REPUBLIC OF THE PHILIPPINES DEPARTMENT OF LABOR AND EMPLOYMENT NATIONAL LABOR RELATIONS COMMISSION NATIONAL CAPITAL REGION ARBITRATION

BRANCH QUEZON CITY

NOEL M. CORTEZ, Complainant-Appellee, -VERSUS NLRC NCR CASE NO. OFW(M) NCR- 06-08786 -10 HON. L. A. ROMELITA N. RIOFLORIDO

MAGSAYSAY MARITIME CORPORATION, SAFFRON MARITIME CO. LTD. AND/OR THE PRESIDENT Respondents-Appellants. X -------------------------------------------- X

NOTICE OF APPEAL WITH MEMORANDUM OF APPEAL

RESPONDENTS-APPELLANTS, Magsaysay Maritime

Corporation, Saffron Maritime Co. Ltd. and/or the President, through undersigned counsels, and to the Honorable Commission most

respectfully appeal the Decision of the Honorable Labor Arbiter Romelita N. Rioflorido dated 18 March 2011 due to: 1) Serious errors in the finding of facts which would cause grave and irreparable damage and injury to respondentsappellants; and Prima facie abuse of discretion on the part of the Labor Arbiter a quo.
2)

Said Decision (herewith attached as ANNEX 1) was received by respondents on 30 March 2011. This appeal is therefore being filed within ten (10) days from receipt thereof and in five (5) copies. The docket fee of Php520.00 has been paid per official receipt no. __________ dated __ April 2011.

Attached herewith as ANNEX 2 is the Compliance and Motion to Admit Surety Bond with the corresponding surety bond executed by herein respondents-appellants and Pioneer Insurance and Guaranty Corporation for the present appeal in the amount of _______________________________________________________ ______ (PHP_______________) equivalent to the judgment award less attorneys fees pursuant to the Labor Arbiters Decision dated 18 March 2011.

The Surety Bond is accompanied by a Certification from Pioneer Insurance and Surety Corporation that the bond is secured by a collateral or security deposit. Complainant, through his counsel, was furnished with a certified true copy of the bond pursuant to the Revised NLRC Rules of Procedure.

PREFATORY STATEMENT

Having in mind Social Justice as the emphatic theme of the Philippine Constitution, it is highly venerable that our labor laws afford a construction in favor of the workingman. After all, it is a fact that labor does not possess the advantages enjoyed by capital. Thus, to fairly level the playing field, our laws have deemed it equitable to institute a public policy guaranteeing the protection of labor from the disadvantageous position it might find itself in. A word of caution is in order, however, lest this public policy would be misused in a manner that is oppressive, unjust, discriminatory and unreasonable.

The favorable construction afforded to labor may only be invoked in the event that ambiguity exists. When no doubt exists, when everything is crystal-clear and most importantly, when the evidence glaringly substantiates the claim of employer, no other course is available except to apply the law.

When a seafarer is declared FIT TO WORK by the companydesignated physician, it logically means that the former does not suffer from any disability. In the case at bar, the Labor Arbiter a quo awarded full disability benefits in the amount of USD60,000.00 in favor of the complainant-appellee despite the fact that the complainant-appellee is already fit to work. The award is therefore seriously erroneous and therefore should be corrected by this Honorable Commission.

Further, the Labor Arbiter a quo committed more serious error in awarding ten percent (10%) attorneys fees notwithstanding the fact that the respondents-appellants had a valid ground to refuse the complainant-appellees unfounded claim for disability benefits, i.e., complainants FIT TO WORK assessment.

In view of the foregoing statements, respondents-appellants now plea that the Honorable Commission rectify the serious reversible errors committed by the Honorable Labor Arbiter a quo in her Decision dated 18 March 2011.

STATEMENT OF FACTS

Complainant-appellee Noel M. Cortez was employed by the respondent-appellant Magsaysay Maritime Corp. on behalf of Saffron Maritime Co. Ltd. to board the vessel SAGA ROSE as Crew Mess Steward under an 8-month POEA - approved employment contract. A copy of the POEA-approved employment contract is attached as ANNEX 1 in respondents-appellants Position Paper.

