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Arbitration case sees another link

WILKES-BARRE – An attorney implicated in the uninsured motorist arbitration case that led to charges against Judge Michael Toole was previously involved in another controversial case in which an arbitrator was accused of improperly providing information to one of the litigants.

That case, involving Harry V. Cardoni and Power Builders Inc., resulted in Cardoni and a business partner receiving a more than $245,000 reduction in additional charges the contractor sought for constructing Cardoni’s law office on Market Street in Kingston.

Cardoni, of Cardoni and Associates, has been indirectly implicated as the attorney who had improper communications with Toole regarding the appointment of a neutral arbitrator in an uninsured motorist arbitration case.

The U.S. Attorney’s Office on Wednesday charged Toole with honest services fraud, saying the judge secretly communicated with an attorney to ascertain who that attorney wished to have appointed as a neutral arbitrator in the case. Toole is also charged with income-tax evasion related to separate dealings with another attorney.

Prosecutors have not identified the attorney in the arbitration case, but details contained in the charges against Toole indicate the case involves an insurance claim Cardoni filed on behalf of Richard Gazenski of Wilkes-Barre that resulted in a $1.2 million award for Gazenski.

Allegations of improper communication between an arbitrator and an attorney were also raised in the contract dispute case that Power Builders filed in 1997 against Carnar Inc., a real estate development firm owned by Cardoni and attorney John Nardone. Carnar is the owner of the building that houses Cardoni’s law office.

Power Builders was the general contractor for the project. The original price of the project was roughly $1.1 million, but that rose to nearly $1.3 million based on numerous change orders that were issued, according to a court papers.

A dispute developed regarding payment for the additional work, prompting Power Builders to file a court action seeking to place a lien on the property.

Under certain conditions, contract disputes can be decided by a three-member arbitration panel instead of a jury. Each side picks one person to serve as their arbitrator. Together they then pick a third, neutral arbitrator.

The Power Builders case was heard by attorneys Conrad Falvello, who was chosen by Carnar, Lawrence Brown, who was chosen by Power Builders, and Joseph Saporito, who was the neutral arbitrator.

Power Builders was seeking $258,332, but the panel, after holding several hearings, ruled in August 2001 that the firm was entitled to only $13,055. The panel determined Power Builders was entitled to $197,471, but that amount was offset by $186,761 that it deemed was due to Carnar.

Before the award was entered, Steven Greenwald, attorney for Power Builders, sought to disqualify the panel based on the fact that Falvello had faxed to Nardone, one of the defendants, a letter that had been written by Brown regarding issues in the case.

A copy of the letter could not be located in court documents. Other documents in the case file indicate the letter disclosed Brown’s position regarding factual issues in the case.

Brown learned that Nardone had been provided the letter because a secretary in Falvello’s office mistakenly faxed the document to Brown as well, according to court documents.

Brown then notified Greenwald, who sought to have the panel disbanded and to present the case before a new panel, arguing Falvello’s release of Brown’s letter was highly prejudicial to Power Builders.

“It is beyond question that the unilateral contact by an arbitrator with a party is patently unfair, highly improper and works to the disadvantage and prejudice of Power Builders ... ,” Greenwald said in court records.

Falvello was out of the office Thursday and could not be reached for comment. Court records show he maintained he sent the letter to Nardone simply to advise him the case was still pending.

Greenwald rebutted that argument in court documents, saying he believed it was clear that the intent was to allow Nardone to provide input or evidence to counter information contained in Brown’s letter.

“There is only one possible reason why Falvello would have contacted Nardone. That reason, the gathering of information, evidence and the like, is highly improper and has deprived Power Builders of an opportunity for a full and fair hearing,” Greenwald wrote.

The motion was heard by former Judge Mark Ciavarella, who on Dec. 13, 1999, issued an order denying the request. Ciavarella said the motion was premature because the arbitration panel had not issued a ruling. Greenwald, he said, had to wait until after the panel rendered a verdict. He could then appeal if he was dissatisfied with the decision.

Contacted Thursday, Brown said he could not recall specific details of the case because the hearing was held so long ago. Saporito, the neutral arbitrator, had far more recollection, however.

Saporito said Cardoni and Nardone maintained any money they owed Power Builders was offset by additional expense they incurred to repair problems with the building they say resulted from faulty construction.

Saporito said he believed some of the issues involved heating and ventilation problems, as well as an uneven floor. Cardoni and Nardone also sought damages of more than $1 million because the structure was not completed on time, he said.

Saporito said the panel thoroughly reviewed all evidence, which included numerous expert reports. He said he believes the panel rendered a fair verdict, noting that it rejected Cardoni and Nardone’s request for damages due to delay in construction.

“There was a lot of evidence the work was not done properly,” Saporito said. “I thought it was very fair based on the evidence and solely the evidence.”

After the arbitration panel ruled, Greenwald continued efforts to overturn the award. In November 1999, he filed a second motion to vacate, arguing that Falvello and Nardone had failed to disclose that they had a business relationship with one another.

According to Greenwald, the attorneys had jointly represented a plaintiff in an automobile accident. They never disclosed that information to Power Builders prior to the arbitration.

No ruling was ever issued on the matter as the case was withdrawn by Greenwald in October 2003.

Neither Greenwald nor Cardoni could be reached for comment Thursday regarding the ultimate resolution of the case. Nardone did not return a phone message seeking comment.

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