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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY AT LOUISVILLE

ANTHONY STEIER, v. MOTORISTS MUTUAL INSURANCE CO., et al.,

PLAINTIFF CIVIL ACTION NO. 3:09-CV-846-S DEFENDANTS

MEMORANDUM OPINION In 2006, Service Drywall Company ("Service") sued Anthony Steier, Clay Locke and Commonwealth Walls, Inc. ("Commonwealth"), on the basis that Locke (while an employee of Service) had surreptitiously and with Steier's help set up Commonwealth to compete with his own employer in the Louisville market. On September 8, 2009, after three years of litigation, a jury of this court returned a verdict holding (inter alia) Steier liable for aiding and abetting Locke's breach of his fiduciary duty as an employee of Service, and for interfering with Service's contracts and prospective business relations. The jury found that Steier was 40% liable for Locke's breach of fiduciary duty and for the $400,000 in damages it assessed therefor, exposing him to liability in the amount of $160,000. The jury also found him 30% liable for the $200,000 in damages attributable to interference with Service's contracts and prospective business, making him responsible for another $60,000. So pursuant to the court's judgment, which the defendants have appealed, Steier owes Service $220,000.1 Steier then filed this action (in state court) for a declaratory judgment against Motorists Mutual Insurance Company ("Motorists"), demanding that the court acknowledge his right to indemnity under Commonwealth's umbrella insurance contract. Motorists removed the

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The jury also assessed $60,000 in punitive damages against Steier, but that sum is not at issue in this lawsuit.

case to this court, asserting diversity of citizenship.2 Steier then moved for judgment on the pleadings. Motorists moved to strike and for an extension of time, but it subsequently found time to file a reply. Thus its motions will be denied as moot and the court will proceed to consider whether to grant Steier judgment on the pleadings. In deciding a Rule 12(c) motion for judgment on the pleadings, a district court "must take all the `well-pleaded material allegations of the pleadings of the opposing party' as true," Cincinnati Ins. Co. v. Beazer Homes Invs., LLC, 594 F.3d 441, 444 (6th Cir. 2010) (quoting Rawe v. Liberty Mut. Fire Ins. Co., 462 F.3d 521, 526 (6th Cir. 2006)), and may also take into account "matters of public record, orders, items appearing in the record of the case, and exhibits attached to the [pleadings]." Barany-Snyder v. Weiner, 539 F.3d 327, 332 (6th Cir. 2008) (quoting Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)). Of course, the court "need not accept the [non-moving party's] legal conclusions or unwarranted factual inferences as true." Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 336 (6th Cir. 2007). The motion should be granted only "where the moving party `is entitled to judgment as a matter of law.'" Beazer Homes, 594 F.3d at 444 (quoting Rawe, 462 F.3d at 526).

Steier is a Kentucky citizen, Motorists is an Ohio citizen, and more than the jurisdictional minimum is in controversy. Also joined as defendants are Service and Commonwealth, and the latter's Kentucky citizenship destroys complete diversity on the complaint's face. To avoid this problem, Motorists argues that the drywall companies are improperly joined and should be ignored. Steier has not disputed this assertion, with which we agree. The relevant consideration is whether the plaintiff has stated a valid cause of action against the allegedly improperly-joined party. See Saltire Industrial, Inc. v. Waller, Lansden, Dortch & Davis, PLLC, 491 F.3d 522, 530 (6th Cir. 2007); Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999). There are no disputed questions here, as the only purpose of the statecourt pleading (styled a "Petition for Declaratory Judgment") is for a declaration of Steier's contractual rights vis-

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