Insured seeks coverage of approved claim

After purchasing property to develop into a single-family residential subdivision, a developer found a previously unknown restriction on the policy. While the insurer was working to determine the diminution in value to pay out the claim, the developer negotiated a release of the restriction. Upon hearing of the release, the insurer stopped its work. The developer filed suit, asking the court to find that its election to pay the diminution in value created a binding obligation to tender payment, despite the removal of the restriction.