Auto repair chain Pep Boys is hoping it will have more traction federal court in defending itself against a breach-of-contract lawsuit filed by the Atlanta Motor Speedway.
At issue is whether Philadelphia-based Pep Boys breached its contract to support several races —- including being the exclusive sponsor of the fall NASCAR Sprint Cup series event —- at the Hampton racetrack when it stopped paying according to terms.
Atlanta Motor Speedway, which says it is still owed $1.6 million on the contract, filed suit in Henry County Superior Court April 30.
In its response, filed last week, Pep Boys has sought to move the case to federal court, submitting a countersuit in the northern district of the United States District Court in Atlanta. The company filed in federal court, arguing the amount of money in question exceeds the Henry County court's jurisdiction.
Pep Boys said it is under no obligation to pay the money because Atlanta Motor Speedway violated the agreement when it decided to move the date of its fall race this year. Typically, the race had been held the last Sunday of October, but this year, the speedway officials moved it up to Sept. 6, the Sunday before Labor Day.
Pep Boys already had a one-year sponsorship agreement with speedway officials in 2007 and renewed for another two years in 2008.
The company also argues the Auto Club Speedway in California had hosted the Labor Day weekend race since 2004 and struggled to sell tickets. In comparison, the October race at the Atlanta Motor Speedway didn't have that problem, the lawsuit states.
Pep Boys' suit also said that after renewing its sponsorship, the company saw that the return on its investment from the 2007 fall race wasn't what it expected, and it told speedway officials to find another sponsor for this year's event.
Ed Clark, president and general manager of the Atlanta Motor Speedway, said he could not comment, citing pending litigation. But he said the revenue loss hasn't hurt the Labor Day weekend race, which is scheduled to be held at night.
He said ticket sales for the event are up compared with sales for the fall race last October. Pep Boys' attorneys also declined to comment, citing the pending suits.