Caitlin Atwater: Wrongful Death Suit, Nortel Benefits, and Alford Plea

Caitlin Atwater is the only biological daughter of Kathleen Peterson, the Durham, North Carolina woman whose 2001 death at the foot of a staircase produced one of the most litigated true-crime cases in the United States. She defended her stepfather Michael Peterson at first, then became the prosecution’s most personal witness against him, and later pursued him in civil court for tens of millions of dollars. She now lives quietly in northern Virginia under her married name, Caitlin Clark.¹

Her Family Before the Case

Caitlin was born to Kathleen Hunt Atwater and Fred Atwater. Kathleen was a Duke University graduate, the first woman admitted to its engineering school, and later a vice president at Nortel Networks; her daughter has described her as a philanthropist and socialite.² After Kathleen and Fred Atwater divorced, Kathleen married the novelist Michael Peterson in 1997. Caitlin grew up in the blended household in Durham with Michael’s two biological sons, Clayton and Todd, and two adopted daughters, Margaret and Martha Ratliff.¹

Her Mother’s Death

Michael Peterson called 911 at 2:40 a.m. on December 9, 2001, saying Kathleen had fallen down 15 to 20 stairs and was unconscious but breathing. A second call minutes later reported that she had stopped breathing. First responders described an enormous amount of blood at the scene, with smears on the walls and blood on Michael’s hands, shirt, and shorts.³

State medical examiner Dr. Deborah Radisch concluded that Kathleen died from blunt force trauma to the head, identifying seven scalp lacerations she said were inconsistent with a fall but consistent with being struck. A Durham County grand jury indicted Peterson on December 20, 2001.³

The trial before Judge Orlando Hudson ran about three months.⁴ Prosecutors argued Peterson beat his wife with a blunt instrument, pointing to more than $140,000 in credit card debt and roughly $1.8 million in life insurance as motive. They also introduced evidence of his secret sexual life and of the 1985 death of Elizabeth Ratliff, a friend of Peterson’s found at the bottom of a staircase in Germany. Defense attorney David Rudolf argued the death was an accidental fall. On October 10, 2003, the jury convicted Peterson of first-degree murder and he was sentenced to life without parole. The North Carolina Supreme Court affirmed the conviction in November 2007.³

Why She Turned Against Michael Peterson

In the weeks after her mother’s death, Caitlin viewed it as a strange accident. She stood with her stepsiblings, acted as a family spokesperson, and publicly defended Michael’s innocence.¹

Her position changed after she reviewed the autopsy photographs and learned of deceptions by Peterson, including those tied to his sexuality. She broke with the other Peterson children and became a prosecution witness at the 2003 trial, the only one of them to speak against Michael.⁵ During the trial she was photographed being comforted by her biological father, Fred Atwater, after breaking down while photographs of disputed valuables from the Peterson home were displayed.⁶

In a 2017 interview with INDY Week, her first extended public comments, she described sitting through every day of the trial: “After the closing arguments, when all was said and done, I felt confident that I knew what happened. I knew what happened to my mom.”²

The Wrongful Death Judgment

Acting as administrator of her mother’s estate, Caitlin filed a wrongful death suit against Michael Peterson in Durham Superior Court in October 2002, before the criminal trial began. On February 1, 2007, Judge Hudson entered a consent judgment for $25 million in compensatory damages, $10.5 million in interest covering the 62 months since filing, and $1,486.80 in court costs, for a total of more than $35.5 million. The judgment accrued interest at roughly $166,667 per month, and Peterson admitted no guilt or liability.⁷

Her attorney, Jay Trehy, acknowledged that Peterson would likely never pay. He called the $25 million figure “absolutely appropriate, if not conservative” and said the point was to show that Kathleen Peterson’s life “had value.” Peterson’s attorney noted at the time that his client had filed for bankruptcy.⁸

By October 2017, Caitlin had received nothing. Court filings said Peterson “has not paid any money in satisfaction of the Judgment against him,” and with accumulated interest the total owed had reached an estimated $55 million.⁴ That month, Trehy filed to reinstate and preserve the judgment, arguing in part that Peterson’s Alford plea earlier in 2017 could be treated as a form of exoneration under the settlement’s terms. The agreement directed any proceeds Peterson might earn from Kathleen’s death to Caitlin until the judgment was satisfied.⁹

Insurance and Nortel Benefits

Kathleen carried a life insurance policy worth about $1.4 million. She had originally named Fred Atwater as beneficiary, then changed it to Michael Peterson after their marriage. After Michael’s murder conviction, he signed away his claim to the policy in May 2006. Caitlin and Fred Atwater then settled with Prudential Insurance to split the proceeds; the division was confidential, but Caitlin’s attorney said the payout would help fund her studies at Cornell.⁶

She also sued Nortel Networks in federal court to recover $384,166 in deferred compensation, pension, and 401(k) benefits the company had paid to Michael. The suit invoked the federal common-law slayer rule, which bars killers from profiting from their crimes. In 2005, the U.S. District Court for the Middle District of North Carolina dismissed one of her ERISA claims while allowing another to proceed. The ultimate resolution of that case is not documented in the available records.¹⁰

The Retrial and Alford Plea

In December 2011, Judge Hudson ordered a new trial after finding that testimony from State Bureau of Investigation blood-spatter analyst Duane Deaver had been “materially misleading” and “deliberately false.” Peterson was released on bond. Rather than face a second trial, Peterson entered an Alford plea to voluntary manslaughter in February 2017, acknowledging the state had enough evidence to convict without admitting guilt. He was sentenced to time served and freed.¹¹

For Caitlin, the plea did not close the case. Her attorney moved almost immediately to reinstate the wrongful death judgment and to make sure Peterson could not profit from the case going forward.⁹

Where She Is Now

Caitlin attended Cornell University, entering as a freshman in late 2006 and finishing her studies by early 2007. Her attorney said at the time that she hoped to become a lawyer.⁶¹¹²

She has kept a deliberately low public profile and disassociated from the Peterson family after the original conviction. In the 2017 INDY Week interview she spoke about her fading memories: “When your memories start to fade some, and they have started to fade, it’s hard.” She also described trying to carry her mother forward through her own life: “I’ve tried to be the person I think I would have been if she were here. Hopefully, that’s a part of her legacy I can pass on to my own kids.”²

1
Newsweek. Who Is Kathleen Peterson’s Daughter Caitlin Atwater
2
INDY Week. Caitlin Atwater Breaks Her Silence in Exclusive Interview
3
FindLaw. State v. Peterson, NC Supreme Court
4
ABC11. Michael Peterson’s Former Stepdaughter Wants Her $25M
5
People. Where Are Michael Peterson’s Kids Now
6
WRAL. Atwater Reaches Settlement on Insurance Proceeds
7
WRAL. Peterson Settles Wrongful Death Suit
8
WRAL. Peterson Wrongful Death Settlement Details
9
WRAL. Caitlin Atwater Clark Files Motion on Wrongful Death Judgment
10
GovInfo. Atwater v. Nortel Networks, Case No. 1:04CV00503
11
People. Where Is Michael Peterson Now
12
Metro. The Staircase’s Michael Peterson, Caitlin Atwater, and Duane Deaver Now