Claim Satisfied Despite $100k Deficit from what was Owed at Time of Loss

The US District Court for the Northern District of Illinois has decided that despite denying a claim and later offering to pay it, the insurers offer satisfied its obligations under the policy. The case is Berkshire Hathaway Homestate Ins. Co. v. Chi. Metro. Hosp., No. 17 C 9370, 2020 U.S. Dist. LEXIS 81 (N.D. Ill. Jan. 2, 2020).

Chicago Metropolitan (Chicago Metro) owned a building in Chicago that once held the Sacred Heart Hospital, known as the Property herein. In 2014 the mortgagees Robert and Kathleen Dieleman (the Dielemans) lent Chicago Metro $500,000, secured by a mortgage on the Property and three other parcels of land. Berkshire Hathaway Homestate Insurance Company (Berkshire) issued a $7,500,000 commercial property insurance policy to Chicago Metro covering the Property between September 2016 to September 2017. The policy listed the Dielemans as loss payees, and provided that under certain circumstances the Dielemans could be entitled to coverage even if Chicago Metro was not.