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Posted September 26, 2012 | comments Leave a comment

Shentel asks court to drop lawsuit

By Alex Bridges -- abridges@nvdaily.com

Attorneys for Shenandoah Telecommunications Company say plaintiffs in a lawsuit over tax preparation services failed to respond to a filing in federal court.

Shenandoah Telecommunications filed a motion Tuesday in U.S. District Court in Harrisonburg asking Judge Michael Urbanski to enter default against Cablecom Tax Services Inc., and strike the plaintiff's answer to the firm's counterclaim.

Texas-based Cablecom, doing business as Property Tax Accounting, sued Shenandoah and its subsidiaries for failing to pay the firm its share of proceeds from savings gained through its tax preparation services. Cablecom also claims Shenandoah used its accounting strategies without permission.

Shenandoah refutes the claims, questions the legitimacy of Property Tax Accounting, and countersued Cablecom for at least $300,000 in damages. The counterclaim accuses Cablecom/Property Tax Accounting for fraud in the inducement and breach of contract.

Shenandoah filed its response to Cablecom's complaint and the counterclaim via the electronic court filing system on Aug. 8, according to the defendant's motion for default. The 21-day period in which Property Tax Accounting had to answer or respond to the counterclaim ended Aug. 29. Property Tax Accounting did not file its answer or otherwise respond to the counterclaim by the deadline, according to the defendants' attorneys.

"Because PTA failed to answer or otherwise respond to the Counterclaim within the time period ... PTA is in technical default and the entry of default is appropriate," the motion states.

Property Tax Accounting filed its answer two weeks after the deadline, according to the counterclaimant. Property Tax Accounting didn't request an extension of the deadline, nor did the court grant leave to the plaintiff to file an untimely pleading. Shenandoah argues Property Tax Accounting did not show good cause to set aside the default or to extend the deadline.

Citing case law granting the court power to strike a pleading, Shenandoah's motion argues that striking the plea remains an appropriate remedy in this case due to Property Tax Accounting's untimely filing. The plaintiff could have asked the court to extend the deadline but did not, the motion states. As a result of its filing after deadline, Shentel argues the court should strike Property Tax Accounting's answer to the counter claim. Federal rule of civil procedure allows either the court or the clerk to enter a party's default when that party's failure to plead of defend is shown by affidavit.

Matthew Von Schuch and Thomas E. Ullrich represent Shenandoah Telecommunications Company. Matthew A. Brennan III and Timothy W. Sorenson represent Cablecom.

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