Sevandal vs. Adame

A lawyer who is not the counsel of record and whose retainer agreement does not cover the proceeding encroaches on the professional employment of another lawyer by entering an appearance, opposing the counsel of record, and demanding or receiving attorney’s fees, in violation of Rule 8.02, Canon 8 of the Code of Professional Responsibility. Any attorney’s fees received under such circumstances must be returned to the client.

Merlina Borja-Sevandal is the surviving spouse of Master Camilo Verano Sevandal, a Ship Master who died on January 27, 2011 while employed by Fuyoh Shipping Co. and Bandila Maritime Services, Inc. Following Camilo’s death, Merlina sought legal assistance to recover death benefits, insurance proceeds, and her shares in the conjugal partnership and legitime. She initially engaged Atty. Virgilio A. Sevandal, who was the uncle of her deceased husband, and later retained Atty. Melita B. Adame to pursue a labor claim before the National Labor Relations Commission. The overlapping engagements led to a dispute over professional employment, culminating in the present administrative case.

• Initial Engagement of Atty. Sevandal: On February 2, 2011, Merlina Borja-Sevandal verbally engaged Atty. Sevandal’s services for claims arising from her husband’s death. The agreement provided for a 10% contingent fee, attested to by an affidavit of Merlina’s cousin.

• The Retainer Contract: On March 9, 2011, Atty. Sevandal and Merlina executed a Retainer Contract for the recovery of Merlina’s share in the conjugal partnership and her legitime. Compensation included a 10% success fee, appearance fees, expenses, and cash advances. The contract expressly stated that it covered litigation at the Regional Trial Court (RTC) level only and that any appeal would require a new retainer agreement.

• The Alleged Addendum: Atty. Sevandal claimed that on April 25, 2011, an Addendum to Retainer Contract was executed, expanding his engagement to cover claims for death and monetary benefits before Bandila Maritime, Del Rosario Pandiphil, Inc., SSS, and other agencies, with a 20% success fee. A secretary’s affidavit stated that the Addendum was handed to Merlina, but the document’s authenticity and contents were disputed.

• Atty. Adame’s Engagement: On May 3, 2011, Atty. Adame, on behalf of Merlina, filed a complaint with the National Labor Relations Commission (NLRC) for death benefits, sickness allowance, damages, and attorney’s fees against the shipping companies. Merlina had appointed Atty. Adame as her attorney-in-fact and counsel for the NLRC case.

• NLRC Proceedings and Atty. Sevandal’s Intervention:

  • On May 4, 2011, DRPI (the insurer) informed Atty. Sevandal that his claim was discontinued due to the NLRC complaint, but intimated that withdrawal of the complaint could resume settlement.
  • On May 9, 2011, Atty. Sevandal filed a Manifestation Re: Withdrawal of Complaint and a Formal Entry of Appearance as counsel for Merlina in the NLRC case, attaching a photocopy of the Addendum.
  • On May 10, 2011, DRPI informed Atty. Sevandal that the settlement would not resume because DRPI decided to appear at the NLRC mandatory conference.
  • At the NLRC mandatory conference on May 23, 2011, Atty. Sevandal entered his appearance; Atty. Ma. Bella Eviota appeared for Atty. Adame. Atty. Sevandal objected to Atty. Adame’s representation.
  • On May 24, 2011, Merlina executed a Revocation of Retainer Contract, annulling the Retainer Contract due to alleged misrepresentations, threats, abuse of confidence, and conflict of interests by Atty. Sevandal.
  • On May 30, 2011, at the next NLRC conference, Atty. Adame filed her entry of appearance, and Merlina declared in open session that she chose Atty. Adame as her counsel.

  • On June 17, 2011, Atty. Sevandal filed an Ex-Parte Motion for Attorney’s Lien equivalent to 20% of any award to Merlina.

  • Compromise and Receipt of Fees: The Labor Arbiter approved a Compromise Agreement between Merlina and Bandila Maritime and awarded ₱300,000.00 attorney’s fees to Atty. Sevandal. He signed a “Sum of Money and Release of Attorney’s Lien,” absolving the company from further claims.

  • Disbarment Complaint: On September 6, 2011, Atty. Sevandal filed the complaint against Atty. Adame for violations of Rule 8.02 and Rule 10.01 of the Code of Professional Responsibility.

• Encroachment and Falsehood: Atty. Sevandal maintained that Atty. Adame encroached on his professional employment by filing the NLRC complaint despite his prior engagement under the Addendum to Retainer Contract covering death benefit claims. He further alleged that Atty. Adame violated Rule 10.01 by falsely stating in a pleading that Merlina denied signing the Addendum and by relaying other allegedly false statements.

• Validity of the Addendum: He argued that the Addendum, executed on April 25, 2011, validly expanded his retainer to include labor claims, and that his entry of appearance before the NLRC was therefore justified. He also relied on the affidavit of Analyn Dingal to prove that the Addendum was delivered to Merlina.

