2005 Area Auto Racking News Trailer/Haulers & Safety Pull-Out Page B-5

What Racers Legally Don’t Know Can Hurt Them In The Pocketbook

By MIKE LLOYD

FT. WASHINGTON, PA —

Tim Monaghan, a Super Stock drag racer from Baltimore, Md. has been around racing for a long time —since 1972 to be exact. Not only does he compete as a dragster but he’s also worked in the management end at several tracks. Over the years he’s seen a lot of evolution in racing, including a lot of things that he doesn’t like.

One thing troubling him is how much of the fun has gone out of the sport, as the business end of racing has become more complex with each passing year. It bothers him so much that last month he attended a free seminar on legal issues while attending the Motorsports ‘05 show at Pa.’s Ft. Washington Expo Center.

“It was an informative and revealing discussion,” he said. “It’s something I would definitely go to again. As a racer, you really need to look beyond motors, brakes and transmissions —there are a lot of legal issues confronting our sport as it grows.”

One of those issues revolves around something that many racers take for granted —towing your race car to the track.

“I learned that you need to have a CDL (Commercial Drivers License) to tow any kind of vehicle in the state of New Hampshire. It doesn’t matter if you’re just towing a small trailer with a pick-up truck. You need to have a CDL or you could get in big trouble,” he said.

Meri J. Van Blarcom-Gupko, the senior associate at the law firm of Wiley, Malehorn & Sirota, in Morristown, N.J., and attorney Eugene Huang were the speakers that hosted the Ft. Washington seminar.

“It is the racer’s responsibility to know the rules and regulations of the highway in whatever state they are traveling to,” said Van Blarcom-Gupko.

As a child, Van Blarcom-Gupko often attended races at Orange County Fair Speedway in Middletown, N.Y. She grew up in a family that provided her with a lifetime of exposure to NASCAR racing, which cultivated her passion for the sport. In 1997 and again in 2004 she had articles on legal issues facing motorsports teams published in the Seton Hall University Journal of Sports and Entertainment Law. She knows first hand that racers sometimes stick their heads in the sand when confronted with legal headaches.

“The day before the seminar,” Van Blarcom-Gupko said, “I was walking around the show and I asked some of the racers I knew if they planned to attend the seminar and most of them said, ‘What for, I don’t need to know that’.”

And on the day of the seminar only about a dozen short track racers, PR reps and promoters bothered to show. Still, Van Blarcom-Gupko and Eugene Huang weren’t totally disappointed.

“I was pleasantly surprised by the quality of the questions that were asked and the number of issues that were raised,” said Van Blarcom-Gupko.

One of the short-trackers who took the time to take in the seminar was Don Hallowell, a dirt Modified driver from Wilmington, Del. He found the class to be very enlightening.

“A lot of legal issues in our sport are overlooked,” he said. “People look the other way and hope nothing like that ever happens to them. Look at the Hans device. Everyone knew about it, that it was wise to use it, but it wasn’t until Dale Earnhardt was killed that it became such a big issue.”

Hallowell competes at two dirt Modified tracks — Delaware International and N.J.’s Bridgeport— and he makes sure to be equipped with the proper safety equipment. He also wants to be sure he’s protecting himself in the legal department as well.

“I must admit I don’t read the waivers when I sign in at the pit gate,” Hallowell said. “Not too many of us do. We’re in such a hurry to get into the track, to get the car set-up and ready for the race, and then when it’s over, we’re in a big hurry to load up and start the long trip home. We never think about the waiver we just signed.”

Van Blarcom-Gupko says racers might want to start doing that.

“Auto-racing is an inherently dangerous sport —that’s how the courts look upon it,” she said. “If you get hurt at a race track that is part of the risk you take by attending or participating in a high risk activity. When you sign that waiver, it protects the speedway. If you are injured while doing something dangerous, you have just signed your rights away. Fans, who sit up in the stands, of course, have a lot more legal protection should something happen to them in comparison to those who willingly enter the pits knowing they are entering a dangerous area.”

This is most likely news to a lot of people who think they can just sue the track if something bad should happen to them.

“The waiver is a legal document,” says Van Blarcom-Gupko. “And while there are some limitations and exceptions, it generally is accepted as a legal document that will hold up in court.”

