The family of a retired teacher who was beheaded and dismembered by a neighbor's son will get $500,000 from the killer's former therapist in a settlement that a Nassau judge approved Tuesday.

State Supreme Court Justice F. Dana Winslow's order ended a wrongful death claim murder victim Denice Fox's family filed after her slaying at the hands of confessed killer Evan Marshall.

Marshall, 40, pleaded guilty and is serving 30 years to life in prison. Police found Fox's severed head in the trunk of Marshall's car and the rest of the 57-year-old victim's body in garbage cans in his mother's basement after the Aug. 17, 2006, murder in Glen Cove.

DataLI crime statsJudge: Victim's family can sue killer's therapist

"We're very pleased with the judge's decision and we hope that this brings some closure to the Fox family," said the plaintiffs' attorney, John Craig of Manhattan.

The victim's family wasn't in court, nor was defendant David P. Gureasko-Moore, the psychologist who treated Marshall at a facility run by SLS Residential Inc. in upstate Brewster, where Marshall had been living. An attorney at the law firm representing the therapist declined to comment Tuesday.

Winslow previously dismissed other defendants from the lawsuit brought by Fox's widower, Jay, and two adult children, but said they could continue their claim against the therapist and facility. The 2008 lawsuit alleged Marshall was out on a weekend pass from the mental health and drug treatment facility when he killed Fox after -- as Winslow said -- using "substantial amounts of cocaine."

advertisement | advertise on newsday

The claim also said police found sadomasochistic porn and a note among Marshall's things at the facility where he wrote of killing a girl and "doing cocaine off her corpse." The suit alleged Marshall shouldn't have been allowed to leave the facility because he was dangerous, and while his program admission was voluntary, the defendants should have sought his involuntary commitment.

Craig previously said in court papers that the settlement was fair because the facility is out of business and any judgment against Marshall "would likely be worthless," since he's in prison.

A state Office of Mental Health spokesman said his agency revoked the facility's license in August 2008 because of regulatory violations, and an appellate court upheld the state's action.

Winslow also ruled against the Fox family's motion to seal the settlement. He said while the case was painful for them, public interest exceeded private rights.

Winslow said the conduct of private institutions in not being accountable for noncriminal mental health issues, including substance abuse, is a "growing concern." He said the nature and extent of responsibility owed to a patient at such a facility should be known to that person and the public, and accountability of "an institution such as SLS cannot be less than that of a hotel."