A rung breaks on a ladder in Pomona, and a roofer falls twelve feet onto his back.
His name is Michael Egan. He is a stout Irish immigrant who works on top of houses in the morning and carries his disabled wife and his young daughter on the wages of a man who is the only one in the home who earns. He owns a disability policy from Mutual of Omaha. The policy promises two hundred dollars a month for life if an accident leaves him totally disabled. He has paid for that promise the way a man pays for the roof over his family, on the theory that the worst day will be met by something stronger than himself.
The worst day comes. The checks come too, for a few months, and then they stop. A man from the company knocks on the door, asks questions, parks across the street, watches the house, and writes that the roofer can work. The file now reads malingerer. The promise bought against the worst day weighs nothing on the worst day, the only day it was ever meant to cover.
The law had no name for that wound. A man pays for a promise, the promise comes due at the hour he can do nothing for himself, and the promise turns back into paper.
Into this walks a young trial lawyer named William Shernoff (b. 1937). He has tried only a few cases. His first was a farmer whose insurer argued the man could not be disabled because he could still walk to his mailbox. Shernoff won that one, and word moved through the orchards and the truck stops that here was a lawyer who would take the giant by the throat. Egan finds him. Shernoff takes the case, and he wins a verdict so large for 1974 that it makes the papers later, though on the afternoon the jury returns it the courtroom gallery sits empty. Nobody comes to hear it. He remembers the feeling of having done a large thing in an empty room.
The verdict becomes Egan v. Mutual of Omaha (1979) when the California Supreme Court upholds it, and the thing built in that empty room outlives everyone who stood in it.
Here is what Shernoff did. Before him a policyholder who got cheated had one remedy, breach of contract. He could sue to recover the money owed, the back benefits, the dollars on the page. He could recover nothing for the fear, the shame of the investigator at the door, the nights spent doing arithmetic against a wall. Shernoff persuaded a jury, and then the high court, to treat the broken promise as a wrong done to the man and not merely to the contract. He turned a commercial default into a tort. He took a quiet betrayal and gave it the standing of an injury, punishable by damages set high enough to hurt. The law named the wrong bad faith. Its opposite became the sacred value of his life: good faith.
The hero and his coin
Ernest Becker (1924-1974) argued that a man cannot live as an animal that knows it will die. To carry that knowledge he builds a hero system, an order of meaning that lets him feel he counts in a drama larger than his body, that his days leave a mark death cannot erase. Each culture hands out its own coin of cosmic worth, and inside a hero system a word can carry the charge of the holy. Step outside the system and the same word goes quiet, or turns to something else in another man’s mouth.
For Shernoff the sacred act is the strong keeping a promise to the weak at the hour the weak can no longer force them to keep it. The roofer on his back cannot make Mutual of Omaha pay. He has no leverage, no second income, no time. That helplessness is the test. Good faith, in this system, means the giant pays when nothing but conscience and twelve jurors can make him. Bad faith is betrayal aimed at a man who cannot fight back, and the helplessness is what turns the betrayal from a business decision into a sin.
The punitive verdict is his coin. Restitution gives the roofer his money. Only punishment gives him back his standing, says aloud that a wrong was done to a man and not to a clause. Shernoff spent fifty years minting that coin, case by case, the disabled truck driver, the cancer patient denied a specialist, the homeowner whose carrier rewrote the fire policy after the fire. He built the firm in Claremont, then Beverly Hills, wrote the treatise other lawyers teach from, wrote Payment Refused and Fight Back & Win for the people who could not afford lawyers by the hour. He took the David and Goliath story the firm still tells and made it the myth of a career.
His sacred value reads clean and obvious from inside his hero system. Good faith. Who could be against it. Yet the same two words sit on the page of a hundred other men, and in each of their worlds they light a different sky.
Five men, one phrase
Consider the claims executive in a corner office, an actuary down the hall, a quarterly number on the wall behind him. To him good faith is fidelity to the pool. Insurance gathers strangers who never meet, each paying a little so the unlucky few collect. Pay the doubtful claim and you tax the schoolteacher and the grocer who hold the same policy and never fall off a ladder. He sees the roofer, and he also sees the ten thousand he will never meet, and he believes he owes those ten thousand his discipline. “We have a duty to every policyholder,” he says, and he means it as a moral claim. In his hero system the man who keeps faith is the underwriter who holds the line through a bad fire year and keeps the company solvent so the promise can be paid at all. Shernoff, in that world, is the man who loots the pool and calls the looting justice.
