Halili v. CIR

RULE 9.02 – NOT TO DIVIDE LEGAL FEES No. L-24864 Halili v. Court of Industrial Relations Makasiar, J. Summarized by Cristelle Collera [Digester’s Note: I only included the parts related to the lesson.] IMPORTANT PEOPLE Halili Bus Drivers and Conductors Union (PTGWO) – union who filed suit against its employer Halili Transit – employer of PTGWO Atty. Benjamin Pineda – one of the lawyers for PTGWO; herein asshole Arbiter Valenzuela – NLRC; also in motion for contempt FACTS 1. PTGWO filed claims for overtime against Halili Transit, eventually settled by an agreement wherein the administrator of Fortunato Halili’s estate would transfer a tract of land in Caloocan, Rizal to the union. This award was established by their original counsel, Atty. Espinas, for Espinas & Associates. 2. Atty. Pineda, while working for the same law firm, later appeared in court for PTGWO. However, he represented himself with the firm “B.C. Pineda and Associates” (with the same address as Espinas & Associates – sketchy) giving the impression that he was now the principal lawyer in the cases (and would be entitled to a bigger share of fees). 3. Meanwhile, Atty. Pineda also entered into an anomalous retainer’s contract with PTGWO, which was later found to be illegal and unethical.  It was executed only between Atty. Pineda and PTGWO’s officers (only 14% of its members). The Labor Code requires all members to vote on any question of major policy.  Atty. Pineda required a contingent fee of 30% for those still working at Halili Transit, and 45% for those already separated. However, when the contract was executed, Halili had already stopped operations, meaning the 45% fee now applied to all the members of PTGWO.  The contract was executed while Atty. Espinas was still representing PTGWO in Halili’s SC appeal. Atty. Pineda didn’t tell his firm about the contract, nor did he try to substitute as counsel, now that he was retained by the union.  The contract wasn’t even notarized.

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4. Manila Memorial Park, which was supposed to buy the land in the award to PTGWO, expressed misgivings over the authority of PTGWO bec. of PD 1529, which says that a court of competent jurisdiction must authorize the sale of a property in trust. 5. Atty. Pineda approached the NLRC, asking for authority to sell the property, which was granted by Arbiter Valenzuela. He later filed a second motion to distribute the proceeds of the sale, also granted by Valenzuela. The distribution was to include the attorney’s fees for him stipulated in his retainer’s contract with PTGWO.  In both motions, neither the two other counsels (Atty. Espinas and Atty. Lopez) nor the other parties were informed. ISSUE with HOLDING 1. W/N Atty. Pineda is guilty of misconduct – Yes.  The 45% attorney’s lien on the award of the employees was exorbitant and unconscionable. He must now return the excessive amount of fees he received.  He acted in a fraudulent manner, representing himself as principal lawyer in the case and from another law firm, albeit at the same address as Espina & Associates.  It was also found that Atty. Pineda intended to share his attorney’s fees with union leaders, which may be why the general membership wasn’t informed of the retainer’s contract with Pineda. This goes against Canon 9.02, which prohibits sharing of attorney’s fees with non-lawyers. 2. W/N Atty. Pineda is guilty of indirect contempt of court – Yes.  He knowingly approached the NLRC for authority to sell and dispose of the proceeds of the awarded property, knowing full well that the NLRC had no jurisdiction to give such authority.  He also did this without the knowledge of his co-counsels and the other parties in the case. DISPOSITIVE PORTION Atty. Pineda is found guilty of indirect contempt, sentenced to imprisonment, and directed to show cause why he should not be disbarred. DOCTRINE Canon 9.02. A lawyer shall not divide or stipulate to divide a fee for legal services with persons not licensed to practice law, except: 2

(a) Where there is a pre-existing agreement with a partner or associate that, upon the latter's death, money shall be paid over a reasonable period of time to his estate or to persons specified in the agreement; or (b) Where a lawyer undertakes to complete unfinished legal business of a deceased lawyer; or (c) Where a lawyer or law firm includes non-lawyer employees in a retirement plan even if the plan is based in whole or in part, on a profit sharing agreement. RELEVANCE TO THE LESSON Sharing of attorney’s fees with non-lawyers (in this case, union heads) is prohibited. Also, don’t be an asshole.

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