A.C. No. 12220 - PSP Development Corp. vs. Arma

Complainant: PSP Development Corporation, a domestic corporation represented by its President, Reynaldo Jesus B. Pasco, Sr.
Respondent: Atty. Luisito C. Arma, engaged as legal counsel.

In August 2004, PSP Development Corporation engaged respondent for legal services to file a case against a certain Pio Castillo, Jr. and Macatan Apparel, Inc.
Respondent accepted the engagement and billed the complainant professional fees amounting to P65,000.00.

Complainant alleges that, despite the payment and its repeated follow-ups, respondent failed and refused to file the necessary court case, resulting in prejudice against the corporation.
On September 7, 2005, a final demand was issued by the complainant asking respondent to return the money received, to no avail.

The Integrated Bar of the Philippines (IBP) Investigating Commissioner prepared a Report and Recommendation dated April 1, 2016, recommending the suspension of respondent from the practice of law for five (5) years.
The report noted that respondent failed to file his answer to the complaint, with a notice returned as “moved with no forwarding address.”
The Investigating Commissioner remarked that complainant did not actively follow up on the status of the case, and no further pleadings or evidence (such as an ex parte submission or mandatory conference proceedings) were presented.

On August 31, 2017, the IBP Board of Governors modified the initial recommendation, reducing the suspension period from five (5) years to two (2) years in Resolution No. XXIII-2017-021.
The disciplinary action was based solely on the allegation contained in the Complaint, without additional evidence or procedural developments.

Whether Atty. Luisito C. Arma committed misconduct warranting his suspension from the practice of law.

Whether the allegations against the respondent were supported by sufficient and substantial evidence.
Whether the due process requirements in administrative proceedings were observed, including giving the respondent an opportunity to be heard despite his default.