Android Dialog - Rounded Corners and Transparency

I'm trying to make a custom android dialog with rounded corners. My current attempts have given me this result.

As you can see, the corners are rounded, but it leaves the white corner still intact.

Below is the xml that I put in the drawable folder to create the blue dialog with the red border with the rounded corners.

<?xml version="1.0" encoding="utf-8"?>
<layer-list xmlns:android="http://schemas.android.com/apk/res/android">
    <item> 
        <shape 
            android:shape="rectangle">
            <solid android:color="@color/transparent_black" />
            <corners android:radius="@dimen/border_radius"/>
        </shape>
    </item>   
    <item 
        android:left="@dimen/border_width" 
        android:right="@dimen/border_width"  
        android:top="@dimen/border_width"
        android:bottom="@dimen/border_width" >  

        <shape android:shape="rectangle"> 
            <solid android:color="@color/blue" />
            <corners android:radius="@dimen/border_radius"/>
        </shape>
    </item>    
</layer-list>

Below is the layout of the dialog.

<?xml version="1.0" encoding="utf-8"?>
<LinearLayout xmlns:android="http://schemas.android.com/apk/res/android"
style="@style/fill"
android:orientation="vertical"
android:layout_margin="@dimen/spacing_normal"
android:padding="@dimen/spacing_normal"

android:background="@drawable/border_error_dialog" >

<RelativeLayout 
    style="@style/block"
    android:layout_gravity="center" >

    <ImageView
        android:id="@+id/imageView1"
        style="@style/wrap"
        android:layout_alignParentLeft="true"
        android:layout_centerHorizontal="true"
        android:contentDescription="@string/content_description_filler"
        android:src="@dr