The Supreme Court’s decision in Vera Law vs. Atty. Hechanova underscores the critical importance of maintaining the integrity of the legal profession. The Court found Atty. Hechanova liable for violating the Code of Professional Responsibility and Accountability (CPRA) by engaging in simple misconduct and representing conflicting interests. This ruling reinforces the principle that lawyers must act with courtesy, fairness, and candor toward their colleagues and clients, and must avoid situations where their loyalties are divided. This case serves as a reminder to all members of the bar that ethical conduct and fidelity to clients are paramount.

Breach of Trust: When a Partner’s Actions Undermine a Law Firm’s Integrity

This case arose from a complaint filed by VERA LAW against Atty. Editha R. Hechanova, a former partner of the firm. VERA LAW accused Hechanova of various acts of misconduct, including making disparaging statements about the firm, poaching clients, and representing conflicting interests. The central legal question revolves around whether Hechanova’s actions violated the ethical standards expected of lawyers, as outlined in the Code of Professional Responsibility (CPR) and its successor, the CPRA.

The factual backdrop reveals a partnership dispute where VERA LAW alleged that Hechanova, while still a partner, took steps to undermine the firm in anticipation of her departure. These steps included registering a competing company, registering her name as a service mark, and recruiting senior lawyers from VERA LAW to join her new firm. Further, VERA LAW claimed that Hechanova took client files and disparaged the firm to its clients. The most serious allegations involved Hechanova’s representation of conflicting interests, specifically opposing a trademark application of a former client and representing parties against another former client.

The Supreme Court, in its analysis, addressed several procedural and substantive issues. First, the Court addressed the validity of the complaint, given the dissolution of the original complainant law firm. The Court acknowledged that the firm was no longer a legal entity but clarified that disciplinary proceedings can be initiated by any person, thereby validating the complaint. Regarding the complainant’s motion to dismiss the case, the Court reiterated that disbarment proceedings are sui generis, undertaken for public welfare, and cannot be terminated merely by the complainant’s desistance.

Turning to the substantive issues, the Court examined whether Hechanova violated the CPR and CPRA. VERA LAW argued that Hechanova violated Canons 3 and 8 of the CPR by making false and disparaging statements about the firm, changing the template wording of the SPA to make herself the exclusive attorney-in-fact of the clients instead of VERA LAW or any of its lawyers, registering her name with the IPO as a service mark without the consent and authorization of VERA LAW while she was a partner of the firm; and registering “Hechanova & Co. Inc.” with the SEC while still a partner of VERA LAW, to unduly compete with the latter. VERA LAW also contends that Hechanova violated Canon 8.02 for her alleged act of poaching the firm’s clients during and after her expulsion as a partner.

The Supreme Court emphasized that in disbarment cases, the burden of proof rests upon the complainant. Lawyers enjoy the presumption of innocence until the contrary is proved. The case against the respondent must be established by substantial evidence before this Court can exercise its disciplinary powers. Substantial evidence is defined under Rule 133, Section 6 of the 2019 Amendments to the 1989 Revised Rules on Evidence as “that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.”

The Court found that VERA LAW failed to provide substantial evidence to support its claims of false statements and client poaching. However, the Court found that Hechanova violated Canon II, Section 2 of the CPRA, which requires lawyers to act with courtesy, civility, fairness, and candor toward fellow members of the bar. Specifically, the Court found that Hechanova’s recruitment of two senior lawyers from VERA LAW’s IP department to join her new firm while she was still a partner amounted to a betrayal of trust and a failure to exercise the required level of honesty and civility.

The most significant aspect of the decision involves the Court’s finding that Hechanova violated the rule prohibiting representation of conflicting interests. Canon 15 and Rule 15.03 of the CPR prevents the representation of conflicting interests. As seen above, the CPRA has demarcated the line between the existence and non-existence of conflict of interests. In doing so, it lays down the test to determine whether such conflict exists: “whether in behalf of one client it is the lawyer’s duty to fight for an issue or claim, but which is his or her duty to oppose for the other client.”

