NVDAILY.COM | Local News

Posted August 31, 2012 | comments Leave a comment

Firm asking judge to overrule Shentel dismissal motion

By Sally Voth svoth@nvdaily.com

A Texas accounting firm is asking a U.S. District Court judge to overrule Shentel's motion to dismiss a $3 million lawsuit filed against it.

Cablecom Tax Services Inc., which was doing business as Property Tax Accounting, filed a suit in federal court in mid-July alleging Shentel and its subsidiaries owe millions of dollars for tax services.

Meanwhile, Shentel accuses the tax company of fraud and breach of contract, and is seeking $300,000 in damages it claims to have suffered.

The suit alleges that among the services Cablecom supplied to the Edinburg telecommunications firm was finding ways to save money on taxes. In turn, Shentel was to pay Cablecom a percentage of the proceeds, according to the suit, which also accuses Shentel of using proprietary trade secrets.

Shentel filed a motion to dismiss for failure to state a claim, as well as a counterclaim of its own on Aug. 8, according to online court records.

Shentel makes various allegations in its motion to dismiss, including that Cablecom didn't sign the contracts on which the suit is based, that Cablecom isn't authorized to do business under Virginia or Texas law "under the fictitious or assumed name 'Property Tax Accounting,'" that Texas had revoked Cablecom's charter at the time Property Tax Accounting is said to have signed the contracts with Shentel, and that it hasn't "sufficiently alleged the existence of a trade secret."

The counterclaim states that John A. White started Property Tax Accounting Service Inc. in Texas in 1991, and six years later the company had forfeited its charter. It states White's daughter is Michele Dawn Kruger, and that both visited Shentel in Edinburg in August 2010.

Neither Kruger nor White let Shentel know that PTA wasn't a legal entity, that White didn't have his certified public accountant license and had federal tax debts, and that neither they nor their company had a Texas license to do tax consulting, according to the counterclaim.

It also states the contracts called for Shentel to pay PTA half of its tax savings, and $175 per hour for services, plus travel expenses. The counterclaim states PTA filed property tax returns that listed Shentel's personal property at amounts that were "artificially low."

Now those tax returns have to be amended, with interest and penalties to pay, it states.

Shentel is alleging damages of $300,000.

In court documents filed Friday, the plaintiff states its charter was forfeited in July 2010 for not paying franchise taxes, but those taxes were paid and the charter reinstated two months later.

PTA also doesn't want to get into details of the alleged trade secret misuse.

"If Plaintiff is required to plead with specificity the exact nature of the trade secrets, they cease being trade secrets because they will have been published in a document open to the general [public]" states a memorandum in support of a response opposing the motion to dismiss.


Copyright © The Northern Virginia Daily | nvdaily.com | 152 N. Holliday St., Strasburg, Va. 22657 | (800) 296-5137