Complainant disembarked the above vessel due to completion of contract. Prior to his disembarkation however, he allegedly reported suffering from Lower limb weakness. He consulted a physician abroad and was given medications after which he was advised to continue treatment in his home country.

Upon arrival in Manila, he was immediately referred to the company-designated physicians, Dr. Jocelyn J. Mariano and Narciso S. Navarro for further evaluation and management and was diagnosed to have lateral foraminal stenosis; small disc protrusion L5-S1, posterior disc bulges L3-4 & L4-5, disc desiccation changes L3-4, L4-5 and L5-S1. Copy of the initial medical report dated 17 February 2010 is attached as ANNEX 2 in respondents-appellants Position Paper.

On 18 February 2010, the complainant was advised by the company-designated physicians to undergo physical therapy three times a week starting on 4 March 2010 and for EMG-NCV testing. He was also given Sirdalud and Ala-Nerv. (See ANNEX 3 in respondents-appellants Position Paper.)

In another medical report dated 30 April 2010, the companydesignated doctors noted that after his physical therapies, his condition greatly improved. It was also noted in the same medical report that the complainant reported complete pain relief. His

neurological findings were also found to be within normal limits. Hence, he was discharged from a formal physical therapy program. After being seen by the orthopedic surgeon, he was declared FIT TO WORK. A Copy of said medical report declaring complainant NOW FIT TO WORK is attached herewith as ANNEX 4 in respondentsappellants Position Paper.

During the time of the medical treatment, the sickness allowance and medical expenses of the complainant were all paid by the respondents.

Notwithstanding the declaration of fitness, complainant filed a complaint against respondents for total and permanent disability benefits with the Honorable National Labor Relations Commission.

Mandatory conferences were held.

But since no agreement

was reached during these conferences, the Honorable Labor Arbiter ordered the filing of Position Papers and Replies.

On 18 March 2011, the Honorable Labor Arbiter Rioflorido rendered a decision awarding permanent disability benefits in favor of the complainant seafarer in the amount of USD60,000.00, as 10% attorneys fees. The dispositive portion of the Decision1 reads:

WHEREFORE, premises considered, respondents are directed to pay, jointly and severally, to complainant the amount of US$60,000.00 as his Permanent Total Disability benefits, plus ten percent (10%) thereof as attorneys fees, in Philippine peso at the time of payment. Other claims are dismissed. SO ORDERED.

In ruling in favor of the complainant, the Labor Arbiter reasoned that:

1.

There was loss or impairment of earning capacity of the

complainant. It has been ruled that by loss or impairment of earning capacity, it means the disablement of an employee to earn wages in the same kind of work, or work of similar nature that he was trained for or accustomed to perform. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but

Page 06, Labor Arbiters Decision.

rather the incapacity to work resulting in the impairment of ones earning capacity.2

2.

The seafarer has not been reemployed or has found employment in

the same kind of work, or work of similar nature that he was trained for or accustomed to perform, up to the present date.3

3.

The seafarer is entitled to attorneys fees equivalent to ten percent

(10%) of the total monetary award as he was forced to rely on the representation and services of counsel to protect his rights.4

Aggrieved by the Labor Arbiter a quos Decision, respondentsappellants interposed the present Appeal to correct the reversible errors committed in the assailed Decision.

ISSUES

1. WHETHER THE COMPLAINANT-APPELLEE IS ENTITLED TO TOTAL AND PERMANENT DISABILITY BENEFITS; AND

2 3

Page 05, Labor Arbiters Decision. Id. 4 Page 07, Labor Arbiters Decision.

2. WHETHER THE COMPLAINANT-APPELLEE IS ENTITLED TO ATTORNEYS FEES.

SUMMARY OF ARGUMENTS

1.

