                   IN THE COURT OF APPEALS OF IOWA

                                No. 19-0491
                             Filed April 1, 2020


GREATAMERICA FINANCIAL SERVICES CORPORATION,
    Plaintiff-Appellee,

vs.

NATALYA RODIONOVA MEDICAL CARE, P.C.,
     Defendant-Appellant.
________________________________________________________________


      Appeal from the Iowa District Court for Linn County, Lars G. Anderson,

Judge.



      The defendant appeals an adverse summary judgment ruling in this breach-

of-contract action. REVERSED AND REMANDED.




      Larry J. Thorson of Ackley, Kopecky & Kingery, L.L.P., Cedar Rapids, for

appellant.

      Randall D. Armentrout and Leslie C. Behaunek of Nyemaster Goode, P.C.,

Des Moines, for appellee.



      Considered by Bower, C.J., and Greer and Ahlers, JJ.
                                        2


BOWER, Chief Judge.

       GreatAmerica Financial Services Corporation (GreatAmerica) seeks to

enforce a “hell or high water” clause against an entity, Natalya Rodionova Medical

Care, P.C. (NRMC), which has submitted evidence the signature on the financing

contract is a forgery and that it did not accept or ratify the Agreement. Because

GreatAmerica has not proved ratification of the Agreement as a matter of law, we

reverse and remand for further proceedings.

I. Background Facts and Proceedings.

       GreatAmerica is an Iowa corporation with its principal place of business in

Cedar Rapids, Iowa. GreatAmerica provides financing for business equipment

and/or software for commercial use.

       NRMC is a professional corporation with its practice located in New York

City, New York. The sole shareholder of the corporation is Dr. Natalya Rodionova,

a licensed physician.

       The “Agreement” GreatAmerica asserts has been breached is reproduced

in its entirety below:1




1 The quality of the copy of the Agreement is very poor. As best as we can make
out, the Agreement purports to require sixty-three monthly payments of $999.00
for “Kyocera copier 4002i–2pcs–sp#W376Z03025/WL376Z02961 Grandstream
phone system–1” provided by New York Digital Products Inc. (New York Digital).
                                      3




      GreatAmerica sent monthly invoices to NRMC beginning October 30, 2017.

According to GreatAmerica records, NRMC made four payments to GreatAmerica.

The first payment was by check in the amount of $1157.17 from the bank account
                                        4


of NRMC dated “11/4/17” with the notation “office internet phone/fax etc” on the

memo line. Additional payments as noted in a GreatAmerica “payment history

report” were made on January 23 ($2355.24), March 29 ($2233.64), and May 21,

2018 ($2607.44).2

      On May 17, 2018, Dr. Rodionova sent an email to Tim McEowen 3

concerning an April 23, 2018 invoice:

      Tim! Tony Barro and New York Digital betrayed me and broke the[ir]
      responsibility to me
      My services got interrupted, in both offices, because he (they) did not
      pay their bills
      I moved back with Verizon and Cable vision.
      You can pick up your phones.
      I cannot use them.
      If you want, and give me a fair price on used printers/ faxes, I will
      purchase them from your company.
      Let me know, how you want to approach it.
      Sorry,
      Ny Digital turned out to be criminals and a fraud.
      Let’[s] take everything into consideration, so I could pay you for
      equipment, if you are looking to sell it I am willing to buy.
      I am not looking to lease. That is out of the equation.
      Thank you. Respectfully,
      Dr Rodionova.
      Ps.
      The last 2 invoices send to Tony Barro.
      He was swearing, he will pay them.
      I have it in writing and witnesses. For all the damage he caused to
      my company.

      On July 26, 2018, GreatAmerica sued NRMC, alleging “NRMC breached

the Agreement by failing to make the required payments.” GreatAmerica also




2The May 21 payment was authorized by Dr. Rodionova by telephone.
3According to an interrogatory answer, McEowen is an employee of GreatAmerica
who “had communications with Defendant regarding late payments and buyout
quote.”
                                         5


asserted a claim of unjust enrichment because “NRMC is in possession of the

equipment financed by GreatAmerica.”

