Downtown's Health Care, LLC et al v. Rademacher

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Nina Y. Wang
Civil Action No. 25-cv-01073-NYW-CYC
DOWNTOWN’S HEALTH CARE, LLC, d/b/a REGEN REVOLUTION, LLC, and
RACHEL ANDERS,
Plaintiffs,
v.
DR. GARY RADEMACHER,
Defendant.
ORDER ON MOTION TO DISMISS
This matter is before the Court on Defendant’s Partial Motion to Dismiss (the
“Motion” or “Motion to Dismiss”). 	[Doc. 11]. 	The Court has reviewed the Motion to
Dismiss, the related briefing, and applicable case law, and concludes that oral argument
would not assist in the resolution of the Motion. For the reasons stated herein, the Motion
to Dismiss is respectfully GRANTED in part and DENIED in part.
BACKGROUND
These facts are taken from Plaintiffs’ Complaint, [Doc. 1], and are presumed true
for purposes of this Order. 	In 2019, Plaintiff Rachel Anders (“Ms. Anders”) was an
employee and 5% owner of Plaintiff Downtown’s Health Care, LLC, d/b/a ReGen
Revolution, LLC (“ReGen”). 	[Id. at ¶ 9]. 	At the time, Defendant Gary Rademacher
(“Defendant” or “Dr. Rademacher”) was ReGen’s “principal owner” and practice manager.
[Id. at ¶¶ 95–96]. At some unidentified point, Dr. Rademacher began to discuss with Ms.
Anders the possibility of her acquiring his majority stake in the practice. [Id. at ¶ 10]. In
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late 2023, Ms. Anders and Dr. Rademacher executed a Purchase Agreement,1 and Ms.
Anders acquired Dr. Rademacher’s share for $735,000, “payable through a variety of
loans taken out by Ms. Anders, and paid to Dr. Rademacher.” [Id. at ¶¶ 15–17].
Plaintiffs’ Complaint alleges a number of ways in which Dr. Rademacher allegedly
breached or acted in contravention of applicable contractual terms. 	For example, the
Purchase Agreement stated that, at closing, “[a]ll the Company’s cash on hand and in
banks” would be distributed to Dr. Rademacher, except that ReGen could “retain an
operating reserve” of $500,000 at closing. [Id. at ¶ 18]. Plaintiff alleges that despite this
provision “making it appear that ReGen had more than the amount the practice would
‘retain’ in its reserve” (i.e., $500,000), Dr. Rademacher actually deposited funds into
ReGren accounts “to enable closing to occur.” 	[Id. at ¶ 19]. 	Additionally, under the
Purchase Agreement, all ReGen assets were to be included as part of the purchase, but
after the sale, Dr. Rademacher attempted to wrongly obtain ReGen’s IRS refund checks.
[Id. at ¶¶ 20–22, 44–46, 55–56, 79]. Plaintiffs also allege that Dr. Rademacher, through
the Purchase Agreement, represented that he was not aware of any facts that could result
in legal actions or litigation, which was false; in reality, Dr. Rademacher “was aware that
a prior employee who had sought unemployment benefits for which she was denied
payment still had time before which she had to file a lawsuit.” 	[Id. at ¶¶ 23–24]. 	That
former employee did file a lawsuit after ownership of ReGen was transferred to Ms.
Anders. [Id. at ¶ 24].
1 The Complaint references a singular “Purchase Agreement,” see, e.g., [Doc. 1 at ¶¶ 3,
18–23 (referencing a single agreement), 31], but also separately references an unknown
number of “purchase agreements,” see, e.g., [id. at ¶¶ 17, 26, 30, 32]. Whether a single
agreement or multiple agreements exist is not material to the Court’s resolution of the
Motion to Dismiss.
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Plaintiffs also allege that Dr. Rademacher “remains responsible for amounts [owed
by ReGen]” that “originated during Dr. Rademacher’s primary ownership of ReGen” but
did not come to light until after the ownership transfer. [Id. at ¶ 65]. According to Plaintiff,
Dr. Rademacher remains responsible for over $100,000 in unpaid invoices. [Id. at ¶ 66].
And, after the sale, Dr. Rademacher “accessed the ReGen business account to make
payments on obligations he had personally incurred as personal expenses.” [Id. at ¶ 86].