And going to court is something that most racers never think about, yet it’s something that could happen to just about anyone, at any time, if circumstances merit it. Take for example, you —the tired race car driver— are driving home from the track on a dark, winding back road somewhere and are involved in an auto accident that causes injuries or even a fatality. The accident was your fault. Not only can you be sued, but —as bizarre as this may sound— your sponsor might get sued, too.

“Due to the very nature of lawsuits, the general practice is to name everybody who might be possibly involved,” explains Van Blarcom-Gupko. “If a sponsor’s name or logo is on your race car or hauler and you are involved in an incident that leads to litigation, chances are good that any sponsors you have may also be named in the suit. It’s very easy to become a defendant in a lawsuit these days.”

This, of course, does not means such a lawsuit will stand up in court. That’s why both sides get lawyers.

Let’s look at contracts and sponsorship agreements for a minute.

Racers are constantly sending sponsorship proposals to companies in the hope of landing a deal that will finance a full season of racing. Then when a company does express interest, the racers are so happy to land the sponsorship deal that sometimes they really don’t know what it is that they just signed.

“If you are going to a sponsorship presentation meeting at a company’s corporate headquarters and they are going to have counsel present, it’s a good rule of thumb that you need to have your lawyer present as well,” advises Van Blarcom-Gupko. “Even if it’s just a small sponsorship package and the contract doesn’t appear to be very complex, it’s still a good idea to have a lawyer look it over.”

In 1992, the year he won the NASCAR Winston Cup championship, Alan Kulwicki had a 14 page personal appearance and sponsorship contract with Hooters restaurants. It was written in such language that it was fairly understandable. But the sport has changed. More recently, Andy Belmont, an ARCA driver from Pendel, Pa., had a 46 page sponsorship contract with AOL, one of his ARCA team sponsors. An ARCA sponsorship contract he had signed several years earlier with Verizon had been only seven pages long.

“The more money you get into, the longer the contract will be and the more confusing and complicated that contract will be,” said Van Blarcom-Gupko. “Most companies, though they may be very interested in the proposal, are going to give the driver as little as possible for the driver’s benefit. That’s why it’s wise to have a lawyer present to look over the proposal and the counter offer, if there is one.”

Of course, in the world of dirt-track racing, a lot of teams don’t even know what a contract is, let alone a sponsorship proposal counter offer.

“So many of the Modified teams don’t keep books,” reveals Don Hallowell. “They just run out of the pocket. It’s just “play money” to their car owners —a lot of the big trucking companies that are heavily involved in Modifieds.”

Hallowell —who does not make his living as a racer, but just races as a side venture— would do things a lot differently if racing was his bread and butter. “If I was one of those race teams who make the bulk of their living from racing, I would be a little bit more interested in what that waiver said and what kind of contracts I have with my sponsors,” he said.

A lot of short-track racers will tell you that they have never signed a sponsorship or an owner-driver contract — everything is done by that time honored tradition of a “handshake agreement”.

Van Blarcom-Gupko’s thought on that is, “A handshake agreement is great but you should still have something in writing, even if it’s just one paragraph explaining the basic agreement. It will really hurt you if you don’t have something in writing. What it comes down to is, that it will be just one person’s word against another.”

Van Blarcom-Gupko also advises that you understand what is written in the contract, even if you do have a lawyer on your side. Remember bump day at last year’s Indy 500 when, at the last minute, Tony Stewart decided not to make a run that could have qualified him for the big race? Why did Stewart change his mind? It wasn’t because his NASCAR car owner, Joe Gibbs, or his NASCAR sponsor, Home Depot, objected to Stewart running in the Indy 500. It was because the car he planned to qualify had a Toyota engine and Stewart is under contract to only run race cars with Chevrolet motors (there may be exceptions for some dirt track events). A lawyer with the contract in hand was at Indy to remind Stewart of this.

Contracts. Waivers. Sponsorship proposals and counter proposals. No more handshake agreements — racing sure isn’t what it used to be. But the times are changing and it’s up to the racers to go with the tide.

“It would behoove all the race teams —with all the money we have invested in racing— to be aware of all the laws and state regulations and how they may affect our operations,” said Tim Monaghan.

And, in conclusion, he’s absolutely right. Because when racers don’t understand our legal system, what they don’t know can hurt them.