Stolen 818Computer Mining Rigs and Litigation with Sentinel Insurance Coverage Gets Ugly


818Computer v. Sentinel Insurance Company Ltd., Sal. Superior Court, Los Angeles County, 18STSVO7218 initially filed in state court and removed to federal court, has been remanded back to state court.

In this matter, Plaintiff alleges

“prior to September 2017, [their] business model was to design and build high-powered computers that ‘mine’ cryptocurrency full time.”

For a plaintiff to manage such a mining operation, it needs to provide a warranty.

Plaintiffs further allege that in September 2017, 16 mining rigs were stolen and dozens of others were described as “total losses” due to the damage that occurred to them during the burglary.

Plaintiff alleges,

“at the time of the burglary, Plaintiff had purchased the component parts for the machines on credit, with the intent of repaying those loans once the machines were sold. At the time of the burglary, the global cryptocurrency market was very favorable, and demand for the ‘rigs’ was very high. However, as a result of the burglary, Plaintiff was left without any means of repaying its loans, as the Subject Property had been sold and/or irreparably damaged. Absent a payment of insurance benefits, Plaintiff would be unable to continue operating its business.”

The allegations in the complaint continue to allege that the insurance company inspected after the burglary, but

“failed to take into consideration all the information and evidence”

and denied the majority of the claim. In addition to naming the insurance company as a defendant, 20 other John Does are named as defendants as well. The claims are a breach of contract, breach of the implied covenant of good faith and fair dealing, unfair business practices, and negligent misrepresentations. The complaint also features a request for punitive damages and attorney’s fees.

Disclaimer: this summary is solely for educational purposes, and are not for legal advice. It is an opinion only and is not authored for any past, present, or future client or employer.

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