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CONTINENTAL BANK N.A. v. EVERETT

August 2, 1990

CONTINENTAL BANK N.A., Plaintiff,
v.
ROBINSON EVERETT, KATHRINE EVERETT, GEORGE LYLES, and J.H. FROELICH, Defendants



The opinion of the court was delivered by: BUA

 NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE

 Defendants Kathrine Everett, Robinson Everett, and J.H. Froelich have moved to dismiss this case for lack of personal jurisdiction. For the reasons stated herein, defendants' motion to dismiss is denied.

 I. FACTS *fn1"

 Plaintiff Continental Bank N.A. ("Continental") is a national banking association which maintains its principal place of business in Chicago, Illinois. In 1984, Continental made a $ 4,200,000 loan to Guilford Telecasters, Inc. ("Guilford"), a North Carolina corporation. Guilford obtained the loan to operate a television station in North Carolina.

 On January 1, 1984, the parties executed a loan agreement. The loan agreement provides that all payments are to be made to Continental in Chicago. Loan Agreement, para. 5.1. The loan agreement further provides that it shall be "governed by the laws of the State of Illinois." Id. P 12.5.

 Repayment of the loan was guaranteed by several individuals, all of whom are shareholders of Guilford. These individuals executed the guaranties in January 1984. Similar to the loan agreement, the guaranties provide that they shall be construed in accordance with Illinois law. See Amended and Restated Guaranty, ยง 8(e).

 In 1986, Guilford began experiencing financial difficulties. Guilford eventually defaulted on its loan obligation and, on December 31, 1986, Guilford filed for bankruptcy. Guilford made several more loan payments until May 1987, when it ceased paying altogether. For the next two years, the guarantors continued to make the monthly payments. By December 1989, however, each guarantor stopped making payment to Continental. According to Continental, approximately $ 3,500,000 remains due and owing on the loan. Seeking to recover the balance of the loan, Continental commenced this diversity action against the guarantors. Three of the guarantors -- Kathrine Everett, Robinson Everett, and J.H. Froelich -- now claim that this court lacks personal jurisdiction over them. *fn2"

 II. DISCUSSION

 In a case based on diversity of citizenship, a federal court has personal jurisdiction over a nonresident defendant only if a court of the state in which the district court sits would have personal jurisdiction. Heritage House Restaurants, Inc. v. Continental Funding Group, Inc., 906 F.2d 276, 279 (7th Cir. 1990); Turnock v. Cope, 816 F.2d 332, 334 (7th Cir. 1987). Illinois courts have personal jurisdiction over a nonresident defendant when the defendant falls within the contours of the Illinois long-arm statute, Ill. Rev. Stat. ch. 110, para. 2-209 (1989). The Illinois long-arm statute provides in relevant part:

 
(a) Any person, whether or not a citizen or resident of this State, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits such person . . . to the jurisdiction of the courts of this State as to any cause of action arising from the doing of any of such acts:
 
(1) The transaction of any business within this State;
 
. . . .
 
(f) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him ...

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