The parents of a 4-year-old boy injured in a freak motel swimming pool accident last year have reached a $20 million settlement with the motel operators and the pool maintenance firm - one of the largest payments of its kind in Maryland.

Gary and Lisa Boulay of Glen Burnie dropped the lawsuit they filed in 1995 after their son William had much of his intestines sucked out by a damaged drain in the Glen Burnie Holiday Inn wading pool. The settlement was reached yesterday morning in a jury froom of the Anne Arundel County Courthouse in Annapolis, the day before the Boulays' $222 million negligence suit was to be tried before a Circuit Court jury.

"There's no financial compensation that can make up for what my son's got to put up with, but the financial advisers say this will take care of him," said Boulay, a carpenter and the father of four children. "Right now, that's what's important."

The Boulays had sued the firm hired to maintain the pool, Chesapeake Pools of Linthicum, and the motel ownders and operators, AMI Operating Partners of Glen Burnie and Winegardner & Hammonds Inc. of Baltimore.

They filed suit Aug. 31, 1995, two weeks after the cover of the motel wading pool drain slipped off, forming a suction that pulled out 20 percent of the boy's large intestine and al of his small intestine needed to process food, said Christopher J. Bron, the family's lawyer. The Boulays were at the motel because they had been burned out of their Baltimore home six weeks earlier, Brown said.

Doctors said the boy's injries should not prevent him from living into his 70's, Brown said. But he said the injuries mean that William, the yougest of the couple's children, will require a nurse 24 hours a day. He will never eat solid food, always must wear a colostomy bag and also keep a tube in his chest that connects him to a computer-assisted feeding pump, Brown said.

Kevin McCarthy, another family lawyer, said the boy's parents have never been interested in profiting from the case, but focused on ensuring that their son receives the treatment he needs. "This boy's got two of the most caring and devoted parents I've ever seen," McCarthy said.

Brown said the Aug. 16, 1995, accident was not the first such accident involving faulty pool drains. Since 1980, 19 people have been trapped on pool or hot tub drains, according to the U.S. Consumer Products Safety Commission. Six of thte cases were fatal, the commission said. The North Carolina General Assembly passed a law in 1994 requiring public wading pools to have two drains after a 5-year-old girl's intestines were pulled out. The New Jersey health department issued a safety advisory calling for daily inspections of drain covers in June after a 16-year-old girl drowned when she was pinned to a broken drain during a post-prom party.

Brown said the settlement will purchase an annuity for the boy that over the years will channel up to $140 million into a fund to cover his medical and living expenses. He said the six insurance firms that provided coverage to the defendants will share payment for the damages, with $18.1 million being paid by AMI and Winegardner & Hammonds insurers and $2 million being paid by Cheasapeake Pools insurers.

The settlement includes the maximum $500,000 allowed in Maryland for pain and suffering claims and $250,000 to reimburse state medical assistance programs for medical expenses incurred so far by the boy's family, Brown said. Both sides agreed yesterday that the settlement was one of the largest ever reached for a single personal injury claim in Maryland. Lawyers for the defendants declined to discuss specifics of the case.

"My reaction is that this was a very tragic situation and the settlement's a good thing for everyone involved, in that everyone can now put this behind them and get on with their lives," said David Levin, a lawyer for the motel operators. But Brown said the case "cries out for a lifting of the $500,000 state cap on pain and suffering awards." "It's satisfying to know that this boy will be taken care of for the rest of his life, but it's frustrating to know that Maryland law doesn't allow us to punish the defendants for doing the horrible things that they've done here," Brown said. He said the pool was closed by county inspectors in 1994 because of drain problems.

When county inspectors went to inspect the pool at the beginning of the 1995 summer season, the motel's management told them that only the adult pool would be used, so the children's wading pool never was inspected. Brown said county ordinances require the motel to have a life-guard on duty whenver pools are open and to have a certified pool maintenance operator on the staff.. However, he said, the motel had no operator, and no lifeguard was on duty at the time of the accident.