AUGUSTA — The large lot at the corner of Murray and Pearl streets where arson destroyed a historic two-story home on Jan. 1, 2008, is headed for the auction block next month.

Citi Mortgage Inc., of O’Fallon, Mo., sued the homeowner, Manley David Davis, in a foreclosure action in Augusta District Court, claiming no mortgage payment was received on or after Oct. 1, 2008. At that time, the mortgage holder said Davis owed slightly more than $186,000. The foreclosure judgment was issued in February.

Eleven months after the fire, Davis was indicted on charges of arson and conspiracy to commit arson in the blaze that leveled his 1870s home at 17 Murray St. as well as arson and conspiracy to commit arson in a Sept. 16, 2005, fire that destroyed his vehicle in Belgrade. Davis had pleaded not guilty to all charges and maintained he was a victim. The indictment was dismissed by a judge’s order 15 months later.

On Wednesday, Davis said he was sad to lose the property but no longer could fight for it.

“I want to cry about it. I lost everything in the world,” he said. “The stress has taken its toll. I kind of wish the true story had come out in the beginning.”

Davis represented himself in the foreclosure case, saying he ran out of money because he spent more than $100,000 on his defense against the criminal charges.

“The people hurt the most were my children,” he said. Davis and his family were out of state at the time of the fire.

Ronald A. Hanson Jr., now 39, who was living in Augusta at the time, pleaded guilty to setting both fires, and investigators said he set them to enable someone else to collect insurance proceeds.

Hanson was sentenced to 12 years in prison, with all but 59 months suspended, and four years of probation. He was released from prison on March 28, 2012, and remains on probation until Jan. 17, 2017, according to Maine Department of Corrections personnel.

Part of Hanson’s sentence required that he cooperate with authorities in cases against an unnamed co-defendant. Davis was charged with hiring Hanson to set both fires to collect insurance proceeds. Those charges were dismissed.

In seeking the dismissal of the arson charges against Davis, defense attorney Leonard Sharon wrote, “This case boils down to the credibility of Ronald Hanson, a drug-addicted convicted felon and serial arsonist. Mr. Davis, the defendant, apparently had taken pity on Mr. Hanson and occasionally assisted him. Mr. Hanson returned the favor by claiming that Mr. Davis paid him to burn down his home and automobile.”

In ordering the dismissal with prejudice — meaning the charges could not be brought again — Justice Nancy Mills wrote, “This is not the typical case in which evidence is not produced in a timely way and then used at trial. …This case involves evidence that existed at or significantly before the time of indictment and simply has not been provided (to the defese), in spite of many court proceedings in which the state was strongly encouraged to do so.”

In a footnote, Mills added, “The court does not in any way suggest bad faith on the part of the state’s attorney.”

Records in the foreclosure case indicate that it was stalled at one point because of a pending insurance claim.

The Davis home was insured, and on Wednesday, Davis said all the insurance proceeds went to the mortgage holder.

Now, he said, he travels between Augusta and Florida and is dealing with medical problems.

However, he said he holds no animosity toward anyone, adding, “Good luck to everybody.”

The property auction is set for 10 a.m. May 16 at the offices of Bendett & McHugh, 30 Danforth St., Suite 104, Portland, and requires a $5,000 deposit to participate.

Records at the Augusta assessor’s office show the 0.3-acre parcel, including the remaining garage, is valued at $34,900.

Betty Adams — 621-5631 [email protected] Twitter: @betadams