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Insurance Policy Disputed After Dale Earnhardt's Death

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More than four years after Dale Earnhardt's fatal crash on the last lap of the Daytona 500, his racing team is still trying to collect on a life insurance policy it applied for just weeks before his death.

Richard Childress Racing says it took out the $3.7 million policy on Earnhardt's behalf. If collected, the money would go to the NASCAR legend's widow, Teresa.

But the insurance company, United of Omaha, argues the policy was never in effect. Part of the problem: Earnhardt died before taking a physical.

There's also a dispute over whether Childress had paid enough of the premium. The team says it made an initial payment and got the bill for a second on Feb. 19, 2001 -- the day after Earnhardt's last race. It paid the bill.

But the company says more money was owed before the policy would take effect.

Now Childress is suing. A trial is set to begin today in Davidson County, where the Childress team is based.

The case is expected to take up to two weeks, and the court called in a pool of 125 prospects for jury selection Monday -- three times the usual number for a civil trial there.

Superior Court Judge Kimberly Taylor told jurors that the case would involve famous names, and prospects filled out a long questionnaire designed to help attorneys select a jury this morning.

Question No. 44 probably clued them in on at least one aspect of the case: Do you have a favorite NASCAR driver?

Richard Childress, who owned the No. 3 car that Earnhardt, a Kannapolis native, made famous, sat in front of the courtroom with his attorneys. He contends that United of Omaha didn't conduct a proper investigation of his claim, as required by N.C. law.

"Within 24 hours of Mr. Earnhardt's death, they closed their file, sent a letter to Richard Childress Racing and said, `We're done,' " said Kevin Williams, an attorney for Childress. "We say that is unfair."

Had the company investigated, Williams says, it would have determined that Childress was owed money on the policy.

The insurance company denies there was any coverage in place, though, because the full initial premium had not been paid. It says the agents used as go-betweens by Childress weren't authorized to act on the company's behalf and made mistakes in arranging for the policy, negating any coverage.

Although the lawsuit doesn't mention a specific amount Childress is seeking, his attorneys suggested during pretrial motions Monday that they'd be arguing for the full $3.7 million, plus punitive damages.

Childress has already reached a partial settlement with the middlemen who arranged for the policy. The agreement is sealed, but attorneys argued before the judge Monday about whether details, including the amount of the settlement, could be revealed at trial.

As a result of the deal, portions of the lawsuit have been dismissed by the judge, in the insurance company's favor.

Stephen Coles, the attorney for United of Omaha, wanted the judge to prevent Childress' lawyers from mentioning the amount of the insurance policy in front of the jurors, saying the $3.7 million isn't relevant to determining damages if Childress Racing wins the case.

"That should not be allowed to come in the back door, the side door or any other door," Coles argued.

Childress and the attorneys for both sides wouldn't comment after the hearings, saying the judge had placed everyone involved under a gag order.

The case file provides some details that will likely be argued out in court, however. Childress says it began an application for the life insurance policy in December 2000, after negotiating a new three-year contract with Earnhardt, its star driver.

The policy, which was required by Earnhardt's contract and would benefit his family, was in addition to a $3.5 million policy Childress had already taken out with a different company, National Life of Vermont.

After Earnhardt's death, Childress Racing says it delivered the money paid on the first policy to Teresa Earnhardt.

Such policies are fairly common for top-tier drivers, similar to policies that corporations take out on their top executives, according to NASCAR insiders.

The policies are meant to cover lost wages if a driver dies. On the application for United of Omaha, an agent estimated Earnhardt's annual earnings at $10 million-plus.

Earnhardt, though, never took the physical required for the second policy. Childress says the insurance company's doctors called to schedule it in early February - when Earnhardt was in Daytona Beach, Fla., preparing for the NASCAR season.

Earnhardt's assistant was told the physical could wait until after the Daytona 500, the suit states. Earnhardt, of course, never made it back.

--David Poole contributed to this report.