Plaintiffs allege that Dr. Rademacher has stolen or misappropriated funds from ReGen.
[Id. at ¶¶ 107–08].
ReGen and Ms. Anders initiated this lawsuit on April 4, 2025. 	See [id.]. 	They
assert five claims against Dr. Rademacher: (1) fraudulent inducement (“Claim One”), [id.
at ¶¶ 88–93]; (2) breach of fiduciary duty (“Claim Two”), [id. at ¶¶ 94–99]; (3) breach of
contract (“Claim Three”), [id. at ¶¶ 100–04]; (4) civil theft (“Claim Four”), [id. at ¶¶ 105–
14]; and (5) unjust enrichment (“Claim Five”), [id. at ¶¶ 115–20]. 	Defendant moves to
dismiss all but the breach of contract claim. [Doc. 11].
LEGAL STANDARD
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court may dismiss
a complaint for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P.
12(b)(6). 	In deciding a motion under Rule 12(b)(6), the Court must “accept as true all
well-pleaded factual allegations . . . and view these allegations in the light most favorable
to the plaintiff.” 	Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (quotation
omitted). 	The plaintiff may not rely on mere labels or conclusions, “and a formulaic
recitation of the elements of a cause of action will not do.” 	Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007). 	Rather, “a complaint must contain sufficient factual matter,
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accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quotation omitted).
ANALYSIS
Dr. Rademacher asks this Court to dismiss Claims One, Two, Four, and Five for
failure to state a claim under Rule 12(b)(6). The Court addresses the Parties’ arguments
on a claim-by-claim basis below.
I. 	Claim One: Fraudulent Inducement
In Claim One, Plaintiffs allege that Dr. Rademacher made false statements and
misrepresentations to induce Ms. Anders to purchase ReGen. 	[Doc. 1 at ¶¶ 88–93].
Defendant seeks dismissal of this claim, arguing (1) Plaintiffs’ allegations fail to meet the
heightened pleading requirements of Rule 9; (2) Plaintiffs fail to allege facts supporting
the elements of a fraudulent inducement claim; and (3) the claim is barred by the
economic loss rule. [Doc. 11 at 7–12].
To state a claim for fraudulent inducement, a plaintiff must allege “(1) the defendant
made a fraudulent misrepresentation of fact or knowingly failed to disclose a fact that
defendant had a duty to disclose; (2) the fact was material; (3) the plaintiff relied on the
misrepresentation or failure to disclose; (4) the plaintiff’s reliance was justified; and (5) the
reliance resulted in damage to the plaintiff.” 	Granite Southlands Town Ctr., LLC v.
Provost, 445 F. App’x 72, 75 (10th Cir. 2011) (applying Colorado law). 	In addition to
pleading these elements, however, a plaintiff asserting a claim for fraudulent inducement
must also “state with particularity the circumstances constituting fraud or mistake.” Fed.
R. Civ. P. 9(b). 	To satisfy this requirement, the plaintiff “must ‘set forth the time, place
and contents of the false representation, the identity of the party making the false
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statements and the consequences thereof.’” George v. Urb. Settlement Servs., 833 F.3d
1242, 1254 (10th Cir. 2016) (quoting Koch v. Koch Indus., 203 F.3d 1202, 1236 (10th Cir.
2000)). The purpose of this heightened requirement is to afford the defendant fair notice
of the plaintiff’s claims, id. at 1255, and to “ensure that the complaint provides the
minimum degree of detail necessary to begin a competent defense,” Fulghum v. Embarq
Corp., 785 F.3d 395, 416 (10th Cir. 2015) (quotation omitted).
Dr. Rademacher first argues that Plaintiffs fail to adequately allege a claim for
fraudulent inducement because their allegations do not meet the heightened standards
of Rule 9. 	[Doc. 11 at 8–9]. 	Specifically, he asserts that Plaintiffs do not “identify any
specific statements to support this claim” or “identify any specific dates or places for the
alleged statements.” [Id. at 8]. The Court respectfully disagrees. The Complaint alleges,
among other things, that Dr. Rademacher made the following misrepresentations or
omissions:
• 	During discussions about Ms. Anders purchasing Dr. Rademacher’s ownership
interest in ReGen, Dr. Rademacher “assured [Ms. Anders] that he would remain
responsible for certain accounts payable,” i.e., “those that were incurred during
his tenure as majority owner and manager of the practice.” 	[Doc. 1 at ¶ 12].
