Depreciation Amount Withheld by Insurer

We are public adjusters, and we have a commercial insured with a CP 00 10 04 02. The insured had a covered total loss, a building fire, and was paid the actual cash value by the carrier. The insured built a different building on the loss site, not equivalent to the one that burned. He plans to sell the property and intends to buy a replacement building at a different site to collect the withheld depreciation. He has replacement cost coverage.

The carrier's adjuster said that he doesn't believe the insured is entitled to claim the withheld depreciation since the insured didn't spend a sufficient amount to trigger the payment based on what the insured spent in building the nonequivalent building at the loss site. The insured does not claim that the building he erected is the replacement for the one lost in the fire. We don't believe that by erecting a nonequivalent structure the insured is now precluded from purchasing a replacement building and collecting the withheld depreciation, provided that the purchase he makes exceeds the amount paid on the ACV of the fire damaged building. He is within the time period allowed under the policy to perform replacement, and the policy specifically states the insured may choose to rebuild or replace the building at a different location than that of the loss. We believe the insured is able to perfect his replacement cost claim by buying a substitute building of equal or greater value than the one lost to fire. Should he be able to recover the withheld amount?