Dateline   |  June 03, 2013

'Reversal of Fortune', Part 1

Michael Peterson finds his wife, Kathleen, dead in their home at the bottom of the back staircase. Dateline NBC's Dennis Murphy reports.

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This content comes from Closed Captioning that was broadcast along with this program.

>> when the cell doors slide shut with a resounding clank --

>> i was a wreck during this period. i really was.

>> when the sun will come up through razor wire for the rest of your life --

>> that's where it begins and ends.

>> a convict's glimmer of a successful appeal and retrial may keep desperate hope alive.

>> i always had hope. it has to be me, right?

>> but in the real world of criminal justice , most of the time once you're inside you're done.

>> this is reality that we couldn't change.

>> but not every case ends the way you'd expect. meet michael peterson . his case which defies all odds became known as the staircase murder. the sensational investigation and trial that ensued would rip a family apart. the secrets, the sleaze. on display for everyone to gorge on.

>> my mother would be absolutely appalled this is the last thing she would have ever, ever wanted to happen to her husband.

>> let's go back to the night, early december, 2001 . and stroll up the driveway of a house in a better neighborhood of durham , north carolina . the homeowners kathleen and michael peterson on the patio as the story goes finishing a bottle of wine. in the living room , the christmas tree is already up. the grown peterson children expected home for the holiday. kathleen was always happy as the next season as her daughter caitlin remembers it.

>> she loved christmas. playing music from start of december all the way through nur year's.

>> it was the kids that brought kathleen and michael together. his marriage started to fall apart. she was separated. michael raising his two boys and two young girls , margaret and martha. the girls became neighborhood playmates with caitlin .

>> this was when i met michael , before he was involved with my mother.

>> as the kids started spending more time together, so did kathleen and michael . before long, they ran an idea by kaitlin, a big one about becoming a family together.

>> they sat me down and said, you know, caitlin how would if we come to live with you? i immediately thought a permanent sleepover.

>> and that's exactly how michael presented it to his two girls . margaret's the older.

>> it is really funny. i think he put it we're going to have a long sleep over and we said, yeah.

>> younger sister martha.

>> of course we want to live with caitlin and kathleen and play barbies and be a -- yeah, be a family together.

>> michael 's two boys from his first marriage, todd and clayton, were almost out of the nest by the time their dad moved in with kathleen . still, clayton has good memories of dropping by the melded family.

>> i would go over all the time. babysit the girls and spend a bit of time over there. we were very close.

>> michael was a worldly u.s. marine vet and now a full-time writer. one of his vietnam books got a big advance, money that went towards buying the big house .

>> he said, we're thinking about moving in to this house and they drove us over. we didn't go inside. we just looked and we thought, oh my goodness. you know? this is amazing.

>> there in his office he'd write his war stories and churn out sharp elbowed come lums on city politics for the local paper. stick in the eye stuff. he'd been a losing candidate for mayor of durham . kathleen , meanwhile, was a top business exec who'd risen through the ranks of nortel. she received a masters engineering degree from duke and on the university magazine. she was nothing if not a super mom juggler.

>> as much a priority for braiding their hair as showing up to work on time.

>> her younger sister candace was in an awe of her energy.

>> not only did she raise these children and have a quite accomplished corporate career, they entertained like several dinner parties a month. oh, dinner for 50? she'd do it.

>> and kathleen would even whip up nightly three-course meals with michael presiding at the table.

>> la quashs, one to be with, incredibly well read.

>> he was always the entertainer at dinner. he would carry the conversation and have the most funny stories.

>> so the children were delighted when after years of living together michael and kathleen made it official and got married.

>> i ought thought, you know, this is what will register as the happiest day of my life.

>> for kathleen , it just may have been.

>> she was thrilled to be marrying michael . all three girls were bridesmaids in her wedding. i remember at the wedding the three girls singing we're going to the chapel. the day they married my sister glowed.

>> kathleen and michael were a durham power couple. for more than a decade, their life together had been a whirl of parties, art openings, charity events. her sister had never been happier.

>> she liked the prestige of being able to say, i'm with this man who's an author and well traveled.

>> but as christmas 2001 approached with the girls away at college, kathleen was jittery, taking valium. her job was overwhelming of late, all those long hours at the office. more than anyone, she welcomed the time out the upcoming holidays offered. and so, on that mild december night out back by the pool as the story goes, michael and kathleen embraced his surprise good news that day. a big-time hollywood producer was nibbling at optioning one of his novels for the movies. another midnight glass of wine was in order.

>> they definitely liked to drink wine. they could probably have two bottles of wine and, you know, start showing it a little bit.

>> what happened next would be the subject of a decade of debate. it seems that kathleen left michael to finish his cigar by the pool. she had to get on the computer to read an e-mail for a conference call in the morning. still, another work crisis. michael says he went back inside the house about 2:00 a.m . only to discover something ghastly. kathleen soaked in blood at the bottom of the back staircase.

>> 911, what is your emergency?

>> [ bleep ]. please.

>> what's wrong?

>> my wife had an accident. she is still breathing .

>> what accident?

>> fell down the stairs. she is still breathing . please come.

>> by dawn, the news of the fall only the vaguest of details was reaching the sisters at college. family members delivered the awful news.

>> she said something's happened.

>> your mom has fallen down the stairs. it was an accident. you know, you should come home.

>> by the time kathleen 's daughter caitlin got the word it was as shocking as it was definitive.

>> she said, it's your mom. she's dead. those words still ring clearly in my head.

>> what had happened on that back staircase pooled down in