop Trust (for his children), later had 1,000,000 reissued to himself and sold that 1,000,000 to LSW for $3.5 million. Issuances and agreements were made without full board approval in violation of bylaws.
Grisaffi also directed below‑market issuances of common stock to associates (Radcliffe group), issued 11,000,000 shares to Epic and 10,000,000 to Lily Li allegedly for fundraising that did not occur, and caused two convertible promissory notes to be issued to himself without authority.
Rocky Mountain sued Grisaffi (and others) for breach of fiduciary duty, conversion, and fraudulent conveyance; Grisaffi counterclaimed on promissory notes and an indemnity/release agreement.
After discovery abuses, the trial court struck Grisaffi’s pleadings, entered a default judgment as a death‑penalty sanction, voided the Series A issuance ab initio, declared several instruments void, found Grisaffi committed breaches, and awarded Rocky Mountain $3.5 million.
Grisaffi appealed, challenging the judgment as an impermissible double recovery (one‑satisfaction rule) and as not conforming to the pleadings under Tex. R. Civ. P. 301. The court reversed in part and remanded.

Issue	Plaintiff's Argument (Rocky Mountain)	Defendant's Argument (Grisaffi)	Held
Whether awarding declaratory relief voiding the Series A issuance plus $3.5M monetary award produces an impermissible double recovery under the one‑satisfaction rule	The declaratory relief does not alone make Rocky Mountain whole as to the world; monetary award and declaration address different harms and may reflect independent wrongs	Both remedies compensate for the same injury (wrongful issuance/conversion of Series A shares); awarding both is a double recovery	Court held judgment violated the one‑satisfaction rule; remanded for election between $3.5M or declaratory relief voiding the shares
Whether Grisaffi failed to preserve the one‑satisfaction/double‑recovery argument by not raising it below	Issue was waived because not raised in trial court	Argument can be resolved as a matter of law on appeal and need not have been presented below	Court held the issue need not be preserved because it presents a legal question resolvable on appeal
Whether the default judgment failed to conform to pleadings under Tex. R. Civ. P. 301	Rocky Mountain contends pleadings supported relief granted	Grisaffi argued judgment did not conform to pleadings	Court did not reach Rule 301 argument because resolution on the one‑satisfaction rule made it unnecessary

Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (articulating the one‑satisfaction rule and that only one recovery is allowed for one injury)
Emerson Elec. Co. v. Am. Permanent Ware Co., 201 S.W.3d 301 (Tex. App.—Dallas 2006, no pet.) (one‑satisfaction rule focuses on the injury, not the theory)
Morris v. Wells Fargo Bank, N.A., 334 S.W.3d 838 (Tex. App.—Dallas 2011, no pet.) (a void instrument passes no title)
Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430 (Tex. 2007) (res judicata and related principles prevent double recovery)
Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177 (Tex. 2012) (defaulting defendant admits facts establishing liability)
Argyle Mech., Inc. v. Unigus Steel, Inc., 156 S.W.3d 685 (Tex. App.—Dallas 2005, no pet.) (legal sufficiency issues in no‑answer default judgments can be resolved as a matter of law)
McCullough v. Scarbrough, Medlin & Assocs., Inc., 435 S.W.3d 871 (Tex. App.—Dallas 2014, pet. denied) (when successful party fails to elect among alternative theories for a single injury, court should select the theory affording greatest recovery)
Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182 (Tex. 1998) (discussing election of remedies when multiple theories seek recovery for the same injury)