       NRMC denied the allegations of the complaint and affirmatively asserted

(1) GreatAmerica “has unclean hands in that [it] knew or should have known that

New York Digital . . . had a history of not performing its obligations with regard to

sales of equipment to its customers, yet [GreatAmerica] continued to finance said

sales”; (2) no authorized person of NRMC signed the Agreement; and (3) the

representative of New York Digital “fraudulently induced [NRMC] to enter into a

contract that was financed by GreatAmerica.” The answer was accompanied by

an affidavit by Dr. Rodionova, which provides in part:

       I did not sign the document which is attached to the Petition by
       GreatAmerica . . . and I have not signed any document with
       GreatAmerica Leasing.
              To the extent that the document purports to have my
       signature, it is a forgery. The representative from New York Digital
       Products created accounts in my name that were not authorized by
       me.

       On January 18, 2019, GreatAmerica sought summary judgment, arguing it

did not matter if “no authorized person of the defendant signed” the Agreement

because under Iowa law, “NRMC ratified the Agreement by accepting the

equipment and making seven monthly payments. Having ratified the Agreement,

the plain language in the Agreement that it is “non-cancelable” must be enforced

as a standard “hell or high water clause.”

       As support for its contention that NRMC accepted and used the equipment,

GreatAmerica filed the affidavit of Steve Louvar:

       I am employed as a litigation specialist for [GreatAmerica.] The
       information set forth in this Affidavit is based on my personal
       knowledge and my review of GreatAmerica’s business records.
                                       6


             ....
             On October 23, 2017, GreatAmerica employee, Katy
       Mulherin, performed a telephone verification with NRMC Employee
       Melissa Santiago. Exhibit 2 is a true and accurate copy of the
       Equipment Inspection/Verification. Santiago confirmed that the
       equipment had been installed and was working.

Exhibit 2 is copied here:




       In response, NRMC asserted the “handwritten part of Plaintiff’s Exhibit 2

does not confirm the year that the person supposedly called” and “[t]here is no

indication that equipment is working.”     In a February 5, 2019 affidavit, Dr.

Rodionova averred:
                                            7


                 (4) I dealt with New York Digital Products, Inc. with regard to
         certain equipment that New York Digital Products, Inc. was
         supposed to provide.         I did not sign any agreement with
         GreatAmerica Financial Services Corporation or GreatAmerica
         Leasing. No one in my office was authorized to sign any agreement
         with GreatAmerica Financial Services Corporation or GreatAmerica
         Leasing.
                 (5) There is what looks like an initial on an agreement with
         GreatAmerica that has been provided to me since this lawsuit has
         been filed. That is not my signature.
                 (6) No agreement was ever signed with me or New York
         Digital Products, Inc. and as a matter of fact I parted ways with New
         York Digital Products, Inc. because of their actions with regard to the
         proposal they gave me concerning certain phone and copier
         equipment and their actions thereon.
                 ....
                 (8) The equipment dropped off at my offices by New York
         Digital Products, Inc. was used equipment and was not something I
         would purchase or finance from anybody.
                 (9) Melissa Santiago is not authorized to act on behalf of the
         corporation, is not authorized to accept delivery of equipment or
         make any determination as to whether or not payment is due and
         owing to anyone from the Defendant corporation, and is not
         authorized to determine if any equipment meets my corporation’s
         needs or standards.
                 (10) When I contacted a representative from GreatAmerica
         Financial Services Corporation he was not helpful and he was only
         defending the actions of New York Digital Products, Inc.
                 (11) New York Digital Products, Inc. made the contact with
         GreatAmerica Leasing Corporation and I had nothing to do with
         deciding who New York Products, Inc. was going to deal with.
                 (12) With regard to the alleged agreement, I was not
         presented a copy of it when I contacted the GreatAmerica Leasing
         representative.
                 (13) . . . The equipment that was sent to my office was
         something that I could not use because it was specific for New York
         Digital Products, Inc. I never got any use out of the equipment.[4]



4   NRMC answered interrogatory No. 14 as follows:
       The agreement never was signed. New York Digital sent equipment
       to the Defendant even though I never signed contract with New York
       Digital and left it in the office. I found out that my identity was stolen
       in 2018 or end of 2017. Even I could not use the equipment (it was
       specific for New York Digital) and I have chosen Cablevision for one
       office and Verizon for another. I paid a lower price.
                                        8


NRMC acknowledged it made seven payments but asserted it did so because New

York Digital was not making promised payments. NRMC also asserted it was

attempting to come to a resolution with GreatAmerica in light of fraudulent conduct

by New York Digital.

