A.C. No. 10571 - Sevandal vs. Adame

Case Summary (A.C. No. 10571)

Petitioner

Atty. Virgilio A. Sevandal filed a complaint for disbarment before the IBP‑CBD alleging that Atty. Adame violated Rule 8.02, Canon 8 (encroachment upon another lawyer’s professional employment) and Rule 10.01, Canon 10 (doing any falsehood) of the Code of Professional Responsibility by appearing in and prosecuting an NLRC action on behalf of Merlina despite an alleged prior retainer and addendum between Sevandal and Merlina.

Respondent

Atty. Melita B. Adame denied violating the CPR. She maintained that the March 9, 2011 retainer Sevandal relied upon covered only RTC litigation (not NLRC claims), that Merlina revoked the retainer by a May 24, 2011 revocation, and that Merlina had validly engaged Adame to file the NLRC complaint. Adame also denied that she made false statements and disputed the authenticity or applicability of the alleged addendum.

Key Dates

Feb. 2, 2011: Alleged verbal agreement between Sevandal and Merlina.
Mar. 9, 2011: Written Retainer Contract executed between Sevandal and Merlina (RTC scope).
Apr. 25, 2011: Alleged Addendum to Retainer Contract expanding claims (fee 20%).
Apr. 26, 2011: Sevandal filed a claim for death benefits with DRPI.
May 3, 2011: Atty. Adame filed an NLRC complaint for Merlina.
May 9, 2011: Sevandal filed a Manifestation/Entry of Appearance at the NLRC and attached a photocopy of the Addendum.
May 24, 2011: Revocation of Retainer Contract executed by Merlina.
June 17, 2011: Sevandal filed an Ex‑Parte Motion for Attorney’s Lien (20%).
Aug. 1, 2011: Labor Arbiter approved a compromise awarding P300,000 to Sevandal as attorney’s fees.
Sept. 6, 2011: Sevandal filed the disbarment complaint with the IBP‑CBD.
Feb. 2, 2013 / Mar. 21, 2013 / Mar. 22, 2014 / Nov. 28, 2017 / Nov. 11, 2020: Administrative and judicial milestones as reflected in the IBP and Court proceedings.

Applicable Law

Code of Professional Responsibility, Rule 8.02, Canon 8 (prohibition against encroaching on another lawyer’s professional employment); Rule 10.01, Canon 10 (prohibition on doing or consenting to any falsehood).
The 1987 Constitution is the governing Constitution for the Court’s resolution (decision date is after 1990).

Factual Background

Sevandal alleges a verbal engagement (Feb. 2, 2011) and produced an affidavit by a witness supporting a 10% contingent fee agreement. On Mar. 9, 2011, Sevandal and Merlina executed a written Retainer Contract covering the recovery of conjugal partnership property and legitime, explicitly limiting the contract’s scope to litigation at the RTC level; the contract set fees and cash advances. Sevandal later alleged an Apr. 25 Addendum expanding his engagement to include claims for death and monetary benefits from multiple agencies and increasing the contingent fee to 20%, supported by a secretary’s affidavit that the addendum was handed to the client. On Apr. 26 Sevandal filed a claim with DRPI. On May 3 Adame filed an NLRC complaint for death benefits and related claims on behalf of Merlina. DRPI informed Sevandal on May 4 that the claim was discontinued because of the NLRC filing. Sevandal filed a Manifestation and formal entry of appearance at the NLRC on May 9 and later appeared at NLRC conferences where Adame and, at times, another counsel appeared for Merlina. On June 17 Sevandal filed an Ex‑Parte Motion for Attorney’s Lien equivalent to 20%. On Aug. 1 the Labor Arbiter approved a compromise; Sevandal was awarded P300,000 and signed a general release/quitclaim. Sevandal thereafter filed the disbarment complaint against Adame.

Proceedings and Findings before the IBP

The IBP‑CBD Investigating Commissioner recommended dismissal of the complaint against Adame, finding no encroachment or falsehood on her part. The Commissioner concluded the March 9 retainer covered only RTC litigation and did not encompass the NLRC action; Merlina expressly declared Adame as her counsel in open NLRC session; and the purported addendum was doubtful (inconsistent versions and failure to amend the retainer’s RTC limitation). The IBP Board of Governors adopted that recommendation and dismissed the complaint; its denial of Sevandal’s motion for reconsideration was followed by a directive that Sevandal explain why he should not be administratively liable for encroachment and for receiving P300,000 without authority or having rendered NLRC services. The IBP‑CBD later found Sevandal guilty of encroachment and recommended a two‑year suspension and restitution of P300,000; the IBP Board adopted that recommendation and transmitted the case to the Supreme Court under Rule 139‑B.

