Affirmed; Opinion Filed August 12, 2019.




                                              In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                      No. 05-18-01020-CV

                    JERRY GRISAFFI, Appellant
                               V.
 ROCKY MOUNTAIN HIGH BRANDS, INC. F/K/A REPUBLIC OF TEXAS BRANDS,
                         INC., Appellee

                      On Appeal from the 192nd Judicial District Court
                                   Dallas County, Texas
                           Trial Court Cause No. DC-17-15441

      MEMORANDUM OPINION ON MOTION TO STRIKE OR
            DECREASE AMOUNT OF SECURITY
                Before Chief Justice Burns, Justice Molberg, and Justice Nowell
                                   Opinion by Justice Nowell
       Before the Court is Jerry Grisaffi’s motion to strike or decrease the amount of security set

by the trial court to supersede a judgment awarding, in part, $3.5 million in damages to Rocky

Mountain High Brands, Inc. f/k/a Republic of Texas Brands, Inc. For the reasons that follow, we

deny the motion and affirm the trial court’s order.

                                        BACKGROUND

       The underlying suit in this appeal stems from Grisaffi’s allegedly fraudulent transfer of

Rocky Mountain stock to himself and subsequent sale of the stock to a third party for $3.5 million.

As a result of discovery sanctions, a default judgment was entered against Grisaffi. The judgment
declared, in part, that the transfer of stock to Grisaffi was “void ab initio” and awarded Rocky

Mountain $3.5 million in damages.

          Seeking to suspend enforcement of the judgment pending appeal, Grisaffi filed in the trial

court a motion to determine the amount of security. He asserted he had a negative net worth as a

result of the judgment against him and asked that he be able to supersede the judgment by making

a cash deposit of $1,000.1 In support, he attached an affidavit that contained only the following

three paragraphs concerning his net worth:

          2.          My assets are worth a total of approximately $250,000. I also receive
                      approximately $1,700 per month in Social Security benefits.

          3.          My liabilities are $3,500,000. This is because a default judgment was
                      entered against me in that amount.

          4.          Net worth is determined by calculating the difference between total assets
                      and total liabilities. My net worth is as follows: $250,000 - $3,500,000 = -
                      3,250,000. Therefore, my net worth is negative and is far below zero. In
                      other words, my current liabilities exceed my current assets, giving me a net
                      worth of negative $3,250,000.

          Rocky Mountain filed both a motion to strike Grisaffi’s motion and a response. Both

argued Grisaffi’s affidavit should be stricken and his motion denied because Grisaffi had failed to

respond to post-judgment discovery requests or produce documents regarding his “true” net worth;

the motion was “bare-bones” and “supported by a wholly conclusory affidavit[;]” and Grisaffi was

not credible.

          The trial court held a non-evidentiary hearing at which Grisaffi, through counsel, presented

as his “main argument” in support of his request that the bond be set at a “de minimis amount”

that the judgment “essentially allowed for a double recovery because it invalidated the stock and

[awarded] the $3.5 million judgment[.]” Rocky Mountain responded that the court did not have

jurisdiction to reconsider the judgment, asked the court to take judicial notice of the case file,


   1
       In a reply to Rocky Mountain’s response, Grisaffi asked that the bond be set at $0 or a “de minimis amount.”

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which demonstrated Grisaffi’s lack of credibility and failure to respond to discovery, and argued

Grisaffi had not made a prima facie showing of his net worth. Finding Grisaffi “not credible . . .

in any shape or form” and that his supporting affidavit lacked “specifics,” the court struck

Grisaffi’s motion and supporting affidavit and set the bond at $3.5 million, plus interest for the

estimated duration of the appeal and court costs.

                                      APPLICABLE LAW

       Texas Rule of Appellate Procedure 24.1 allows a judgment debtor to supersede the

judgment by posting “a good and sufficient bond.” See TEX. R. APP. P. 24.1(a)(2). Under appellate

rule 24.2(a)(1) and Texas Civil and Practice Remedies Code section 52.006(a), when the judgment

is for money, the amount of the bond must equal the sum of compensatory damages awarded in

the judgment, interest for the estimated duration of the appeal, and costs. See TEX. CIV. PRAC. &

REM. CODE ANN. § 52.006(a); TEX. R. APP. P. 24.2(a)(1). The amount, however, must not exceed

the lesser of fifty percent of the judgment debtor’s current net worth or $25,000,000 and, upon a

showing that posting the required security is likely to cause the judgment debtor substantial

economic harm, must be lowered to an amount that will not cause harm. See TEX. CIV. PRAC. &

REM. CODE ANN. § 52.006(b),(c); TEX. R. APP. P. 24.2(a)(1), (b).

       A judgment debtor has the burden of proving net worth and substantial economic harm.

