A.C. No. 11663. July 31, 2017. NANETTE B. SISON, represented by DELIA B. SARABIA, Complainant, vs. ATTY. SHERDALE M. VALDEZ, Respondent.
FACTS

Complainant Nanette B. Sison, an OFW, engaged respondent Atty. Sherdale Valdez in September 2012 to file a case against a contractor for failing to build her house. No written agreement was executed, but complainant, through her mother, paid respondent a total of ₱215,000.00 in three installments for litigation expenses and attorney’s fees. Respondent acknowledged the first two payments with a handwritten note but had the third payment deposited into his wife’s bank account. On January 8, 2013, complainant terminated respondent’s services via email and demanded a refund, alleging he failed to render services, update her on the case, commingled funds, and misappropriated money. Respondent claimed he performed services, including studying the case, attempting to personally serve a demand letter, and drafting a complaint. He argued the termination was premature and offered a partial refund.
The parties later filed a Joint Manifestation before the IBP Commission on Bar Discipline (CBD) agreeing to settle amicably, with respondent making a partial refund and complainant undertaking not to pursue the case. The IBP-CBD Investigating Commissioner disapproved the compromise as non-exonerative in disciplinary proceedings and found respondent liable for several violations.

ISSUE

Whether respondent Atty. Sherdale Valdez violated the Code of Professional Responsibility, warranting disciplinary action.

RULING

Yes, the Supreme Court found respondent guilty of violating the CPR and suspended him for six months. The Court affirmed the IBP-CBD’s rejection of the compromise agreement, stressing that settlement between parties does not absolve a lawyer from administrative liability, which is meant to protect the public and the integrity of the legal profession.
The Court upheld the IBP’s findings of multiple violations. First, respondent failed to diligently pursue his client’s case and keep her adequately informed of its status, breaching his duty under Canon 18. His actions—such as delaying the formal service of demand letters and only detailing his services after termination—demonstrated neglect. Second, by requesting and receiving substantial payments for filing and bond fees before even preparing the complaint or knowing the exact court costs, he exhibited a lack of prudence. Third, his failure to issue a proper official receipt for the full amount received violated accounting and fiduciary standards. Most seriously, by directing his client to deposit a payment into his wife’s personal bank account, he commingled client funds with personal or third-party funds, a clear violation of the rule against commingling under Canon 16.
The Court modified the IBP’s recommended penalty of reprimand, imposing a six-month suspension instead. It emphasized that commingling is a serious offense that undermines trust, and a reprimand was too lenient given the totality of the breaches, which included neglect, improper financial dealings, and failure to account. The suspension serves to uphold the standards of the legal profession.