A North Carolina federal jury has awarded nearly $2 million to a warehouse owner after finding that his insurer mishandled a fire claim, delayed its coverage decision and wrongly accused him of deliberately setting the blaze.

The jury in Statesville delivered its verdict Friday, finding that Auto-Owners Insurance Co. breached its contract with warehouse and business owner Austin Powell by failing to pay claims stemming from a 2023 fire. Jurors also determined that the insurer failed to conduct a reasonable investigation and did not decide coverage within a reasonable time.

The verdict awarded Powell $1.94 million and rejected the insurer's allegation that he intentionally participated in burning the property.

The dispute highlights the stakes when an insurance investigation becomes a prolonged battle over responsibility, documentation and coverage. What began as a warehouse fire ultimately became a federal court fight over whether an insurer had fulfilled its contractual obligations.

Auto-Owners Insurers Verdict Centers on Unpaid Fire Claims

Powell and his businesses, IceCold, AMP Services LLC and Tree Sprout, accused Auto-Owners of violating a tailored protection insurance policy by refusing to pay claims following a fire at their warehouse in Granite Falls, North Carolina.

According to Powell's September trial brief, the fire broke out in the building's basement in July 2023. The warehouse served as the operating base for his businesses, while IceCold used the facility to store inventory, including millions of dollars' worth of refrigerant gas, packaging materials and equipment.

Powell submitted an insurance claim the day after the fire. Auto-Owners subsequently dispatched a claims representative and a fire expert, who concluded that the blaze had been deliberately set, according to the brief.

Dispute Over the Fire Investigation

Powell alleged that the insurer failed to tell him it had classified the fire as incendiary or that it suspected him of starting it.

The insurer also rejected multiple proofs of loss, citing insufficient documentation, according to Powell's filing. He maintained that he had cooperated with the investigation and permitted the insurer to access the information it requested.

Powell said he had allowed investigators to "retrieve any information they needed, including complete imaging of his cellphone, without limitation."

Despite that cooperation, Powell argued, the insurer failed to provide a legitimate explanation for its inaction. When he filed suit in September 2024, more than a year after the fire, he said Auto-Owners still had not determined whether the claim was covered or paid any benefits under the policy.

His lawsuit alleged breach of contract, unfair business practices and bad faith.

Insurer Cites Evidence of an Intentionally Set Fire

Auto-Owners offered a different account in its trial brief, arguing that evidence supported its conclusion that the warehouse fire was intentional.

The insurer said the North Carolina State Bureau of Investigation determined that the blaze had been deliberately ignited using a halogen lamp placed beneath pine straw, cardboard and tires. Auto-Owners also said its own fire expert reached the conclusion that the fire had been intentionally set.

The disagreement over the fire's origin became central to the dispute, with the insurer relying on its investigation while Powell challenged its handling of the resulting insurance claim.

The jury ultimately found that Powell had not intentionally participated in burning the property and concluded that Auto-Owners had breached its contractual obligations.

Fight Over Missing Surveillance Footage

The litigation also featured a separate dispute over evidence preservation.

Auto-Owners requested spoliation sanctions, alleging that Powell failed to preserve surveillance footage showing the area leading to the basement where the fire began. The insurer argued that the missing footage prejudiced its defense because it could not review or present video showing the basement staircase during the minutes and hours before the fire.

According to the insurer, the footage could have helped establish when Powell left the building that day.

U.S. District Judge Matthew E. Orso denied the request without prejudice, allowing the issue to be raised again during the formal jury charge conference. The ruling came a few days before the trial began Oct. 13.

It was not clear from the court docket whether Auto-Owners renewed its sanctions request.

Attorneys and Parties in the Case

Attorneys for the parties did not immediately respond to requests for comment Tuesday.

AMP Services LLC and Powell are represented by Bo Caudill, Tomi M. Suzuki and Nicholas E. Williams of Villmer Caudill PLLC.

Auto-Owners is represented by Colin E. Scott and Jeffrey B. Kuykendal of McAngus Goudelock & Courie PLLC.

The $1.94 million verdict marks a significant outcome for Powell after a lengthy dispute over the warehouse fire and the insurer's response. The jury's findings addressed both the handling of the insurance claim and the allegation that Powell had deliberately set the blaze, rejecting the insurer's accusation while holding it liable for its contractual failures.