The Labor Arbiter a quo seriously erred in awarding disability benefits in favor of the complainant-appellee. It must be stressed that total and permanent disability benefits are awarded only to those who are suffering from disabilities which are assessed to fall under Grade 1. Complainant-appellees alleged disability was not given any disability assessment. As a matter of fact, the

company-designated physicians declared that he is FIT TO WORK.

2.

The Labor Arbiter a quo seriously erred in disregarding the findings of the company-designated physician and in basing the award for disability benefits from the findings of the private doctor, Dr. Nicanor Escutin. The findings of the company-designated physicians are given utmost weight

and credence, if not finality. This great weight accorded to the company-designated doctors findings accords with the POEA contract and prevailing case laws.

3.

The Labor Arbiter gravely erred in not dismissing the Complaint for lack of cause of action. It must be pointed out that there was no basis for complainant-appellees claim for total and permanent disability benefits

considering that at the time the Complaint was filed in June 2010, neither the company doctors nor his private doctor found the complainant-appellee permanently unfit for sea duty.

4.

While it is true that the complainant-appellee was advised to undergo surgery to remove a disc which, according to Dr. Escutin, is necessary to rehabilitate his back, the complainant-appellee deliberately failed to submit for said medical treatment for no valid reason at all, but because of mere second thoughts. Evidently, said omission

constituted gross negligence. Applying Sec. 20 (B) (D) of

the POEA Contract, said gross negligence amounts to a waiver of compensation and benefits. Hence, the Labor Arbiter a quo committed grave error in disregarding this critical fact in resolving complainant-appellees claim.

5.

The Labor Arbiter a quo seriously erred in awarding ten percent (10%) attorneys fees in favor of the complainantappellee. Truth be told, the complainant-appellee is not entitled to attorneys fees there being no bad faith on their part in denying complainant-appellees exorbitant and unfounded claim for permanent disability benefits. By relying on the findings of the company-designated physicians that complainant-appellee is now fit to work, respondents-appellants have a just, valid and lawful ground to refuse complainants claim for full disability benefits.

DISCUSSIONS

1.

The Labor Arbiter a quo seriously erred in awarding disability benefits in favor of the complainant-appellee. It must be stressed that total and permanent disability benefits are awarded only to those who are suffering from disabilities which are assessed to fall under Grade 1. Complainant-appellees alleged disability was not given any disability assessment. As a matter of fact, the

company-designated physicians declared that he is FIT TO WORK.

With utmost respect, it is submitted that the Labor Arbiter a quo committed serious error, if not abuse of discretion, in awarding full disability benefits in favor of the complainant-appellee despite the fact that the company doctors did not issue any disability assessment. It must be stressed that total and permanent disability benefits are awarded only to those who are suffering from disabilities which are assessed to fall under Grade 1 was as per POEA a Contract. Grade 1

Complainants

alleged

disability

not

given

assessment. As a matter of fact, the complainant was not given any disability assessment as he was declared FIT TO WORK. Hence, he

is not entitled to any disability benefits. Clearly, the above-mentioned facts would show that indeed there exists no entitlement to total and permanent disability benefits. Complainants insistence to such

benefits do not have basis whatsoever.

As may be gleaned from the evidence, the companydesignated physician Dr. Jocelyn J. Mariano and Narciso S. Navarro opined that the complainant-appellee is already fit to work. Remarkably, said doctors treated and monitored the complainant since his repatriation and has subjected him to various tests and procedures along the way, thus scientifically and objectively assessing his condition with his extensive and intimate knowledge of complainant and his injury.

Moreover,

it

was

the

company-designated

physicians

themselves who examined, observed and treated the complainant. It must be stressed that under the POEA Standard Employment Contract as well as prevailing case laws, the findings of the companydesignated physician are given utmost weight and credence, if not finality. This is based on the fact that the company-designated

physician had full opportunity to study, examine, observe and treat the complainant over a long period of time. In fact, in Respondents Position Paper, several medical reports were even attached as Annexes thereto. These only show that the findings of the companydesignated physician were a product of an explorative, exhaustive and extensive examination of complainants condition. There can

thus be no doubt that the company-designated physicians findings are entitled to greater weight than the Labor Arbiter a quos simplex dicta that complainant had already lost his earning capacity and is consequently entitled to permanent disability benefits.

