The city of San Jose has agreed to pay a Milpitas woman $10,000 to settle a civil rights lawsuit alleging she was wrongfully arrested during a 2012 police investigation into a gang-related killing.

With a trial looming next week in San Jose federal court, city lawyers and attorneys for Mary Lou Gonzales late Thursday settled for $10,000 and yet-to-be determined legal fees, according to court papers.

“There is no admission of liability, but there is always risk in litigation,” City Attorney Richard Doyle said Friday. “I think the mistaken identity issue was a good faith mistake (by the police). The $10,000 number was something everyone can live with.”

Gonzales sued the Police Department after her February 2012 arrest in her Milpitas home, where officers arrived searching for her son and other suspects in a probe of gang-related shootings that included the death of a 20-year-old San Jose man.

As it turned out, officers arrested Gonzales because she fit the description of a woman with the same appearance and similar name who had a felony arrest warrant out for her and was believed to have had a connection to Gonzales’ son, Robert Cordova Jr., a suspect in the murder probe.

Cordova and four other men were later arrested in connection with the gang-related shooting of Ramon Ruano, who was found dead in an apartment complex near Saratoga and Moorpark avenues.

Gonzales’ lawsuit alleged the officers arrested her as a ruse to search her home during the murder probe, claiming they knew she was not the Watsonville woman sought in the felony arrest warrant. U.S. District Judge Beth Labson Freeman last year allowed those claims to proceed to trial.

In court papers, city officials called the arrest and handcuffing of Gonzales “reasonable” in view of the similarities between the two women, portraying the brief detention as an honest mistake that did not support a civil rights violation.

Howard Mintz covers legal affairs. Contact him at 408-286-0236, or follow him at Twitter.com/hmintz.