The mother of a toddler who died of respiratory failure at a Palos Heights hospital have settled their lawsuit for $4.25 million.The parties reached the agreement in late November, but it still awaits formal approval by a Law Division judge.On Oct. 16, 2011, 23-month-old Ryan Kutchinski Jr. was brought to the Palos Community Hospital emergency room just before midnight experiencing fever, runny nose and cough.Emergency Room physician Tam V. Thai treated Ryan for croup — an infection of the upper airway — and …