Carrel v. Serco Inc., 291 Neb. 61

August 2008: Carrel alleges Devin Witt ran over his foot; truck registration listed a Serco Inc. address in Texas.
February 2010: Carrel’s then-attorney sent a demand letter to a Reston, VA address; Serco’s claims manager replied denying any relationship to Witt or Nebraska vehicles.
May 21, 2012: Carrel sued Serco (a New Jersey corporation) and Witt; Serco’s Nebraska registered agent was served August 7, 2012; no responsive pleading was filed.
Court entered default judgment against Serco on October 7, 2013 for $210,216.36 after Serco failed to appear at hearings; notice was received by Serco but mishandled by employees.
March–April 2014: Garnishment led Serco’s general counsel to learn of the judgment; Serco moved to vacate on April 1, 2014 (within six months of the judgment) and tendered an answer asserting it neither employed Witt nor owned the vehicle.
The district court found Serco’s neglect "severe," denied the motion to vacate despite recognizing a meritorious defense and timely filing within six months; Serco appealed.

Issue	Carrel's Argument	Serco's Argument	Held
Whether district court abused discretion in denying Serco’s motion to vacate default judgment	Serco’s employees’ mishandling was inexcusable; delay was not prompt; deny vacatur	Motion was filed within six months after term, was prompt after discovery, and Serco tendered a meritorious defense (no employment or ownership)	Reversed: court abused discretion; vacatur required and Serco given reasonable time to answer
Whether Serco presented a meritorious defense warranting relief	Meritorious defense absent; Carrel relied on default judgment	Serco produced evidence it never employed Witt and was not owner of vehicle — a defense worthy of judicial inquiry	Held meritorious: defense not frivolous and merits adjudication
Whether promptness of motion to vacate was sufficient	Delay and employee negligence justified denying relief	General counsel moved immediately after learning of judgment; motion filed within six months statute	Held timely and prompt once company learned of judgment
Whether prejudice to Carrel justified refusing vacatur	Allowing vacatur would prejudice Carrel and undermine finality	Carrel had prior notice of Serco’s noninvolvement (2010 letter); statute of limitations against proper defendant had run	Held no unfair prejudice to Carrel that outweighs Serco’s right to defend

Miller v. Steichen, 268 Neb. 328 (insurance coverage defense that raises a question of law can be meritorious for vacating default judgment)
Barney v. Platte Valley Public Power and Irrigation District, 147 Neb. 375 (employee lapses not necessarily so inexcusable as to bar trial on merits)
Beliveau v. Goodrich, 185 Neb. 98 (policy favoring hearings on merits when meritorious defense is tendered)
Fredericks v. Western Livestock Auction Co., 225 Neb. 211 (tendering proof of meritorious defense can show abuse of discretion if court refuses to set aside default)
Fitzgerald v. Fitzgerald, 286 Neb. 96 (application of statutory six-month rule for motions to vacate entered after term)