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Wrongfully imprisoned Cathy Woods to receive nearly $10 million in settlements

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Warning: This article includes details of several murders that some may find disturbing. 

When details of all of her lawsuits are finalized Cathy Woods—who spent three and a half decades behind bars for a murder she didn’t commit—will receive $9.6 million in settlements. Unlike the murder case that twice resulted in her wrongful conviction, none of these will go before a jury. Woods served the longest ever wrongful conviction sentence of any woman in United States history.

Now, she’ll receive an official certificate of innocence in addition to the monetary settlement.

Woods first settled with Washoe County and former county district attorney Calvin Dunlap in 2019. Her settlement with the city and its former detectives—as well as Shreveport detectives—was announced last month. The settlement against the State of Nevada will mark the close of the last of her suits. Washoe County’s settlement was $3 million. The City of Reno and private detectives’ settlements will amount to about $3.7 million. And the State of Nevada settlement will amount to just shy of $3 million.

Four years ago, Woods filed a federal civil rights lawsuit against the City of Reno, Washoe County and the individual law enforcement officers and prosecutor whose work put her behind bars. The suit alleged violations of her Fourth, Fifth and 14th Amendment rights.

She also filed suit against the State of Nevada under a law passed in 2019 to allow those released from wrongful imprisonment to receive a certificate of innocence, have their conviction records sealed and receive monetary compensation. Those who spent more than 20 years in prison can receive $100,000 per year every year they spent behind bars.

“Part of the agreement is that she will get a certificate of innocence,” Wang said. “It’s up to the judge, but the state is agreeing to it. We’re going to jointly seek a certificate of innocence, which I’m sure the judge will grant. And then the amount will be agreed upon.”

She added, “There’s no amount of money that can possibly compensate her for what she went through—and what the defendant officers put her through, and the State of Nevada put her through,” Wang said. “But, in light of her age and her health conditions, this is what is in her best interest. It will allow her to live comfortably.”

Murder of Michelle Mitchell

To understand what happened to Woods and how it led to her suits against the people and government entities that put her in prison, one must go back nearly 44 years to Feb. 24, 1976.

In 1976, Woods was managing a topless bar in downtown Reno, this despite the fact that she was a diagnosed paranoid schizophrenic with a sixth-grade education who’d been hospitalized as a result of the condition off and on since she was 12 years old. She’d been living in Reno since 1969 and remained here until 1977.

Michelle Mitchell

On Feb. 24 of that year, Michelle Mitchell—a 19-year-old nursing student at the University of Nevada, Reno—was murdered near campus. Her body was found in the garage of an elderly couple—her hands bound behind her back and her throat slit.

A cigarette butt was collected from the scene, and shoe prints in the dirt floor of the garage—about a men’s size 9 or 9.5—were documented in addition to Mitchell’s.

Barbara Mitchell, Michelle’s mother, told UNR’s student newspaper, the Sagebrush, that Michelle had a fear of things like spiders and sheds. “How could she have been taken into that old garage without a fight?” she asked.

Tips and information reported to police by witnesses who’d been in the area that night suggested they were looking for a male suspect.

Two witnesses told police Mitchell was startled by a man who put his arms around her as she was walking back to her car. Others reported seeing a man running away from the scene of the crime near the time it was believed to have occurred. Fraternity brothers at the Sigma Alpha Epsilon frat house on Evans Avenue told the police they’d seen a man walking away from the neighborhood in a hurry.

Another witness said she’d almost hit a man who ran in front of her car near the scene. She also told the police that the man appeared to have blood on him and had held one of his hands at his side, potentially under this jacket, as he ran.

The police continued seeking the killer, without success, until the case went cold.

Woods “confession”

Woods left Reno the following year and moved to Shreveport, Louisiana, to be closer to her family. Once there, however, her mental illness became worse and she was involuntarily committed to the Central Louisiana State Hospital in October 1978. She stayed there through December. Just months later, in February 1979, she was involuntarily committed once again—this time to the Louisiana State University Medical Center. It had been three years since Mitchell’s murder.

