Sims Buick-GMC Truck, Inc. v. General Motors LLC, 876 F.3d 182

Background

Sims Buick-GMC (Ohio dealer) participated in GM’s Vehicle Purchase Program, which provides incentives for sales to eligible GM employees/retirees/families; the program accounted for ~80–90% of Sims’ sales.
Under the program dealers must collect a signed Consumer Dealer Agreement (CDA) evidencing purchaser eligibility and include an authorization number from GM.
GM issued a 2012 bulletin requiring CDAs at time of delivery and a 2014 bulletin extending the deadline to 30 days after delivery.
A 2014 GM audit of Sims’ 2013–early-2014 sales found numerous transactions with untimely CDAs; GM charged back approximately $47,493.28 in incentives.
Sims sued (breach of contract and Ohio Dealer Act claims); district court granted summary judgment for GM; Sixth Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether GM breached the Dealer Sales & Services Agreement by charging back incentives for untimely CDAs	Sims: contract contains no specific timing requirement, so chargebacks violated the contract	GM: contract incorporated its Incentive Manual and bulletins, which imposed timing rules; dealer agreed to comply	Held for GM — contract incorporated time rules; GM entitled to enforce them
Whether an implied covenant of good faith supports Sims’ claim	Sims: GM’s chargeback violated an implied covenant; jury should decide	GM: Michigan law does not recognize an independent cause of action for breach of an implied covenant outside established duties	Held for GM — no independent cause of action; GM acted within contractual rights and in good faith
Whether untimely but ultimately produced CDAs are "material documentation" under Ohio Rev. Code § 4517.59(A)(20)(a) (dealer-protecting statute)	Sims: cured documentation before audit renders the defect immaterial; statute prohibits chargebacks for incidental/clerical errors	GM: timely-executed CDA is material because timing prevents abuse and preserves ability to unwind improper transactions	Held for GM — timing requirement is material; chargebacks permissible where claim lacks material documentation
Whether other statutory provisions (A)(19) and (A)(1) block GM’s chargeback or require certification to Ohio Supreme Court	Sims: (A)(19) requires approval/disapproval within 30 days; (A)(1) requires good faith; ask for state-court certification	GM: initial payments complied with (A)(19); debits after audit are contemplated by (A)(20); GM acted in good faith; no certification needed	Held for GM — statute construed consistently; no (A)(19) violation; GM acted in good faith; certification not required

Key Cases Cited

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment standard)
New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 439 U.S. 96 (franchise laws protect dealers from manufacturer overreach)
State Farm Mut. Auto. Ins. Co. v. Norcold, Inc., 849 F.3d 328 (6th Cir.) (choice-of-law principles in diversity cases)
Belle Isle Grill Corp. v. City of Detroit, 666 N.W.2d 271 (Mich. Ct. App.) (limits on implied covenant as independent cause of action under Michigan law)
Gorman v. Am. Honda Motor Co., Inc., 839 N.W.2d 223 (Mich. Ct. App.) (use of good faith principle to interpret contractual duties)
Littlejohn v. Parrish, 839 N.E.2d 49 (Ohio App.) (fact question on good-faith dealing under Ohio law)
Earl Evans Chevrolet, Inc. v. Gen. Motors Corp., 598 N.E.2d 1187 (Ohio App.) (construction of dealer-protection statute)
Pennington v. State Farm Mut. Auto. Ins. Co., 553 F.3d 447 (6th Cir.) (standards for certifying questions to state supreme court)
In re Carter, 553 F.3d 979 (6th Cir.) (statutory interpretation and promoting legislative purpose)