As well noted by the Supreme Court in many decisions, which the Labor Arbiter a quo arbitrarily disregarded, the assessment given by the company-designated physician on the illness of a seafarer should not be ignored. The POEA contract expressly recognizes the authority and responsibility of a company-designated physician in determining the nature of the illness and condition of the seafarer. Case law settles well, from German Marine vs. NLRC, infra to the 2010 case of Magsaysay Maritime Corp. vs. NLRC and Cedol,

supra, that the findings of the company-designated doctor assumes utmost importance and is given greatest weight and authority.

In Magsaysay Maritime Corporation and/or Cruise Ships Catering and Services International N.V vs. NLRC and Cedol, G.R. No. 186180, 22 March 2010, the Supreme Court observed that it is the company-designated physician who is entrusted with the task of assessing the seaman's disability. This reiterates the

doctrine earlier pronounced in the case of German Marine Agencies, Inc. and Lubeca Marine Management HK Ltd. vs. NLRC and Froilan de Lara, G.R. No. 142049, 30 January 2001, where the Supreme Court ruled:

In order to claim disability benefits under the Standard Employment Contract, it is the company-designated physician who must proclaim that the seaman suffered a permanent disability, whether total or partial, due to either injury or illness, during the term of the latters employment.

In Sarocam v. Interorient Maritime Ent., Inc., et al, G.R. No. 16783, 27 June 2006, the Supreme Court had occasion to apply the

well-enshrined principle discussed in the preceding paragraphs in ruling that:

Dr. Pidlaoan [the company-designated physician] examined and treated petitioner from the time he was repatriated up to his recovery and subsequent assessment as fit for duty on December 13, 2000. As in the German Marine case, the extensive medical attention extended by Dr. Pidlaoan enabled the latter to acquire familiarity, if not detailed knowledge, of petitioner's medical condition. No doubt such specialized knowledge enabled Dr. Pidlaoan to arrive at a much more accurate appraisal of petitioner's condition, as compared to another physician not privy to petitioner's case from the very beginning. Indeed, the assessment of the three other personal doctors of petitioner could not have been that reliable considering that they based their conclusions on the prior findings of Dr. Pidlaoan; moreover, they examined petitioner 7 or 8 months after he was assessed as fit to work and treated him for only one day [Emphasis supplied].

In Vergara vs. Hammonia Maritime Services, Inc., infra, the Supreme Court also upheld the diagnosis/assessment of the company-designated physician as against the contrary assessments of the seafarers two private physicians. The Supreme Court further clarified that:

The POEA Standard Employment Contract and the CBA clearly provide that when a seafarer sustains a work-related illness or injury while on board the vessel, his fitness or unfitness for work shall be determined by the company-designated physician. If the physician appointed by the seafarer disagrees with the companydesignated physician's assessment, the opinion of a third doctor may be agreed jointly between the employer and the seafarer to be the decision final and binding on them.

Thus, while petitioner had the right to seek a second and even a third opinion, the final determination of whose decision must prevail must be done in accordance with an agreed procedure. Unfortunately, the petitioner did not avail of this procedure; hence, we have no option but to declare that the company-designated doctor's certification is the final determination that must prevail. We do so mindful that the company had exerted real effort to provide the petitioner with medical assistance, such that the petitioner finally ended with a 20/20 vision. The companydesignated physician, too, monitored the petitioner's case from the beginning and we cannot simply throw out his certification, as the petitioner suggested, because he has no expertise in ophthalmology. Under the facts of this case, it was the company-designated doctor who referred the petitioner's case to the proper medical specialist whose medical results are not essentially disputed; who monitored the petitioner's case during its progress; and who issued his certification on the basis of the medical records available and the results obtained. This led the NLRC in its own ruling to note that:

x x x more weight should be given to the assessment of degree of disability made by the company doctors because they were the ones who attended and treated petitioner Vergara for a period of almost five (5) months from the time of his repatriation to the Philippines on September 5, 2000 to the time of his declaration as fit to resume sea duties on January 31, 2001, and they were privy to petitioner Vergara's case from the very beginning, which enabled the company-designated doctors to acquire a detailed knowledge and familiarity with petitioner Vergara's medical condition which thus enabled them to reach a more accurate evaluation of the degree of any disability which petitioner Vergara might have sustained. These are not mere company doctors. These doctors are independent medical practitioners who passed the rigorous requirements of the employer and are more likely to protect the interest of the employer against fraud.

