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MADD Claims Promoter Bamboozled It

DALLAS (CN) - Mothers Against Drunk Driving claims a North Carolina-based promoter fraudulently claimed it could get MADD a NASCAR sponsorship and licensing deal.

Mothers Against Drunk Driving sued SponsorMonsters.com, of Mooresville, N.C., and Bob Boston, of Concord, N.C., in Dallas County Court.

NASCAR is not a party to the complaint.

MADD says it believed an affiliation with NASCAR would prove "an excellent opportunity to educate a large number of people about its mission and further its goal to stop drunk driving."

It felt that MADD's reputation, trade name and logo would provide good co-branding opportunities with for-profit businesses that shared in its goals.

MADD says Boston approached it in 2010 and introduced himself as owner and operator of SponsorMonsters, "a motorsports marketing agency that had unique access to NASCAR, its racing teams, and sponsors."

"MADD and Boston, purportedly acting on behalf of SponsorMonsters, had a number of communications about the potential for a business relationship between them," the complaint states.

Based on these meetings, MADD says it signed a 3-year contract with SponsorMonsters, in which Boston promised to run a car displaying the MADD marks in at least one NASCAR series for each year of the contract, and that MADD would receive royalty payments of $600,000 over the life of the deal.

MADD says Boston agreed to immediately place $100,000 in an escrow account and provide it with documentation of it.

MADD honored Boston at its 2010 National Conference, presenting him with an award for his commitment to pay it the NASCAR-related royalties.

In retrospect, MADD says, "Boston attended that conference in person to accept that award, notwithstanding his apparent intention not to make those payments."

MADD says SponsorMonsters breached the agreement on June 30, 2011, when it failed to make the first royalty payment. It tried to notify the company of the breach in a letter sent by Federal Express, but the package was returned, marked as "refused."

"While the notice provisions of the agreement were met as of the mailing of the Federal Express letter, in an attempt to amicably resolve this dispute, MADD also sent the same letter by first class mail on August 9, 2011," the complaint states. "That letter was ultimately returned unopened and marked 'return to sender - no longer at this address' and 'vacant.'"

MADD says Boston used SponsorMonsters "as a means to perpetrate a fraud."

"It now appears that SponsorMonsters has been abandoned as a business entity," the complaint states. "Boston appears to be working with another sports marketing company performing the same services he purported to be able to provide MADD in 2010."

MADD claims that "SponsorMonsters was a mere tool or conduit of Boston" and served as his alter ego for the sole purpose of defrauding entities that wished to forge a relationship with NASCAR.

MADD seeks liquidated damages of $600,000 and exemplary damages for breach of contract, fraud and fraudulent inducement, negligent misrepresentation and omissions, and unjust enrichment.

It is represented by Vance L. Beagles, with Weil, Gotshal & Manges.

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