NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 18a0394n.06

No. 17-6237

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

DARK HORSE EXPRESS, LLC,

Plaintiff-Appellant,

v.

LANCER INSURANCE COMPANY, 

Defendant-Appellee.

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ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE MIDDLE 

DISTRICT OF TENNESSEE

Before: KEITH, ROGERS, and KETHLEDGE, Circuit Judges.

KETHLEDGE, Circuit Judge. Dark Horse, a trucking company, held an insurance policy 

with Lancer. That policy required Lancer to pay any amount that Dark Horse “legally must pay” 

for loss to a customer’s cargo. Lancer argues, and the district court held, that this clause referred 

only to payments mandated by court judgments, rather than by other legally binding documents 

like contracts. We respectfully disagree and reverse. 

In 2014, Dark Horse contracted to transport goods for the Performance Food Group. 

Performance then bought about $250,000 worth of meat from a vendor in Dallas, and a Dark Horse 

driver picked up the load for delivery to Performance. Along the way, he stopped for a liaison at 

a motel; when he woke up, his truck was gone. 

The next day, Dark Horse located the truck with GPS and finished the delivery. When the 

load arrived, Performance found that about $30,000 of the meat was missing and that the trailer’s

security seal was broken. The transportation contract gave Performance the right to refuse goods 
No. 17-6237

Dark Horse Express, LLC v. Lancer Insurance Company

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for “[a]ny unexplained break in the chain of custody” and for any “broken seals.” Performance 

rejected the entire load. 

Lancer eventually resold the meat for about $50,000 and gave the money to Performance. 

Performance demanded payment for the remaining cost of the meat (about $200,000) from Dark 

Horse, which in turn demanded that Lancer pay that amount. When Lancer refused, Dark Horse 

paid Performance itself. Dark Horse then sued Lancer, alleging among other things that Lancer

had breached the terms of Dark Horse’s insurance policy. The district court granted summary 

judgment to Lancer, finding that the policy required coverage only for payments mandated by a 

court judgment—which Performance never sought against Dark Horse here. We review the 

court’s decision de novo. See Luna v. Bell, 887 F.3d 290, 297 (6th Cir. 2018).

The policy provided four types of coverage: Covered Autos Liability, for damage caused 

by Dark Horse trucks; Physical Damage, for damage to Dark Horse trucks; Trailer Interchange, 

for damage to trailers; and Cargo Insurance, the section at issue here. That section required Lancer 

to “pay all sums” that Dark Horse “legally must pay as a motor carrier for ‘loss’ to Cargo while in 

[Dark Horse’s] custody or control in the ordinary course of transit.” The question here is whether 

the phrase “legally must pay” included payments mandated by sources other than court judgments, 

namely the transportation contract between Dark Horse and Performance.

The parties agree that Tennessee law governs the policy’s terms. Under Tennessee law, 

we give those terms their plain meaning. See Alcazar v. Hayes, 982 S.W.2d 845, 848 (Tenn. 1998). 

The term “must” signifies an obligation. See, e.g., Webster’s Third New International Dictionary 

1492 (2002) (defining “must” as “required by law, custom, or moral conscience to” take an act). 

Obligations can arise in the legal sense from contracts as well as judgments, since a contract is a 

promise that “the law in some way recognizes as a duty.” Restatement (Second) of Contracts § 1 
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(1981). Indeed, contracts exist to create legal obligations, and thus to save parties the expense of 

reducing every dispute to a court judgment. And when parties go to court, presumably the court

simply enforces the contract. Thus, as a matter of ordinary English, one would say that a party

who breaches a contract is obligated—not only morally, but legally—to make the other party

whole. Accordingly, the phrase “legally must pay” included Dark Horse’s payment obligations 

under contracts as well as under judgments. See Certain Underwriter’s at Lloyd’s of London v. 

Transcarriers Inc., 107 S.W.3d 496, 501 (Tenn. Ct. App. 2002). 

Lancer makes several arguments to the contrary. It argues first that, under some other 

insurance policies, courts have found judgments to be necessary for coverage. “But we do not 

construe contractual provisions in gross. Instead we interpret each contract individually, according 

to its terms.” Bennett v. State Farm Mut. Auto. Ins. Co., 731 F.3d 584, 585 (6th Cir. 2013) (internal 

quotation marks and citation omitted). That other courts reached different results under different 

insurance contracts matters little here. 

Second, Lancer tries to rely upon two provisions that apply to the Covered Autos Liability 

section of the policy, rather than to the Cargo Insurance section. But this case is about Cargo 

Insurance, not Covered Autos, and by the policy’s plain terms those two sections are separate. 

Hence this argument is meritless. 

Third, Lancer argues that, by paying Performance without a judgment, Dark Horse

undermined Lancer’s right to “defend” Dark Horse against suit. But Performance never sued Dark 

Horse, so that right never accrued. Finally, Lancer noted at oral argument that the policy excluded 

coverage for payments made without Lancer’s consent. But Lancer failed to develop that argument 

in its brief on appeal, so that argument is waived. See Sec. Watch, Inc. v. Sentinel Sys., Inc., 176 

F.3d 369, 376 (6th Cir. 1999). 
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Lancer also disputes the extent to which, under the transportation contract, Dark Horse was 

in fact obligated to pay Performance for the rejected meat. But the district court can resolve that

issue on remand. For present purposes it suffices to say that Lancer must pay under the insurance 

policy whatever Dark Horse must pay under the transportation contract. 

The district court’s judgment is reversed, and the case remanded for further proceedings 

consistent with this opinion.