Auto-Owners Fire Insurance Verdict: Jury Rejects Arson Defense and Awards $1.94 Million

In the Auto-Owners fire insurance verdict returned on Friday, October 16, 2026, a federal jury in Statesville, North Carolina awarded about $1.94 million to warehouse owner Austin Powell and his companies after finding that Auto-Owners Insurance Company breached its policy by refusing to pay claims from a July 2023 fire. The jury also rejected the insurer's defense that Powell helped set the fire, and found that Auto-Owners failed to investigate reasonably and failed to decide coverage within a reasonable time, two findings that can expose an insurer to more than the contract damages.

The case is AMP Services, LLC et al. v. Auto-Owners Insurance Company, No. 5:24-cv-00235, in the U.S. District Court for the Western District of North Carolina. Law360 reported the verdict on October 20, and USA Herald published a parallel account. The Auto-Owners fire insurance verdict is modest by the standards of the trucking and product verdicts this site usually tracks. The structure of the verdict is the reason it matters to policyholder lawyers, plaintiffs' firms that handle property and fire losses, and claims departments. The jury did more than decide that a claim was covered. It answered questions about how the claim was handled, and under North Carolina law those answers can lead to tripled damages and fee awards.

What did the jury decide in AMP Services v. Auto-Owners?

The jury decided four things, according to the two published accounts:

1. Breach of contract. Auto-Owners breached its policy with Powell and his businesses by failing to pay claims arising from the 2023 fire.
2. No arson by the insured. The jury rejected Auto-Owners' allegation that Powell intentionally participated in burning the property.
3. No reasonable investigation. Auto-Owners failed to conduct a reasonable investigation of the claim.
4. No timely coverage decision. Auto-Owners did not decide coverage within a reasonable time. Law360 described this as an improper delay in issuing a coverage decision.

The plaintiffs are Austin McCoy Powell, AMP Services, LLC, IceCold US LLC and Tree Sprout LLC, according to the GovInfo docket listing and USA Herald. The federal court classifies the action as an insurance case whose cause of action is breach of contract. The "5:" prefix on the docket number places it in the court's Statesville Division, which is where the trial was held.

How much did the jury award against Auto-Owners?

The jury awarded about $1.94 million. Neither published report breaks the figure into components such as building loss, contents and inventory, business income, or extra expense. Neither report says whether the jury awarded anything separately on the claim-handling findings.

That missing breakdown matters. If the claim-handling findings support a claim under North Carolina's Unfair and Deceptive Trade Practices Act, the judge, not the jury, applies the statutory trebling after the verdict. The reports do not say whether the $1.94 million is the number before or after trebling, and this article does not assume either. The table below separates what has been reported from what has not.

Item	Status as of October 21, 2026	Source
Court and case number	W.D.N.C., No. 5:24-cv-00235	GovInfo; Law360
Verdict date	Friday, October 16, 2026	USA Herald (verdict "Friday"); Law360 dated October 20
Amount	About $1.94 million	Law360; USA Herald
Breach of contract	Found against Auto-Owners	USA Herald
Arson defense	Rejected	Law360; USA Herald
Reasonable investigation	Found lacking	USA Herald
Timely coverage decision	Found lacking	Law360; USA Herald
Damages breakdown	Not reported	—
Trebling or Chapter 75 count	Not reported	—
Punitive damages	Not reported	—
Presiding judge	Not reported	—
Judgment entered / post-trial motions	Not reported	—

Why did Auto-Owners deny the Granite Falls warehouse fire claim?

Auto-Owners denied the claim on the theory that the fire was deliberately set and that its insured was involved. According to Law360's account of the insurer's trial brief, Auto-Owners told the court that the North Carolina State Bureau of Investigation had determined someone started the blaze on purpose by setting a halogen lamp under a pile of tires, cardboard and pine straw, and that the insurer's own fire expert had also concluded the fire was intentionally set.

Powell's side told a different story. According to USA Herald's summary of the plaintiffs' trial brief, the fire started in the basement of the Granite Falls warehouse in July 2023, where the businesses stored inventory including refrigerant gas, packaging and equipment. The policy at issue was described as a "tailored protection" policy covering the warehouse.

An official finding that a fire was set does not, by itself, prove that the policyholder set it. That point decided this case. A fire can be incendiary and still be someone else's crime. An insurer that denies a claim as arson has to connect the insured to the act, and the jury concluded that Auto-Owners had not done so.

Who has the burden of proof when an insurer says the policyholder set the fire?

The insurer carries the burden. In the Fourth Circuit, which hears appeals from North Carolina's federal courts, the leading articulation is Rabon v. Great Southwest Fire Insurance Co., 818 F.2d 306 (4th Cir. 1987). Rabon was decided under South Carolina law. It holds that an insurer asserting arson as an affirmative defense must prove by a preponderance of the evidence that the fire was incendiary and that the insured caused it. Courts accept that arson is rarely proved directly, so circumstantial evidence is allowed: incendiary origin, financial motive, and the insured's opportunity to set the fire.

