Rosie O'Donnell's "Queen of Nice" image took a brutal beating in a Manhattan's State Supreme Court Wednesday as a cancer survivor burst into tears while testifying how O'Donnell suggested she was lying about incidents at her now-defunct magazine -- and told the woman that liars get cancer.

Cindy Spengler, the one-time head of marketing at Rosie magazine, said O'Donnell made the remark after a meeting to discuss the magazine's problems, reports the Associated Press.

Spengler said O'Donnell told her that her silence in the meeting was the same as lying.

"You know what happens to people who lie," the witness quoted O'Donnell as saying. "They get sick and they get cancer. If they keep lying, they get it again."

Spengler's testimony before Judge Ira Gammerman (who alone will decide the outcome of the case) was part of the ongoing battle between O'Donnell and Rosie publisher Gruner+Jahr, who are both suing each other for breach of contract.

According to her testimony, Spengler shot back at O'Donnell: "Your mother died of breast cancer. Was she lying?"

"Yes," Spengler quoted the entertainer as replying.

Outside court, O'Donnell, 41, told a large gathering of reporters that she called Spengler the next morning and apologized for the cancer comment.

"I'm sorry I hurt her the way I did," she said. "That was not my intention."

Meanwhile, settlement talks between both sides apparently were held on Tuesday but broke down when the parties could not agree on a confidentiality clause, reports The New York Times. So the clash of the titans resumed in earnest Wednesday.

O'Donnell is expected to take the stand late Thursday afternoon.