Hilton Hotels Corp. has agreed to pay up to $1.8 million to settle a lawsuit filed on behalf of guests who stayed in Kalia Tower during a six-week period in 2002 when the Waikiki hotel discovered mold problems in guest rooms.

The settlement, subject to court approval, was announced yesterday by plaintiffs attorneys at Honolulu law firms Davis Levin Livingston Grande and Price Okamoto Himeno & Lum.

Under terms of the settlement, guests who participated in the suit will have the choice of receiving either $150 in travel coupons or $50 in cash for each night's stay. There are approximately 2,900 Hilton guests from the Mainland and abroad who are entitled to participate in the settlement, said Thomas Grande, one of the attorneys representing the guests.

"The settlement is an important victory for consumers and for their rights to be fully informed when they are buying services or products," Grande said.

Hilton will pay for the notification of affected guests, including advertisements in Japanese newspapers, Grande said.

"The class members are from almost every state and many countries around the world — it's going to be important to make sure that as many class members as possible are informed of their right to participate in the settlement," he said.

The lawsuit did not make health-related claims, but sought refunds because Hilton continued to rent rooms after discovering widespread mold damage.

The suit, originally filed on behalf of Florida resident Jeff Moffett, was granted class action status last December. It was expanded to include other guests who stayed in the tower between June 14, 2002, when mold was discovered, and July 23, 2002, when the tower was closed. The hotel was reopened in September 2003 after Hilton spent $60 million to clean up the mold. Hilton sued its architect and contractors for the cost of the cleanup.

The settlement doesn't include payment of attorneys' fees, which will be decided by the court at the final settlement hearing.