Consider the Reformed pastor. Faith for him is sola fide, trust in a promise no work can earn and no failure can void, the covenant that holds because God keeps it and not because the creature deserves it. Hand him an insurance policy and he sees a thin thing, a wager dressed in the clothes of a promise, faith pointed at the wrong object. Good faith between a man and a company is bookkeeping. Faith is what a man owes his Maker and receives back as grace he did not buy. To call a denied disability claim a crisis of faith strikes him as a confusion of categories, close to a profaning of the word.
Consider the law-and-economics professor, chalk on his fingers, a seminar on contract remedies. He teaches the efficient breach. A contract sets a price against a risk, and a party who breaks it and pays the damages has chosen the cheaper lawful path, not committed a wrong. Good faith for him is a term of art, an implied covenant courts should read small so that men can plan their affairs and so that insurance can be priced at all. Shernoff’s tort looks to him like a hole below the waterline, a license for juries to punish on sympathy and move fortunes to plaintiffs’ lawyers, with the cost landing on every premium written afterward. He does not hate the roofer. He fears the precedent.
Consider the combat veteran in a wheelchair, a former Marine whose insurer overrules his surgeon on the days he may stay in the hospital. Faith for him is the man beside him in the wire, the rule that you carry the wounded out and leave no one in the dirt. Good faith is a blood thing, paid in bodies, never in dollars. He kept that faith when it cost everything, and now a company totals his recovery on a spreadsheet and calls the days past some number not medically necessary. The betrayal lands in a register the actuary cannot reach, because the actuary and the Marine do not mean the same thing by the word, and never have.
Consider the dayan, the judge in a Jewish court, for whom a man’s word once given binds because Heaven hears it. The seal of the Holy One, the sages teach, is emet, truth. A promise stands as a kind of altar, and to break faith profanes the Name. Money settles the loss in his court too. The breach against truth is a separate account, and that account is kept above. He and Shernoff recognize something in each other across the distance, the conviction that betrayal wounds the order of things and not only a bank balance, though one man looks to a jury for the reckoning and the other looks to Heaven.
What the word cannot carry
Five men read the same phrase on the same page of the same policy, good faith, and five worlds light up, none of them the same world.
The executive hears a duty owed to the pool. The pastor hears a counterfeit of grace. The professor hears an implied covenant best kept narrow. The Marine hears the oath of the wire. The dayan hears the seal of Heaven. Shernoff hears the one promise that turns holy at the exact hour the man who bought it can no longer enforce it.
Becker’s claim holds under the weight of all five. The word does not carry its own meaning around with it. The hero system carries the meaning and lends it to the word. Take a man out of his system and good faith goes flat in his hands, or fills with a charge he did not put there. The argument between Shernoff and the claims executive looks like a fight over evidence and damages. Underneath it runs a fight over which hero system gets to say what the sacred words mean, and that fight has no referee both men accept, because each man’s referee lives inside his own cosmos.
This is why Shernoff needed the jury and not only the judge. A jury is twelve people pulled out of one hero system, the ordinary American faith that a promise is a promise and a giant who breaks one against a broken man has done something the law should punish. Shernoff did not invent that faith. He found it sitting in the box, gave it a story it could believe, and handed it a coin large enough to make the betrayal visible from a distance. The genius of the move was matching the courtroom to a hero system already loaded and ready, then naming the wrong in a word the jurors already felt before they could define it.
The thing that outlasts the room
Becker held that a hero system pays the man back in a single currency, the sense that some part of him will stand after the body falls. The verdict in 1974 did not give Shernoff that. The verdict was an afternoon in an empty room. What gave it to him was the doctrine. Egan has been cited some eight thousand times in the years since, carried into courtrooms by lawyers who never met the roofer and never met Shernoff, in states where the man has never set foot. He built a portable sacred object, a tort that other men pick up and carry against other giants, and the object does the work long after the maker stops.
The man ages and the tort keeps minting the coin. Health insurers now answer for it, life insurers, carriers who slow-walk a cancer patient past the window when treatment might have held. Shernoff calls bad faith a living thing that is not so new anymore, and the phrase has a melancholy buried in it, the melancholy of a builder who has watched his cathedral fill with strangers. He wanted the strangers. The strangers are the immortality. A hero system offers a man symbolic life past his own death, and Shernoff took the version the law allows, a word he sharpened into a weapon and a remedy that punishes the betrayal of the helpless, both of them carried now by people who will never know whose hands first shaped them.
The roofer got his money and his name back, and then he passed out of the story. The lawyer got the thing the money could not buy. He got into the moral architecture and stayed there. Long after the empty courtroom, the verdict nobody came to hear keeps speaking, in his own word, in other men’s mouths, against giants he will never live to see.