Two practical points follow:

• Preponderance, not clear and convincing. The insurer does not have to prove arson beyond a reasonable doubt or by clear and convincing evidence. A civil jury can find for the insurer even where no criminal charge was ever brought.
• Origin alone is not enough. Proof that the fire was set (here, the SBI finding the insurer relied on) establishes only the first element. Without evidence tying the insured to the fire through motive and opportunity, the defense fails.

The Statesville jury's finding fits that framework. Jurors could accept or doubt the incendiary-origin evidence and still conclude that Auto-Owners had not proved Powell's participation. Because the published reports do not describe the motive and opportunity evidence, they do not show which element failed.

Why the Auto-Owners fire insurance verdict's claim-handling findings matter most

Coverage verdicts against insurers are common. Findings that an insurer failed to investigate reasonably and failed to decide coverage in time are less common, and they have a specific meaning in North Carolina.

N.C. Gen. Stat. § 58-63-15(11) lists unfair claim settlement practices. The list includes refusing to pay claims without conducting a reasonable investigation based on all available information, which is subsection (11)(d), and failing to affirm or deny coverage within a reasonable time after proof-of-loss statements have been completed, which is subsection (11)(e). The two findings the Statesville jury made track those two subsections almost word for word.

Section 58-63-15 does not give policyholders a private right of action of its own. The route to damages runs through N.C. Gen. Stat. § 75-1.1, the general prohibition on unfair or deceptive acts in commerce:

• In Gray v. North Carolina Insurance Underwriting Ass'n, 352 N.C. 61 (2000), the Supreme Court of North Carolina held that conduct violating § 58-63-15(11)(f), the failure to attempt in good faith to settle claims where liability has become reasonably clear, is a violation of § 75-1.1 as a matter of law. The policyholder does not also have to show the frequency that would make it a "general business practice."
• Courts applying Gray have treated the other § 58-63-15(11) practices as examples of conduct that can establish a § 75-1.1 violation. Whether a particular finding does so in a given case is usually decided by the judge after the jury has found the facts.

The jury answers fact questions such as whether the insurer conducted a reasonable investigation, and the court then decides whether those facts amount to an unfair or deceptive practice. That division of labor is why the reported findings deserve attention even though the reports do not mention a Chapter 75 count.

Can the Auto-Owners verdict be tripled under North Carolina law?

It can if the plaintiffs pleaded and preserved a Chapter 75 claim and the court concludes that the jury's findings establish a § 75-1.1 violation that caused injury. In that case, N.C. Gen. Stat. § 75-16 makes trebling mandatory: the court triples the damages the jury assigned to that violation. The published accounts do not confirm that a Chapter 75 claim was tried, so this is an open question rather than a prediction.

Three related rules shape what the final judgment could look like:

• Attorney fees. N.C. Gen. Stat. § 75-16.1 lets the court award reasonable attorney fees to a prevailing plaintiff where the defendant willfully engaged in the practice and unwarrantedly refused to fully resolve the matter. A coverage fight that ran from a July 2023 fire to an October 2026 verdict is exactly the kind of record on which fee motions are litigated. North Carolina, like most states, otherwise follows the American rule, so this is one of the few fee-shifting routes open to an insured.
• Election of remedies. A plaintiff cannot recover both Chapter 75 treble damages and punitive damages for the same conduct. Where both are available, the plaintiff must elect one.
• Punitive damages cap. If punitive damages are pursued on a tort claim for bad faith refusal to pay instead, the plaintiff must prove a refusal to pay after recognizing a valid claim, bad faith, and aggravated or outrageous conduct. That last element is set out in the state's pattern jury instruction for bad faith refusal to settle. N.C. Gen. Stat. § 1D-25 caps Punitive Damages at the greater of three times compensatory damages or $250,000.

On a $1.94 million base, the arithmetic is simple. Full trebling would produce about $5.82 million before fees and interest. A punitive award at the statutory ceiling would also top out at three times compensatory damages. Neither outcome has been reported, and either would depend on what was pleaded, what the jury was asked, and what the court does after trial.

Auto-Owners fire insurance verdict timeline

Date	Event
July 2023	Fire starts in the basement of the Granite Falls, North Carolina warehouse used by Powell's businesses
After July 2023	Auto-Owners investigates. The SBI and the insurer's own expert conclude the fire was deliberately set, according to the insurer's trial brief. The claims are not paid.
2024	AMP Services, IceCold US, Tree Sprout and Powell sue in the Western District of North Carolina (No. 5:24-cv-00235)
October 8, 2026	Court entry published on GovInfo for the case
October 16, 2026	Statesville jury returns a verdict of about $1.94 million for the plaintiffs, rejects the arson defense and finds investigation and timing failures
October 20, 2026	Law360 reports the verdict
Next	Entry of judgment, any Chapter 75 and fee rulings, and Rule 50(b) and Rule 59 motions

Will Auto-Owners appeal the verdict?