See TEX. R. APP. P. 24.2(c)(3); O.C.T.G., LLP v. Laguna Tubular Prod. Corp., 525 S.W.3d 822,

831 (Tex. App.—Houston [14th Dist.] 2017, opinion on motion); G.M. Houser, Inc. v. Rodgers,

204 S.W.3d 836, 840 (Tex. App.—Dallas 2006, opinion on motion). An affidavit that states the

debtor’s net worth and states complete, detailed information concerning the debtor’s assets and

liabilities from which net worth can be ascertained is prima facie evidence of the debtor’s net worth

for purposes of establishing the amount of the bond, deposit, or security required to suspend

enforcement of the judgment. See TEX. R. APP. P. 24.2(c)(1); see also G.M. Houser, 204 S.W.3d

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at 840 (net worth is difference between total assets and total liabilities as determined by generally

accepted accounting principles). Where the record reflects, and the trial court finds, that the debtor

failed to offer complete and detailed information regarding his assets and liabilities from which

net worth can be determined, the trial court may set the bond in accordance with rule 24.2(a) and

section 52.006(a) of the civil practice and remedies code. See Bishop Abbey Homes, Ltd. v. Hale,

No. 05-14-01137-CV, 2015 WL 4456209, *5-6 (Tex. App.—Dallas July 21, 2015, mem. op. on

motion). For purposes of determining net worth under rule 24.2 and section 52.006, the contingent

money judgment that is sought to be superseded is not included as a liability. See Anderton v.

Cawley, 326 S.W.3d 725, 726 (Tex. App.—Dallas 2010, opinion on motion).

                                     STANDARD OF REVIEW

          On a party’s motion, an appellate court may review the sufficiency or excessiveness of

security. See TEX. CIV. PRAC. & REM. CODE ANN. § 52.006(d); TEX. R. APP. P. 24.4(a). The trial

court’s determination of the amount of security is reviewed for abuse of discretion, but because

the trial court, as fact finder, is the sole judge of the credibility of the witnesses and weight to be

given their testimony, a credibility finding will not be disturbed. See G.M. Houser, 204 S.W.3d at

840, 841. An appellate court will find an abuse of discretion where the trial court acted arbitrarily

and unreasonably or without reference to any guiding rules and principles. O.C.T.G., 525 S.W.3d

at 829.

                                            DISCUSSION

          Grisaffi does not challenge the trial court’s findings in his motion for review but focuses

on the judgment both declaring the issuance of stock to him “void ab initio” and awarding Rocky

Mountain $3.5 million in damages. Grisaffi maintains the judgment improperly awards double

recovery because once the issuance of stock was invalidated, Rocky Mountain received the equity

represented by the stock and was made “whole.” Grisaffi asserts the $3.5 million from the sale of

                                                 –4–
the stock “rightfully” belongs to the third party who purchased the stock and the likelihood the

third party will successfully sue him is high. Grisaffi asserts he will suffer substantial harm if he

is required to post the bond set by the trial court and also satisfy a potential $3.5 million judgment

in favor of the third party. Grisaffi asks the Court to order no security or to reduce the amount of

security to $100 or “some other small sum that is appropriate.” Rocky Mountain responds, in part,

that Grisaffi’s argument as to double recovery goes to the merits of the appeal and is not relevant

to an analysis under rule 24.

       We agree with Rocky Mountain that whether the judgment improperly awards double

recovery is a question to be determined on submission not on review of the trial court’s order

setting the bond. McCullough v. Scarborough, Medlin and Assoc., Inc., 362 S.W.3d 847, 850

(Tex. App.—Dallas 2012, opinion on motion). On motion to review an order setting a supersedeas

bond, the Court’s task is to determine if the bond was set “without regard to any guiding rules or

principles.”

       The bond set by the trial court here is exactly for the amount required for a money judgment

under rule 24.2(a) and section 52.006(a)—the sum of compensatory damages, interest for the

estimated duration of the appeal, and costs. See TEX. CIV. PRAC. & REM. CODE ANN. 52.006(a);

TEX. R. APP. P. 24.2(a)(1). Although Grisaffi filed an affidavit asserting his net worth was negative

$3,250,000, the affidavit provided no details as to his assets and improperly included as a liability

the $3.5 million judgment against him. See Anderton, 326 S.W.3d at 726. Moreover, the trial

court found Grisaffi not credible, a finding that cannot be disturbed. On the record before us, we

cannot conclude the trial court abused its discretion. Accordingly, we deny Grisaffi’s motion to

strike or decrease the amount of security and affirm the trial court’s order.


                                                    /Erin A. Nowell/
181020NF.P05                                        ERIN A. NOWELL
                                                    JUSTICE
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