State high court rules suspect in killing can use insurance money for defense

A Denver man who is accused of strangling his wife to death can use the money from her life insurance policy to pay his defense attorney even though the guardian of his two young children has argued that they should get it, the Colorado Supreme Court has ruled.

Robert Feldman, 55, was charged with first-degree murder in February 2018 in connection with the death of his wife, Stacy Feldman, three years earlier.

The couple had two schoolage children, who are in the custody of a legal guardian.

When Stacy Feldman died, the Denver medical examiner was unable to determine a cause of death, and Robert Feldman received a $751,910 life insurance payout, according to court documents. He planned to use $550,000 of it to fund his defense after he was arrested, and some of that money was paid to the law firm Haddon, Morgan & Foreman.

The guardian of the Feldmans’ children argued in probate court that the money should be frozen and saved for the children. In court documents, the children’s attorneys said allowing Robert Feldman to use the money went against what’s referred to as Colorado’s “slayer statute.”

The statute forbids someone who feloniously killed another person from profiting from their estate.

The probate court agreed and ordered the law firm to place the money from the law firm’s trust into a court registry until the criminal proceedings had concluded.

The Colorado Supreme Court reversed the decision Monday.

It’s an unusual case and unlike most insurance disputes, said Kurt Zaner of Denver’s Zaner Harden Law. He is not connected to the case.

Insurance companies almost always withhold payment if there are any issues surrounding a death, Zaner said. In this case, Robert Feldman received the money because there were no immediate suspicions surrounding Stacy’s death.

The question is not whether Feldman should have received the insurance payout. Instead, the case dwells on whether the probate judge had the authority to freeze money in the law firm’s account.

The Supreme Court ruling makes sense, Zaner said.

Although the probate court likely wanted to protect the Feldman children and to ensure equity, state law doesn’t allow probate judges that much discretion, he said.

“It’s difficult when the equities of a case will favor one result … but the law only allows for the opposite result,” he said.

Efforts to reach attorneys at Haddon, Morgan & Foreman were unsuccessful.

In the court’s opinion, Chief Justice Nathan Coats wrote, the probate court “abused its discretion.”

The slayer statute protects third parties who receive payment legally and they are not held liable, the Supreme Court ruled.

Feldman already had retained the law firm to defend him, and money was placed in the firm’s client trust account based on a fee agreement.

Even if Feldman is convicted, the statute won’t require the law firm to pay back any money it had received or was owed via the fee agreement.

“Although the statute makes a person who receives a payment to which that person is not entitled obligated to return the payment … the statute does not expressly address the question of freezing insurance proceeds until it can be determined, according to the statute, whether the person receiving the payment was entitled to receive it or not,” Coats wrote.

Stacy Feldman’s death never has been ruled a homicide by the Denver coroner, and no new evidence has been brought for reassessment, spokesman Steve Castro said.

Robert Feldman had told po