Moreover, as between those who had actually attended to petitioner Vergara throughout the duration of his illness and those who had merely examined him later upon his recovery for the purpose of determining disability benefits, the former must prevail.

In the case of Magsaysay Maritime Corp. vs. Jaime M. Velasquez, G. R. N0. 179802, 14 November 2008, it was settled very well that the under POEA-SEC the degree of disability, fitness to

work, and nature of the illness/injury of a seafarer should be assessed by the company-designated physician. Thus in said case, the Supreme Court essayed:

The POEA Contract is clear in its provisions when it provided who should determine the disability grading or fitness to work of seafarers. The POEA contract recognizes only the disability grading provided by the company-designated physicians. Section 20 B.3 of the POEA contract provides:

3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall exceed one hundred twenty (120) days. xxx For this purpose the seafarer shall submit himself to a postemployment medical examination by a company designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the

seafarer to comply with the mandatory reporting requirement shall resort in his forfeiture of the right to claim the above benefits.

Moreover, Section 20 (B), no. 2, paragraph 2 of the POEA Contract provides:

However, if after the repatriation the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the company-designated physician.

These provisions clearly illustrate that respondents disability can only be assessed by the company-designated physician. If the

company-designated physician declares him fit to work, then the seaman is bound by such declaration.

In Magsaysay Maritime Services vs. NLRC and Cedol supra, the Supreme Court also upheld the findings of the companydesignated physician in the following discussions:

While it is true that medical reports issued by the company-designated physicians do not bind the courts, our examination of Dr. Ong-Salvadors Initial Medical Report leads us to agree with her findings. Dr. Ong-Salvador was able to sufficiently explain her basis in concluding that the respondents illness was not work-related: she found the respondent not to have been exposed to any carcinogenic fumes, or to any viral infection in his workplace. Her findings were arrived at after the

respondent was made to undergo a physical, neurological and laboratory examination, taking into consideration his (respondents) past medical history, family history, and social history. In addition, the respondent was evaluated by a specialist, a surgeon and an oncologist. The series of tests and evaluations show that Dr. Ong-Salvadors findings were not arrived at arbitrarily; neither were they biased in the companys favor. (Emphasis supplied)

Finally, in Cootauco vs. MMS Philippine Maritime Services, G.R. No. 184722, 15 March 2010, the Supreme Court further stressed the importance of the findings of the company-designated physician stating that it must be the company-designated physician who must declare that petitioner suffered a permanent disability, whether total or partial, due to injury or illness, during the term of the latters employment.

Based on the foregoing authorities, it should be crystal-clear that the company- designated physician is the one who is given the primary authority and responsibility, based on the POEA-SEC, to determine the nature of the injury and condition of the seafarer. Yet

as can be clearly observed in this present case, the Labor Arbiter a quo deliberately disregarded clear and convincing evidence showing complainants actual medical condition, and opted to uphold the opinion of complainants private doctor, Dr. Nicanor Escutin, with no firm basis at all.

To repeat, the assessment of the company-designated physician should be given full weight and credence. This rule is

based on a practical consideration that the extensive medical treatment and length of time that the company-designated physician treated the patient/seafarer has allowed him to have a better grasp of the current condition of the seafarer and thus his assessment should be given more weight and credence, if not finality. Considering that the company-designated physician did not give complainant any disability assessment, he is therefore not entitled to total and permanent disability benefits. The Labor Arbiter a quos award of said disability benefits in the amount of USD60,000.00 is therefore seriously erroneous.