Despite this, certain outstanding invoices from Dr. Rademacher’s tenure have
not been paid. [Id. at ¶¶ 61–68].
• 	The Purchase Agreement stated that ReGen would distribute its cash in hand
and in bank accounts to Dr. Rademacher, which Plaintiff asserts “ma[de] it
appear that ReGen had more than the amount [it] would ‘retain’ in its reserve.”
[Id. at ¶¶ 18–19].
• 	The Purchase Agreement stated that there were no known legal claims against
ReGen and that Mr. Rademacher was “not aware of any facts that [he]
reasonably anticipate[d] may result” in legal proceedings. [Id. at ¶ 23 (emphasis
omitted)]. 	However, Mr. Rademacher was aware that a prior employee had
employment-related claims that could be asserted against ReGen. [Id. at ¶¶ 24,
69–72].
• 	The Purchase Agreement falsely stated that ReGen and Dr. Rademacher had
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filed all required tax returns. [Id. at ¶¶ 25–26].
These allegations sufficiently describe the contents of the allegedly false statements, the
identity of the party making the false statements (Dr. Rademacher), and the place of the
alleged misstatements (within the Purchase Agreement).
Plaintiffs further allege that Dr. Rademacher and Ms. Anders signed the Purchase
Agreement “in October and November of 2023,” which provides a sufficiently specific
timeframe for purposes of Rule 9(b). 	See [Doc. 1 at ¶ 16]; see also [Doc. 11-1 (the
Purchase Agreement)]; cf. Aaron H. Fleck Revocable Tr. through Fleck v. First W. Tr.
Bank, No. 21-cv-01073-CMA-GPG, 2022 WL 1193452, at *7 (D. Colo. Feb. 17, 2022)
(finding that the plaintiff’s “factual allegations [were] sufficiently temporally grounded
within a brief period between February to May 2018” for purposes of Rule 9), report and
recommendation adopted, 2022 WL 872633 (D. Colo. Mar. 23, 2022).2 	And finally,
Plaintiffs allege that Ms. Anders relied upon these misstatements in deciding to purchase
ReGen. [Doc. 1 at ¶¶ 54, 89, 91–92]. The Court concludes that these allegations meet
the requirements of Rule 9.
In the alternative, Dr. Rademacher challenges a portion of Claim One under Rule
12(b)(6). 	Specifically, he argues that to the extent the fraudulent inducement claim
2 With respect to any alleged misrepresentations that were not made within the Purchase
Agreement, 	“not every 	allegation 	of 	fraudulent misconduct must 	be 	pleaded 	with
particularity for a complaint to survive at the motion to dismiss stage.” 	Clinton v. Sec.
Benefit Life Ins. Co., 63 F.4th 1264, 1280 (10th Cir. 2023). “[A] complaint may . . . satisfy
Rule 9(b)’s requirements when its allegations are sufficiently particularized when ‘taken
as a whole.’” Id. (emphasis omitted) (quoting George, 833 F.3d at 1257); see also United
States ex rel. Lemmon v. Envirocare of Utah, 614 F.3d 1163, 1173 (10th Cir. 2010) (“The
federal rules do not require a plaintiff to provide a factual basis for every allegation. Nor
must every allegation, taken in isolation, contain all the necessary information [under Rule
9].”). 	Reviewing the Complaint in its entirety, the Court finds that it contains adequate
allegations to be sufficiently particularized as a whole.
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“relates to the lawsuit of a former employee,” Plaintiffs cannot state a claim under Rule
12(b)(6) because they do not allege a “false representation of material past or present
fact.” 	[Doc. 11 at 10 (quoting Colo. Jury Instructions, Civ. § 19:1 (4th ed. Apr. 2025
update))]. 	Dr. Rademacher asserts that because the employee’s lawsuit was filed after
Ms. Anders bought ReGen, the lawsuit provides no support for a fraudulent inducement
claim. 	[Id.]. 	However, 	this 	argument 	disregards 	the 	fact 	that, 	as 	pleaded, 	Dr.
