Axia NetMedia Corp. v. Massachusetts Technology Park Corp.

Case Type:
Business
Case Status:
Affirmed
Citation:
17-1607 (1st Circuit, Apr 25,2018) Published
Tag(s):
Ruling:
AFFIRMED in part and REMANDED in part. The First Circuit Court of Appeals AFFIRMS the District Court's judgment ordering Axia to perform obligations of KCST as guarantor of KCST and REMANDS to the District Court for the limited purpose of amending the order to clarify that Axia's obligations terminate once Axia itself has complied with the Guaranty.
Procedural context:
Axia NetMedia Corporation (Axia) appeals from the order of the United States District Court for the District of Massachusetts ordering Axia, as guarantor to KCST, Inc. (KCST) to perform various obligations of KCST while disputes between the parties remain unresolved.
Facts:
Massachusetts Technology Park Corporation (MTC) engaged KCST to operate a broadband network in western and north central Massachusetts. KCST's parent company, Axia guaranteed KCST's performance. MTC, KCST and Axia brought claims against each other and KCST filed for bankruptcy protection. Pursuant to 362(a), the filing of the petition stayed MTC's state court action. KCST continued to perform what it viewed as its obligations, but ceased making many of the payments under a Network Operator Agreement with MTC. Axia preemptively filed suit in federal district court seeking a declaratory judgment that MTC had breached the Network Operator Agreement, and because of that breach Axia had no responsibility under the guaranty. The parties agreed to resolve the claims by arbitration. In the meantime, MTC obtained a preliminary injunction in the District Court requiring Axia, as guarantor of KCST, to perform obligations of KCST while the substantive disputes between the parties remaing unresolved. Axia appealed the order.
Judge(s):
Lynch, Souter, Kayatta

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