Issue Presented

Whether the IBP’s recommendation—suspending Sevandal for two years and directing the return of P300,000—was correct.

Court’s Analysis

The Court found that Sevandal violated Rule 8.02, Canon 8. It was undisputed that Adame was the counsel of record in the NLRC case; the March 9 retainer explicitly limited Sevandal’s engagement to RTC litigation and thus did not authorize his appearance in the NLRC. The IBP’s findings cast doubt on the validity and effect of the alleged addendum: it did not amend the retainer’s RTC limitation and there were two differing versions in the record. Despite lacking authority to represent Merlina at the NLRC—and despite Merlina’s revocation of the retainer on May 24, 2011—Sevandal filed a formal entry of appearance on May 9, repeatedly entered appearances at mandatory conferences, objected to Adame’s representation, filed an Ex‑Parte Motion for Attorney’s Lien (June 17), and ultimately received P300,000 said to be attorney’s fees. The Court observed that, under Rule 8.02 and prior authorities cited in the record (including Linsangan v. Atty. Tolentino

Case Syllabus (A.C. No. 10571)

Case Information

Reported at 890 Phil. 1, Third Division; docketed as A.C. No. 10571; Decision dated November 11, 2020.
Originating disciplinary docket: CBD Case No. 11-3154 (disbarment complaint filed September 6, 2011, docketed as CBD Case No. 11-3154).
Related NLRC docket: NLRC Case No. NCR OFW (M) 05-06890-11.
Investigative and administrative proceedings conducted before the Integrated Bar of the Philippines Commission on Bar Discipline (IBP-CBD) and the IBP Board of Governors prior to transmission to the Supreme Court pursuant to Rule 139-B of the Rules of Court.

Parties

Complainant: Atty. Virgilio A. Sevandal (hereafter "Atty. Sevandal").
Respondent: Atty. Melita B. Adame (hereafter "Atty. Adame").
Client/Principal third party: Merlina Borja-Sevandal (hereafter "Merlina"), surviving spouse of Master Camilo Verano Sevandal (deceased January 27, 2011).
Other involved entities: Fuyoh Shipping Co.; Bandila Maritime Services, Inc.; Del Rosario Pandiphil, Inc. (DRPI) as indemnity agent; NLRC; various government agencies identified in pleadings (SSS, OWWA, Employees' Compensation Commission, Associated Maritime Officers' and Seamen's Union of the Philippines).

Core Issue Presented to the Court

Whether the IBP was correct in (a) suspending Atty. Sevandal from the practice of law for two (2) years, and (b) directing him to return the amount of P300,000.00 to the client, based on findings that he encroached upon the professional employment of Atty. Adame and received attorney's fees without authority or having rendered services in the NLRC case.

Factual Background and Chronology (chronological emphasis)

