When Good Faith Goes Bad

According to the Times-Picayune news, a family home caught in the grip of Hurricane Katrina was blown off its foundation by the wind. When the owners filed an insurance claim against State Farm for damage replacement, they were denied by the company and told it was flooding which took the structure out. Flood insurance is usually the job of the federal government and FEMA, but the cause of structure damage was eventually proven by experts in court to indeed have been the force of the wind and not the floods of the hurricane. Although the mistake cost the owners time and legal fees, they could not recover "bad faith" fees on the part of the insurance company on appeal because the court was convinced it was an honest mistake in judgment. You can find the full details of the story here: http://blog.nola.com/tpmoney/2009/03/appeals_court_reverses_ruling.html

Tragically, I believe we will be seeing more of the same by way of excuses from businesses in order to shelter themselves from liability for lapses in moral and/or ethical judgments. Good faith comes from the Latin expression bonafides, where we get the term bona fide, for example, that is a bona fide company, job or resume. It implies that the statements or representations made by a company or a person on behalf of themselves is honest, true and which can be counted upon to be reliable. When we hold a contract or legal agreement in good faith with another, we trust that any statements they have made about their product or services will be executed faithfully and represented as promised. The company deserves the same from us. Good faith goes both ways.

Today's societal environment literally cries out for mercy and justification in the face of such bold lack of good faith in businesses and contractual agreements, take for example our mortgage crises where people are simply walking away from their homes due to improper loan contracts. These are due to lies and deceit made by profiteering lending institutions who realized early on that others would be left holding the bag and not themselves. Now, if like our homeowners above, those most victimized and financially ruined by a person's bad faith brought their cases to court for not only return of their money or service, but also asked for compensatory damages such as the repayment of legal fees based upon the lender's bad faith, do you think they could win?

According to the insurance case above, all the business would need to do on appeal is state that it was an honest mistake since they did not know any better. Too bad, they simply did not use right reason or the right experts. Logically, one would even expect a company to weigh in on the side which would benefit itself the most, not the client anyway. We knew the glory days of taking someone's word, oath or handshake were over, but what we did not realize was how far businesses are willing to go to make excuses for faulty behavior and lack of ethics. I even had a case recently where although my homeowners' policy exemptions held, the company could not even find favor under the personal liability provisions which should have protected for bodily harm by others.

In some shocking modern instances we even see a business owner totally and unabashedly unrepentant as to the lives they ruin and the homes they destroy by structuring pyramid schemes. We even see the courts being slow to incarcerate even the most self-evident and self-professing criminals. Getting restitution for the injured financially appears to be a grim prospect, let alone obtaining monies from them to pay legal fees and costs to get such restitution in the first place. I believe that folks need to be prepared for the inevitable decline ahead of the lack of good faith in business by many. I only hope that folks do not do unto others what was done to them.

I would suggest only doing business personally with those whom you can trust implicitly. Get everything in writing. Stand up for yourself and join together with others in the same boat, even if it means rocking it. Try to rely upon oneself and one's own means more. Settle and avoid the courts at all costs, since justice is apparently blind when it comes to things like motive, ethics and morality. Try to be honest with yourself. Building a home in a hazardous or expensive zone, living beyond one's ability to pay now or in the future, or signing a questionable mortgage during job insecurity, pregnancy, poor health or youthful and old age means we are not exercising good faith with ourselves.