The family filed the lawsuit against Edward Nelson, a 90-year-old Woodside resident at the time of the Oct. 17 crash, after his BMW SUV struck the twins as they walked along the Santa Cruz Avenue sidewalk near Walgreens with a nanny and their older brother.
One twin emerged with a broken arm, while the other was left with critical injuries that required multiple surgeries and a five-week hospital stay.
In their lawsuit, the family asked for punitive and general damages for injuries ranging from extensive skin grafts and lower-body damage; orthopedic and soft-tissue damage to the upper body; and emotional trauma.
The bid for punitive damages was denied on grounds that there was no evidence that Mr. Nelson maliciously struck the children or that he knew he was not safe to drive, according to San Mateo County Superior Court Judge Lisa Novak's ruling.
The terms of the settlement, filed with the court on May 19, are confidential. The filing indicates the agreement is conditional "on the satisfactory completion of specified terms," but does not state what those terms are.
None of the parties responded to a request for comment. Mr. Nelson, a former attorney himself, is represented by a team of lawyers from two law firms, Pedersen, Eichenbaum & Lauderdale and Dyer & White. The Cadigans are represented by attorneys Michael Kelly and Valerie Rose.