Sweet nurse Peggy Regan stepped into a delicate situation when she signed on to act as nurse to young Joey Roberts who was suffering from rheumatic fever in 1951. Peggy was an immediate hit with the Roberts children, who hoped that Joe would marry Peggy. Peggy was, indeed, developing a crush on Joe but realized that she had no future with him since his heart belonged to Meta Bauer.

In 1953, after the birth of her daughter, Robin, Kathy Roberts Grant came down with viral pneumonia and began to experience hallucinations. To help his wife, Dick Grant called in his cousin, Peggy, who had returned to Cedars. Dick's rich mother, Laura, previously had no use for her own middle-class side of the family, but she was now getting chummy with her niece in hopes of learning the identity of Robin's real father. Ultimately, Kathy would tell Dick the truth herself. Unfortunately, by this point, she had pushed him right into the arms of another woman and the marriage was over.

Meanwhile, Dick was building his medical career and sharing residents' quarters with a young medic named Jim Kelly. The brusque, pipe-smoking son of an eminent Chicago surgeon, Jim had wriggled out from under his father's thumb and moved to Los Angeles to make his own way. Jim was attracted to Peggy, but Peggy was falling for a complex, mysterious man named Dan Peters whom Dick and Dr. Baird were preparing for plastic surgery. When Dan came to realize that Peggy felt affection, rather than pity for him, he gradually opened up to her about his tortured past. Dan had been born in Chicago with a disfigured face. All his life, he had felt like the odd person out. Kids called him Scarface, and even his own father rejected him in favor of his good-looking, popular brother. The only person who loved and nurtured Dan was his mother. Because the family was poor, Dan's mother had encouraged him to become successful so he could afford an operation to correct his facial malformity. Young Dan couldn't wait that long, however, and he dug his nails into his face in hopes of changing his appearance for the better. Sadly he only made it worse. When Dan was fourteen years old, his mother died of cancer. With no one left to care about him, Dan left his family and struck out on his own. Years later, Dan read of Dr. Baird's excellent reputation as a plastic surgeon and decided to come to Los Angeles. Baird immediately sensed Dan's torment and isolation and told him that he could transform him from a scared little boy into a handsome and secure man. Dan underwent surgery and healed well, but Jim Kelly suspected there was more to Dan's story than he was letting on. He was right.

At this time, Joe Roberts and District Attorney Richard Hanley were immersed in the case of Judith Weber, a "lonely spinster" who was found shot to death in a cabin. Joe's newspaper stories of the "Cabin Murder" had the people of Los Angeles both fascinated and baffled, because the murder victim had no known enemies. Upon further investigation, Joe discovered that on the day of her murder, Judith had withdrawn her life savings. As Joe and the police went through Judith's effects, they found a jar of Coverall, a heavy cream for concealing birthmarks and scars. One day in a routine conversation, Joe filled Peggy in on his all-consuming case. Peggy gasped to herself -- she had seen a container of Coverall in Dan's room! Telling no one, Peggy took the Coverall and agonized over it for weeks. Meanwhile, Jim couldn't help noticing that Dan was obsessed with the Cabin Murder, clipping articles and listening to all the news reports about the case. Privately, Dan was racking his brain, trying to remember whether or not he had killed Judith Weber!

Finally, Peggy confronted Dan and asked if he knew the murdered woman. Dan blurted out that yes; he had a "marriage pact" with Judith. She would give him the money to finance his plastic surgery and he would marry her. Dan was in such a tailspin, trying to re-create his last moments with Judith, that he began yelling and smashing mirrors. Frightened by his temper, Peggy accused Dan of killing Judith and threatened to turn him in. Dan disappeared from the hospital and, a few weeks later, showed up in Chicago at the office of Paul Avery, a top criminal defense lawyer. Seeking his legal counsel, Dan told Avery that he now remembered having killed Judith. Apparently, after she had handed him the money for his surgery, Dan backed out on their agreement to marry. Judith pulled a gun, and as they struggled over it, a shot rang out and Judith was dead. Dan had something else to tell Paul Avery, though -- they were brothers! Dan's actual last name was Avery, and Paul was the popular brother who'd been groomed for success. Overcome with guilt for rejecting his brother years ago, Paul decided to represent Dan, and the brothers returned to Los Angeles to face the authorities. Before Dan went to prison, Dr. Baird told him that Judith's murder was for naught, as the doctor never intended to charge Dan for the surgery.

With all of this heartbreak, both with her and those around her, Peggy left Cedars, and Los Angeles ,for good in 1955.