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Earnhardt's car owner pursues life insurance claim for widow
AARON BEARD
Associated Press
Posted on Wed, May. 25, 2005

LEXINGTON, N.C. - A life insurance company cheated the widow of late race car driver Dale Earnhardt out of millions of dollars by refusing to pay up when he died, a lawyer for Richard Childress Racing said in the opening statements of a civil trial Wednesday.

The insurer, United of Omaha, argued the $3.7 million policy was never in effect because Earnhardt had not taken the required physical before he died in a crash at the Daytona 500 in 2001.

"We made a fair decision. We made a reasonable decision. There's no question we made an unpopular decision, but we did what we're supposed to do based on what occurred," company lawyer Stephen Coles told the jury.

But Richard Childress Racing - Earnhardt's car owner, which is pursuing the matter on behalf of the family - has accused the insurer of failing to properly investigate before denying payment just days after the driver's death.

An insurance company has "a duty to find out why a claim should've been paid," said attorney John Morrow.

He said in his opening statement that Earnhardt had passed a physical for NASCAR shortly before his death.

Richard Childress Racing took out the policy on Earnhardt's behalf and made a $5,000 payment in January 2001.

Earnhardt died in the last-lap crash that Feb. 18. The next day, the race team received a second invoice - dated two days before the crash - for another $5,000 payment toward the annual $21,645 premium. Childress Racing made the payment believing the policy was active, according to the complaint.

The $3.7 million was part of a $7.2 million benefits package, according to the driver's contract. A $3.5 million policy with a second insurer, set up in 1996, was paid to Childress and signed over to Earnhardt's widow, Teresa.

But United of Omaha sent a letter dated Feb. 21 to Childress Racing saying it would not pay the $3.7 million because the application was incomplete "and now cannot be completed," according to the complaint.

Coles said that, despite the payments, the policy hadn't attached to the 49-year-old Earnhardt, one of the most popular drivers in the history of stock-car racing, because he had put off requests to undergo a physical.

"Just because somebody files an application doesn't mean they get a policy," Coles said. "It's not automatic. It's especially not automatic when it's the amount of money in this case."

Childress Racing's lawsuit alleges that the insurer operated in bad faith by not investigating completely, and that the denial of benefits without a "reasonable" investigation amounted to unfair and deceptive trade practices. Childress' attorneys indicated earlier this week that they should receive the full $3.7 million payment, along with compensatory and punitive damages.

Aside from its claim that Earnhardt never took the required physical, United of Omaha also denied responsibility for the actions of the two contractors who set up the policy. Childress has reached a partial settlement with the two, though the agreement is sealed. Davidson County Superior Court Judge Kimberly Taylor has issued a gag order in the case.

Childress and Bill Patterson, executive vice president of Childress Racing, both testified about the payments made to the Shuford Insurance Agency of Concord, which helped arrange the policy.

Childress testified that he was "pretty upset" when the letter arrived denying the claim.

"All I know is we had the checks where we paid for insurance," he said.

Earnhardt Jr. switches crew chiefs
5/24/2005 9:42 PM
By: Jenna Fryer, Associated Press

Dale Earnhardt Jr., right, struggled under Pete Rondeau, left.

CHARLOTTE, N.C. -- Still seeking his first win of the season, Dale Earnhardt Jr. on Tuesday replaced his crew chief in an attempt to turn his team around.

Steve Hmiel, the longtime technical director at Dale Earnhardt Inc., will replace Pete Rondeau on an interim basis beginning with this weekend's Coca-Cola 600 at Lowe's Motor Speedway. Hmiel has often stood in as Earnhardt's spotter on race day.

Rondeau took over at the beginning of the season after a shakeup at Dale Earnhardt Inc. sent Junior's longtime crew to teammate Michael Waltrip.

Earnhardt got Waltrip's crew and seemed to be adapting to the new leadership after finishing third in the season-opening Daytona 500. Instead, the team slipped into a terrible slump and dropped as low as 27th in the points standings.

Earnhardt has just five top 10 finishes in 11 races this year, but in a more telling sign, he did not battle for the wins at either Daytona or Talladega Superspeedway -- the two tracks he has dominated the past few years.

"We are capable of consistently winning and are focused on that as a company," Richie Gilmore, vice president of DEI, said in a statement. "We are going to concentrate our efforts on improved results with the No. 8 car."

Earnhardt, NASCAR's most popular driver, heads into Sunday's race ranked 11th in the standings. He is still in contention to qualify for NASCAR's 10-race championship playoffs, but the crew chief change shows that DEI has gotten nervous about where Earnhardt's team currently stands.

"We have high expectations of how our teams are to perform and we will utilize every resource we have to win races," Gilmore said. "Our primary objective is to get (Earnhardt) and (Waltrip) solidly into the Chase for the Championship and as a company, we're focusing everything we have at that goal."

The shakeup of crews at DEI before the season raised eyebrows in the NASCAR garage. Earnhardt only had experience working with the tandem of Tony Eury Sr. and Tony Eury Jr., his uncle and cousin.

The Eurys led Earnhardt to the Busch Series title in 1998 and '99 , and went with him to the Cup series in 2000. Earnhardt went on to win 15 races with the Eurys, including the Daytona 500 last season, and finished a career-best third in the points in 2003.

But Eury Sr. was named director of competition at DEI in December and Eury Jr. was named Waltrip's crew chief. He took most of Earnhardt's crew with him to Waltrip's team.

"I guess, it's a big gamble in a way," Earnhardt said when he announced the crew changes.

Earnhardt said at the time a change was needed because he often clashed with Eury Jr.

"I really like working with Tony Jr., but, at the same time, the bad times were really, really bad," Earnhardt said. "I told him, 'I don't want to lose you as a cousin and lose the family and friendship side of it. I don't care if we ever talk about race cars again as long as you come over to the house and we visit each other all the time.'

"I think he can have a lot more success with another race car driver than he could with me because we were so stubborn and disrespectful to each other."

Rondeau, who finished 2004 as Waltrip's crew chief and was crew chief for Earnhardt in a Busch series win, will remain with DEI.