Rademacher knew of the employee’s potential legal claims and still falsely represented
that he was not aware of those potential claims. See [Doc. 1 at ¶¶ 23–24, 69]. Plaintiffs
do not, as Defendant suggests, “seek to hold Defendant accountable for failing to predict
a lawsuit,” [Doc. 11 at 10]; rather, they allege that Dr. Rademacher concealed his
knowledge of ReGen’s potential liabilities. 	Furthermore, the Court is respectfully
unpersuaded by Defendant’s contention that the allegations about his knowledge of the
employee’s potential claims are “conclusory.” 	See [id.]. 	It is unclear to the Court how
Plaintiffs could provide more detailed facts establishing Dr. Rademacher’s subjective
knowledge—information that is solely within his possession—at the pleading stage and
without any discovery. 	See [Doc. 21 (Judge Chung staying all discovery pending
resolution of the Motion to Dismiss)].3
3 Defendant also argues that Ms. Anders “was in a much better position to have
anticipated 	this 	lawsuit 	than” 	Dr. 	Rademacher, 	as 	Ms. 	Anders hired 	and 	directly
supervised the employee and had “firsthand knowledge” of the events underlying her
claims. [Doc. 11 at 10 n.6]. In support, Defendant relies on and cites to the complaint in
the employee’s federal lawsuit, arguing that the Court may take judicial notice of the
complaint because it constitutes “material[] in a court file.” 	[Id. at 5 n.5]; see also [Doc.
11-2]. 	However, while the Court may take judicial notice of court records, Binford v.
United States, 436 F.3d 1252, 1256 & n.7 (10th Cir. 2006), the function of judicial notice
is a limited one. 	The Court can take judicial notice of court records only to show their
contents, not to provide the truth of the matters asserted therein. Tal v. Hogan, 453 F.3d
1244, 1264 n.24 (10th Cir. 2006). 	Moreover, this sort of factual dispute is not
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Finally, Dr. Rademacher argues that the fraudulent inducement claim is barred by
the economic loss rule. 	[Doc. 11 at 11]. 	Colorado’s economic loss rule dictates that “a
party suffering only economic loss from the breach of an express or implied contractual
duty may not assert a tort claim for such a breach absent an independent duty of care
under tort law.” Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000).
Defendant contends that, through Claim One, Plaintiffs are attempting “to recover purely
economic damages based upon a duty covered by contract,” so the claim is barred by the
economic loss rule. 	[Doc. 11 at 12]. 	Plaintiffs respond that “the duties [at issue] arose
independently from the contractual duties imposed.” 	[Doc. 12 at 8]. 	They also contend
that the Complaint includes allegations of “misrepresentations from prior to the Purchase
Agreement,” so the economic loss rule does not apply. [Id. at 9].
The Court respectfully declines to reach the Parties’ substantive arguments about
the economic loss doctrine at this time. Courts in this District routinely decline to dismiss
claims at the pleading stage based on the economic loss rule. See, e.g., Bartch v. Barch,
No. 18-cv-03016-RBJ-NYW, 2022 WL 3597119, at *3 (D. Colo. May 9, 2022) (“I decline
to dismiss the conversion claim at this stage. . . . Plaintiff is permitted to plead the contract
and conversion claims in the alternative.”); GEA Power Cooling Sys., LLC v. Bechtel
Power Corp., No. 09-cv-02051-RPM, 2010 WL 1241290, at *1 (D. Colo. Mar. 18, 2010)
(“While an election may be required at some time before trial, a ruling on the applicability
of the economic loss rule at this pleading stage would be premature.”); M.M.A. Design,
appropriately raised in a Rule 12(b)(6) motion to dismiss, which is designed to challenge
the sufficiency of the operative pleading’s allegations, not dispute the veracity of them.
Casanova, 595 F.3d at 1124 (a court ruling on a Rule 12(b)(6) motion to dismiss accepts
all well-pleaded allegations as true).
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LLC v. Capella Space Corp., No. 18-cv-02957-MSK-NRN, 2019 WL 3973935, at *4 (D.
Colo. Aug. 21, 2019) (declining to address economic loss rule, as it was “a matter that
[was] best deferred to future summary judgment proceedings”). 	And “inconsistent
contract and tort claims may be pled in the alternative.” 	Gorsuch, Ltd. v. Wells Fargo
Nat’l Bank Ass’n, No. 11-cv-00970-PAB-MEH, 2013 WL 6925132, at *3 (D. Colo. Dec.