2.

The Labor Arbiter a quo seriously erred in disregarding the findings of the company-designated physician and in basing the award for disability benefits from the findings of the private doctor, Dr. Nicanor Escutin. The findings of the company-designated physicians are given utmost weight and credence, if not finality. This great weight accorded to the company-designated doctors findings accords with the POEA contract and prevailing case laws.

Another serious error was committed by the Labor Arbiter a quo when he relied on the findings of the private doctor, Dr. Escutin, who opined that the complainant-appellee is now permanently unfit for sea duty. To justify the erroneous ruling, Labor Arbiter Rioflorido simply stated:

While we adhere to the rule that the opinion of the companydesignated physician is entitled to respect, the same is

nevertheless not binding or conclusive and may be disregarded if there is ample basis to establish entitlement to benefits. In this particular case, this office finds ample basis to hold that complainant should be paid his disability benefits.5
5

P. 4, Labor Arbiters Decision.

Notably, however, the Labor Arbiter a quo did not discuss in the subsequent paragraphs the alleged ample basis which will justify the award for disability benefits. Nothing at all was mentioned as to why the Labor Arbiter a quo opted to adopt the findings of Dr. Escutin that the complainant-appellee is still suffering from a disability. Considering this obvious error committed by the Labor Arbiter a quo in failing to provide a basis for her ruling which evdiently gave more credence to the findings of the private doctor, it is prayed that the Honorable Commission will take a second look and review this crucial point.

A side-by-side comparison of the medical reports issued by the company-designated physicians, Dr. Jocelyn J. Mariano and Narciso S. Navarro versus the two-page report issued by Dr. Escutin will safely convince anyone that the findings of the company doctors are more credible and trustworthy than that of the private doctor.

Although the complainant-appellee secured a medical report from his private doctor, Dr. Escutin, said second opinion appeared

inferior, in terms of credibility, to the findings of the company doctor. This will be easily seen after a comparative analysis of the two conflicting medical reports. On one hand are the medical reports prepared by the company-designated physicians, after series of medical evaluation and treatment, detailing the procedures

undertaken by the complainant and the progress of his condition. On the other hand is the two-paged medical report by the complainants private doctor, reiterating the factual backdrop of complainants medical case on the first page, a mere general physical examination, a brief statement of final diagnosis and a disability assessment, the latter three items rolled in the second page. Which between the two medical opinions appears to be more credible should not be difficult to discern.

Considering that the company-designated physicians found the complainant FIT TO WORK, the complainant is therefore not entitled to total and permanent disability benefits. The Labor Arbiter a quos utter disregard of the findings of the company doctors with no good reason at all is utterly erroneous.

3.

The Labor Arbiter gravely erred in not dismissing the Complaint for lack of cause of action. It must be pointed out that there was no basis for complainant-appellees claim for total and permanent disability benefits

considering that at the time the Complaint was filed in June 2010, neither the company doctors nor his private doctor found the complainant-appellee permanently unfit for sea duty.

With due respect to the Labor Arbiter a quo, respondentsappellants submit that grave abuse was committed when she awarded disability benefits in favor of the complainant-appellee even when the complainant had no cause of action to claim disability benefits. Unfortunately, even if the respondents raised this issue in their Position Paper and in their Reply, this issue was not even passed upon in the assailed Decision.

It must be noted that before an action can prosper, the existence of a cause of action must first be established. In the case of Baluyot vs. Court of Appeals, 311 SCRA 29, 22 July 1999, the

Supreme Court laid down the elements for the existence of a cause of action, to wit:

A cause of action exists if the following elements are present, namely: (1) a right in favor of plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligations of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages.

Later, in Swagman Hotels and Travels vs. Court of Appeals, G.R. No. 161135, 08 April 2005, the Supreme Court essayed in the following paragraphs the meaning of cause of action:

Cause of action, as defined in Section 2, Rule 2 of the 1997 Rules of Civil Procedure, is the act or omission by which a party violates the right of another. Its essential elements are as follows: 1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;

2. An obligation on the part of the named defendant to respect or not to violate such right; and 3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages or other appropriate relief.

