Dateline   |  April 03, 2014

'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.

>> shut with a resounding clank.

>> i was a wreck. i really was.

>> when the sun woke him up through razor wire every day for the rest of your life.

>> that's where everything both begins and ends.

>> a convicts glimmer of a successful appeal and retrial may keep desperate hope hay live.

>> i always had hope. it has to be made right.

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

>> this was a reality that we couldn't change.

>> but not every case ends the way you would expect. meet michael pierce, 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 ever, ever want to that to her husban husband.

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

>> she loved christmas . she loved being in the mood playing christmas from the start of december all the way through new year's.

>> it was the kids actually who brought michael and kathleen together. she was separated. michael was raising his two young boys and two young girls , margaret and martha . the girls became playmates with kathleen 's daughter.

>> i guess that was when i first met michael , before he was ever romantically 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, kaitlin , how would you like if martha comes to live with you. and i immediately thought, a permanent sleepover.

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

>> he put it, we're going to have a long sleepover. and we said, yeah!

>> her younger sister , martha . of course we wanted to live with kaitlin 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 memories of dropping by the family.

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

>> new york call was a worldly u.s. marine vet and was 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 of moving into 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 would write his war stories and churn out columns on city politics for the local paper. stick in the eye stuff. he would battle losing candidate for mayor of durham . kathleen , meanwhile, was a top business exec who had risen through the ranks of a telecommunications company . she received a masters degree in engineering from duke, even appearing on the cover of the the university magazine. she was nothing if not a superer mom juggler.

>> power points by day, martha stewart by night. her younger sister was in awe of her.

>> not only did she raise the children with quite an accomplished corporate career, they entertained like several dinner parties a month. oh, dinner for 50, she would do it.

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

>> fun to be with, incredibly well read. zblf he was always the entertainers at dinners. he would carry the conversations 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 always thought, you know, this is what i'll register as the happiest day of my life.

>> and for kathleen , it just may have been.

>> she was thrilled to be marrying michael , all three girls were bridesmaids in her wedding. i remember 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 parties, art openings, charity events. to candice, her sister had never been happier.

>> she liked prestige of being able to say, i'm with this man who is an author and well traveled. but as christmas of 2001 approached with the girls away at college, kathleen was jittery. she was taking vale ining valium. her job was overwhelming as of late. more than anyone, she welcomed the upcoming time off for the holidays. and so on that mild december night out back by the pool, as the story goes, michael and kathleen embarrassed his surprise good news that day. a big time homillywood producer was nibbling at his options for a movie.

>> 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 do 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's your emergency?

>> [ muted ] street. please.

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

>> she said, um, 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 kaitlin got the word, it was as shocking as it was definitive.

>> she looked me straight in the eyes and she said, kaitlin , it's your mom. she's dead. those words still ring clearly in my head.

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