13, 2013), aff’d, 771 F.3d 1230 (10th Cir. 2014); see also Fed. R. Civ. P. 8(d)(3). 	This
case is in its early stages; discovery has not commenced, and Defendant has not filed an
answer. 	The Court declines to try to ascertain the economic loss rule’s applicability in
this procedural posture.4
For all of these reasons, the Motion to Dismiss is DENIED to the extent it seeks
dismissal of Claim One.
II. 	Claim Two: Breach of Fiduciary Duty
Next, Defendant seeks dismissal of Claim Two on the grounds that it is barred by
the economic loss rule. 	[Doc. 11 at 11]. For the reasons discussed above in Section I,
the Court declines to dismiss the breach of fiduciary duty claim based on the economic
loss rule at this early stage. Bartch, 2022 WL 3597119, at *3; GEA Power Cooling Sys.,
2010 WL 1241290, at *1. The Motion to Dismiss is DENIED as to Claim Two.
4 Moreover, “[t]o determine whether a contracting party owes an independent common
law duty of care, [courts] consider (1) whether the relief sought in tort is the same as the
contractual relief; (2) whether there is a recognized common law duty of care; and
(3) whether the tort duty differs in any way from the contractual duty.” 	Dream Finders
Homes LLC v. Weyerhaeuser NR Co., 506 P.3d 108, 118 (Colo. App. 2021) (quotation
omitted). The Parties do not address these factors in their briefing. See [Doc. 11 at 11–
12; Doc. 12 at 8–9]. 	The Court declines to undertake a sua sponte analysis of these
factors.
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III. 	Claim Four: Civil Theft
To state a claim of civil theft, “a plaintiff must allege the elements of criminal theft:
that the defendant ‘knowingly obtain[ed], retain[ed], or exercise[d] control over anything
of 	value 	of 	another 	without 	authorization 	or 	by 	threat 	or 	deception, 	and 	act[ed]
intentionally or knowingly in ways that deprive[d] the other person of the property
permanently.’” Scott v. Scott, 428 P.3d 626, 633 (Colo. App. 2018) (quoting Van Rees v.
Unleaded Software, Inc., 373 P.3d 603, 608 (Colo. 2016)). And “for a civil theft claim to
lie, the party claiming civil theft must have a proprietary interest in the property claimed
to be stolen.” Million v. Grasse, 549 P.3d 1043, 1051 (Colo. App. 2024). “If the property
that is the subject of the civil theft claim is money, in order for the plaintiff to have a
proprietary interest in the money, there must be either a specifically identifiable account
or a wrongful obtaining, retention, or exercise of control over specifically identifiable funds
that belong to the plaintiff.” Id. at 1051–52 (footnote omitted).
Defendant argues that Plaintiffs’ civil theft claim should be dismissed because the
Complaint does not point to specifically identifiable funds that Dr. Rademacher allegedly
stole. [Doc. 11 at 15]. He asserts that Plaintiffs’ allegation that Dr. Rademacher obtained
“readily identifiable” funds in the form of “amounts [he] paid from accounts that he no
longer should have been accessing” or “amounts that [he] received through unlawful
means from the IRS or other entities like the Card Settlement Fund administrator,” see
[Doc. 1 at ¶ 108], is conclusory and insufficient to state a claim, [Doc. 11 at 15].
Plaintiffs respond that “the allegations in the Complaint go through significant detail
in identifying the specific funds and invoices at issue here, to the extent they are
identifiable by Plaintiffs.” [Doc. 12 at 9]. In support, Plaintiffs direct the Court to paragraph
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65 of their Complaint. [Id.]. But paragraph 65 does not, as Plaintiffs suggest, identify any
funds that Dr. Rademacher allegedly stole from Plaintiffs; rather, paragraph 65 identifies
“amounts that have come to light” that “originated during Dr. Rademacher’s primary
ownership of ReGen” and for which Dr. Rademacher allegedly “remains responsible.”