It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff the right to maintain an action in court for recovery of damages or other appropriate relief. (Emphasis ours)

The Labor Arbiter a quo committed grave abuse of discretion in not dismissing the instant Complaint despite the fact that the complainant-appellee had no cause of action to file the said Complaint for disability benefits. While the complainant presented in evidence a medical certificate from his private doctor Dr. Escutin saying that the complainant is permanently unfit for sea duty, it must be observed that said medical report was issued only on 02 October 2010, which shows that the complainant only sought the opinion of a private doctor when this case was already on the stage of submission

of Position Papers. This only revealed that at the time complainant filed his Complaint in June 2010, there was still no cause of action to file a claim for permanent disability benefits.

In view of this particular circumstance, it should be crystal-clear that the complainant cannot base his cause of action on the findings of his private doctor since at the time the Complaint was filed, no doctor, not even Dr. Escutin, made an assessment that he is suffering from any disability. Complainants allegation that he is permanently disabled was a mere subjective opinion that is self-serving and incredible considering that he is not even a medical expert. This strongly proved that at the time complainant filed his Complaint in June 2010, there was still no cause of action to institute a claim for disability benefits. For this reason alone, the instant Complaint should have been dismissed for lack of cause of action at the time the Complaint was filed.

4.

While it is true that the complainant-appellee was advised to undergo surgery to remove a disc which, according to Dr. Escutin, is necessary to rehabilitate his back, the

complainant-appellee deliberately failed to submit for said medical treatment for no valid reason at all, but because of mere second thoughts. Evidently, said omission

constituted gross negligence. Applying Sec. 20 (B) (D) of the POEA Contract, said gross negligence amounted to a waiver of compensation and benefits. Hence, the Labor Arbiter a quo committed grave error in disregarding this critical fact in resolving complainant-appellees claim.

The Labor Arbiter a quo further committed serious error in simply glossing over the fact that the complainant-appellee deliberately failed to submit to the required medical procedure for no valid reason at all. Said failure amounted to gross negligence which is a ground for forfeiture of entitlement to disability benefits under the POEA Standard Employment Contract. Again, this was raised by the respondents in their pleadings yet the Labor Arbiter a quo did not even pass upon the issue with no reason at all.

Notably, even complainants private doctor, Dr. Escutin stated in his medical report that the complainant was advised to undergo

surgery to remove the disc but patient has second thoughts. If this is not done to him, his condition will worsen and can lead to more serious damage to his nerve. (See ANNEX J of complainants Position Paper)

Even assuming, WITHOUT ADMITTING, that Dr. Escutins finding on this particular matter is correct, it clearly appears from the above report that the company-designated physicians advised the complainant to undergo the prescribed surgery, but because he was having second thoughts, the complainant ultimately refused to undergo said procedure.

It must be stressed that complainant has no basis at all for his refusal. He did not even ask a second opinion from a private doctor to inquire on the importance or necessity of said procedure. He simply refused because he was having second thoughts. Worse, when Dr. Escutin issued his medical report on 2 October 2010, he concurred with the company-designated physicians that said procedure is important in the rehabilitation of complainants back. Dr. Escutin only

differed with the company doctors who opined that there are other means to cure complainants back pain.

As Dr. Escutin clearly noted in his medical report, it was the complainant who refused to undergo surgery because of some second thoughts. But even assuming ex gratia argumenti that complainants condition got worse because of failure to undergo the surgery, it will be utterly unfair to attribute complainants alleged disability to the respondents since it clearly appears that his alleged present condition was the result of his own omission. His own negligence brought him his alleged disability.

Section 20 (B) (D) of the POEA Contract provides that:

No compensation and benefits shall be payable in respect of any injury, incapacity, disability or death of the seafarer resulting from his willful or criminal act or intentional breach of his duties, provided however, that such injury, incapacity, disability or death is directly attributable to the seafarer.

