G.R. No. 250830 - Municipality of Tiwi, Province of Albay vs. Antonio B. Betito

The dispute arises from respondent Antonio B. Betito’s claim for attorney’s fees based on a contingent fee contract entered into with the Municipality of Tiwi.
The contract, together with the involvement of Atty. Alberto Lawenko, provided that respondent would receive a contingent fee of 10% on all amounts collected by Tiwi from the National Power Corporation (NPC) as a result of legal services rendered.
The contract was executed following the adoption of Resolution No. 15-92 by the Sangguniang Bayan of Tiwi, which authorized the hiring of a lawyer for the recovery of unpaid realty taxes from the NPC.

The case is intricately connected to past litigation, notably the NPC case (National Power Corporation v. Province of Albay) and the 2010 Tiwi Case, which clarified the scope of legal services and the limits of the contingent fee arrangement.
On January 25, 1993, the contract was executed after Mayor Corral of Tiwi engaged legal counsel to recover the municipality’s share in the unpaid realty taxes, following disputes over the remittance of tax shares from payments made by the NPC.
Subsequent administrative and judicial actions ensued, including:

The RTC’s Partial Judgment on March 3, 2001, which ruled in favor of respondent by recognizing that the legal authority granted to Mayor Corral extended beyond mere execution of the NPC decision.
The CA Decision on October 19, 2005 that affirmed the reasonableness of the stipulated 10% contingent fee.

In the 2010 Tiwi Case, the Supreme Court clarified that the legal services under the contract were limited strictly to the recovery of Tiwi’s share in the unpaid realty taxes as determined by the NPC case.
The Court held that any legal services rendered outside this scope were not compensable under the contract, thereby limiting the basis of respondent’s fees.
The ruling emphasized that while the contract was valid, the actual legal fee computation should be determined by weighing the extent of services rendered that directly contributed to the recovery.

The RTC rendered a Decision on December 27, 2013 ordering Tiwi to pay respondent 10% of the amount recovered from the NPC. The decision emphasized:

The binding nature of the written contract;
The validity of the 10% contingent fee as a reasonable compensation for legal services rendered.

Respondent subsequently sought immediate execution pending appeal and filed motions for reconsideration.
The CA, in its Decision and subsequent Resolution (dated March 1, 2019 and November 4, 2019, respectively) amid contested issues, modified the RTC ruling by:

Deleting the imposition of a legal interest rate on the awarded attorney’s fees; and
Remanding the case to the RTC for the determination of the reasonable amount of attorney’s fees, in line with the guidelines set in the 2010 Tiwi Case.

Additionally, various motions concerning execution, reduction of bond, and requests for certiorari were filed, further complicating the procedural history and leading up to the present petition for review under Rule 45.

Whether or not the Court of Appeals erred as a matter of law in affirming the RTC’s decision, which awarded respondent a 10% contingent fee as attorney’s fees based solely on the contract.

The reasonableness of the 10% contingent fee given that the recovery of Tiwi’s share in the unpaid realty taxes was not solely attributable to respondent’s legal services.
Whether the scope of legal services rendered by respondent, as contemplated by the contract and limited by Resolution No. 15-92, fully justified the fee claimed.
Whether the additional claim for attorney’s fees should be computed on a quantum meruit basis instead of the fixed 10% contingent fee.
The appropriateness of imposing legal interest on the attorney’s fees awarded, considering the nature of the legal services agreement.