Why a California Court of Appeal Held that Scott Peterson Won't Be Collecting on the Insurance Policy For His Wife and Murder Victim, Laci

On November 12, 2004, Scott Peterson was convicted of murdering his pregnant wife, Laci. On March 16, 2005, Peterson received a death sentence for the crime. Now, this family tragedy and legal drama is back in the court system -- this time, because Scott is seeking access to the $250,000 proceeds from Laci's life insurance.

Last month, the Court of Appeal of California, Fifth Appellate District, said that Scott Peterson has no right to the proceeds, thus affirming the trial court's holding on the matter. In this column, I'll explain why this result - which is the intuitively correct one - is also correct as a matter of California law.

The First Key Holding: A Conviction on Appeal is Not a "Final Judgment" for These Purposes

If a murderer could financially profit from his own criminal activities by collecting on his victim's life insurance, that would seem profoundly unjust - especially as, at times, life insurance proceeds are the very motive for the murder. Thus, to serve justice and deter financially-motivated killings, states have enacted various measures to prevent murders from gaining insurance proceeds based on the deaths of their victims.

(In contrast, states have generally protected suicide victims by statute, ensuring that their life insurance proceeds pass to their estates as long as the policy has been in place for a certain specific period of time, usually two years. The rationale for allowing recovery is that the perpetrator is not the beneficiary. The rationale for the waiting period is so that no one purchases life insurance intending to shortly thereafter commit suicide, in order to convey the proceeds to beneficiaries on the "I'm worth more dead than alive" theory.)

Yet enforcing these measures is not always straightforward. That is because, generally, the selection of a named beneficiary is given great weight. Only in cases of severe conflicts of interest (such as when the beneficiary is proven to have murdered the covered party) do policymakers overrule that selection.

In California, the relevant body of law is the Probate Code, which governs the proper administration of a decedent's estate. The question posed was whether Scott's conviction, though still on

appeal, constituted a "final judgment of conviction of felonious and intentional killing." (Emphasis added). If so, then under Section 252, Scott is prevented from receiving "any benefit" under the life insurance policy, and the $250,000 policy goes to Laci's estate, as if Scott had predeceased her.

The Court held that, as a matter of California law, Peterson's conviction is not "final" until the appeals process has concluded. Thus, it was not itself conclusive evidence of whether Peterson "feloniously and intentionally" killed Laci. But that was not the end of the matter.

The Second Key Holding: A Preponderance of the Evidence Showed Scott Killed Laci Feloniously and Intentionally, and Thus Could Not Recover Benefits

Importantly, under the relevant Probate Code section, "in the absence of a final judgment of conviction," the court still could use the civil standard of preponderance of the evidence to determine whether Scot Peterson could be determined to have "feloniously and intentionally" killed his wife. The "preponderance of the evidence" standard is thought to be roughly equivalent to "more likely than not," and thus is not a very difficult standard to meet, especially as comparable to the criminal-law standard of "beyond a reasonable doubt."

Before the lower court, the insurance company presented the conviction as evidence that the preponderance standard had been satisfied, and Scott did not offer any evidence suggesting the court could not properly infer a "felonious and intentional" killing from the conviction. As a result, the lower court decided to accept the conviction as evidence, found it sufficient to meet the "preponderance of the evidence" standard, and therefore barred Scott from recovering the proceeds of Laci's insurance policy. As noted above, the appeals court then agreed with the lower court's analysis.

What if Scott had, in fact, offered some evidence to controvert the inference that his conviction, even if on appeal, established his guilt by a preponderance of the evidence? Even so, he still would likely have lost. Few factfinders would lightly disregard the evidentiary value of a murder conviction - especially for a murder so heinous as to trigger the death penalty. Thus, although in theory the California Code might seem to create a loophole allowing murderers to gain their victims' life insurance proceeds, in practice factfinders' common sense will typically close the loophole.