The state has agreed to pay $550,000 to settle two lawsuits in a notorious case in which five children suffered years of abuse in what authorities called a "house of torture."

The settlement amount is included in a bill before the Legislature that would appropriate nearly $1.5 million to resolve about a dozen lawsuits against various state agencies.

In two civil complaints filed in 2009 and 2010, the state was accused of negligence for failing to sufficiently investigate whether Gabriel and Barbara Kalama of Waianae would be suitable guardians for the children, all siblings.

With the support of the state Department of Human Services, the court approved the Kalamas as guardians in 2000.

The plaintiffs also said the state should have known that Allen and Rita Makekau, both of whom had criminal records, were part of the Kalamas’ nuclear family and would be assisting in the care of the children.

The state in 1999 had removed the five minors from the home of the Makekaus, who were their foster parents at the time, because officials became aware of their criminal records, according to court documents.

The Kalamas were sentenced to a year behind bars and five years’ probation in 2008 for multiple counts of abuse, child endangerment and assault, while Rita Makekau received a five-year prison term after pleading no contest to eight counts of assault. Allen Makekau was never charged in the criminal proceedings.

The children endured physical, sexual and psychological abuse on numerous occasions until they were removed from the Kalamas’ home in 2005, according to the lawsuits and other court documents. During that period, they were never taken to a doctor or dentist, prosecutors said.

The abuse inflicted on the children included being struck in the mouth with a hammer, chipping teeth; struck on the head with a wooden spoon and knife, causing cuts and scarring; and sometimes being fed dog food laced with hot sauce, according to prosecutors.

One boy was forced to sleep under the house with dogs, the court files say.

The $550,000 settlement would not be a record for the state in a child abuse case, according to attorneys familiar with such matters. The state has paid more than $1 million in at least one case over roughly the past decade, they said.

Attorney Dennis Potts, who represented three of the five children under the Kalamas’ care, said Wednesday that the case was significant and difficult because the plaintiffs were attempting to prove that the state was negligent before the children even suffered the abuse.

Other negligence cases typically accuse the state of failing to act while abuse is ongoing and the children still are wards of the state, such as in foster care situations.

But once the guardianship was approved for the five children, the state maintained that it no longer was involved in their oversight.

Potts said the case did not reflect a flaw in the guardianship system but people failing to do what they were supposed to do.

"Hopefully, this has or will bring about some changes in the way DHS follows regulations," he said.

The Attorney General’s Office, which represented the state in the lawsuits, did not respond to requests for comment.

The state Department of Education and EPIC Inc., which the state hired to assist in evaluating the Kalamas as guardians, also were named as defendants. EPIC reached a confidential settlement.

If HB 775 or its companion measure (SB 1005) is approved and the settlement payment made, the two "house of torture" lawsuits, which were consolidated into a single case, would be dismissed. Four of the five children are now adults.