January 27, 2011: Death of Master Camilo Verano Sevandal, employed as Ship Master by Fuyoh Shipping/Bandila Maritime.
February 2, 2011: Alleged verbal agreement between Merlina and Atty. Sevandal for legal services (10% contingent fee alleged); Josefina Verano Sevandal executed an Affidavit dated December 7, 2011 attesting she witnessed the meeting and agreement.
March 9, 2011: A Retainer Contract executed between Atty. Sevandal and Merlina covering recovery of conjugal partnership share and legitime; contract expressly limited scope to litigation at the RTC level only; compensation terms included a 10% acceptance and success fee on prevailing market value of restored property, appearance fees, travel/hotel/food, and cash advances including P100,000 upon receipt of insurance proceeds and P150,000 upon filing in proper court.
April 25, 2011: Alleged Addendum to Retainer Contract executed by Atty. Sevandal and Merlina (per Atty. Sevandal) expanding subject matter to claims for death and other monetary benefits from a list of agencies (Bandila Maritime; DRPI; Associated Maritime Officers' and Seamen's Union of the Philippines; OWWA; Employees' Compensation Commission; SSS; and others) with acceptance and success fee of 20% of total death/monetary benefits; Analyn B. Dingal executed an affidavit dated December 2, 2011 regarding handing the Addendum to Merlina.
April 26, 2011: Atty. Sevandal filed a claim with DRPI for death and other benefits on behalf of Merlina.
May 3, 2011: Atty. Adame filed a Complaint with the NLRC on behalf of Merlina for death benefits, sickness allowance, damages, and attorney's fees.
May 4, 2011: DRPI informed Atty. Sevandal that Merlina’s claim was discontinued because of the NLRC complaint filed by Atty. Adame; DRPI intimated settlement could resume if NLRC complaint withdrawn and that a check could be issued in less than two months.
May 9, 2011: Atty. Sevandal filed with the NLRC a Manifestation Re: Withdrawal of Complaint (filed by Atty. Adame) and an Entry of Appearance as counsel for Merlina, attaching a photocopy of the Addendum to Retainer Contract.
May 10, 2011: DRPI informed Atty. Sevandal that the settlement claim would not be resumed because DRPI decided to enter its appearance at the NLRC mandatory conference.
May 23, 2011: At NLRC mandatory conference, Atty. Sevandal entered appearance for Merlina and objected under Rule 8.02, Canon 8; Atty. Ma. Bella Eviota entered appearance for Merlina in absence of Atty. Adame.
May 24, 2011: Merlina executed a Revocation of Retainer Contract dated May 24, 2011, purportedly annulling the Retainer Contract because of misrepresentations, threats, abuse of confidence, and conflict of interest (as asserted by Atty. Adame in pleadings).
May 25 and May 30, 2011: Merlina filed a Manifestation on May 25, 2011 to the NLRC appointing Atty. Adame as lawful attorney-in-fact on May 3, 2011; on May 30, 2011 Merlina declared in open court that she chose Atty. Adame as her legal counsel.
May 30, 2011: At succeeding NLRC mandatory conference, Atty. Adame filed Entry of Appearance as counsel for Merlina; DRPI’s counsel denied earlier assertions of pending payment before DRPI in settlement during open session.
June 17, 2011: Atty. Sevandal filed an Ex-Parte Motion for Attorney’s Lien asking for 20% of whatever amount would be awarded to Merlina per the alleged Addendum.
July 7, 2011: Atty. Adame filed Opposition/Manifestation to Ex-Parte Motion for Attorney’s Lien stating she caused filing of the NLRC complaint; claimed Merlina denied signing any addendum giving 20% fee to Atty. Sevandal and that Retainer Contract was revoked May 24, 2011.
August 1, 2011: Labor Arbiter approved a Compromise Agreement between Merlina and Bandila Maritime; awarded P300,000.00 attorney’s fees to Atty. Sevandal; Atty. Sevandal signed a general release and quitclaim captioned “Sum of Money and Release of Attorney’s Lien” to release Bandila Maritime from claims.
September 6, 2011: Atty. Sevandal filed the disbarment complaint against Atty. Adame with the IBP-CBD (docketed CBD Case No. 11-3154).
October 4, 2011: Atty. Adame filed Answer denying violations and asserting the Retainer Contract was limited to RTC litigation; alleged revocation by Merlina and denial by Merlina of having signed any Addendum; contested authenticity/ originality of Addendum copies submitted by Atty. Sevandal.
February 2, 2013: IBP-CBD Investigating Commissioner issued Report and Recommendation dismissing the complaint against Atty. Adame for lack of merit and recommending investigation of Atty. Sevandal for possible administrative liability for encroachment and receiving P300,000 without authority or service rendered.
March 21, 2013: IBP Board of Governors adopted the Investigating Commissioner’s Report and Recommendation and dismissed complaint for lack of merit.
March 22, 2014: IBP denied Atty. Sevandal’s Motion for Reconsideration in Notice of Resolution No. XXI-2014-128 and directed Atty. Sevandal to show cause why he should not be held administratively liable for encroaching and receiving P300,000 without authority.
December 14, 2015: Atty. Sevandal filed Compliance with Show Cause Resolution.
IBP-CBD thereafter issued Report and Recommendation finding Atty. Sevandal guilty of encroaching and recommending suspension for two (2) years and restitution of P300,000.00.
November 28, 2017: IBP Board of Governors adopted the IBP-CBD findings and recommendation; documents transmitted to the Supreme Court.
Supreme Court decision: Modified IBP recommendation; found Atty. Sevandal GUILTY of encroaching professional services of Atty. Adame; suspended him from practice of law for one (1) year; directed return of P300,000.00 to Merlina; warned against repetition; required notifications and posting.

Agreements, Documents, and Evidence Introduced (as described in the source)

Retainer Contract (March 9, 2011): purports to cover recovery of conjugal partnership property and legitime; scope expressly limited to litigation at the RTC level; compensation terms include 10% acceptance and success fee on prevailing market value, appearance fees, expenses, and cash advances (P100,000 upon receipt of insurance proceeds; P150,000 upon filing in proper court).
Alleged Addendum to Retainer Contract (April 25, 2011): purports to engage Atty. Sevandal to handle death and monetary benefit claims before a list of agencies and to charge 20% acceptance and success fee on total death/monetary benefits (authenticity and consistency contested in record; IBP found two different versions).
Affidavit of Josefina Verano Sevandal (December 7, 2011): attesting she witnessed the February 2, 2011 meeting and the agreement fo