Paxton v. Citizens Bank & Trust of West Georgia
307 Ga. App. 112
| Ga. Ct. App. | 2010Background
- CB & T sued Hot-Lanta Developers Group, LLC and its guarantors on promissory notes and guaranties; guarantors are Alabama/Florida residents; Hot-Lanta was formed in Alabama to fund a Georgia real estate project; loan renewals in 2008 involved personal guaranties; communications and documents were exchanged electronically or by mail from Alabama/Georgia; guaranties state Georgia lender and contain a Georgia-related loan context and choice-of-law provisions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court properly exercised jurisdiction under OCGA § 9-10-91(1). | CB & T contends guarantors transacted Georgia business. | Guarantors did not physically transact in Georgia; contacts were by mail/phone. | Yes; minimal contacts through financing activities and purposeful availment support jurisdiction. |
| Whether guarantors’ activities satisfy the first prong (purposeful action) of the three-part test. | Guarantors availed themselves of Georgia banking resources via guaranties. | No substantial Georgia activity beyond execution/communication. | Yes; execution of guaranties and renewal loans, with Georgia lender, constitutes purposeful activity. |
| Whether the second prong (arising from the same transaction) is satisfied. | Claims arise from Georgia loan and guaranties. | Arising from unrelated activities. | Yes; claims arise from the Georgia loan and guaranties. |
| Whether asserting jurisdiction complies with traditional notions of fairness. | Georgia has interest in adjudicating a loss to a Georgia bank; transactions were purposeful. | Defendants would be burdensome to defend in Georgia. | Yes; Georgia has substantial interest, and burden is not undue. |
Key Cases Cited
- Innovative Clinical, etc. Svcs. v. First Nat. Bank of Ames, 279 Ga. 672 (2005) (limits of due process for long-arm jurisdiction clarified; presence not required.)
- ATCO Sign, etc. Co. v. Stamm Mfg., 298 Ga.App. 528 (2009) (intangible contacts can establish minimum contacts.)
- Home Depot Supply v. Hunter Mgmt., 289 Ga.App. 286 (2008) (intangible contacts may suffice for jurisdiction.)
- Southern Electronics Distrib. v. Anderson, 232 Ga.App. 648 (1998) (earlier view rejecting electronic contacts; distinguished by Innovative Clinical.)
- Drennen v. First Home Savings Bank, 204 Ga.App. 714 (1992) (guaranties tied to Georgia project can satisfy first prong.)
- Baron v. Georgia R. Bank, etc. Co. (Barton), 169 Ga.App. 821 (1984) (nonresident availed themselves of Georgia lender; substantial effect.)
- Robertson v. CRI, Inc., 267 Ga.App. 757 (2004) (guaranty tied to Georgia loan can satisfy first prong.)
- White House, Inc. v. Winkler, 202 Ga.App. 603 (1992) (forum state's interest and purposeful activity considerations.)
- Aero Toy Store v. Grieves, 279 Ga.App. 515 (2006) (single event with effects in forum may establish jurisdiction.)