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The federal government has agreed to pay two developers and the city of San Diego $1.5 million as part of a settlement involving the 1983 deaths of two boys, killed when a military shell exploded after they found it while playing in a Tierrasanta canyon.

In settling the case, the federal government has acknowledged at least partial responsibility for the deaths and any similar incidents that may occur, said San Diego attorney David Holdway, who represented the developers, Christiana Community Builders and Ponderosa Homes.

The boys’ parents sued the developer and the city, who are expected to turn over the settlement to them.

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Assistant U.S. Atty. Michael E. Quinton, representing the federal government, refused to comment.

Holdway said Christiana Community Builders, Ponderosa Homes and the city of San Diego paid $6.3 million in settlements after Corey Alden Peake and Matthew Smith were killed by a live artillery shell they found in an area that was the Marine Corps’ Camp Elliott during World War II.

The developers and the city combined suits to seek full restitution, but settled for $1.5 million May 30 in an arbitration proceeding conducted by Magistrate Harry R. McCue, Holdway said. The Navy has conducted several cleanups in the area since 1984, and has scheduled a major $16-million sweep this summer, the developers’ attorney said.

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