      On February 28, 2019, the district court granted GreatAmerica’s motion for

summary judgment. The district court noted the Agreement contains a hell-or-

high-water clause, which is valid and enforceable under Iowa law. The district

court found:

      NRMC confirmed receipt of the equipment and paid the invoices, one
      of which was paid by Dr. Rodionova herself on the phone. Both the
      verbal affirmation and the payments . . . function as acceptance of
      the goods and trigger the enforcement of the “hell or high water
      clause.”
             ....
             The court finds that [NRMC] did accept the delivery of the
      goods both according to the phone call verification with
      GreatAmerica and to the extent there is any question of the
      substance of that phone call, by keeping the goods for seven months
      and making payments there upon, without any attempt to reject the
      goods.
             ....
             As with the conduct that constitutes acceptance of the goods,
      in the same ways, Dr. Rodionova ratified the contract with
      GreatAmerica, regardless of who signed the initial agreement. By
      accepting the equipment and keeping it, using it to some degree, and
      making seven monthly payments, Dr. Rodionova received a benefit
      from the agreement for which she also was obliged to continue
      making payments.

The court entered judgment for GreatAmerica for contractual damages of

$60,879.51 plus interest, attorney fees of $16,724.00, and costs of $314.99.

      NRMC appeals, contending genuine issues of fact remain that preclude a

finding that NRMC ratified the Agreement by making payments.
                                          9


II. Scope and Standard of Review.

       We review the grant of summary judgment in favor of GreatAmerica for

correction of errors at law. See C & J Vantage Leasing Co. v. Wolfe, 795 N.W.2d

65, 73 (Iowa 2011). Summary judgment is proper when the record reveals no

genuine issue of material fact and the moving party is entitled to judgment as a

matter of law. Iowa R. Civ. P. 1.981(3). The nonmoving party is entitled to have

the evidence viewed in the light most favorable to its position. See Luana Sav.

Bank v. Pro-Build Holdings, Inc., 856 N.W.2d 892, 895 (Iowa 2014). “Where

reasonable minds can differ on how an issue should be resolved, a fact question

has been generated, and summary judgment should not be granted.” Wolfe, 795

N.W.2d at 73. “[O]ur review is limited to whether a genuine issue of material fact

exists and whether the district court applied the correct law.” Id.

III. Discussion.

       In ruling in GreatAmerica’s favor, the district court relied upon the case of

Life Investors Insurance Co. of America v. Estate of Corrado, 838 N.W.2d 640

(Iowa 2013). In Life Investors, our supreme court stated:

       A principal may ratify the unauthorized act of an agent. See
       Abodeely v. Cavras, 221 N.W.2d 494, 502 (Iowa 1974) (stating a
       factor to determine whether a contract is ratified often is whether a
       principal accepted benefits from an agent’s unauthorized act). Even
       if the actor who signed the contract was not Corrado’s agent at the
       time of signing, “[a] person may ratify the act of an actor who was not
       an agent at the time of acting,” providing the actor purports to be the
       person’s agent or assumed to be the person’s agent. Restatement
       (Third) of Agency ch. 4, intro. note, at 304 (2006).

838 N.W.2d at 644.
                                         10


       In discussing ratification,5 the supreme court adopted the rule contained in

the Restatement (Third) of Agency that an undisclosed principal may ratify an

actor’s unauthorized act. Id. at 647. “We reach this conclusion for the reasons set

forth in comment “c” of section 4.03 of the Restatement (Third) of Agency and for

the fact that our legislature has adopted this rule for negotiable instruments.”6 Id.

“A person should not be able to accept the benefits of a contract even if the signer’s

acts are unauthorized, but deny his or her obligations under the contract because

the signer’s acts are unauthorized.” Id.7

       Under Restatement (Third) of Agency, which was adopted by our supreme

court, “[r]atification is the consequence of a choice freely made by the principal.

The principal may choose to ratify the action of an agent or other actor without

knowing material facts.”      Restatement (Third) of Agency § 4.06 cmt. d.

