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

Case Summary (A.C. No. 10571)

Factual Background

On February 2, 2011, following the death of Master Camilo Verano Sevandal on January 27, 2011, Merlina Borja-Sevandal purportedly engaged Atty. Virgilio A. Sevandal by verbal agreement to provide legal advice and to file suits to recover benefits due to her as surviving spouse. On March 9, 2011, Atty. Sevandal and Merlina executed a written Retainer Contract covering recovery of conjugal partnership shares and legitime and expressly limited to litigation at the Regional Trial Court level. On April 25, 2011, Atty. Sevandal alleged that he had executed an Addendum expanding his engagement to claims for death and monetary benefits before several agencies, promising a twenty percent fee. Atty. Sevandal filed a claim with Del Rosario Pandiphil, Inc. on April 26, 2011. On May 3, 2011, Atty. Melita B. Adame filed an NLRC complaint on behalf of Merlina for death benefits and related relief, and on May 24, 2011 Merlina executed a Revocation of Retainer Contract.

Proceedings in the NLRC

Following the NLRC filing by Atty. Adame, DRPI advised on May 4, 2011 that it had discontinued the settlement process because of the pending NLRC complaint. On May 9, 2011, Atty. Sevandal filed a Manifestation Re: Withdrawal and a Formal Entry of Appearance in the NLRC, attaching a photocopy of the alleged Addendum. He thereafter appeared at NLRC mandatory conferences and objected to Atty. Adame’s representation. On June 17, 2011 Atty. Sevandal filed an Ex-Parte Motion for Attorney’s Lien for twenty percent of any award. The Labor Arbiter approved a Compromise Agreement on August 1, 2011 and awarded P300,000.00 as attorney’s fees to Atty. Sevandal, who signed a general release captioned “Sum of Money and Release of Attorney’s Lien.”

Complaint before the IBP

On September 6, 2011 Atty. Sevandal filed a disbarment complaint with the IBP-CBD against Atty. Adame, alleging violations of Rule 8.02, Canon 8 (encroachment upon another lawyer’s professional employment) and Rule 10.01, Canon 10 (doing any falsehood). Atty. Adame answered denying violations, contending that the March 9, 2011 Retainer Contract was limited to RTC litigation, that Merlina revoked the Retainer on May 24, 2011, that Merlina denied signing the alleged Addendum, and that Atty. Adame was the duly appointed counsel in the NLRC proceedings.

IBP Investigation and Recommendations

The IBP Investigating Commissioner issued a Report and Recommendation dated February 2, 2013 dismissing the disbarment complaint against Atty. Adame for lack of merit and recommending that Atty. Sevandal explain why he should not be administratively liable for encroaching on Atty. Adame’s services and for receiving P300,000.00 without authority or service in the NLRC case. The Investigating Commissioner found that the Retainer Contract expressly covered only RTC litigation; that Merlina declared in writing and in open court that Atty. Adame was her counsel of choice; and that Atty. Sevandal had, in fact, meddled in the NLRC proceedings and received fees without rendering services. The IBP Board of Governors adopted the Report and Recommendation on March 21, 2013. After subsequent proceedings, the IBP-CBD later found Atty. Sevandal administratively liable and recommended suspension for two years and the return of P300,000.00; the IBP Board adopted that recommendation on November 28, 2017 and transmitted the records to the Supreme Court pursuant to Rule 139-B.

Issues Presented to the Court

The principal issue before the Supreme Court was whether the IBP correctly suspended Atty. Sevandal from the practice of law for two years and directed him to return P300,000.00 to the client for having encroached upon the professional employment of Atty. Adame and for receiving fees without authority.

Ruling of the Supreme Court

The Supreme Court, through a decision authored by Delos Santos, J., modified the IBP’s recommended penalty. The Court found Atty. Virgilio A. Sevandal guilty of encroaching upon the professional services of Atty. Melita B. Adame in violation of Rule 8.02, Canon 8 of the Code of Professional Responsibility. The Court suspended Atty. Sevandal from the practice of law for one year, effective upon receipt of the decision, and directed him to return P300,000.00 to Merlina B. Sevandal. The Court further warned that repetition of the same or similar acts would be dealt with more severely and ordered the usual notifications and postings.

