GreatAmerica Financial Services Corporation v. Ride Now Auto Parts LLC, Josephine Dolatowski and Robert Hastis
20-1066
| Iowa Ct. App. | Jan 12, 2022Background:
- In 2018 Ride Now Auto Parts LLC (Ride Now) signed a 60‑month lease/financing agreement for office equipment with GreatAmerica; Ride Now’s president Josephine Dolatowski signed for the company.
- The Agreement contained a "hell‑or‑high‑water" clause making Ride Now’s payment obligations unconditional and noncancelable.
- On the same day Dolatowski and employee/relative Robert Hastis each signed a personal guaranty of Ride Now’s obligations.
- Ride Now accepted delivery of the equipment and made six payments over eight months; GreatAmerica later sued for breach and sought recovery under the guaranty(s).
- The district court granted summary judgment to GreatAmerica for contract damages and attorney fees against Ride Now, Dolatowski, and Hastis.
- On appeal the court affirmed liability for Ride Now and Dolatowski but reversed and remanded as to Hastis because material factual disputes existed about fraud in the execution of his guaranty; the attorney‑fee award was upheld as to Ride Now and Dolatowski.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of the lease (hell‑or‑high‑water clause) | GreatAmerica: Ride Now accepted equipment and payments; clause bars defenses and obligates payment. | Ride Now: Agreement procured by fraud; contents hidden so no enforceable contract. | Affirmed — possession and payments ratified the contract; clause enforceable. |
| Dolatowski’s personal guaranty liability | GreatAmerica: Dolatowski knowingly signed guaranty; bound despite not reading. | Dolatowski: Documents were covered/hidden; she was deceived in execution. | Affirmed — she knew she was signing contracts and had opportunity to read; not relieved by alleged artifice. |
| Hastis’s personal guaranty liability | GreatAmerica: Guaranty binds guarantors; Hastis signed. | Hastis: Told he was signing a delivery receipt, not a guaranty; was misled and did not ratify. | Reversed/Remanded — factual dispute on fraud‑in‑the‑execution precludes summary judgment for GreatAmerica as to Hastis. |
| Attorney fees awarded to GreatAmerica | GreatAmerica: Contract and guaranty permit recovery of fees; fees supported by detailed time records. | Ride Now/Dolatowski: Fees excessive relative to contract damages. | Affirmed as to Ride Now and Dolatowski — court did not abuse discretion given litigation scope; fees vacated as to Hastis pending remand. |
Key Cases Cited
- GreatAmerica Fin. Servs. Corp. v. Natalya Rodionova Med. Care, P.C., 956 N.W.2d 148 (Iowa 2021) (ratification by acceptance of benefits; lease acceptance analysis)
- C & J Vantage Leasing Co. v. Wolfe, 795 N.W.2d 65 (Iowa 2011) (definition and enforceability of hell‑or‑high‑water clauses)
- Peak v. Adams, 799 N.W.2d 535 (Iowa 2011) (failure to read a contract does not invalidate it)
- Life Invs. Ins. Co. of Am. v. Estate of Corrado, 838 N.W.2d 640 (Iowa 2013) (ratification can follow knowing acceptance of benefits despite unauthorized acts)
- Midland Mortgage Co. v. Rice, 198 N.W. 24 (Iowa 1924) (fraud or artifice preventing reading can avoid contract obligations)
- Thornton v. American Interstate Ins. Co., 897 N.W.2d 445 (Iowa 2017) (attorney‑fee recovery principles)
- NCJC, Inc. v. WMG, L.C., 960 N.W.2d 58 (Iowa 2021) (standard of review for attorney‑fee awards)