[Doc. 1 at ¶ 65]; see also [id. at ¶¶ 67–68 (further alleging that Dr. Rademacher “only paid
a portion” of one of the invoices identified in paragraph 65 and “fail[ed] . . . to pay for . . .
comparable . . . invoices from the same period”)]. Plaintiffs do not explain, and the Court
cannot ascertain, how the invoices, charges, and expenses identified in paragraph 65
and allegedly unpaid by Dr. Rademacher constitute funds stolen from Plaintiffs.5
Plaintiffs also suggest that their allegations about certain settlement funds from a
“Payment Card Settlement” provide sufficient support to their civil theft claim. [Doc. 12 at
10]. Plaintiffs allege that ReGen “has applied for” those settlement funds and that, after
applying, Plaintiffs learned “that another party had already sought to recoup the same
funds.” 	[Doc. 1 at ¶¶ 81–82]. 	They imply that although they are unable to confirm the
unnamed third party’s identity, the third party must have been Dr. Rademacher because
“there is no other person authorized to apply for the funds.” 	[Id. at ¶¶ 83–84]. 	In his
Motion to Dismiss, Defendant argues that these allegations are inadequate because
(1) the funds are not specifically identified by amount or location; (2) Plaintiffs concede
that it is unclear whether it was Dr. Rademacher who applied for the funds; and
5 Plaintiffs do not allege that they paid these invoices, see [Doc. 1 at ¶¶ 105–14], and they
do not appear to proceed on a theory that any payments Plaintiff made on these invoices
could form the basis of a civil theft claim, see [Doc. 12 at 9–10]. 	Indeed, Plaintiffs only
allege that the funds Dr. Rademacher allegedly stole are amounts he paid from accounts
he should not have been accessing or funds he received through unlawful means. [Doc.
1 at ¶ 108].
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(3) Plaintiffs do not allege that they are entitled to the funds and do not allege that any
person is actually in possession of the funds. [Doc. 11 at 16].
Plaintiffs respond by focusing on Defendant’s first argument, asserting that the
Complaint sufficiently connects Dr. Rademacher as the third party who applied for the
funds. 	[Doc. 12 at 10]. 	Although this argument is well taken, as the Complaint clearly
connects the dots between the unidentified third-party applicant and Dr. Rademacher,
[Doc. 1 at ¶¶ 83–85], Plaintiffs do not adequately address Defendant’s other challenges
to this theory of civil theft. 	Specifically, the Court agrees with Defendant that the
allegations about the Payment Card Settlement funds do not adequately allege that Dr.
Rademacher obtained, retained, or exercised control over anything over which Plaintiffs
have a proprietary interest, so as to state a civil theft claim. 	Scott, 428 P.3d at 633.
Indeed, the Complaint does not allege that Dr. Rademacher obtained any portion of the
Payment Card Settlement funds—it alleges only that a third party, and presumably Dr.
Rademacher, filed a claim for the funds. 	See [Doc. 1 at ¶¶ 81–85]. 	But this alone is
insufficient to satisfy the elements of a civil theft claim: if Dr. Rademacher did not obtain
the funds, he could not have stolen them. Accordingly, the Court agrees with Defendant
that Plaintiffs have not alleged a plausible civil theft claim with respect to the Payment
Card Settlement funds.
Finally, Plaintiffs assert that their allegations that Dr. Rademacher stole IRS refund
checks, which were owed to ReGen, are sufficient to support a civil theft claim. [Doc. 12
at 9–10]. Defendant argues that these allegations are insufficient to state a claim because
they “fail to identify any specific or identifiable amounts, or the total amount of refunds at
issue.” 	[Doc. 11 at 16]. 	The Court respectfully disagrees with Defendant at this
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preliminary stage of the case. The Court does not read Million to require that, in all cases
and in all circumstances, a plaintiff must identify a specific amount of money allegedly
stolen to adequately state a civil theft claim. 	In Million, the Colorado Court of Appeals
affirmed the dismissal of a civil theft claim that was based on the (lack of) distribution of
funds pursuant to a settlement agreement. 549 P.3d at 1046. The settlement agreement
in that case “provided a formula for determining the amount, if any, owed to [the plaintiff]
on the sales of the designated properties,” but “[i]t did not identify a specific amount of
money payable to” the plaintiff. 	Id. at 1052. 	And “due to imprecisions in the parties’
Settlement Agreement,” it was not possible to determine what amount was owed to the
plaintiff “at the time [the defendant] distributed the funds.” Id. Because “the net proceeds
were not either specifically identifiable funds or funds from a specifically identifiable
account,” the Colorado Court of Appeals concluded that the plaintiff “did not have a
sufficient proprietary interest in the money, precluding a civil theft claim.” 	Id. 	In other
words, the funds claimed by the plaintiff in Million were so amorphous and indefinite that
the plaintiff could not plausibly assert a proprietary interest in them.