• Limited Scope of Retainer: Atty. Adame countered that the Retainer Contract was confined to civil litigation at the RTC level and had no relation to the NLRC case. She pointed out that the Addendum was of doubtful authenticity, was denied by Merlina, and did not amend the contract’s scope.

• Revocation and Client’s Choice: She stressed that Merlina revoked the Retainer Contract on May 24, 2011, and publicly declared her choice of Atty. Adame as counsel. No encroachment occurred because Atty. Sevandal was never the counsel of record in the NLRC case.

• Absence of Falsehood: The statements attributed to her were those of Merlina, not her own. She did not make any falsehood nor consent to one.

• Atty. Sevandal’s Improper Conduct: She argued that Atty. Sevandal’s appearances and objections were self-serving and constituted interference, while his acceptance of ₱300,000.00 was an attempt to monetize a case in which he rendered no service.

• Encroachment by Atty. Sevandal: Whether Atty. Sevandal violated Rule 8.02, Canon 8 of the Code of Professional Responsibility by entering his appearance, objecting to Atty. Adame’s representation, and receiving attorney’s fees in the NLRC case.
• Return of Attorney’s Fees: Whether Atty. Sevandal should be ordered to return the ₱300,000.00 he received.
• Penalty: Whether the IBP’s recommended penalty of two years’ suspension was proper.

• Encroachment by Atty. Sevandal: Atty. Sevandal’s acts directly violated Rule 8.02, Canon 8 of the CPR. It was undisputed that he was not the counsel of record in NLRC Case No. NCR OFW (M) 05-06890-11; Atty. Adame was the sole counsel on record. The Retainer Contract explicitly covered litigation at the RTC level only, and the Addendum — found by the IBP to be dubious and containing conflicting versions — did not amend that scope. Despite having no authority, Atty. Sevandal filed an entry of appearance, objected to Atty. Adame’s appearance, and moved for an attorney’s lien. All these occurred after Merlina engaged Atty. Adame and revoked the Retainer Contract. The conduct fell squarely within the prohibition against stealing a client or inducing a change of counsel, as articulated in Linsangan v. Atty. Tolentino.

• Return of Attorney’s Fees: Because Atty. Sevandal had no engagement to appear before the NLRC, he had no right to receive attorney’s fees. The ₱300,000.00 he collected must be returned to Merlina.

• Penalty: The IBP’s recommendation of two years’ suspension was modified to one year, consistent with the penalties imposed in Likong v. Lim and Cahanap v. Palangan for similar violations of Rule 8.02. The suspension was accompanied by a warning that repetition of the same or similar acts would be dealt with more severely.

• Encroachment on Professional Employment (Rule 8.02, Canon 8, CPR) — A lawyer shall not, directly or indirectly, encroach upon the professional employment of another lawyer. This includes stealing a client or inducing the latter to retain the lawyer by a promise of better service, good result, or reduced fees. The exception is the right to give proper advice and assistance to those seeking relief against unfaithful or neglectful counsel, which did not apply here.

• Unauthorized Appearance and Attorney’s Fees — A lawyer who is not the counsel of record and whose retainer does not cover the proceeding lacks authority to enter an appearance, object to the chosen counsel, or claim attorney’s fees. Any fees received without authority must be returned to the client.

• Disciplinary Precedent for Encroachment — The Court imposes a one-year suspension from the practice of law for a lawyer who encroaches on another’s professional employment and receives a substantial unauthorised fee, as established in Likong v. Lim and Cahanap v. Palangan.

• “Not having been engaged by the client to appear before the NLRC, Atty. Sevandal had no authority to enter his appearance as counsel and encroach on the services of another lawyer. He also had no right to receive the amount of ₱300,000.00 as attorney's fees awarded by the NLRC.”

• “Rule 8.02, Canon 8 of the CPR mandates that a lawyer ‘should not steal another lawyer's client nor induce the latter to retain him by a promise of better service, good result or reduced fees for his services.’” (quoting _Linsangan v. Atty. Tolentino)_

• Linsangan v. Atty. Tolentino, 614 Phil. 327 (2009) — Cited for the definition of encroachment under Rule 8.02, emphasizing that a lawyer should not steal another’s client.
• Likong v. Lim, 305 Phil. 448 (1994) — Applied as precedent for imposing a one-year suspension for violation of Rule 8.02.
• Cahanap v. Palangan, A.C. No. 11983, August 6, 2018 — Similarly applied to support the one-year suspension penalty.

• Rule 8.02, Canon 8, Code of Professional Responsibility — Prohibits a lawyer from directly or indirectly encroaching upon the professional employment of another lawyer. Applied to Atty. Sevandal’s unauthorized appearance and receipt of fees.
• Rule 10.01, Canon 10, Code of Professional Responsibility — Prohibits falsehood and misleading the court. Not found to have been violated by Atty. Adame; the statements complained of were attributed to the client.
• Rule 139-B, Rules of Court — Governed the transmission of the case records from the IBP to the Supreme Court for final resolution.

Justices Leonen, Hernando, and Rosario concurred. Justice Inting was on official leave.

• N/A — The decision was unanimous without separate opinions.