G.R. No. 127444 - People vs. Velasco

The complainant is Santos Ventura Hocorma Foundation, Inc. (Hocorma Foundation), represented by Gabriel H. Abad.
The respondent is Atty. Richard V. Funk, who previously held various positions for Hocorma Foundation including corporate secretary, legal counsel, chief executive officer, and trustee (from 1983 to 1985).

Atty. Funk rendered legal services to the foundation in both criminal and civil cases and, in doing so, acquired confidential information about the foundation’s affairs.
Don Teodoro V. Santos, the founder behind both Mabalacat Institute and Hocorma Foundation, engaged Atty. Funk in a series of cases beginning in January 1982, establishing a primary attorney–client relationship with Santos rather than solely with the foundation.
In 1983, Atty. Funk assumed roles that further integrated him into the operations of both organizations, including a directorial and legal advisory capacity for Mabalacat Institute.

Prior to departing for medical treatment in August 1983, Santos and Atty. Funk entered into a retainer agreement, wherein Funk was to receive payment for legal services out of properties that Santos sold or donated to the Hocorma Foundation.
The Hocorma Foundation later approved a compensation agreement on December 13, 1983, but subsequently reneged on this agreement by not disbursing the agreed legal fees.
As a result, Atty. Funk eventually severed his professional relationship with the foundation in 1985 and filed a separate complaint for collection of fees four years later, which was eventually decided in his favor by the trial court, the Court of Appeals, and the Supreme Court.

On November 25, 2006, while still in possession of confidential information from his tenure as counsel for Hocorma Foundation, Atty. Funk filed an action for quieting of title and damages against the foundation on behalf of a new client, Mabalacat Institute.
A pivotal document in this context was the Special Power of Attorney (SPA) executed by Santos on August 13, 1983, which granted Atty. Funk authority over advising and facilitating the transfer of a 5-hectare land in Pampanga to Mabalacat Institute, including all expense coordination.
Despite the SPA and previous roles as legal counsel for different entities, at the time of the SPA’s execution Atty. Funk was not yet acting as the legal counsel for the Hocorma Foundation, and when the deeds of conveyance were executed, his clients were identified only as Santos and Mabalacat Institute.

The Committee on Bar Discipline (CBD) reviewed the case and found Atty. Funk to have violated Canon 15, Rule 15.03 of the Code of Professional Responsibility (CPR) by engaging in actions that pitted the interests of a former client against those of a new one.
The violation was further characterized by a pattern of misconduct, evident in the four separate court appearances against his former client, Hocorma Foundation.
Based on these findings, the CBD recommended a one-year suspension from the practice of law for Atty. Funk, a recommendation that was later adopted by the IBP Board of Governors.

Atty. Funk filed a motion for reconsideration of the disciplinary ruling; however, the IBP Board of Governors upheld the decision on June 26, 2011.
The Supreme Court, in affirming the IBP resolution, ordered the suspension to take effect immediately.
The decision mandates the dissemination of copies to the Court Administrator, the Integrated Bar of the Philippines, and the Office of the Bar Confidant for inclusion in the respondent’s record.

Whether Atty. Funk violated the Code of Professional Responsibility by representing a new client (Mabalacat Institute) in litigation against his former client (Hocorma Foundation) without obtaining the necessary written consent.
Whether the filing of actions against the foundation, immediately following the termination of his service, constitutes a breach of the fiduciary duty and the duty of loyalty owed to his former client.
Whether the disciplinary sanction of a one-year suspension imposed by the IBP and affirmed by the Court is the appropriate remedy given the established facts and ethical breaches.