Judge Rules in Favor of Earnhardt's Team

LEXINGTON, N.C. – A judge ruled Monday that she would side with the race team of the late stock-car driver Dale Earnhardt (search) because an insurance company failed to share legal documents in a court battle over whether benefits should have been paid upon his death.

Superior Court Judge Kimberly S. Taylor (search) issued the order as sanctions against United of Omaha Life Insurance Co. following 12 days of proceedings in Davidson County Superior Court.

Taylor declined the request of Richard Childress Racing (search) to enter a default judgment of $3.7 million, plus interest, and triple that amount as allowed under state law.

Instead, jurors will return Tuesday to hear arguments over whether RCR is entitled to the monetary damages. Last week, attorneys for both sides discovered the legal department of Mutual of Omaha, the parent company of plaintiff United of Omaha Life Insurance Co., failed to share 18 pages of relevant documents before trial.

Omaha Life attorney Stephen Coles asked Taylor to consider lesser sanctions and allow RCR attorneys to re-examine defense witnesses.

"I just don't see any way to remedy this situation," Taylor said. "We all know this should have been provided to the plaintiffs."

The ruling came on the first day after the trial resumed following a recess. The trial began May 24.

Earnhardt's racing team claims United of Omaha, failed to conduct a proper investigation before deciding not to pay the claim.

Earnhardt died Feb. 18, 2001, while in a last-lap crash at the Daytona 500.

His insurer denied the claim because several policy requirements, including a physical, were never completed.

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

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