Furthermore, “[a] factfinder may conclude that the principal has made such a


5 We observe that the Life Investors court was addressing “[o]nly ratification by the
principal of an agent’s signature” and not “ratification by an individual who had the
power to avoid the contract but affirmed the contract.” 838 N.W.2d at 645.
6 Comment “c” provides:

        Forgeries. . . . Official Comment 3 acknowledges that a forger is not
        an agent. However, the person whose name is signed may
        retroactively adopt the forger’s signature as the person’s own. The
        retroactive adoption carries the consequences of ratification. Like
        ratification, it is a unilateral expression of a person’s consent, and
        like ratification it does not require consideration to be enforceable. It
        may be in the principal’s interest to ratify a forgery to obtain the
        benefit of a transaction not otherwise available.
7 See Life Inv’rs Ins. Co. of Am. v. Corrado, 804 F.3d 908, 911 (8th Cir. 2015)

(where insurer brought a breach-of-contract action against its life-insurance sales
representative, alleging that defendant breached the parties’ settlement
agreement by failing to repay advances on monies he received from plaintiff, the
district court granted summary judgment for plaintiff and court of appeals affirmed,
holding that defendant was bound by the settlement agreement through
ratification—even if defendant did not sign the agreement, he was bound by it
because he did not object to it and accepted the benefits he received from it).
                                          11


choice when the principal is shown to have had knowledge of facts that would have

led a reasonable person to investigate further, but the principal ratified without

further investigation.” Id. (emphasis added). Viewing the record in the light most

favorable to NRMC,8 we conclude there is a question of fact whether NRMC had

knowledge that would have led a reasonable person to investigate further.

        GreatAmerica asserts NRMC received GreatAmerica’s invoice “referencing

a finance agreement” [at which point] “NRMC had a choice: refuse payment under

the Agreement and investigate the Agreement further; or accept the benefits of this

Agreement without further investigation and perform under it.” GreatAmerica

overstates its evidence.

        The initial billing to NRMC is set out below:




8   See Luana Sav. Bank, 856 N.W.2d at 895.
                                       12




The billing references “Agreement Number 013-1296204-000.” Nothing is said of

a “finance agreement.” It does not provide any terms of the referenced agreement.

      We also noted Dr. Rodionova’s affidavit states: “There is what looks like an

initial on an agreement with GreatAmerica that has been provided to me since this

lawsuit has been filed. That is not my signature.” (Emphasis added.) She also

states, “[W]ith regard to the alleged agreement, I was not presented a copy of it

when I contacted the GreatAmerica Leasing representative.”
                                         13


       Perhaps a factfinder could conclude NRMC “had knowledge of facts that

would have led a reasonable person to investigate further,”9 but that is a question

for a factfinder. See Argus v. Ware & Leland, 136 N.W. 774, 775–76 (Iowa 1912)

(noting ratification presented a jury question).

       We believe the same is true as to whether NRMC accepted the benefits of

a contract. Dr. Rodionova’s affidavit states Melissa Santiago “is not authorized to

act on behalf of the corporation, is not authorized to accept delivery of equipment

or make any determination as to whether or not payment is due and owing to

anyone from the Defendant corporation and is not authorized to determine if any

equipment meets my corporation’s needs or standards.” Dr. Rodionova also

states, “New York Digital Products, Inc. made the contact with GreatAmerica

Leasing Corporation and I had nothing to do with deciding who New York Products,

Inc. was going to deal with.” Moreover, “the equipment that was sent to my office

was something that I could not use because it was specific for New York Digital

Products, Inc. I never got any use out of the equipment.”

       We also observe there appears to be a question of fact as to whether NRMC

attempted to reject the equipment. The evidence is not so one-sided that the issue

can be determined as a matter of law. Cf. GreatAmerica Leasing Corp. v. Davis-

Lynch, Inc., No. 10-CV-13-LRR, 2011 WL 167248, at *9 (N.D. Iowa 2011) (“[T]he

undisputed evidence demonstrates that Moreno’s supervisor and Defendant’s

office manager, Adrienne Redd, accepted the copy machines and served as


9 See Restatement § 4.06 cmt. b (“A person who has ratified is not bound by the
ratification if it was made without knowledge of material facts about the act of the
agent or other actor. . . . The burden of establishing that a ratification was made
with knowledge is on the party attempting to establish that ratification occurred.”).
                                        14


Defendant’s primary contact with Seamless. Despite Redd’s knowledge of the

transactions, Redd continued to deal with Seamless on Defendant’s behalf, and

Defendant continued to use the copy machines Seamless provided to Defendant

under the C/CAMP Agreements. Thus, Redd later ratified the agreements and

Defendant benefitted from the use of the copy machines.”).

