Usaco Coal Company; Usaco Kohleforderungs-gmbh & Companyhandels-kg; Axel Rossbach, Plaintiffs-appellees, v. Carbomin Energy, Inc., et al., Defendants,westport Coal, Inc.; Bill Worden, Defendants-appellants, 85 F.3d 630 (6th Cir. 1996)

In this diversity action, defendants Bill Worden and Westport Coal, Inc. appeal the district court's dismissal with prejudice of defendant Worden's counterclaim against plaintiffs USACO Coal Company, USACO Kohleforderungs-GmbH & Company Handels-KG, and Axel Rossbach for payment of wages allegedly owing him. On appeal, the issues are (1) whether the district court erred in holding that the Kentucky Supreme Court would adopt the "faithless servant" doctrine, and (2) whether the district court erred in applying the doctrine to the facts of this case.

After hearing argument of counsel and considering the record and briefs filed herein, we find that the period of defendant Bill Worden's unfaithfulness included the period of actual wrongdoing, the active concealment of this wrongdoing, and a reasonable period of time for plaintiffs to take action to terminate defendant Worden. Thus, we hold that, on the unique facts of this case, all of the time period during which plaintiffs withheld defendant Worden's salary fell within the period of his unfaithfulness. We, therefore, conclude that the district court did not err in either holding that the Kentucky Supreme Court would adopt the faithless servant doctrine or in applying the doctrine to the facts of this case, and we AFFIRM the district court.