In March of ’79, Woods became a suspect in Mitchell’s murder when she told Carol Sherman, a counselor at LSU, about the three-year-old cold case, suggesting that she’d killed Mitchell. During this same conversation, as records from Woods’ attorneys indicate, she also made claims about being an FBI agent and insisted that her mother, whom she’d moved to Louisiana to be near, was poisoning her.

Cathy Woods in an undated photo.

Nonetheless, Sherman decided to contact the Shreveport police—who, in turn, contacted the Reno Police Department. After interviewing Sherman, Shreveport police detective Donald Ashley and his partner, detective Clarence Lewis, contacted the Reno Police Department, which sent then lieutenant Lawrence Dennison to Louisiana to follow up on the possible new lead in the cold case.

Woods was interrogated at the LSU Hospital by Ashley and Dennison on March 7, 1979. On March 8, two additional men from Nevada—then Washoe County district attorney Calvin Dunlap and RPD detective John Kimpton—arrived in Shreveport to interrogate Woods again and to obtain a warrant to search her mother’s home for a murder weapon, which they never found.

Interrogations of Woods over the course of two days were not recorded. Nor did she sign or initial the confession written up for her by the officers. Yet this was the primary piece of evidence that was used to convict Woods of first-degree murder in 1980. The confession used in her trial stated that Woods had offered to help Mitchell fix her car, had taken her into the garage where her body was found on the pretext of getting some tools, had made a sexual proposal to her, and when rebuffed, had slit her throat. Woods was sentenced to life in prison without the possibility of parole.

But this would not be the only time Woods was convicted of Mitchell’s murder.

Her case was tried again in 1985 after the Nevada Supreme Court overturned her conviction based on testimony that was not allowed by the court during her first trial—testimony that was related to another, lesser publicized killing that happened only two days before Mitchell’s and could have implicated someone else as the killer.

Woods’ retrial 

A woman named Peggy Davis was murdered sometime between Feb. 19 or 20, 1976 in an apartment on Ralston Street. Davis and one of the two women convicted of killing her—Raye Wood—had at one time both worked as topless dancers at the Lucky Lady Club, 120 E. Second St., a club owned by Davis’ former lover Morey Kaplan.

Raye Wood and her accomplice in the killing—a woman named Marjorie Carter—were convicted of first-degree and second-degree murder, respectively. The pair had bludgeoned and stabbed Davis to death as a part of a contract killing sponsored by Kaplan, who was the beneficiary of Davis’ life insurance policy.

Raye Wood’s boyfriend, Tony Lima, was charged and convicted as an accessory to the murder, having helped Raye Wood dispose of the murder weapons.

But according to the Nevada Supreme Court’s opinion issued when Woods’ re-trial for Mitchell’s murder was ordered, there may have been evidence linking Lima to Mitchell’s murder.

According to the court, the argument put forth by Woods’ defense attorney during her first trial was that Lima had killed Mitchell. And there was someone ready to testify to having information to corroborate the theory. It was Raye Wood’s former jailmate, a woman named Kathy Murnighan—and she was ready to testify that Raye Wood had told her that she and Lima had discussed killing a woman to cover up the Davis murder by making it appear as though both murders were the work of a homicidal maniac. One night, Lima told Raye Wood that he had found a girl whose car had broken down and had slashed her throat. Raye Wood and Lima together disposed of the murder weapon.

Lima was called during the offer of proof at Woods’ first trial and denied having killed Mitchell. Raye Wood invoked her Fifth Amendment privilege against self-incrimination and refused to testify unless she was granted immunity. The state denied it and ruled her unavailable.

It was at this point, Woods’ defense counsel sought to introduce Murnighan’s testimony, but the court denied it—claiming it was not sufficiently trustworthy.

