Jewish Federation of Lincoln v. Rosenblatt

Filing 60

MEMORANDUM AND ORDER - that Knecht's motion to dismiss (filing 27 ) is denied. Ordered by Chief Judge John M. Gerrard. (LKO)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
JEWISH FEDERATION OF
LINCOLN, INC., a Nebraska NonProfit Corporation,

4:18-CV-3048

Plaintiff,
MEMORANDUM AND ORDER
vs.
KURT KNECHT AND JENNIFER
ROSENBLATT,
Defendants.
This matter is before the Court on defendant Kurt Knecht's motion to
dismiss (filing 27). That motion will be denied.
STANDARD OF REVIEW
A complaint must set forth a short and plain statement of the claim
showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). This
standard does not require detailed factual allegations, but it demands more
than an unadorned accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The
complaint need not contain detailed factual allegations, but must provide more
than labels and conclusions; and a formulaic recitation of the elements of a
cause of action will not suffice. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007). For the purposes of a motion to dismiss a court must take all of the
factual allegations in the complaint as true, but is not bound to accept as true
a legal conclusion couched as a factual allegation. Id.
And to survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a
complaint must also contain sufficient factual matter, accepted as true, to state

a claim for relief that is plausible on its face. Iqbal, 556 U.S. at 678. A claim
has facial plausibility when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. Id. Where the well-pleaded facts do not permit the court
to infer more than the mere possibility of misconduct, the complaint has
alleged—but has not shown—that the pleader is entitled to relief. Id. at 679.
Determining whether a complaint states a plausible claim for relief will
require the reviewing court to draw on its judicial experience and common
sense. Id. The facts alleged must raise a reasonable expectation that discovery
will reveal evidence to substantiate the necessary elements of the plaintiff’s
claim. See Twombly, 550 U.S. at 545. The court must assume the truth of the
plaintiff’s factual allegations, and a well-pleaded complaint may proceed, even
if it strikes a savvy judge that actual proof of those facts is improbable, and
that recovery is very remote and unlikely. Id. at 556.
FACTUAL ALLEGATIONS
The allegations of the operative complaint are fairly straightforward.
The plaintiff, the Jewish Federation of Lincoln, engaged defendant Jennifer
Rosenblatt as its treasurer starting in 2009. Filing 23 at 1. According to the
Jewish Federation, Rosenblatt began embezzling funds starting in 2010. Filing
23 at 1. All told, the Jewish Federation claims that Rosenblatt took more than
$100,000 between March 2010 and October 2016. Filing 23 at 2.
Knecht is Rosenblatt's husband. Filing 23 at 1. The Jewish Federation
alleges that Knecht "was aware" of Rosenblatt's embezzling, "or in the exercise
of reasonable care should have been aware, and benefitted from her conduct."
Filing 23 at 1. The Jewish Federation asserts that Rosenblatt converted funds,
"and both defendants benefitted from this conversion." Filing 23 at 2. And the
Jewish Federation alleges that both defendants "conspired to and did embezzle
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and fraudulently convert funds from the [Jewish Federation] to their own
personal use." Filing 23 at 2.
DISCUSSION
Knecht moves to dismiss the Jewish Federation's complaint as to him for
failure to state a claim. Specifically, he argues that the Jewish Federation
doesn't allege facts establishing that he exercised dominion over its funds, or
any concerted action to steal from it. See filing 28 at 5.
But the Court is not convinced. To begin with, there are circumstances
under which a conversion action may be maintained against a defendant who
received stolen funds. See Bryant Heating & Air Conditioning Co. v. U.S. Nat'l
Bank, 342 N.W.2d 191, 195 (Neb. 1983); Talich v. Marvel, 212 N.W. 540, 542
(Neb. 1927); see also Restatement (Second) of Torts §§ 223 cmt. b, 224 cmt. c,
229 cmt. e, & 224 (1965). And second, while the Jewish Federation's civil
conspiracy allegations are threadbare, the Court will not dismiss that claim at
the pleading stage. There is enough to infer that Knecht may have agreed with
Rosenblatt to embezzle funds, or at least aided and abetted her conduct. See
Salem Grain Co. v. Consol. Grain & Barge Co., 900 N.W.2d 909, 923-24 (Neb.
2017).1 Accordingly,

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It is, moreover, well-pleaded facts, not legal theories or conclusions, that determine the

adequacy of the complaint. Mickelson v. Cty. of Ramsey, 823 F.3d 918, 923 (8th Cir. 2016);
Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d 843, 848 (8th Cir. 2014). It is, in fact,
unnecessary to set out a legal theory for the plaintiff's claim for relief in a pleading. In re
SuperValu, Inc., 870 F.3d 763, 772 (8th Cir. 2017). And on the facts alleged in the complaint,
thin as they are, the Court cannot rule out another theory of recovery, such as money had
and received or unjust enrichment. See Hanigan v. Trumble, 562 N.W.2d 526, 531 (Neb.
1997); see also Hydroflo Corp. v. First Nat. Bank of Omaha, 349 N.W.2d 615, 621-22 (Neb.
1984); Washington v. Beselin, 4 N.W.2d 753, 756 (Neb. 1942).

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IT IS ORDERED that Knecht's motion to dismiss (filing 27) is
denied.
Dated this 7th day of February, 2019.
BY THE COURT:

John M. Gerrard
Chief United States District Judge

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