No appeal or post-trial motion had been reported as of October 21, 2026, and Auto-Owners' position on an appeal has not been published. The federal procedure is fixed, however. Under Federal Rules of Civil Procedure 50(b) and 59, a renewed motion for judgment as a matter of law or a motion for a new trial must be filed no later than 28 days after the entry of judgment. A notice of appeal to the Fourth Circuit is generally due 30 days after judgment, or 30 days after the court disposes of a timely post-trial motion.

Two features of the case make post-trial practice likely to be contested:

• Sufficiency of the arson evidence. An insurer that presented a state investigator's incendiary-origin finding and its own expert can be expected to argue that no reasonable jury could reject the defense. Under Rabon's framework, however, a jury may accept that a fire was set and still find the insured's involvement unproved. That is a hard verdict to overturn on sufficiency grounds.
• Interest. In a diversity case, North Carolina law governs prejudgment interest. Under N.C. Gen. Stat. § 24-5(a), damages in a contract action bear interest from the date of breach, at the 8 percent legal rate in § 24-1 unless the contract sets another rate. Depending on when the court fixes the breach date, interest running from 2023 or 2024 can add a meaningful amount to the judgment. Post-judgment interest then runs at the federal rate under 28 U.S.C. § 1961.

What it means for policyholders, insurers and the plaintiffs' bar

For policyholder and plaintiffs' counsel. The verdict form is the lesson of the Auto-Owners fire insurance verdict. A coverage case framed only as a breach of contract caps recovery at the policy benefits owed. A case that puts the claim-handling questions to the jury, in language tracking § 58-63-15(11), sets up the court's Chapter 75 analysis and the fee motion under § 75-16.1. Plaintiffs' firms that handle residential and small-business fire losses alongside personal injury work will find that the most useful detail is the separate jury questions on investigation and timing, not the dollar figure.

For insurers and coverage defense counsel. An SBI or fire marshal finding of incendiary origin answers only half of the arson defense. The other half is evidence linking the insured to the fire through motive, opportunity and conduct, and a jury weighs that evidence against the time the claim sat undecided. A long gap between the loss and a coverage decision can become proof of an unreasonable investigation, which is a separate source of exposure even if the arson defense is credible.

For claims departments. The timing finding matters on its own. Subsection (11)(e) of the statute concerns failing to affirm or deny coverage within a reasonable time after proof of loss. An open file with a suspected-arson flag can create liability through delay, separate from whether the eventual denial was right.

For litigation funders and contingency-fee firms. First-party property claims that carry a credible Chapter 75 count have a different risk profile from plain coverage suits. The Contingency Fee economics improve where trebling and statutory fees are available, which is why claim-handling findings, not the contract award, often drive settlement value in North Carolina. Comparable dynamics appear in West Virginia's Hayseeds doctrine, discussed in this site's coverage of the $30 million Ramaco verdict against two Chubb insurers in the same federal circuit.

None of this is a forecast of the final judgment that will follow the Auto-Owners fire insurance verdict. The court has not ruled on any post-verdict question, and the published accounts leave key variables unknown.

FAQ

What did the jury decide in AMP Services v. Auto-Owners?

On October 16, 2026 a federal jury in Statesville found that Auto-Owners breached its policy by not paying claims from a July 2023 warehouse fire, rejected the insurer's claim that owner Austin Powell intentionally helped set the fire, and found that Auto-Owners failed to investigate reasonably and failed to decide coverage within a reasonable time.

How much did the jury award against Auto-Owners Insurance?

About $1.94 million, according to Law360 and USA Herald. Published reports do not break the award into components and do not say whether any trebling, attorney fees or interest will be added.

Who has the burden of proof when an insurer claims arson?

The insurer does. Under the Fourth Circuit's framework in Rabon v. Great Southwest Fire Insurance Co., the insurer must prove by a preponderance of the evidence both that the fire was incendiary and that the insured caused it, and it may rely on circumstantial evidence of motive and opportunity.

Can the Auto-Owners verdict be tripled?

Only if a claim under North Carolina's Unfair and Deceptive Trade Practices Act was preserved and the court finds that the jury's findings establish a violation. In that event N.C. Gen. Stat. § 75-16 requires trebling. The reports do not confirm that such a claim was tried.

Will Auto-Owners appeal?

No appeal has been reported. Post-trial motions under Rules 50(b) and 59 are due within 28 days of entry of judgment, and any appeal would go to the Fourth Circuit.

Does an official arson finding defeat a fire insurance claim?

No. A state investigator's finding that a fire was deliberately set addresses only the fire's origin. The insurer must still prove that the policyholder was responsible, and in this case the jury found that Auto-Owners had not done so.