Legal Basis and Reasoning

The Court grounded its decision on the plain scope of the Retainer Contract, which expressly limited Atty. Sevandal’s engagement to litigation at the Regional Trial Court level. The Court accepted the IBP’s finding that the alleged Addendum was dubious because it did not amend the Retainer’s stated scope and because two different versions appeared in the record. Having no authority to represent Merlina before the NLRC, Atty. Sevandal nonetheless filed a formal entry of appearance, persisted in appearing at mandatory conferences, objected to Atty. Adame’s representation, filed an Ex-Parte Motion for Attorney’s Lien, and received P300,000.00 as attorney’s fees. The Court held that those acts constituted impermissible encroachment under Rule 8.02, which prohibits a lawyer from directly or indirectly appropriating another lawyer’s client, and that acceptance of a substantial fee without authority or service required restitution. The Court relied on disciplinary precedents, citing Linsangan v. Atty. Tolentino, Likong v. Lim, and Cahanap v. Palangan, in assessing the appropriate disciplinary measure and modified the IBP’s two-year suspension recommendation to one year consistent with prior sanctions for encroachment.

Disposition

The Court ordered that Atty. Virgilio A. Sevandal be suspended from the practice of law for one year, to be effective

Case Syllabus (A.C. No. 10571)

Parties and Posture

Atty. Virgilio A. Sevandal filed a Complaint for disbarment with the Integrated Bar of the Philippines Commission on Bar Discipline (IBP-CBD) docketed as CBD Case No. 11-3154.
Atty. Melita B. Adame was the respondent in the IBP disciplinary proceedings and the counsel of record in NLRC Case No. NCR OFW (M) 05-06890-11.
The IBP Board of Governors adopted IBP-CBD findings and later transmitted the records to the Court pursuant to Rule 139-B, Rules of Court.
The Court adjudicated the transmitted administrative case and issued a decision modifying the IBP recommendation.

Key Facts

Atty. Sevandal alleged a verbal engagement with Merlina Borja-Sevandal on February 2, 2011 and a written Retainer Contract dated March 9, 2011 for recovery of conjugal partnership property and legitime at the Regional Trial Court level.
Atty. Sevandal alleged an Addendum dated April 25, 2011 expanded his retainer to include claims for death and monetary benefits from Bandila Maritime, DRPI, SSS, and other agencies for a twenty percent fee.
Atty. Adame filed an NLRC complaint for death benefits on May 3, 2011 as counsel for Merlina and was the only counsel of record in the NLRC case.
Merlina executed a Revocation of Retainer Contract dated May 24, 2011 and declared in open NLRC session that she chose Atty. Adame as her counsel.
Atty. Sevandal filed entries of appearance in the NLRC on May 9 and at subsequent mandatory conferences, filed an Ex-Parte Motion for Attorney’s Lien on June 17, 2011, and later received P300,000.00 purportedly as attorney’s fees.

Claims and Defenses

Atty. Sevandal charged Atty. Adame with violating Rule 8.02, Canon 8 for encroaching on his professional employment and Rule 10.01, Canon 10 for doing any falsehood.
Atty. Adame denied violating the CPR and asserted that the March 9, 2011 Retainer Contract applied only to RTC litigation and thus did not cover the NLRC claim.
Atty. Adame further claimed that Merlina revoked the Retainer Contract on May 24, 2011 and denied signing any Addendum giving Atty. Sevandal a twenty percent fee.
Atty. Adame argued that alleged false statements attributed to Merlina were not attributable to her as statements made by the client.

Procedural History

The IBP Investigating Commissioner issued a Report and Recommendation dated February 2, 2013 recommending dismissal of the complaint against Atty. Adame and suggesting a show-cause against Atty. Sevandal.
The IBP Board of Governors adopted the Investigating Commissioner’s Report in Notice of Resolution No. XX-2013-362 dated March 21, 2013 and denied reconsideration in Notice of Resolution No. XXI-2014-128 dated March 22, 2014 while issuing a show-cause directive against Atty. Sevandal.
The IBP-CBD later found Atty. Sevandal administratively liable and recommended suspension for two years and restitution of P300,000.00.
The IBP Board of Governors adopted the IBP-CBD recommendation in a Resolution dated November 28, 2017 and transmitted the case to the Court under Rule 139-B, Rules of Court.

IBP Findings

The Investigating Commissioner found that Atty. Adame did not encroach on another lawyer’s employment and did not commit falsehood.
The Investigating Commissioner concluded that the March 9, 2011 Retainer Contract was limited to RTC litigation and that the purported Addendum was doubtful and inconsiste