      Viewing the record in the light most favorable to NRMC, the district court

erred in finding GreatAmerica proved ratification as a matter of law. There are

genuine issues of material fact concerning ratification that preclude summary

judgment. We therefore reverse the entry of judgment in favor of GreatAmerica

and remand for further proceedings not inconsistent with this opinion.

      REVERSED AND REMANDED.

      Ahlers, J., concurs; Greer, J., dissents.
                                         15


GREER, Judge (dissenting).

       I respectfully dissent; I would affirm the district court and grant

GreatAmerica Financial Services Corporation (GreatAmerica) summary judgment

against Natalya Rodionova Medical Care, P.C. (NRMC). As an affirmative defense

to   the   GreatAmerica    breach-of-contract   claim,   NRMC     confirmed    “[t]he

representative from New York Digital Products, Inc. fraudulently induced the

Defendant to enter into a contract that was financed by GreatAmerica Financial

Services Corporation.” (Emphasis added.) Next, Dr. Rodionova10 verified she did

not sign any document with GreatAmerica, but on October 23, 2017, Melissa

Santiago,11 a NRMC employee, confirmed the equipment leased (a telephone

system and copiers) was installed and working. On top of that, NRMC made seven

months of payments on the contract for the telephone system and copiers, one of

which was personally authorized by Dr. Rodionova by telephone. Finally on May

17, 2018, seven months after delivery of the equipment, Dr. Rodionova sent

GreatAmerica an email seeking to cancel the agreement.            Without question,

NRMC and its vendor, New York Digital Products, Inc. (New York Digital), are at

crosshairs based on New York Digital’s alleged fraud. But the question here is

whether NRMC contracted with GreatAmerica.

       The district court applied the “hell or high water” clause of the contract and

found NRMC was bound because of its unconditional acceptance of the contract

terms by usage and payment.         The court confirmed the agreement is non-



10 Dr. Natalya Rodionova is the sole shareholder of the professional corporation
NRMC.
11 Dr. Rodionova argues this employee had no authority to bind NRMC.
                                           16


cancelable. The court also determined NRMC ratified the contract by its actions

and inaction. GreatAmerica contends the district court got it right. But finding there

are still genuine issues of material fact to resolve, the majority reverses the district

court’s summary judgment ruling. Those disputed facts are: (1) whether NRMC

had insufficient knowledge so that it had no duty as a reasonable person to

investigate further into the transaction, thereby avoiding ratification of an

agreement the principal did not sign; (2) whether NRMC accepted the benefits of

the contract; (3) whether Melissa Santiago authorized acceptance and approval of

the equipment; and (4) whether NRMC rejected the equipment. Even addressing

these questions, I disagree that material facts prevent summary judgment as a

matter of law.

        Under established principles of summary judgment, NRMC’s arguments

fail.   A party resisting summary judgment must set forth specific facts which

constitute competent evidence showing a prima facie claim. Summary judgment

“is the ‘put up or shut up’ moment in a lawsuit, when a [nonmoving] party must

show what evidence it has that would convince a trier of fact to accept its version

of the events.” Schacht v. Wis. Dep’t of Corr., 175 F.3d 497, 504 (7th Cir. 1999),

overruled on other grounds as stated in Higgins v. Mississippi, 217 F.3d 951, 954

(7th Cir. 2000); see also Bauer v. Stern Fin. Co., 169 N.W.2d 850, 853 (Iowa 1969)

(“[A] party ‘may not rest upon the mere allegations or denials of his pleading.’ He

must set forth specific facts showing there is a genuine issue. He cannot merely

say there is one; but it must appear ‘by affidavits or otherwise’ that this is the case.”