Here, unlike Million, Plaintiffs have alleged the specifically identifiable funds
allegedly stolen by Dr. Rademacher—the tax refunds owed to ReGen by the IRS, but
allegedly improperly rerouted to and obtained by Dr. Rademacher. See [Doc. 1 at ¶¶ 42–
46, 54–56, 75–79]. 	The Court does not find that Plaintiffs were required to specifically
calculate the entire amount allegedly stolen by Dr. Rademacher, especially where that
information may not be available to Plaintiffs prior to discovery. See [id. at ¶ 79 (Plaintiffs
alleging that there are more refund checks at issue, but “none of them have been provided
to ReGen or Ms. Anders”)]. Plaintiffs sufficiently provide notice to Defendant of the basis
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of this portion of the civil theft claim and allege facts plausibly establishing their proprietary
interest in the refunds. See [id. at ¶¶ 20, 22, 46].
Accordingly, the Court concludes that insofar as the civil theft claim is based on
the alleged theft of the IRS refund checks, Plaintiffs’ allegations are sufficient to state a
claim at this time. 	But for all other portions of the civil theft claim, the Court finds that
Plaintiffs’ allegations are insufficient to state a claim under Rule 12(b)(6). The Motion to
Dismiss is thus GRANTED in part and DENIED in part as to Claim Four. 	Claim Four
REMAINS to the extent it is based on the IRS refund checks, but it is DISMISSED without
prejudice in all other respects.6
IV. 	Claim Five: Unjust Enrichment
Finally, Defendant argues that Plaintiffs’ unjust enrichment claim is “barred by
contract” and must be dismissed. [Doc. 11 at 17]. It is well settled that, generally, “a party
cannot recover for unjust enrichment by asserting a quasi-contract when an express
contract covers the same subject matter because the express contract precludes any
implied-in-law contract.” Interbank Invs., LLC v. Eagle River Water & Sanitation Dist., 77
P.3d 814, 816 (Colo. App. 2003). But if “(1) the express contract fails or is rescinded,” or
“(2) the claim covers matters that are outside of or arose after the contract,” then a plaintiff
may still recover for unjust enrichment despite the existence of a contract. 	Pulte Home
Corp. v. Countryside Cmty. Ass’n, 382 P.3d 821, 833 (Colo. 2016). Defendant relies on
6 Defendant asks for dismissal with prejudice. 	[Doc. 11 at 1, 18]. 	However, Defendant
does not address the standard for dismissal with prejudice or articulate why dismissal
with prejudice is appropriate. “A dismissal with prejudice is appropriate where a complaint
fails to state a claim under Rule 12(b)(6) and granting leave to amend would be futile.”
Brereton v. Bountiful City Corp., 434 F.3d 1213, 1219 (10th Cir. 2006). The Court declines
to undertake a futility analysis absent argument from the Parties and declines to rule that
amendment would be futile before the Parties have engaged in discovery.
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the recent Colorado Supreme Court case of Board of Governors of the Colorado State
University v. Alderman, 563 P.3d 1205 (Colo. 2025), to argue that dismissal of the unjust
enrichment claim is appropriate, see [Doc. 11 at 17–18].
In Alderman, the Colorado Supreme Court reviewed an appellate court decision
essentially ruling that, because the plaintiffs’ breach of contract claims failed (and they
could not recover on those claims),7 the plaintiffs could proceed on their unjust enrichment
claims. 	See 563 P.3d at 1210–11. 	The Colorado Supreme Court disagreed with the
intermediate appellate court’s decision, finding that the lower court had “conflated the
failure of [the] breach of contract claim with the failure of the contract itself.” Id. at 1213.
