Applied Underwriters Captive Risk Assurance Company, Inc., an Iowa corporation, appellee,
Oceanside Laundry, LLC, doing business as Campus Laundry, appellant.
Motions to Vacate: Appeal and Error. The
decision to vacate an order is within the discretion of the
court; such a decision will be reversed only if it is shown
that the district court abused its discretion.
Judges: Words and Phrases. A judicial abuse
of discretion exists when the reasons or rulings of a trial
judge are clearly untenable, unfairly depriving a litigant of
a substantial right and denying just results in matters
submitted for disposition.
Service of Process: Waiver. A general
appearance waives any defects in the process or notice, the
steps preliminary to its issuance, or in the service or
Jurisdiction: Pleadings: Parties. A party
will be deemed to have appeared generally if, by motion or
other form of application to the court, he or she seeks to
bring its powers into action on any matter other than the
question of jurisdiction over that party.
Default Judgments. When determining whether
to set aside a default judgment, two competing interests must
be considered: the right of a litigant to defend the action
on the merits and judicial efficiency.
Default Judgments: Proof: Time. Where a
judgment has been entered by default and a prompt application
has been made at the same term to set it aside, with the
tender of an answer or other proof disclosing a meritorious
defense, the court should on reasonable terms sustain the
motion and permit the cause to be heard on the merits.
Default Judgments: Motions to Vacate: Words and
Phrases. In the context of a motion to vacate a
default judgment, a meritorious or substantial defense or
cause means one which is worthy of judicial inquiry [300 Neb.
334] because it raises a question of law deserving some
investigation and discussion or a real controversy as to the
Default Judgments: Motions to Vacate.
Although a defendant seeking to vacate a default judgment is
required to present a meritorious defense, it is not required
that the defendant show he will ultimately prevail in the
action, but only that the defendant show that he has a
defense which is recognized by the law and is not frivolous.
from the District Court for Douglas County: J. Michael
Coffey, Judge. Reversed and remanded with directions.
Kristopher J. Covi, of McGrath, North, Mullin & Kratz,
PC, L.L.O., for appellant.
Jeffrey A. Silver for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, and Funke, JJ.,
and Vaughan, District Judge. Vaughan, District Judge.
appeal involves a default judgment against Oceanside Laundry,
LLC, doing business as Campus Laundry (Oceanside). Applied
Underwriters Captive Risk Assurance Company, Inc. (AUCRA),
filed a breach of contract action against Oceanside. When
Oceanside did not file a responsive pleading, the district
court for Douglas County granted AUCRA's motion for
default judgment. The district court subsequently denied
Oceanside's motion for reconsideration or, in the
alternative, to set aside the default judgment on the basis
of several defenses. Oceanside now appeals the district
court's orders. Because we conclude that Oceanside made
prompt application to set aside the default judgment and
demonstrated at least one meritorious defense in support of
its motion, we reverse, and remand with directions to vacate
the default judgment and allow Oceanside a reasonable time in
which to file an appropriate responsive pleading.
Neb. 335] BACKGROUND
a California-based limited liability company doing business
as Campus Laundry, entered a reinsurance participation
agreement (RPA) with AUCRA, an Iowa corporation with its
principal place of business in Douglas County. Nebraska. On
December 12, 2016, AUCRA brought a breach of contract action
against Oceanside in the district court for Douglas County.
AUCRA unsuccessfully attempted to serve process on Oceanside
via certified mail, using a California address for Campus
Laundry. AUCRA next filed a praecipe that requested personal
service at the same address by an authorized process server
in California. According to the proof of service, on January
25, 2017, a civil process server personally served
"'John Doe' (Caucasian male, 30's,
5'9", 200 lbs., Brown eyes, Brown hair) Person in
did not file a responsive pleading.
March 23, 2017, AUCRA filed a motion for default judgment and
sent notice of the hearing to the same address it used to
serve Oceanside the summons.
hearing on the motion for default judgment, counsel for
Oceanside made an appearance and opposed the motion, alleging
improper service of process. The district court received
Oceanside's affidavit evidence that AUCRA did not serve a
summons on any person authorized by the company to receive
service of process on its behalf.
support of AUCRA's motion for default judgment, it
offered an exhibit consisting of a copy of the RPA, a series
of statements for Oceanside's account with AUCRA, and an
affidavit designating the most recent balance as the amount
due and owing. The RPA provides that it shall be governed
exclusively by the laws of Nebraska and that any matter shall
be resolved exclusively by the courts of Nebraska.
Additionally, the RPA states that AUCRA may apply to a court
of competent jurisdiction for relief in the event of breach.
Neb. 336] Oceanside's counsel objected to AUCRA's
exhibit on relevance grounds and argued that the balance
cited by AUCRA as the amount due and owing may not be
accurate because the balances fluctuate over time. The
district court received AUCRA's exhibit over
Oceanside's objection. Oceanside's counsel then
reiterated the position ...