(citation omitted)). NRMC, other than protesting unfairness, omits verified facts

refuting summary judgment.
                                          17


       (1) Ratification. First, even looking at the facts in the light most favorable to

the nonmoving party and assuming that Dr. Rodionova did not sign the

GreatAmerica agreement and that someone forged her initials, it does not change

this result. “Signature is not always essential to the binding force of an agreement.

If accepted and acted upon by the parties as a binding engagement, mutuality

appears without formal signature. This is elementary.” Henderson v. Henderson,

114 N.W. 178, 179 (Iowa 1907). NRMC made seven months of payments to

GreatAmerica for the equipment. When NRMC defaulted, it stopped making all

payments but still had the equipment. The default came seven months after

delivery of that equipment to NRMC. The district court found NRMC ratified the

contract “[b]y accepting the equipment and keeping it, using it to some degree, and

making seven monthly payments.” Additionally, in the NRMC affirmative defenses,

it asserted that “New York Digital Products, Inc. fraudulently induced [it] to enter

into a contract that was financed by GreatAmerica Financial Services Corporation.”

(Emphasis added.)

       After conceding some contract existed, I would find NRMC ratified the

contract’s terms. Our supreme court has said, “Ratification is the affirmance by a

person of a prior act which did not bind him but which was done or professedly

done on his account, whereby the act, as to some or all persons, is given effect as

if originally authorized by him.” Abodeely v. Cavras, 221 N.W.2d 494, 502 (Iowa

1974) (quoting Restatement (Second) of Agency § 92, at 210 (Am. Law Inst.

1958)). “There are two types of ratification: (1) ratification by the principal of the

signature of an agent, and (2) ratification by an individual who had the power to

avoid the contract but affirmed the contract.” Life Inv’rs Ins. Co. of Am. v. Estate
                                          18

of Corrado, 838 N.W.2d 640, 645 (Iowa 2013). Whether the party “expressly or

implicitly authorized a person to sign on his behalf is not a necessary fact to

determine” ratification of a contract since a principal may ratify the act of an agent.

Id. at 644. “In other words, if ratification exists a contract exists and the action is

on the contract.” Id.; see also Mayrath Co. v. Helgeson, 139 N.W.2d 303, 306–

309 (Iowa 1966) (holding ratification occurred where corporation knew employee

accepted settlement agreement and corporation accepted benefit of contract).

       In the second type of ratification—ratification by an individual who had the

power to avoid the contract but affirmed the contract—failure to act can be fatal.

NRMC asserts it did not ratify the actions of New York Digital because it did not

know material facts about the contract terms. So NRMC and the majority assert a

fact question exists on whether NRMC had knowledge that would have led it to

investigate further. See Restatement (Third) of Agency § 4.06 cmt. d (Am. Law

Inst. 2006).12 But under the undisputed facts NRMC had information and ratified

without a further investigation. Even though NRMC had not seen the contract

terms before suit, it received a billing referencing an agreement number and “your

agreement.”13 NRMC confirmed it had no agreement with New York Digital. Yet


12 Restatement (Third) of Agency § 4.06 cmt. d provides,
       d. Risk of lack of knowledge. Ratification is the consequence of a
       choice freely made by the principal. The principal may choose to
       ratify the action of an agent or other actor without knowing material
       facts. A factfinder may conclude that a principal has made such a
       choice when the principal is shown to have had knowledge of facts
       that would have led a reasonable person to investigate further, but
       the principal ratified without further investigation.
13 Under “ADDITONAL INFORMATION” the billing noted:

       If you have a right under your agreement to purchase the equipment
       at or after the end of the term of the agreement, and you properly
       exercise such right, you are hereby notified that the seller of the
                                        19


it received billings from GreatAmerica, received equipment at its office, and paid

seven months of payments without protest. Under any commercial scenario, a

company would not pay a billing without investigating what the term “agreement”

meant in the billing. Life Inv’rs Ins. Co. of Am. v. Corrado, 804 F.3d 908, 912–13

(8th Cir. 2015) (upholding summary judgment and concluding, when faced with

inconsistencies about the commercial relationship, Corrado ratified an agreement,

which he claimed he had not signed, but had operated under for years).