Had jurors been allowed to hear it, they would have learned the following, according to the Nevada Supreme Court document:

“A maroon Monte Carlo was seen near the scene of the crime on the night of the murder. Lima traded in his car, a maroon Monte Carlo, soon after Mitchell was killed. A footprint in the garage matched Lima’s shoe size. Murnighan said that Lima lost something in the garage; a blue cigarette lighter was found on the scene. Most strikingly, Murnighan stated that Lima had said that Mitchell was having her menstrual period when he killed her. Lima was trying to excuse himself for not having stabbed Mitchell in the vagina as Davis had been stabbed, because Raye Wood berated him for not having killed Mitchell the same way that Davis had been killed. Mitchell’s autopsy had disclosed that she had been having her menstrual period prior to her death. This fact was not mentioned in any of the numerous news accounts of the crime, and the State has been unable to proffer an alternative explanation of how Murnighan could have learned of it.”

Despite this testimony, Woods was re-convicted of Mitchell’s murder in 1985 and again sentenced to life without parole.

In 1985, media reports of the matter did not try so hard to sensationalize Woods’ time managing the topless bar as they had during the first trial. They did not begin their reports as they often had during the first trial, with phrases like, “Woods, a known lesbian…” though these statements still appeared. Nor, however, did they shy away from referring to the confessions she’d supposedly given to detectives, for which there was no corroborating evidence.

Woods exonerated 

4685764_g-6264560-8173467
Rodney Halbower, in an FBI photo from his incarceration in Oregon.

In 2013, one of Woods’ fellow inmates helped her send a letter to the Rocky Mountain Innocence Project requesting DNA testing on the cigarette butt that had been found at the scene of Mitchell’s murder. And, in the fall of 2013, the DNA tests failed to link Woods to the murder—instead identifying a male DNA profile. This was sent to the FBI’s national DNA database, but no matches were found until July 2014 when Reno authorities were notified that an uploaded DNA profile had been matched to the cigarette butt.

By then, Woods had spent another 30 years behind bars since her second conviction.

The match on the cigarette butt was for a man named Rodney Halbower.

Halbower has often been referred to—under the media’s ill-advised predilection to nickname serial killers as though they were fictional super villains—as the “Gypsy Hill Killer.” He’s believed to have murdered five young women in San Mateo County in Northern California around the time of Mitchell’s murder. But Halbower’s crimes in Nevada predate these.

After being paroled from a Michigan prison after a 1970 robbery conviction, Halbower moved to Nevada. In November of 1975, he was arrested for beating and raping a blackjack dealer. Halbower was out on bail but appeared in court in Reno on Feb. 23, 1976—the day before Mitchell’s murder.

Halbower was convicted of the 1975 rape. He spent years behind bars but escaped in 1986 from prison in Nevada. Upon arriving in Oregon, he accosted and stabbed a woman in a parking lot. This earned him a lifetime sentence in Oregon, which he was transported to serve after finishing his time in Nevada.

Upon arriving in Oregon, Halbower was required to give a sample of his DNA. Authorities later said it links him to Mitchell’s murder. This finding was disclosed by the FBI in September of 2014.

As a result, Woods was released from prison on bond on Sept. 11, 2014. The prosecution dismissed the charges against her on March 6, 2015.  

Woods now lives in Washington state in an assisted living facility. She has a full-time guardian who lives nearby.


This Is Reno spoke with former Reno Police Lieutenant J. Andre Boles, who is now a true crime writer. Boles has two books about true crime in Reno, Nevada. His latest is Monster on Gypsy Hill, about the Gypsy Hill murders committed by Halbower. Listen to the podcast:

Jeri Chadwell
Jeri Chadwellhttp://thisisreno.com
Jeri Chadwell came to Reno from rural Nevada in 2004 to study anthropology at the University of Nevada, Reno. In 2012, she returned to the university for a master’s degree in journalism. She is the former associate and news editor of the Reno News & Review and is a recipient of first-place Nevada Press Association awards for investigative and business reporting. Jeri is passionate about Nevada’s history, politics and communities.

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