Appeals court reverses decision against BMS owners

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   A three-member panel of the Tennessee Court of Appeals has reversed a lower court's ruling that awarded the former owner of the Bristol motor race track more $1 million against current ownership Speedway Motorsports, Inc. (SMI).
   In a ruling issued Thursday, the Court of Appeals unanimously reversed a ruling in favor of former Bristol speedway owner Robert "Larry" Carrier of Bristol. Carrier filed a lawsuit against SMI two years ago alleging breach of contract in a dispute over specifics amount of property leased to Carrier after SMI purchased the speedway from him in 1996.
   Judge Charles D. Susano delivered the opinion of the court that dismissed Carrier's original complaint against BMS and upheld the lower court's dismissal of a counterclaim filed against Carrier by SMI for a debt totaling $175,028. The opinion was joined by judges Herschel P. Franks and William H. Inman.
   SMI attorney Daniel Tarwater said Friday the crux of the appellate court's decision concurred with the company's interpretation of a document that represented three buildings leased to Carrier rather than a 15.54-acre tract of land on SMI property.
   "It was a victory for the speedway," he said.
   Carrier opened the speedway in the early 1960s that has grown into the colossal Bristol Motor Speedway. After several changes in ownership, Carrier reacquired the speedway property in the mid-1980s. He continued to own and operate the speedway through his family corporation, National Raceways, Inc. (NRI), over the next 10 years.
   In addition to conducting two NASCAR-sanctioned races at the speedway each year, NRI facilitated professional boxing matches in a boxing arena on the property.
   The speedway's real property consists of more than 100 acres of land. The 15.54 acre tract at issue in the case is located within the 100 acres. In mid-January of 1996, Bruton Smith, chief executive officer of SMI contacted Carrier and inquired about purchasing the speedway. The plaintiff offered to sell the common stock of NRI to Smith for $20 million.
   In January, 1996, Carrier and his family sold their 100 percent stock ownership interest in NRI to SMI including the well-known Bristol Motor Speedway. In conjunction with the sale, the parties executed a lease agreement, wherein SMI leased back a portion of the speedway's property to the plaintiff. The critical issue in the case involved whether the lease was the boxing arena, trailer, and garage, or the entire 15.54 acre parcel of land on which those structures are located.
   Two months after the closing - during the weekend of March 30, 1996 - SMI conducted its first NASCAR race at the speedway. Immediately following the race, SMI embarked upon a construction project to enlarge and enhance the existing speedway facilities. The project included the construction of sky boxes, grandstands, loading docks, and rest rooms, on the premises of the Speedway, specifically on the 15.54 acre parcel of land in dispute in this case. The expansion was completed in May of 1997.
   The plaintiff filed suit against SMI and Bristol Motor Speedway, Inc., in February of 2002, claiming that the defendants had breached the lease by interfering with the plaintiff's leasehold interest. Specifically, Carrier claimed that the lease covered the 15.54-acre parcel of land lying adjacent to the grandstand at the racetrack.
   SMI denied that it had breached the lease and asserting that the subject matter of the lease is limited to three buildings on the 15.54-acre tract rather than to the entire tract. Attorneys for SMI also filed a counterclaim for an unpaid debt against Carrier totaling $175,028.
   Following a bench trial in the Chancery Court of Sullivan County, Chancellor Thomas R. Frierson II of Hamblen County ruled in favor of Carrier in October of 2002. Frierson's ruling concluded that SMI had breached the lease agreement because the lease involved the entire parcel of land rather than just the three buildings. The court awarded the plaintiff compensatory damages of $1,199,655 plus $172,000 in prejudgment interest. Thursday's ruling vacated the damage award.
   Susano writes that the appellate court disagreed with the trial court's interpretation that the language of the lease as encompassing the entire parcel of land. "The preponderance of the evidence is that the language of the lease contemplates only the lease of the three buildings, since those buildings are specifically mentioned," he wrote.
   The appellate court upheld the trial court's dismissal of a counterclaim filed by Speedway Motorsports, Inc. seeking an unpaid debt of more than $175,000 against Carrier. The trial court had dismissed the defendants' counterclaim ruling the debt "arose from an agreement entered into between Carrier and Carl R. Moore on Dec. 31, 1994", according to the case history. The trial court ruled the debt had been satisfied and discharged under a release dated Jan. 17, 1996 and executed by Moore.
   Susano writes that the court's analysis of the record in the instant case reveals that the greater weight of the evidence favors a finding that the parties intended a lease of only the boxing arena, the garage, and the trailer, and not the entire 15.54 acre parcel of land.
   The Court of Appeals ruled that the trial court erred in its determination that the lease was without ambiguity. "On the contrary, we hold that the subject matter of the lease, on its face, is clearly ambiguous," Susano writes.
   Cecil Laws, attorney representing Carrier said his clients were out of town and he was not aware of the ruling until Friday. He said no decision had been made regarding an appeal of the appeals court's ruling
   "None of us have discussed it at this point," he said.
   BMS hosts two Nextel Cup and Busch Series events each year. The Bristol track is wildly popular with both NASCAR fans and drivers.