The 28-year-old Lutz will never get into a relationship with the pop sensation out of respect for his friendship with Hemsworth, reported Contactmusic.
"Kellan is friends with Liam and doesn't want to insult him by getting serious with Miley," a source said.
"Miley came on way too strong for Kellan. All he wanted was to have a good time, and when they first hooked up she told him that was all she was after too," the source added.
"He didn't expect her to get obsessed with him, because she acts so cool and independent. He feels bad. He never meant to hurt her," the insider said.
But Lutz has always maintained he is just friends with her.