      (2) Acceptance of Benefits. Second, NRMC accepted the equipment and

made payments from when it was delivered in October 2017 until May 2018 when

the last payment was authorized over the telephone by Dr. Rodionova. It matters

not whether or how much they could use it. Here because the agreement was

ratified, under the “hell or high water” clause, once a lessee formally accepts the

property there is an unconditional obligation to pay the lease payments required

under the agreement. See, e.g., Hinkel Excavation & Constr., Inc. v. Constr.

Equip. Int’l, LTD., No. C00-4090-MWB, 2001 WL 34008497, at *5–6 (N.D. Iowa

2001); Citicorp of N. Am., Inc. v. Lifestyle Comm. Corp., 836 F. Supp. 644, 655–

56 (S.D. Iowa 1993); GreatAmerica Leasing Corp. v. Star Photo Lab, Inc., 672

N.W.2d 502, 504 (Iowa 2003). It does not matter if property is suitable for its

intended purpose, is lost, or is destroyed. Citicorp, 836 F. Supp. at 655–66. The

court in Hinkel Excavation noted:



     equipment (“Seller”) has assigned to Account Services Exchange
     LLC, a qualified intermediary, as part of an Internal Revenue Code
     Section 1031 like-kind exchange program, Seller’s rights (but not its
     obligations) under the agreement to sell office and/or communication
     equipment to you.
(Emphasis added.)
                                          20


       The essential practical consideration requiring liability as a matter of
       law in these situations is that [hell or high water] clauses are essential
       to the equipment leasing industry. To deny their effect as a matter
       of law would seriously chill business in this industry because it is by
       means of these clauses that a prospective financier-assignee of
       rental payments is guaranteed security for his outright loan to the
       lessor. Without giving full effect to such clauses, if the equipment
       were to malfunction, the only security for this assignee would be to
       repossess equipment with substantially diminished value.

2001 WL 34008497, at *7 (quoting Colorado Interstate Corp. v. CIT Grp./Equip.

Fin., Inc., 993 F.2d 743, 748 (10th Cir. 1993)).

       (3) Melissa Santiago’s Actions. Third, NRMC did not dispute that Melissa

Santiago said the equipment was accepted and working but instead argues she

was not authorized to accept the equipment or make any determination about its

working condition. And following the October 2018 contact between Santiago and

the GreatAmerica representative, payments were made and there was no rejection

of agreement or equipment. Through these undisputed actions, NRMC accepted

the equipment by the October 2018 phone call between GreatAmerica’s employee

and Santiago, NRMC’s employee, wherein she confirmed that the goods were

delivered and were operational. See Star Photo Lab, Inc., 672 N.W.2d at 506; see

also GreatAmerica Leasing Corp. v. Davis-Lynch, Inc., No. 10-CV-13-LRR, 2011

WL 167248, at *5 (N.D. Iowa Jan. 19, 2011). NRMC provided no affidavit of

Santiago refuting the acceptance of the equipment or its working condition.

       (4) Rejection of Equipment. Finally under this record, there is no factual

dispute impacting the summary judgment ruling. Reviewing the facts in the light

most favorable to NRMC, no rejection of the equipment occurred until Dr.

Rodionova emailed GreatAmerica suggesting the phones did not work but she

would consider buying the copiers and fax. Belated efforts to cancel a lease cannot
                                         21


constitute an “effective rejection.” A refusal to keep making payments after seven

months of payments does not constitute an effective rejection of goods under Iowa

law. See In re Rafter Seven Ranches L.P. v. C.H. Brown Co., 546 F.3d 1194,

1201–02 (10th Cir. 2008) (holding lessee who made no payments under the leases

but did nothing to reject defective sprinklers for six weeks did not reasonably reject

the goods); Davis–Lynch, Inc., 2011 WL 167248, at *5 (stating lessee’s payments

over nine months before refusing to continue to pay “does not constitute an

effective rejection of goods under Iowa law”); Campbell v. AG Finder Iowa Neb.,

No. 03-0323, 2004 WL 893937, at *3 (Iowa Ct. App. Apr. 28, 2004) (noting a

rejection is ineffective unless made within a reasonable time).

       Based on these undisputed facts, I believe the district court correctly

granted summary judgment against NRMP. I would affirm the summary judgment

ruling and enter judgment accordingly.
