7th Circuit rules insurer properly capped payout at $25,000 for fire-destroyed mansion contents because owner…

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In the United States Court of Appeals for the Seventh Circuit ____________________ No. 25-1121 WESLEY J. GIBSON, Plaintiff-Appellant, v. CHUBB NATIONAL INSURANCE COMPANY, Defendant-Appellee. ____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 20-cv-1069 — Elaine E. Bucklo, Judge. ____________________ ARGUED OCTOBER 29, 2025 — DECIDED JULY 13, 2026 ____________________ Before SYKES, ST. EVE, and MALDONADO, Circuit Judges. SYKES, Circuit Judge. In October 2019 a freak lightning strike sparked a devastating fire at Pine Manor, Wesley Gibson’s 24,000-square-foot countryside mansion in southern Illinois. The fire caused a constructive total loss of the man- sion and its contents. Gibson promptly filed a claim with Chubb National Insurance Company, his insurer. 2 No. 25-1121 Gibson purchased Pine Manor almost 30 years ago as a private vacation home for his family. Over time he renovated it and filled its rooms with expensive furniture, antiques, and artwork from all over the world. He also transformed the property into a commercial lodging and events venue, pur- chasing and refurbishing neighboring homes, and adding amenities like a pool and conference center to form what the estate’s website calls a “luxury country inn and resort.” Gibson and his family periodically stayed at Pine Manor after the change in its use—typically for about 70 days each year, mostly over weekends and holidays. But the estate is primar- ily a rental facility, and Gibson reported it on his tax returns as a business property with 365 days of commercial use. Although Pine Manor’s use changed over time, Gibson continued to insure the mansion under a homeowner’s policy rather than upgrade to commercial property insurance. That proved to be a costly decision. At the time of the fire, the Chubb policy provided $8.75 million in coverage for the man- sion under the “Deluxe House” section and $3.5 million for its contents under the “Deluxe Contents” section. But the con- tents section excluded coverage for losses to property used to conduct the insured’s business, except “as provided under Extra Coverages.” And the “Extra Coverages” section capped coverage for losses to business property at $25,000. Chubb paid the full $8.75 million policy limit for the loss of the mansion itself; unlike the contents coverage, the Deluxe House coverage did not contain a business-property exclu- sion. But the insurer denied Gibson’s $3.5 million claim for the loss of the mansion’s contents, explaining that because he operated the property as a commercial lodging and events venue, the business-property exclusion in the contents cover- No. 25-1121 3 age applied. Chubb accordingly paid only the $25,000 policy sublimit for loss of property used to conduct the insured’s business. Gibson sued Chubb for breach of contract, seeking the full $3.5 million in contents coverage; he also asserted claims un- der state insurance and consumer-fraud statutes. On cross- motions for summary judgment, the district judge held that Chubb had properly classified most (but not all) of Pine Manor’s contents as business property, so she granted partial summary judgment for the insurer. The parties settled the few issues that remained, and the judge entered final judgment. Gibson appealed, challenging the partial summary judgment against him. We affirm. Gibson operated Pine Manor as an upscale lodging and events facility and used nearly all the mansion’s contents to conduct that business. The contents coverage in the Chubb policy promised to pay no more than $25,000 for losses to property used to conduct the insured’s business. Chubb paid that amount in full, so the judge properly entered judgment for the insurer. I. Background Gibson owns and manages Gibson Consulting Group, a Chicago-based logistics consulting firm. In the late 1990s, he purchased Pine Manor, a 24,000-square-foot mansion on a pri- vate lake in the foothills of the Shawnee National Forest on the outskirts of Carbondale, Illinois. Intending to use the man- sion as a vacation home for his family, Gibson refurbished it and filled it with personal belongings: family heirlooms, furniture and artwork from a different home he had recently sold, and an oriental rug that he had given his wife to cele- brate their first wedding anniversary. 4 No. 25-1121 To supplement the furnishings he already owned, he cu- rated a lavish collection of antiques, artifacts, and fine art, in- cluding an Italian rococo-style mirror and windows from the original Lloyd’s of London building. Over time, Gibson spent millions of dollars renovating, furnishing, and decorating Pine Manor. He also gradually expanded the Pine Manor estate, trans- forming it from a stand-alone family mansion into a sprawl- ing commercial lodging and events complex. He built confer- ence facilities that could accommodate large groups and pur- chased neighboring homes—some modest, others grandi- ose—to house additional guests. He also dotted the property with amenities, including a pool, carriage house, boat dock, and sports courts. The estate eventually grew to include al- most a dozen structures occupying over 100 wooded acres. With the Pine Manor compound’s growing size came a shift in the mansion’s use. Whereas Gibson and his family were once the mansion’s only visitors, the estate soon began to welcome paying guests. Between 2016 and 2019, Gibson’s consulting firm paid a $70,000 monthly retainer to use Pine Manor for its corporate training retreats; each year, the estate hosted up to 20 weeks of client training. And on weekends Pine Manor was a popular wedding venue: Starting in about 2010, at least six and sometimes as many as sixteen weddings were celebrated at Pine Manor every year. Gibson also made the Pine Manor properties available for short-term vacation stays. To attract guests, Gibson hired a marketing firm to design social-media pages and a website for the estate. Describing Pine Manor as a “luxury country inn and resort,” the website boasted of its proximity to Southern Illinois University and its ability to accommodate large gath- No. 25-1121 5 erings like family reunions, retirement celebrations, and birthday parties. At the time of the fire, the website also high- lighted Gibson’s impressive collection of antiques, promising prospective guests a “backdrop of fine art and collections from around the world.” All told, in both 2017 and 2018, Gibson earned $1 million in lodging revenue from hosting guests at Pine Manor, and his personal tax returns consist- ently reported 365 “fair rental days” for the estate. Many of Pine Manor’s visitors stayed in the original man- sion, enjoying unfettered access to its movie room, pub room, game room, dining spaces, and commercial and country kitchens. Guests also had access to the collectibles and heir- looms that filled these rooms. In fact, even after Pine Manor opened its doors to paying guests, Gibson continued to dis- play his family heirlooms and antiques throughout the man- sion because, in his words, it was “way cheaper than a storage unit” and “fun for people to see and use” them. Indeed, only a few spaces were off-limits to guests: a wine cellar, a gun safe, and two locked closets in the master bed- room. In these closets Gibson and his wife stored clothing, jewelry, and other personal items they used when visiting Pine Manor; the family didn’t relinqui

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