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“Good Faith” vs. “Naive Realism”?

by Phyllis Pollack
March 2015

PGP Mediation Blog by Phyllis G. Pollack

Phyllis  Pollack

Perhaps I am an idealist, or even though a baby boomer with many years of litigation experience behind me— a bit naïve. Or –perhaps it is because I am a mediator and so am privy to both sides of the dispute and can see the “story” as an outsider or bystander. I do not know.

It is a lemon law mediation that is prompting these reflections. The vehicle in question is a hard top convertible. The issues were that the hard top had a rattle and the windows would sometimes roll down on their own. With respect to the rattle, to the plaintiff- the rattle was loud. To the defendant manufacturer, it was normal. The manufacturer tried to lessen the noise by first using tape and then lubricating the seals. The plaintiff still was not satisfied.

The plaintiff also complained about the windows rolling down on their own. Evidently, when plaintiff put up the convertible top, and the windows are up, the windows will automatically roll mid way down. With the touch of the “one touch” button, the windows will and did roll up again. Plaintiff did not believe that this was proper; to have to push the “one touch” button to have the windows roll up again. Also, according to plaintiff, once or twice, the windows rolled down on their own. On one occasion, Plaintiff not realizing the window was down, left the vehicle with the window open when she parked to go someplace.

To the extent that the windows always rolled down to the midpoint when the top was put up, the manufacturer claimed this was a normal operation of the vehicle. To the extent that the windows rolled down once or twice on their own, plaintiff did not bring it in for repair, and so the manufacturer had no opportunity to inspect the issue and repair it.

So- here we are; a plaintiff who claims that the vehicle is defective and a manufacturer who claims that the vehicle is operating as it should and to the extent that the convertible did have a rattle, it is not “substantial “ enough to merit a repurchase or a large cash settlement. (Under the California statute, the non conformity is one “…which substantially impairs the use, value or safety …” of the vehicle. (Civil Code Section 1793.22(e) (1).) (Emphasis added.)

In response to the plaintiff’s large cash and keep demand, the manufacturer offered to waive the costs of the lawsuit in exchange for a dismissal. This upset the plaintiff greatly. Plaintiff’s counsel responded by contending that the manufacturer was not at mediation in “good faith”.

This got me thinking. What is “good faith”? Isn’t it in the eye of the beholder? Its simplistic definition is “Honesty; a sincere intention to deal fairly with others. ” (http://legal-dictionary.thefreedictionary.com/good+faith ). To the manufacturer, there was nothing wrong with the vehicle, and the lawsuit was unfounded. So- it believed it was acting in “good faith” by refusing to accede to what it considered to be an unfounded demand.

Just because the parties disagree on the merits or value of a lawsuit, does this instantly mean that one party is acting in “bad faith” by disagreeing and not acceding to the demands of the other? Just because one party sues another, does it mean that she is automatically entitled to obtain a settlement in the amount demanded or in any amount?

If one looks at “good faith” from the view point of the manufacturer, it might seem that the plaintiff was not acting in “good faith” by filing the lawsuit and demanding a large amount of cash to settle. In short, isn’t it possible to strongly disagree with someone and still be acting in “good faith?” Is it correct to claim that the instant another party disagrees with your view point, she is automatically acting in “bad faith”? Can’t parties have a sincere and honest disagreement and still act in “good faith. “ Or, as the saying goes, “Can’t reasonable minds differ?”

Or, is this simply the cognitive bias of naïve realism at work?

Naive realism is the belief that we see reality as it really is (objectively and without bias); that the facts are plain for all to see; that rational people will agree with us; and that those who don’t are either uninformed, lazy, irrational, or biased…. (http://en.wikipedia.org/wiki/Na%C3%AFve_realism_(psychology))

In short, that everyone sees the world as we do, and if they don’t – they are irrational, if not crazy. So… when parties disagree over any issue, is it a sign of acting in “bad faith” when one does not accede to the demands of the other or is it naïve realism at work? I will leave that to you to ponder the answer.

… Just something to think about.

Biography


Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as well as their own needs better than any mediator or arbitrator. She does not impose her views or make decisions for the parties. Rather, Phyllis assists the parties in creating options that meet the needs and desires of both sides.  When appropriate, visual aids are used in preparing discussions and illustrating possible solutions. On the other hand, she is not averse to being proactive and offering a generous dose of reality, particularly when the process may have stalled due to unrealistic expectations of attorney or client, a failure to focus on needs rather than demands, or when one or more parties need to be reminded of the potential consequences of their failure to reach an agreement.



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