In other words, although a plaintiff may pursue an unjust enrichment claim when the
contract itself fails (i.e., it is legally unenforceable), it does not follow that “a plaintiff may
pursue an unjust enrichment claim when that plaintiff’s breach of contract claim fails
because the defendant did not breach the contract.” Id. at 1214. Notably, in Alderman,
there was “no dispute that an implied-in-fact contract” existed between the parties. Id. at
1213. 	So because “a party cannot properly state a claim for unjust enrichment when a
legally enforceable contract exists that covers the same subject matter and that contract
has not been abrogated or rescinded,” the Colorado Supreme Court decided that the
plaintiffs’ unjust enrichment claims failed as a matter of law. Id.
Even in light of Alderman, however, this Court is respectfully unpersuaded that
7 For additional context, the Alderman case involved college students who sued their
university for breach of contract after the school temporary moved to remote classes
during the COVID-19 pandemic. 563 P.3d at 1207. Because a state statute authorizes
the temporary suspension of “a university in case of fire, the prevalence of fatal diseases,
or other unforeseen calamity,” Colo. Rev. Stat. § 23-30-111, the state trial court concluded
that the breach of contract claims could not succeed, Alderman, 563 P.3d at 1209.
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dismissal of the unjust enrichment claim is appropriate at this juncture. 	“Absent any
conflicting 	constitutional 	requirements, 	federal 	statutes 	or 	Federal 	Rules 	of 	Civil
Procedure, a federal district court sitting in diversity applies federal procedural law and
state substantive law.” Jones v. United Parcel Serv., Inc., 674 F.3d 1187, 1203 (10th Cir.
2012). 	Pleading requirements in federal court are governed by federal law. 	Strong v.
Cochran, No. 2:14-cv-00788-TC, 2017 WL 4620984, at *5 (D. Utah Oct. 13, 2017)
(“[F]ederal law provides the legal standard to determine whether the Defendants are
entitled to dismissal under Rule 12(b)(6).”). 	And relevant here, “[t]he Federal Rules of
Civil Procedure allow a party to include alternative or inconsistent claims in its complaint.”
United Water & Sanitation Dist. v. Geo-Con, Inc., 488 F. Supp. 3d 1052, 1058 (D. Colo.
2020) (citing Fed. R. Civ. P. 8(d)(2), (3)). 	Consistent with Rule 8, courts in this District
consistently recognize that “a party may plead breach of contract and unjust enrichment
claims in the alternative.” 	Id. 	While the ultimate question of whether Plaintiffs can
proceed on (and succeed on) their unjust enrichment claim will be governed by Colorado
substantive law, Rule 8 dictates that, at this juncture and in federal court, Plaintiffs may
plead inconsistent claims. Fed. R. Civ. P. 8(d)(3).
Moreover, unlike Alderman, the Court cannot definitively say at this early stage
that there is “no dispute” that a valid contract exists. 563 P.3d at 1213. In their Complaint,
Plaintiffs allege that the “purchase agreements constitute valid and enforceable contracts”
between Ms. Anders and Dr. Rademacher, [Doc. 1 at ¶ 101], and Defendant suggests in
his Reply that this allegation is sufficient to demonstrate that dismissal of the unjust
enrichment claim is appropriate, see [Doc. 13 at 9]. 	But Plaintiffs’ assertion is a legal
conclusion that is not entitled to the presumption of truth. Iqbal, 556 U.S. at 678 (“[T]he
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tenet that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions.”). 	And because Defendant has not filed an answer in
this case, the Court is presently unable to determine whether any agreement or dispute
exists about the validity or enforceability of the Purchase Agreement.
At this early stage in the proceedings—prior to the filing of an answer and prior to
discovery—the Court finds it would be premature to dismiss the unjust enrichment claim
as duplicative. Accordingly, the Motion to Dismiss is respectfully DENIED to the extent it
seeks dismissal of Claim Five. 	Defendant may renew this argument at a later stage in
the case, if appropriate.
CONCLUSION
For the reasons set forth above, IT IS ORDERED that:
(1) 	Defendant’s Partial Motion to Dismiss [Doc. 11] is GRANTED in part and
DENIED in part;
(2) 	Claims One, Two, Three, and Five all REMAIN; and
(3) 	Claim Four REMAINS only with respect to the theory based on the IRS
refund checks, but is DISMISSED without prejudice in all other respects.
DATED: January 28, 2026 	BY THE COURT:
_________________________
Nina Y. Wang
United States District Judge
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