LOS ANGELES (DPA) - The southern California city of Simi Valley has reached a US$21 million (S$28 million) settlement with a man who spent more than 38 years wrongfully incarcerated in the brutal 1978 murders of a woman and her four-year-old son.

Mr Craig Coley, 71, was released from prison in 2017 after he was pardoned by then-Governor Jerry Brown who said that DNA evidence and a painstaking re-investigation of the Simi Valley murders proved his innocence.

The city said last Saturday (Feb 23) that the agreement would mitigate long, costly and unnecessary legal proceedings. Simi Valley will be on the hook for roughly US$4.9 million of the settlement, while the rest is expected to be paid by insurance and other sources, officials said.

"While no amount of money can make up for what happened to Mr Coley, settling this case is the right thing to do for Mr Coley and our community," City Manager Eric Levitt said in a statement.

"The monetary cost of going to trial would be astronomical and it would be irresponsible for us to move forward in that direction."

The state approved a separate, much smaller payout last year. Mr Brown approved a US$1.95 million payment for Mr Coley - US$140 for each day he was wrongfully behind bars - that marked the largest payout by the state's Victim Compensation Board for an erroneous conviction.

The murder victims were discovered by a relative who grew concerned when Ms Rhonda Wicht didn't show up for a family get-together. The 24-year-old had been strangled with a 3m macrame rope; her son, Donald, smothered in his bed.

Mr Coley, a Vietnam War veteran who was going through a break-up with Ms Wicht, was held for questioning that day and ultimately charged with the two murders. He did not have a prior criminal record.

A key witness against Mr Coley was Ms Wicht's next-door neighbour, who said she heard banging noises and saw Mr Coley's truck parked outside the apartment complex the morning of the murders. She testified that someone with medium-length hair drove it away.

Another neighbour who lived downstairs told jurors that he heard noises from Ms Wicht's apartment at 5.30am.

At Mr Coley's first trial, jurors spent four weeks deliberating before announcing they were deadlocked 10 to two in favour of guilt. A second jury convicted him of two counts of first-degree murder in 1980, and he was sentenced to life in prison without the possibility of parole.

But he always maintained his innocence. A retired Simi Valley detective named Mike Bender was instrumental in pushing law enforcement agencies to re-examine the case.

Mr Bender has said that in 2015, he caught the right ear in Mr Brown's office. A year later, Simi Valley Police Chief David Livingstone also launched an investigation, just as he was taking the helm of the department.

In Mr Coley's claim for compensation and other court filings, his attorneys and prosecutors detailed troubling inconsistencies in the evidence against him.

The neighbour who heard noises from downstairs first told police, hours after the murders, that he heard the commotion not at 5.30am, but an hour earlier, exactly when Mr Coley, who worked as a night manager at a restaurant, was out socialising with former co-workers.

Mr Coley dropped one of them off at 4.45am.

The new investigation also raised questions about Ms Wicht's next-door neighbour's claim that she had seen a man matching Coley's description drive away the morning of the killings.

Exactly 39 years after Ms Wicht's murder, detectives returned to the neighbour's apartment to peer out her window.

There was no way, they concluded, that she could have seen from her window whoever was inside a truck parked outside.

But the most indisputable finding that officials said supported Mr Coley's innocence came when detectives located DNA evidence once thought destroyed.

A piece of Ms Wicht's bedsheet the night she was found dead contained another man's sperm, along with a man's epithelial cells. Mr Coley's DNA was not found on the sheet.

Investigators also tested stains, blood and semen on a child's Mickey Mouse T-shirt that police at the time said they discovered in a pile of dirty clothes during a search of Mr Coley's apartment after the murders. New tests on the shirt revealed the boy's DNA, as well as the sperm of several individuals. None of them matched Mr Coley.

Soon after Mr Coley was pardoned, a judge declared him factually innocent. Simi Valley police have not arrested anyone else in the killings.

Mr Ron Kaye, an attorney representing Mr Coley, said the settlement offers some closure and vindication for his client, though no amount of money can compensate him for the life he missed while imprisoned.

"He now can live the rest of his life, which we hope will be really well into the future, with the security he deserves," Mr Kaye said.