SEATTLE — U.S. District Judge Kymberly K. Evanson on Friday ordered former counsel Western Washington Law Group to transfer $0.20 million in reserved litigation funds and remaining tutoring money to current counsel Arnold Jacobowitz & Alvarado, ruling the court has ancillary jurisdiction to enforce settlement conditions but not to adjudicate third-party liens.
The order resolves a dispute between the two law firms over money held in Western Washington Law Group’s IOLTA account following the termination of its representation of plaintiffs James and Shaylee Medicraft.
The Medicrafts filed suit in September 2021 alleging harms suffered by their minor children while in state custody. Three minor plaintiffs settled with former defendants Phoenix Protective Services and employee Lufti Al Marfadi in March 2024 for $2 million.
A settlement guardian ad litem recommended the court approve the settlement but expressed concern over the ratio of proceeds going to legal fees and litigation financier Legalist, Inc. versus the children.
The SGAL noted that after deductions, each minor would receive only $0.13 million net from their one-third share of the gross settlement.
At a hearing, attorney Dennis McGlothin of Western Washington Law Group represented that counsel intended to leave $0.20 million of their fees in trust to cover future litigation costs, allowing the case to proceed without further third-party financing.
Judge Evanson had previously reduced the attorneys’ fees to 35% of the settlement proceeds, citing the imbalance between counsel’s recovery and the plaintiffs’ recovery.
In March 2026, Arnold Jacobowitz & Alvarado filed an emergency motion to enforce the court’s prior order, arguing that because it had terminated Western Washington Law Group’s authority as of December 31, 2025, the trust funds should be transferred to its own IOLTA.
Western Washington Law Group argued that while the court had ancillary jurisdiction over the tutoring funds, it lacked jurisdiction to resolve the dispute over the reserved litigation funds, which were set aside based on counsel’s internal decision rather than an explicit court order.
The firm also emphasized that Legalist purported to have a security interest funds.
Evanson ruled that the court has ancillary jurisdiction to enforce the condition that counsel front future litigation expenses, noting that the existence of the reserved funds was fundamental to her approval of the settlement.
“The Court explicitly relied on counsel’s representations in this regard when entering the order,” Evanson wrote.
However, the judge declined to resolve competing claims by Legalist or Western Washington Law Group regarding the allocation of the reserved funds, stating that her orders never specified how those funds were to be divided among counsel or adjudicated liens.
“Although Mr. McGlothin presented extensive argument regarding the validity of his and Legalist’s claims to the reserved funds, the Court will not exercise its jurisdiction to resolve those disputes at this time,” Evanson wrote.
The court ordered Western Washington Law Group to transfer the remaining tutoring and reserved funds to Arnold Jacobowitz & Alvarado’s IOLTA by May 14, 2026, and to provide a full accounting of all deposits and disbursements by that date.
The appointment of settlement guardian ad litem Andrew Benjamin was terminated.