Seagrape Investors LLC v. Kaleil Isaza Tuzman

Background

Seagrape Investors LLC brought this action after its investment in a Colombian hotel project failed. The court previously dismissed Seagrape’s federal securities, fraud, and fiduciary-duty claims, leaving breach-of-contract claims. In July 2023, the court granted Seagrape’s renewed motion for summary judgment and found Kaleil Isaza Tuzman, Obra Pia Ltd., KIT Capital Ltd., KIT Capital (Nevis) LLC, Obra Pia Management, GP, and Obra Pia Ltd., Surcusal Colombia liable for breaching the Credit Security Acknowledgment. The court also decided that Seagrape could immediately collect from those defendants other than Obra Pia under the Subordination Agreement.

The Clerk entered judgment in August 2024 and later corrected it. Defendants then moved under Federal Rule of Civil Procedure 59(e) to amend the judgment. They argued for the first time that OP Colombia was only a branch of Obra Pia and therefore could not have payment obligations separate from Obra Pia’s subordinated obligation. They submitted new corporate materials and a declaration from a Colombian-law expert.

Seagrape later learned that OP Feeder’s presence defeated diversity jurisdiction because Seagrape itself was one of OP Feeder’s limited partners. Seagrape moved under Rule 21 to drop OP Feeder from the judgment. It also asked the court to remove Amanda Blaurock, Rosario Davi, Joseph P. Garland, and Kenneth A. Elan, who had previously been dismissed but were mistakenly named in the judgment.

Rule 21 motion

The court held that OP Feeder was a necessary party because the case involved interpreting and enforcing the Subordination Agreement, which OP Feeder had signed. But the court concluded that OP Feeder was not indispensable—that is, the case could proceed without it without creating unacceptable prejudice.

The court emphasized that OP Feeder had been dismissed from the case five years earlier, had already had an opportunity to protect its interests, and was not the subject of an effort to cancel or invalidate a contract. The parties had completed discovery and litigated three rounds of summary judgment, so dismissing the action for OP Feeder’s absence would harm the efficient administration of justice. The court therefore granted Seagrape’s motion to drop OP Feeder under Rule 21 and directed the Clerk to omit OP Feeder from the judgment’s caption and body.

The court distinguished its ruling from the result in the related action, where it had found OP Feeder indispensable. That case was still at the pleading stage and included claims seeking to cancel agreements involving OP Feeder, creating a greater risk of prejudice.

Rule 59(e) motion

The court denied Defendants’ motion to amend the judgment under Rule 59(e). That rule permits relief only for an intervening change in controlling law, newly available evidence, clear error, or manifest injustice. It cannot be used to raise arguments or evidence that could have been presented before judgment.

The court found that Defendants had multiple opportunities during the three rounds of summary-judgment briefing to argue that OP Colombia’s status as a branch prevented immediate collection. Instead, they argued that Seagrape could not collect from any defendant until the senior loan was satisfied. Their answer had described OP Colombia as a branch, but Defendants did not develop the legal argument, submit supporting evidence, or explain its effect on collection until after judgment.

The court also stated that Defendants had not shown clear error. The Credit Security Acknowledgment identified OP Colombia as jointly and severally liable with Obra Pia and other defendants and as jointly and severally obligated to pay Seagrape. The court further found that the Colombian-law declaration and cases about bank branches did not establish that OP Colombia could not have separate payment obligations in this case.

Rule 60(a) motion

The court construed Seagrape’s request to remove the four previously dismissed individuals as a motion under Rule 60(a), which permits correction of clerical mistakes or oversights in a judgment. Because the court had dismissed all claims against Blaurock, Davi, Garland, and Elan in 2020, the judgment should have stated that judgment was entered in their favor. The court granted Seagrape’s Rule 60(a) motion and directed the Clerk to modify the judgment accordingly.

The court declined to remove KIT Capital Ltd. because Seagrape raised that request only in a reply letter, and it was not clear that the company’s inclusion was a clerical error. The court stated that KIT Capital Ltd. could file its own motion.

Disposition

The court granted Seagrape’s motion to drop OP Feeder under Rule 21, denied Defendants’ motion to amend the judgment under Rule 59(e), and granted Seagrape’s motion to correct the judgment under Rule 60(a).