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Edens says The Paper was 'out of my control'

January 19, 2000|By BRENDAN KIRBY

MARTINSBURG, W.Va. - The former president of a defunct weekly newspaper in Berkeley County argued Wednesday at a hearing that she is not responsible for the hundreds of thousands of dollars in salaries that employees never received.

The proceeding, held at the Martinsburg Holiday Inn in front of a West Virginia Division of Labor hearing examiner, revolved around a single question: Was Judith Edens responsible for the missed payments, or did she believe the money would come from her onetime partner, Judy Carlberg?

The answer, according to Edens' lawyer, David A. Camilletti, is that she was a victim.

Hearing Examiner James W. McNeely will make a recommendation to the commissioner of the Division of Labor after receiving written arguments from both sides. If Edens is held responsible, the commissioner then must determine how much she owes.

A decision could be months away.

Robert Miller, the Labor Division's general counsel, presented six witnesses in an attempt to pin responsibility on Edens.

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"She was one of the people who directed the work force," testified John Junkins, supervisor of the Wage and Hour section of department.

After a hearing in February, the Division of Labor in March determined that Carlberg and the corporation, the Carlberg Edens Publishing Co., violated the state's wage law and owe $345,000 in lost wages. Miller said no money has been collected and no attempt has been made to enforce the judgment because it appears neither Carlberg nor the company has the money.

A criminal indictment against Carlberg alleging fraud is scheduled to go to trial in May.

The state determined at the same hearing that Edens was also responsible for the lost wages, but she appealed to Berkeley County Circuit Court, claming she was not notified of the February hearing.

Wednesday's proceedings stemmed from an agreement by the state to rehear Edens' case.

Carlberg and Edens left a Martinsburg newspaper in the summer of 1998 to start a weekly newspaper for the Eastern Panhandle. They recruited nearly 50 employees and published several editions before the paper folded in November 1998.

Three employees complained to the state Division of Labor and the department launched an investigation.

Junkins testified that Edens signed several documents, including business account agreements at One Valley Bank on behalf of the company. Paperwork from the firm lists her as the president and a member of the board of directors, he said.

Finally, Junkins noted the name of the corporation: Carlberg Edens Publishing Co.

But Camilletti said there was no documentation that specifically listed Edens as an owner, and Edens testified she did not learn of the name until after Carlberg filed the incorporation papers.

Mary Beth Whitmore, a Division of Labor compliance officer who investigated the complaints, testified that Edens acted as an equal partner in the business.

Several former employees concurred.

"Yes, that was my understanding," testified Patricia Arndt, who left Warner Production Agency to join The Paper as the accounting and credit manager. "What I remember is that this paper was being started by both of them, equally."

When employees' paychecks did not arrive on Sept. 2, 1998, Carlberg told the staff that a problem had delayed payment, according to the testimony of several ex-employees. They said Carlberg told them the money was being wired from a bank in Chicago, but had been held up.

With each successive missed payment, Carlberg continued to reassure staffers that the money was on the way, several employees testified.

Deanna Culler, who as an advertising representative, testified that Edens, too, promised the money would arrive.

"'(Carlberg) is well-financed.' That's what (Edens) said," Culler testified.

Patricia Hoffman, who was an advertising representative, said she put trust in Edens and Carlberg.

"If they say, 'We will pay you,' I believe an employer," she said. "Everyone wanted to believe it."

Sharon L. Smith, who was human resources director for The Paper, testified she viewed Carlberg and Edens as partners, a point bolstered after Edens told her she invested more than $12,000 in the company.

But on cross-examination, Hoffman said she believed Edens accepted Carlberg's explanations along with everyone else.

"I think, truthfully and honestly, Judy wanted to believe, too," she said.

Edens testified that she believed Carlberg because she saw a list of stocks that Carlberg supposedly owned along with pictures of houses and contracts for $2 million homes she said she owned.

She said she understood her role as running day-to-day operations because of her extensive newspaper experience and Carlberg's responsibility as providing the capital.

"She was to plant the seed; I was to see that it grew," she said.

Edens said she invested $12,500 on stock in May 1998 and another $5,000 later in the year. She said she did not believe she was accepting any liability for the company with the investments, comparing it to owning shares of a large company.

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