Luxor Agentes Autonomos De Investimientos, LTDA v. Intertransfers, Inc.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-12947
Non-Argument Calendar
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D.C. Docket No. 1:12-cv-20664-DLG
LUXOR AGENTES AUTONOMOS
DE INVESTIMIENTOS, LTDA.,
a Brazilian corporation,
Plaintiff - Appellee,
versus
INTERTRANSFERS, INC.,
a Florida corporation,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 21, 2016)
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Before TJOFLAT, WILSON and JILL PRYOR, Circuit Judges.
PER CURIAM:
Intertransfers, Inc. (Intertransfers), appeals the district court’s denial of its
Motion for Relief from Judgment. Intertransfers requested such relief pursuant to
Rule 60(b)(4) of the Federal Rules of Civil Procedure after the court entered final
judgment in favor of Luxor Agentes Autonomos de Investimientos, Ltda. (Luxor).
On appeal, Intertransfers argues that the district court lacked jurisdiction to enter
the judgment and, therefore, the court erred in denying its request for relief. We
affirm.
In 2012, Luxor brought suit against Intertransfers, raising a number of state
law claims. Luxor also named Jose Augusto Martins, Intertransfers’s president, as
a defendant. In its complaint, Luxor asserted diversity jurisdiction pursuant to 28
U.S.C. § 1332(a). In their responsive pleadings, Intertransfers and Martins
confirmed that the district court had subject matter jurisdiction over the dispute
under § 1332(a). Thereafter, the parties entered a settlement agreement. The
agreement provided that Luxor was entitled to entry of final judgment if
Intertransfers and Martins failed to comply with its terms. As a result, the district
court dismissed the case, and in its order, stated that it was retaining jurisdiction
for the limited purpose of enforcing the agreement.
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In 2013, Luxor filed a motion for entry of final judgment because
Intertransfers and Martins had breached the agreement. The district court granted
the motion and entered final judgment in favor of Luxor. The judgment provided
that Intertransfers and Martins were jointly and severally liable for all damages
awarded to Luxor. After the judgment was entered, Intertransfers and Martins
filed a joint Motion for Relief from Judgment. Fed. R. Civ. P. 60(b)(4). They
argued that the judgment is void due to jurisdictional error. Specifically, they
asserted diversity jurisdiction does not exist because Martins, like Luxor, is a
citizen of Brazil. In support thereof, Intertransfers and Martins provided new
documentation related to Martins’s citizenship. In light of this documentation,
Luxor admitted that Martins’s presence as a defendant deprived the district court of
diversity jurisdiction. In turn, Luxor requested that the court dismiss Martins
pursuant to Rule 21 of the Federal Rules of Civil Procedure. The court elected to
exercise its authority under Rule 21 to dismiss Martins as a party and denied
Intertransfers’s Rule 60(b)(4) request for relief. This appeal followed.
The crux of Intertransfers’s argument on appeal is that the district court did
not have the authority to dismiss Martins. According to Intertransfers, given that
Martins must remain a defendant, the final judgment is void due to jurisdictional
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error and its request for relief must be granted.1 However, we find that the district
court did not err in dismissing Martins and, therefore, the judgment is not void as a
result of jurisdictional error.
Under Rule 21, “[o]n motion or on its own, the [district] court may at any
time, on just terms, add or drop a party. The court may also sever any claim
against a party.” Fed. R. Civ. P. 21. “Rule 21 invests district courts with authority
to allow a dispensable nondiverse party to be dropped at any time, even after
judgment has been rendered.” Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S.
826, 832, 109 S. Ct. 2218, 2223 (1989) (emphasis added). This includes the
authority to dismiss a nondiverse party for the purpose of “rescu[ing] an otherwise
valid judgment.” See Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330,
1343 (11th Cir. 2011); Ingram v. CSX Transp., Inc., 146 F.3d 858, 862 (11th Cir.
1998) (“[F]ederal courts of appeals have the authority—like that given to the
district courts in Fed. R. Civ. P. 21—to dismiss dispensable, nondiverse parties to
cure defects in diversity jurisdiction.”). But, prior to exercising this authority, the
1 Relatedly, Intertransfers asserts the district court lacked authority to enforce the
settlement agreement because “enforcement of the . . . agreement is for state courts.” But,
because the district court’s dismissal order specifically stated that the court was retaining
jurisdiction to enforce the agreement, this argument is without merit. As long as the district
court properly corrected the diversity jurisdiction defect arising from Martins’s presence, the
court had authority to enter the judgment. See Kokkonen v. Guardian Life Ins. Co. of Am., 511
U.S. 375, 381, 114 S. Ct. 1673, 1677 (1994) (“[I]f the parties’ obligation to comply with the
terms of the settlement agreement had been made part of the order of dismissal—either by
separate provision (such as a provision ‘retaining jurisdiction’ over the settlement agreement) or
by incorporating the terms of the settlement agreement in the order . . . [then] a breach of the
agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement
would therefore exist.”).
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district court should consider whether the dismissal of the nondiverse party will
prejudice any party in the litigation. Cf. Newman-Green, 490 U.S. at 838, 109 S.
Ct. at 2225. Prejudice exists if the party to be dismissed is indispensable and the
presence of the party “provided the other side with a tactical advantage in the
litigation.” Molinos Valle Del Cibao, 633 F.3d at 1343–44.
Here, the district court properly exercised its Rule 21 authority in dismissing
Martins. Under Rule 21, the district court had authority to dismiss a nondiverse
party after entering a judgment for the sake of rescuing the judgment. In addition,
no party was prejudiced by Martins’s dismissal. First, since Martins and
Intertransfers were jointly and severally liable under the judgment, Martins was a
dispensable party. See Newman-Green, 490 U.S. at 838, 109 S. Ct. at 2226
(“[G]iven that all of the [defendants] are jointly and severally liable, it cannot be
argued that [any one defendant] was indispensable to the suit.”). Second,
Intertransfers does not identify any tactical advantage that Luxor received from
Martins’s presence in the suit. Thus, the district court properly dismissed Martins
pursuant to Rule 21, and in doing so, rescued the final judgment. Based on this
finding, we conclude that the court did not err in denying Intertransfers’s Motion
for Relief from Judgment.2
2 In addition to the arguments discussed above, Intertransfers challenges the district
court’s ruling on a number of other grounds. After careful consideration of these additional
arguments, we find they each lack merit.
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AFFIRMED.
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