VERA LAW claims that there was clear violation because: first, Hechanova opposed Gourdo’s Inc.’s application for the Calphalon mark and logo notwithstanding the fact that she was the former counsel and resident agent of Gourdo’s, Inc; and second, she represented Newell et al. in Civil Case No. 08-073 against AMSPEC, prior to severing her professional relationship with AMSPEC. The Court rejected Hechanova’s argument that her representation was limited to specific terms in the SPA, emphasizing that a lawyer cannot represent a subsequent client against a former client when the subject matter is related. The court also emphasized that the rule on conflict of interests covers not only cases in which confidential communications have been confided, but also those in which no confidence has been bestowed or will be used.

The court emphasized the fiduciary duty inherent in a lawyer-client relationship. As such, the court held that it was Hechanova’s duty to protect the latter’s intellectual property claims. She, on the other hand, represented Calphalon Corporation and opposed Gourdo’s, Inc.’s trademark application. The Court also found that there was a lawyer-client relationship between Hechanova and AMSPEC, despite her claims to the contrary. From the moment that a lawyer-client relationship begins, lawyers are bound to respect that relationship and to maintain the trust and confidence of their client.

In determining the appropriate penalty, the Court found Hechanova guilty of both simple misconduct and violating the rule on conflict of interests. Given that this was Hechanova’s first offense, a mitigating circumstance was appreciated in her favor. However, the Court also noted her lack of remorse as an aggravating circumstance, which offset the mitigating factor. Thus, the Court imposed the following penalties: (a) a fine of PHP 100,000.00 for simple misconduct; (b) suspension from the practice of law for six months and one day for intentional violation of the rule on conflict of interests in relation to Gourdo’s Inc.; and (c) suspension from the practice of law for six months and one day for intentional violation of the rule on conflict of interests in relation to Amalgamated Specialties Corporation.

FAQs

What was the key issue in this case?	The key issue was whether Atty. Hechanova violated the Code of Professional Responsibility by engaging in simple misconduct and representing conflicting interests. This involved actions such as recruiting lawyers from her former firm and opposing a trademark application of a former client.
Why was VERA LAW’s motion to dismiss not granted?	The Supreme Court held that disbarment proceedings are sui generis and cannot be terminated merely because the complainant desists or withdraws charges. Such proceedings are undertaken for the public welfare and to maintain the integrity of the legal profession.
What constitutes a conflict of interest in this context?	A conflict of interest exists when a lawyer represents opposing interests of two or more parties, or when the lawyer’s duty to one client is in conflict with the duty to another. This includes situations where the lawyer has previously represented a client and now represents someone with adverse interests.
What is the significance of the CPRA in this case?	The Code of Professional Responsibility and Accountability (CPRA) is the set of ethical rules that govern the conduct of lawyers in the Philippines. It outlines the duties and responsibilities of lawyers to their clients, the courts, and the legal profession.
What evidence supported the claim of simple misconduct?	The evidence showed that Hechanova recruited senior lawyers from VERA LAW’s IP department to join her new firm while she was still a partner at VERA LAW. The Court found this amounted to a betrayal of trust and a failure to exercise the required level of honesty and civility.
How did Hechanova violate the rule on conflicting interests with Gourdo’s Inc.?	Hechanova, as a former counsel and resident agent of Gourdo’s Inc., opposed Gourdo’s Inc.’s application for the Calphalon mark and logo. The Supreme Court emphasized that a lawyer cannot represent a subsequent client against a former client when the subject matter is related.
What penalties were imposed on Atty. Hechanova?	Atty. Hechanova was fined PHP 100,000.00 for simple misconduct and suspended from the practice of law for six months and one day for each instance of intentional violation of the rule on conflict of interests.
Why did the Court appreciate a mitigating circumstance in favor of Hechanova?	The court appreciated a mitigating circumstance because this was Hechanova’s first offense. However, this was offset by her lack of remorse, which was considered an aggravating circumstance.

The Vera Law vs. Atty. Hechanova decision reinforces the high ethical standards expected of lawyers in the Philippines. It serves as a reminder that lawyers must not only avoid conflicts of interest but also act with honesty, courtesy, and fairness in all their professional dealings. The Court’s decision demonstrates its commitment to maintaining the integrity of the legal profession and protecting the public interest.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: VERA LAW (DEL ROSARIO BAGAMASBAD & RABOCA) VS. ATTY. EDITHA R. HECHANOVA, A.C. No. 13986, February 26, 2025