Equity Prime Mortgage is firing back at a NASCAR team accusing it of breaking a sponsorship deal, suggesting the racing team breached the agreement earlier.
The Atlanta-based lender also denied an accusation by Jesse Iwuji Motorsports that the company got “margin called” last fall, according to EPM’s counterclaim filed last week in the U.S. District Court for the Southern District of Florida. The racing team sued the lender in December for $4.1 million for breach of contract, for allegedly failing to continue making the $187,500 monthly payments for sponsorship commitments, which included stock car signage.
The mortgage company made payments to JIM between December 2021 and September 1, 2022, both parties agree. The racing team alleges an EPM executive late last September said the firm wouldn’t make further payments and cited trouble stemming from mortgage rate hikes.
In turn, EPM last week claimed JIM co-owner Matthew Casto, identified in the filing as a representative, acknowledged to the lender last May the racing team breached the terms of the sponsorship agreement, and that he would “make it right.”
“Casto claimed that Jesse Iwuji was being ‘sabotaged’ by JIM’s own racing team and being subjected to racism,” wrote attorney Seth Kreiner of Boca Raton, Florida-based Kreiner Burns in the filing made on behalf of EPM. “Casto acknowledged that what was transpiring within the race team and to Jesse Iwuji was concealed from EPM.”
The lender also claimed Casto said Iwuji wasn’t good enough as a driver, prompting the team to replace him with a more experienced driver to compete in NASCAR Xfinity Series races.
Kreiner on Tuesday declined to comment, and EPM did not return requests for comment. JIM’s attorney Darren Heitner of Fort Lauderdale, Florida-based Heitner Legal said in an email Tuesday there is “no truth” to EPM’s claims of Casto acknowledging the breach and pledging to “make it right.”
EPM allegedly in good faith kept making payments through September but founder and CEO Eduardo Perez pulled support in October amid mortgage industry struggles. JIM in November sent the mortgage lender a notice to terminate the sponsorship, EPM responded the next day by rejecting the race team’s contentions.
The lender also claims it was surprised in May to discover JIM used a second driver for the car, which created an alleged breach of the sponsorship agreement. Racing records show Kyle Weatherman drove for JIM during the 2022 NASCAR Xfinity Series season. The racing team deferred comment to Heitner, who confirmed Weatherman occupied the car.
“It was not a breach of the sponsorship agreement, and we possess evidence of EPM congratulating him on his success,” wrote Heitner.
The mortgage lender and servicer signed a two-year, $6 million sponsorship agreement with JIM in November 2021, according to court filings. The lender’s logo appeared on the team’s racecar during eight races while also appearing on race suits, hats and content. In exchange, EPM received race passes, use of JIM talent likeness for advertising, and appearances from Iwuji along with co-owner and NFL Hall of Fame running back Emmitt Smith, among other perks.
Perez founded EPM in 2008 and the lender is licensed in 50 states, offering conventional, government-insured and reverse mortgages. The company originated $1.9 billion in residential loans between Jan. 1, 2022 and Oct. 31, 2022, according to data from by S&P Global.