Although those Grimtotems were simply a nuisance to me, Captain Vimes will want to know of your deeds. Bring him the news that you have tracked down and dealt with those responsible for the burning of the Shady Rest Inn.
It's too late to save Jim Hyal's family, but perhaps the Grimtotems will think twice before attacking anyone connected to Theramore.
<The captain listens to your report intently.>
We have avenged James and his family, but not even that can restore what was destroyed.
You will receive 2 40 and 410 XP
This is part of The Shady Rest Inn quest chain: