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Peterson Claims He's Entitled To Insurance Payout

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DURHAM, N.C. — Mike Peterson, fighting to prove he didn't kill his wife, is also in court fighting toprove he should be the beneficiary of her $1.4 million lifeinsurance policy.

Peterson is scheduled to go on trial in May for murder in thedeath of his wife, Kathleen, who was found dead at the bottom of astaircase in their Durham home last December.

A successful novelist, one-time candidate for mayor and formernewspaper columnist, Peterson has said his wife fell down thestairs. Police and prosecutors say deep gashes to KathleenPeterson's head indicate she was killed.

Last month, Caitlin Atwater, Mrs. Peterson's only child and aone-time advocate for Mike Peterson's innocence, filed awrongful death lawsuit against her stepfather in Durham SuperiorCourt. She also made a claim to her late mother's insurance policyin federal court in Greenville.

In April, Prudential Insurance asked a federal judge to decidewho should be paid the proceeds, which include $145,000 for basiclife benefits, $580,000 optional life benefits and $725,000 foraccidental death.

The insurance company said in court papers that it couldn'tdecide who should get the money because of "adverse andconflicting or potentially adverse and conflicting claims."

Court records show that on June 8, 1987, Mrs. Peterson made Frederick M. Atwater, her husband at the time, the beneficiary of the insurance policy sheheld as an employee of Nortel Networks, court documents show. Thetwo divorced in November of 1991.

On July 29, 1997, Mrs. Peterson made her new husband, MikePeterson, the beneficiary. But she never signed the form, courtrecords show. Nortel date-stamped the unsigned form as being"entered."

Because there is no signature on the form, Frederick and CaitlinAtwater have said in court documents that all of the money shouldgo to them.

"Prior to her death, decedent designated Defendant Frederick M.Atwater as the beneficiary of the life and accidental deathbenefits ... and made no valid change in the beneficiarydesignation prior to her death on December 9, 2001," FrederickAtwater's attorney, David Rooks of Chapel Hill, said in courtdocuments filed in June.

Frederick Atwater, who lives in Washington, N.C., declinedcomment on the dispute.

Caitlin Atwater's attorney filed documents in June contendingthat if Frederick Atwater is not made the beneficiary, she shouldbe the sole beneficiary because of North Carolina's "slayerstatute," which prohibits economic gain for a person convicted ofkilling another.

Mike Peterson's attorneys countered in July that, because the1997 form designating him as beneficiary was stamped by Nortel, itis clear he should get the money.

Mike Peterson said Frederick Atwater's claim to the insurancepolicy ended with his marriage to Kathleen Peterson.

"Kathleen made her feelings very clear when she divorced him," Peterson said.

Kathleen Peterson took out two insurance policies to comply withthe terms of her divorce agreement with her ex-husband, Mike Peterson said. After Caitlin Atwater turned 18 and decided toattend Cornell University, she cashed them in and invested themoney, he said.

Because of the continuing criminal trial, Mike Peterson'sattorneys asked U.S. District Judge Malcolm Howard to keep theproceedings confidential. Howard refused that request in June.

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