Jury Rules That Owner Of Historic NC Inn Set Fire

"All of our leads have been run at this point," he said. "We really have nothing else to go on unless someone comes up with some new information."

Thompson said the jury's conclusion in the civil trial doesn't mean there's enough evidence to bring criminal charges.

"There's a difference in the way that evidence is looked at in a civil and a criminal case," he said. "In a civil trial it's the preponderance of the evidence. In a criminal trial you have to find guilt beyond a reasonable doubt."

Three days before the fire, Buncombe County officials finalized the property's foreclosure and set the auction for a month later.

Harleysville's claim stated it wouldn't pay for "loss caused by or resulting from criminal, fraudulent, dishonest or illegal acts committed alone or in collusion with another."

The insurance company maintained that the inn was closed at the time of the fire and that Gray was the only person on the grounds that evening.

Gray said in a deposition that he didn't cause the fire or instruct anyone to set it. He told the Citizen-Times in 2010 that he believes former employees set the fire.

The lawsuit also claimed the insurance policy should be voided because the application didn't disclose allegations of sexual abuse.

Gray, a child psychiatrist, entered into an agreement in 1993 in Virginia in which he agreed to surrender his medical license in exchange for prosecutors dropping charges of sodomy and sexually abusing young men and patients.

That same year the Virginia Board of Medicine revoked Gray's license, finding that he had "unethically exploited the physician/patient relationship by engaging in sexual activities with patients" and had traded housing, food, money and transportation for sexual favors. At the time Gray said the charges were a conspiracy by a group of boys from dysfunctional families.

"Had Harleysville known the truth about the claims for sexual misconduct against The Hammocks' managing member, it would not have accepted the risk on the same terms as it did, if at all," the company said in a court filing.

The Hammocks bought the inn in 2005 from Albert and Marge Michel, of Guilford County, for $10.2 million.

The Michels had owned the property since 1986 and restored the mansion, which housed the four-star Gabrielle's restaurant and 12 guest rooms. They added a lower garden and more buildings to house guest rooms and another restaurant.

The Michels owner-financed the sale, but Gray failed to pay most of the debt, so they began foreclosure proceedings.

Oshun Mountain Sanctuary Inc. bought the property last year for $4.5 million. The nonprofit group plans to develop it into a wellness center.