More than a thousand customers of Mililani Memorial Park and Mortuary are being offered partial refunds on canceled contracts to buy pre-need funeral services and plots.

Refunds are part of a proposed settlement in a class-action lawsuit filed in 2009, alleging that cemetery operator Mililani Group Inc. in many cases was keeping 100 percent of payments made on pre-need contracts after customers defaulted.

Hawaii law allows funeral service providers to keep the first 30 percent of payments on pre-need funeral plans after a default.

The lawsuit, filed by local attorney Michael Jay Green on behalf of two customers, William Makanui and John Ortiz, alleged that Mililani Group contract termination notices didn’t inform customers that they may be entitled to partial refunds under terms of their contracts and state law.

Mililani Group in the suit said it consistently paid refunds to eligible customers who requested them, but acknowledged not paying refunds to eligible customers who made no request. The company said there was no scheme to retain refunds, and denied doing anything wrong.

Under the settlement, Mililani Group customers who had pre-need funeral plans terminated after they paid for more than 30 percent of the price will be offered a refund of any payments over the 30 percent figure.

The lawsuit also dealt with customers who were buying two or more plots at Mililani Memorial Park and defaulted.

Hawaii law allows companies to keep 100 percent of payments for burial plots if customers default before a plot purchase is paid in full.

The lawsuit claimed that some customers were not offered a refund when they contracted to buy two or more plots and had paid the equivalent of 100 percent for at least one plot, but defaulted on their remaining payments.

Customers who paid at least enough for one plot are being given a choice to take one plot assigned by Mililani Group or receive a refund for the price of one plot, according to the settlement. Any amount paid toward any additional plots is not subject to refund.

Customers are being notified of their options by mail.

A hearing to approve the settlement is scheduled for May 5.