The Foundation Series · Part 2 of 5 · July 2026
Two professors argued for decades over what good faith requires. California’s courts stopped waiting and answered — and the answer is the one that condemns the biased expert.
Part 1 established that the covenant of good faith and fair dealing lives in every contract, protects each party’s reasonable expectation of receiving the benefit of the bargain, and does its heaviest work where one party holds discretion over the other’s stake. All true — and all silent on the question that decides real cases: what does good faith actually require? “Neither party shall do anything to injure the other’s right to the benefits of the agreement” is a principle, not a test.
That question was the subject of the most sustained argument in American contract scholarship — a decades-long exchange between Robert Summers, who held that “good faith” has no content of its own and functions only to exclude the open-ended list of things that count as bad faith, and Steven Burton, who tied bad faith to the use of contractual discretion to recapture an opportunity the party gave up on contracting. The academy never fully resolved it. California’s courts, who could not wait, worked out a practical answer of their own — and it is the answer that determines whether an insurer’s use of a bought expert breaches the covenant.
California did not choose between the theories. It held both at once. In Carma Developers v. Marathon Development (1992) — one of the few high-court opinions anywhere to cite both scholars by name in the same passage — it took Burton’s discretion as the trigger and Summers’s objective unreasonableness as the measure: the covenant “can be breached for objectively unreasonable conduct, regardless of the actor’s motive.” That single phrase disarms the insurer’s most natural defense — that no individual adjuster meant any harm — because the question is not what anyone intended, but whether deploying an expert selected for his predictability is objectively unreasonable claims handling.
Part 2 publishes in three companion editions on Expert Bias Report: a free edition that makes the conceptual argument, a paid deep-dive that works through both scholars and every California case that resolved them, and a free case study that reads the two decisions at the center of the synthesis.
Free edition · The concept
Why “good faith” resists definition, the real points on which Summers and Burton diverge (source, scope, and — the one that matters here — whose state of mind counts), and how California absorbed both into a working standard. Then the payoff: applied to an insurer that denies a claim on a bought expert, Burton’s half explains why it is a breach and Summers’s objective half, made law in Carma, is what makes the breach provable.
Paid edition · The scholarship and the case law
Both scholars in full — the excluder and the foregone-opportunity accounts, exactly where they agree and where they part — and then the five California decisions that turned the academic debate into working law: the two Supreme Court opinions that set the terms (Foley and Carma) and the three Court of Appeal decisions that applied them to banks, insurers, and consumers (Price, Walbrook, and Badie). Closes with the evaluation the free edition only gestures at: did California get it right?
Free edition · Case study
A close reading of the two decisions the synthesis rests on. Foley v. Interactive Data Corp. (1988) is remembered for keeping the bad-faith tort out of employment — but to confine the tort, the court had to explain, at length and over three dissents, why insurance is different, producing a rare extended judicial theory of insurance exceptionalism. Carma (1992) then built the working synthesis and, in the same opinion, drew the covenant’s outer boundary: conduct a contract expressly permits can never breach it — the wall insurers try to hide behind, and why it does not hold them.
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The framework the later parts build toward — the inference-of-bias standard, the four factors, and the rebuttable presumption — is laid out in Demer’s Paradigm for Assessing Biased Insurance Experts (Advocate Magazine, 2024), and operationalized across the Practical Tips.
This page summarizes Part 2 of The Foundation Series as published on Expert Bias Report. The Summers–Burton frameworks derive from the project’s analysis in treatise/03-good-faith/03-05-summers-burton.md and the vault conversions of the underlying Summers and Burton articles (1968–1984); case holdings and quotations (including Carma’s disjunctive subjective/objective test and its express-terms limitation) derive from the project’s primary reading of Foley v. Interactive Data Corp. (1988) and Carma Developers v. Marathon Development (1992). Restatement (Second) of Contracts § 205 is referenced as general background. Educational and informational only; not legal advice.