Tax firm gets second chance with lawsuit

^ Posted Oct. 7

By Alex Bridges

A federal judge dismissed an accounting firm's claim that Shenandoah Telecommunications Co. used its trade secrets and reneged on a tax-preparation contract.

Judge Michael F. Urbanski dismissed the entire complaint filed by Texas-based Cablecom Tax Services without prejudice and gave leave to submit an amended claim within 30 days during a hearing on motions Thursday in U.S. District Court in Harrisonburg.

However, Urbanski also dealt blows to Shenandoah by denying motions aimed to undercut the plaintiff's case.

Cablecom, of Denton, Texas, doing business as Property Tax Accounting, claimed in a lawsuit filed in July that Shenandoah Telecommunications and its subsidiaries failed to pay proceeds from savings acquired through its tax preparation services as set forth in a contract. Cablecom also claimed Shenandoah employed its tax accounting strategies to gain more savings without permission, which the plaintiff argued constitutes as unauthorized use of trade secrets. Cablecom sought $4.5 million in damages from Shenandoah.

Edinburg-based Shenandoah refuted Cablecom's claims and countersued for at least $300,000 in damages. Shenandoah questioned in its filing the legitimacy of Property Tax Accounting and accused Cablecom of fraud in the inducement and breach of contract. Shenandoah argued the tax accounting strategies were not trade secrets.

Shenandoah, represented by attorneys Thomas Ullrich and Matthew Von Schuch, argued at the hearing the motion to dismiss Cablecom's complaint for its failure to state a claim, according to an account of the proceedings filed in the court. The plaintiff, represented by Matthew Brennan III and Timothy Sorenson, responded to the defense arguments. Urbanski ruled on the motion to dismiss Cablecom's complaint.

The plaintiff's counsel indicated to the court they had no objection to the defendant's motion to amend their counterclaim. Urbanski granted the motion to amend the counterclaim.

However the judge denied Shenandoah's motions to strike the plaintiff's answer to its counterclaim as well as seeking to find Cablecom in default for missing a court filing deadline. The court document on the hearing proceedings did not indicate Urbanski's reasons for his rulings on Shenandoah's motions.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or

1 Comment

Just shows you how crooked Shentel/Shenadoah Telecomunications really are in their practices. Get a company to show you what they can do and then go behind their backs and screw them on the contract.

Shentel may have saved millions but they haven't passed any on to the customers that are held at ransom for services. The fees keep going up and the service has never been of a quality to pay premium prices.

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