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EVANGELINA MASMUD v. NLRC (LABOR DISPUTE)

FACTS:

The case involves a complaint filed by Alexander Masmud against First Victory Shipping Services and Angelakos (Hellas) S.A. for non-payment of benefits and damages. Alexander hired Atty. Rolando B. Go as his counsel, and they agreed on a contingent basis for attorney's fees. The Labor Arbiter ruled in favor of Alexander, and this decision was affirmed by the Court of Appeals. The NLRC dismissed the employer's appeal, and its decision became final and executory. Atty. Go moved for the execution of the NLRC decision, and the surety bond of the employer was garnished. The surety company gave a check to the NLRC Cashier, which Atty. Go requested to be released to Evangelina. Part of the amount was released to Evangelina, and she paid Atty. Go P680,000.00. Atty. Go later filed a motion to enforce his attorney's lien as Evangelina allegedly did not comply with the contingent fee agreement. Evangelina argued that Atty. Go's claim for attorney's fees was null and void under the Labor Code. The Labor Arbiter granted Atty. Go's motion and ordered the payment of the remaining attorney's fees to him. Evangelina appealed to the NLRC, but the appeal was dismissed. She then filed a petition for certiorari before the Court of Appeals, which partially granted her petition but upheld Atty. Go's claim for attorney's fees. Evangelina filed a motion for reconsideration, but it was denied by the Court of Appeals. Hence, this petition.

ISSUES:

  1. Whether Atty. Go is entitled to 40% attorney's fees of the total monetary award.

  2. Whether Atty. Go's attorney's fees have been fully compensated.

RULING:

  1. Yes, Atty. Go is entitled to 40% attorney's fees of the total monetary award. The Court of Appeals committed an error in declaring that Atty. Go's attorney's fees have been fully compensated. The contingent fee agreement between Atty. Go and Alexander allowed for twenty percent (20%) of the total monetary claims as settled or paid and an additional ten percent (10%) in case of appeal. Any award of attorney's fees shall pertain to Atty. Go's law firm as compensation. The February 14, 2005 Order of the Labor Arbiter correctly recognized the remaining twenty percent (20%) as due to Atty. Go as attorney's fees.

  2. No, Atty. Go's attorney's fees have not been fully compensated. The Court of Appeals erred in declaring that the amount of P1,347,950.11 already received by Atty. Go fully compensates his attorney's fees. Atty. Go is still entitled to the remaining twenty percent (20%) of the attorney's fees due to him.

PRINCIPLES:

  • The terms of a contingent fee agreement between a lawyer and a client shall be upheld as long as they are fair, reasonable, and free from undue influence or coercion. (Article 111, Labor Code)

  • Any award of attorney's fees shall pertain to the counsel as compensation, unless otherwise agreed upon by the parties. (Article 111, Labor Code)