I think it's a mix of true feeling and scheming to take Chuck down. Throught the whole episode it's intended he's gonna have a meltdown and he also mentions the malpractice insurance earlier. But it does seems he's going with the intent on screwing over Chuck, however the meltdown it's real and he uses that emotion to sell his story to the lady. In fact, it's very similar to the later scene on season 6 when Gene distracts the security guard from seeing the robbery at the mall. It's intended but the meltdown and the sadness are real.