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The mother of two small children who were killed two years ago has settled her lawsuit against Arizona's Child Protective Services for $1 million.

The lawsuit was settled in May but finalized on Wednesday, said Jamie Hallam's attorney, Jorge Franco Jr. of Phoenix.

Hallam filed the lawsuit against CPS and the Tucson Police Department in February in Maricopa County Superior Court.

The lawsuit contended that even though Hallam had been given sole custody of Ariana Payne, 4, and Tyler Payne, 5, CPS allowed their father, Christopher Payne, 30, to keep them. Payne, along with his girlfriend, Reina Gonzales, 24, are accused of killing the children and could face the death penalty if convicted.

Ariana's remains were found in a plastic storage tub on Feb. 18, 2007, after the manager of a self-storage business near East Prince Road and North First Avenue called police to report a foul odor. Tyler's remains never have been found, but police believe he is dead.

The lawsuit says that CPS officials never investigated Payne or Gonzales, or checked on the children's well-being. If they had, they would have discovered that Payne physically abused Gonzales and he had been arrested on a drug-paraphernalia charge while the children lived with him.

Although the state did not admit wrongdoing as part of the settlement, Franco noted the lawsuit was settled faster than is typical.

"The reality is it's $1 million. It's a significant settlement, and no one pays that amount of money unless they fear a jury will find them at fault," Franco said.

"On the one hand, the settlement was unexpected because I've never seen it happen where the state offers to pay (the amount you demand). Normally it's a hard-fought battle. On the other hand, it's not unexpected given the facts of the case," Franco said.

Hallam is thinking about using a portion of the funds to continue her education, Franco said.

The portion of the lawsuit pertaining to the Tucson Police Department is ongoing, Franco said.

In other recent developments, Gonzales was in court Thursday for the first day of a three-day hearing to determine if she is eligible for the death penalty.

Denis Keyes, an associate professor of special education at the College of Charleston in Charleston, S.C., testified he believes Gonzales is mentally retarded and therefore ineligible for the death penalty.

His decision was based on a variety of tests conducted by other doctors and interviews he conducted with Gonzales, her mother and three former teachers.

Keyes testified that although Gonzales reads at a seventh-grade level, she functions at a third-to-fourth grade level in most other areas. In addition, Keyes said, Gonzales has "adaptive skills deficits."

In order for someone to be mentally retarded, they have to have a low IQ and adaptive skills deficits. They must also have exhibited intellectual deficits before the age of 18.

Keyes explained Gonzales has difficulty with abstract thinking, concentrating, impulsive behavior and coping. If living alone, Gonzales would have difficulty managing her money, maintaining a home and problem solving.

Gonzales can count out $3.64 in change, but when given a $10 bill can't make change if the item cost $3.64, Keyes said.

"If she's in a group of 100 people, she'll be the lowest person in terms of functioning," Keyes said.

Typically, mentally retarded people such as Gonzales are people-pleasers who are gullible, naive and subject to being victimized, Keyes said.

Under cross-examination from Deputy Pima County Attorney Susan Eazer, Keyes acknowledged he did not ask Gonzales questions about her day-to-day living.

For example, they didn't discuss how she cared for her toddler son, the various jobs she held, how she got to work, doing laundry, cooking and going grocery shopping, Keyes said.

They also didn't discuss the fact Gonzales supplemented her income by selling drugs, Keyes said.

Pima County Superior Court Judge Paul Tang will hear more testimony next month before rendering a decision.