Keelean v. Central Bank of the South

In Keelean v. Central Bank of the South, 544 So. 2d 153, 156-57 (Ala. 1989) the Court considered the question whether signing a guaranty out of state that will have economic effects in this State will satisfy Alabama's long-arm requirement that a defendant have contacts with Alabama sufficient for an Alabama court to properly exercise jurisdiction over that party. In Keelean, a Florida corporation had executed and delivered a promissory note to an Alabama bank and then had defaulted on the note. The bank sought to have an Alabama court exert personal jurisdiction over the guarantors to the promissory-note obligation. The Court used the following rationale in concluding that the signing of the guarantees met the "sufficient-contact" requirement of the 14th Amendment of the U.S. Constitution and Rule 4.2(a)(2)(I) so that the Alabama court has in personam jurisdiction: "Applying the 'effects test' mandated by Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984); Alabama Waterproofing Co. v. Hanby, 431 So. 2d 141 (Ala. 1983); Duke v. Young, 496 So. 2d 37 (Ala. 1986), we determine that clearly the appellants/guarantors should have foreseen the effects of their contracts of guaranty in the State of Alabama in the event of a default on the promissory note. A clear and firm connection exists between the execution of the promissory note, the subsequent default, the contract of guaranty, and this litigation. Furthermore, it is clear that the signing of the contracts of guaranty for this loan gave appellants/ guarantors the requisite 'fair warning' required by Burger King Co. v. Rudzewicz, 471 U.S. 462, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985)...." (544 So. 2d at 157.)