YORK — Carrying a wash basin of court and bank documents, a Rock Hill woman accused of setting her family home on fire told prosecutors it would’ve been “stupid” for her to start the blaze that incinerated the top half of a house she paid thousands of dollars to remodel.

A judge agreed.

After a two-day bench trial in a York County courtroom, Eighth Circuit Court Judge Frank R. Addy on Tuesday ruled that Charlotte Ann Smith, 63, was not guilty of burning $125,000 worth of a house she owned at 4986 Mount Gallant Road.

Deputies charged Smith with third-degree arson on Feb. 14, 2011, nearly two weeks after Rock Hill and Newport volunteer fire crews were called to an early-morning fire at the two-story home with an attached apartment Smith rented out to tenants.

York County Fire Investigator Andrew Rollins ruled the fire an arson and fielded Smith’s theories that Guardian Fidelity Mortgage, the secondary mortgage holder on the house, conspired to burn the house to collect a $500,000 from an insurance policy they had on the house.

Guardian Fidelity CEO Howard Wright testified that the company had a $50,800 insurance policy on the house to protect their interests.

Prosecutors argued Smith set the fire two years after the primary mortgage-holder, Bank of America, placed the house in foreclosure and opted to give the house to a receiver, possibly limiting Smith’s access to the property and rental money.

Rebecca McNerney, one of two 16th Circuit assistant solicitors prosecuting the case, said Smith burned the house a week before she was scheduled to appear in court to hear motions for the receivership.

“We find that to be a strange coincidence,” said Christopher Epting, the other assistant solicitor who prosecuted Smith.

York County Sheriff’s Detective Johnny Martin said Smith admitted to buying several gallons of gasoline that she put in a bathtub in the house to burn tree limbs before a planned house inspection.

Fire officials on Monday testified that they evacuated the house when burning embers collapsed on them. After the flames were doused, investigators found buckets of gasoline “strategically” placed throughout the house, along with bags of sticks, McNerney said.

In other buckets, they found gasoline-soaked bank and court documents addressed to Smith from both her property lenders, Bank of America and Guardian Fidelity, she said. They found similar documents at the house where Smith lived, along with a matchbook missing some of its matches.

On the stand, Smith said she spent more than $16,000 to remodel her parents’ home with plans to move into the apartment herself.

“I never thought my home would burn,” she said.

She blamed deputies for failing to question or consider several other suspects, including her handyman who threatened her and a former tenant who harbored a grudge.

“I wouldn’t pay $16,000 on a house and then burn it down. That’s stupid.”

Smith’s defense attorneys, York County Public Defenders BJ Barrowclough and Dan Hall, argued that all the evidence presented was “circumstantial.” They went on to say Smith is in a worse financial condition after the fire, and fire officials weren’t able to smell gas on her.

The foreclosure action against Smith is pending, Barrowclough said. If convicted, Smith, who now lives in Chester with her mother, would have faced 10 years in prison.

Jonathan McFadden •  803-329-4082