The Court of Common Pleas in Ohio determined that BitCoin was property and denied the insurer's motion for judgment on the pleadings seeking to establish there was limited coverage for the loss. Kimmelman v. Wayne Ins. Group, 2018 Ohio Misc. LEXIS 1953 (Ohio Misc. Sept. 25, 2018).
James Kimmelman submitted a claim to Wayne Insurance Group based upon a loss of $16,000 of BitCoin that had been stolen. The insurer investigated the claim and awarded $200 to Kimmelman. The insurer determined that the property was "money" and governed by a sublimit within the policy. Kimmelman filed suit and Wayne Insurance moved for judgment on the pleadings, arguing that BitCoin was "money" under the policy, and that Kimmelman had no claim for breach of contract or bad faith.
The insurer relied upon references in articles from CNN, CNET, and the New York Times to support the argument that BitCoin was recognized as "money." The only authority, however, that the court could rely on in determining the status of BitCoin was the Internal Revenue Service Notice 2014-21. There, the IRS stated, "For federal tax purposes, virtual currency is treated as property." Therefore, BitCoin was recognized as property by the IRS and would be so recognized by the court.
Accordingly, Kimmelman properly pled his complaint for breach of contract and bad faith. The motion for judgment on the pleadings was denied.
