A Capehart Scatchard Blog

Fraud case – Cardiello v. Community Medical Center

By on July 1, 2008 in Key Defenses with 0 Comments

In a case handled successfully on appeal by Anne Hammill, Esq. of Capehart Scatchard,  the Appellate Division vacated a 60% award to petitioner in Cardiello v. Community Medical Center, A-3172-06T1 (App. Div. March 19, 2008).

Petitioner, Valerie Cardiello, alleged that she injured her back on December 30, 2001 while working for respondent.  She later amended to include her neck and shoulder.  Respondent denied the neck and shoulder injuries.  Later petitioner alleged that she was totally and permanently disabled, applying for Second Injury Fund benefits.

Trial took place on November 6, 2006.  The following sequence of testimony is important:

Q.  You began working in 1977 as an LPN?

A.  Correct.

Q. And you worked various places as an LPN until your last day of employment, January 22nd, 2002?

A. That’s correct.

Q. Have you worked anywhere since then?

A. No.

Q. Any family business or off the books jobs, anything of that nature?

A. No.

Q. And your last place of employment was the Community Medical Center?

A. Correct.

On January 3, 2007 respondent offered a settlement of 60% of partial total with a credit for twelve and one-half percent for a total of $151,179.  On the day the settlement was supposed to be put through, respondent’s counsel advised the judge of compensation that petitioner may have engaged in fraudulent conduct when she testified and in other representations.  The judge of compensation denied respondent’s request for one cycle, (three weeks) as well as the request of the Attorney for the Second Injury Fund.

The judge then recalled petitioner for further testimony at the January 3, 2007 hearing and petitioner admitted that she was employed at that time as a supervisor at a nursing home where she said she just did paperwork.  The court then prevented any further questioning beyond petitioner’s current employment.  The court also prevented respondent from withdrawing its settlement offer and entered an order for the award of $151,179 over respondent counsel’s objection. The court reasoned that since the award was for partial permanent disability, (not total), it did not matter that petitioner could work.  According to the judge, working status was an issue only insofar as petitioner was claiming she was totally and permanently disabled.

Respondent filed a motion to vacate the order in part based on the provisions of the New Jersey Fraud Statute.  The judge of compensation refused to consider new evidence on fraud, “I think we have got a settlement.  The parties have agreed that she’s permanently and partially disabled.  Now somebody thinks, well, gee, we got more evidence now that she might have been working somewhere.  Well, the total disability issue is over.  It sounds to me like somebody just doesn’t like this lady and they’re trying to kill the settlement.”  The judge, therefore, denied respondent’s request to vacate the order, leading to this appeal.

The Appellate Division noted that the extent of working ability is critical to any determination of overall disability.  It stated, “Consequently, the judge abused his discretion in limiting the questioning of petitioner’s working status to her then current working status.”  In addition, the court observed that the parties clearly had not reached a settlement given the issues raised by respondent’s counsel.

The Appellate Division went on to note that under the New Jersey Fraud Act, the judge of compensation has the ability to order an immediate termination or denial of benefits whenever a false or misleading statement is made.  “Thus, the Act does not restrict its application to the time period before a settlement agreement is made.”  The court also commented that it was significant that respondent offered within three weeks of the award proof that petitioner had maintained she was not able to work even when the Second Injury Fund claim was pending.  In fact, petitioner had been working at that time.   Petitioner received an employee of the month award on June 18, 2006 five months before she testified in court that she had not been employed since January 22, 2002.

This case was remanded to the Division of Workers’ Compensation for further proceedings and was eventually dismissed for no compensation with petitioner having to repay a $7,000 TDB lien.


About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.


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