There is no law or jurisprudence which excuses a seafarer from reporting to the company doctor for treatment. Most certainly, he is obligated under the POEA Contract to submit to medical treatment and this was already settled by Supreme Court decisions, hence, the birth of the 240 day rule. In other words, the treatment provided by the employer through the company doctor is mandatory in nature and a sick or injured seafarer has the positive duty to complete the same. To rule otherwise would be to place in the hands of the seafarer the determination of the amount of disability benefits he is entitled to for all he has to do to get the maximum disability benefits is to stall his treatment and let the duration thereof reach more than 120 or 240 days then invoke jurisprudence on this matter. This is certainly not the spirit and intent of the POEA Contract for (u)ndoubtedly, jurisprudence is replete with pronouncements that it is the company-designated physician's findings which should form the basis of any disability claim of the seafarer. Hence, the matter of entitlement to disability benefits is not for a seafarer to decide but is best left for the company doctor to determine.

Complainant had the duty to submit to surgery (removal of disc) as required by the company doctors because it was reasonably necessary for his recovery. In fact, even his private doctor, Dr. Escutin opined that the If the surgery was not done on him, his condition will worsen and can lead to more serious damage on his nerve. According to his doctor, this was not done to the complainant because he was having second thoughts, hence, his present condition. Notably, the complainant refused to undergo the

procedure for no reason at all. Thus, by complainants refusal to undergo said medical treatment, he almost prevented the company doctor from affording him maximum medical cure. Consequently, this gross negligence was tantamount to an intentional breach of Complainants duties which resulted in the forfeiture of his right to claim disability benefits from the respondents.

5.

The Labor Arbiter a quo seriously erred in awarding ten percent (10%) attorneys fees in favor of the complainantappellee. Truth be told, the complainant-appellee is not entitled to attorneys fees there being no bad faith on their part in denying complainant-appellees exorbitant and

unfounded claim for permanent disability benefits. By relying on the findings of the company-designated physicians that complainant-appellee is now fit to work, respondents-appellants have a just, valid and lawful ground to refuse complainants claim for full disability benefits.

Another grave error committed by the Labor Arbiter a quo in its decision is the unreasonable award of 10% attorneys fees in favor of the complainant-appellee. The Labor Arbiter a quo simply reasoned out in the assailed Decision that since the complainant-appellee was forced to rely on the representation and services of counsel to protect his rights.6 Although complainant indeed sought legal assistance from his counsel, the most important thing to factor in is the fact that respondents-appellants never acted in bad faith in their dealings with the complainant-appellee. Truthfully, respondents have faithfully and in good faith fulfilled all their obligations to the complainant under the POEA contract.

P. 6, Labor Arbiters Decision.

The record is bereft of proof that respondents-appellants acted in bad faith in refusing to pay the claimed disability benefits. The denial of complainants disability claim is based on the fact that under the POEA contract, respondents are not liable to pay full disability benefits to the complainant.

Clearly, respondents have not performed acts of bad faith towards complainant. When he was repatriated, he was immediately referred to a company-designated doctor for further medical treatment. These circumstances clearly illustrate respondents utmost good faith toward complainant, thereby negating his claim for attorneys fees. This position assumes utmost merit considering that the entire purpose behind the policy embodied in Article 2208 of the Civil Code is not to put a premium on the right to litigate.

A perusal of Art. 2208 of the Civil Code will intimate that the award of attorney's fees is actually an exception rather than a general rule. Hence, to be entitled, the complainant must show the existence of exceptional circumstances such as "clearly unfounded civil action or proceeding" or evident bad faith on the part of respondents in

denying the formers claim. As held in Padillo vs. Court of Appeals, G.R. No. 119707, 29 November 2001:

With respect to attorney's fees, the award thereof is the exception rather than the general rule; counsel's fees are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. Attorney's fees as part of damages are not the same as attorney's fees in the concept of the amount paid to a lawyer. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal service he has rendered to the latter, while in its extraordinary concept, they may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party. Attorney's fees as part of damages is awarded only in the instances specified in Article 2208 of the Civil Code. As such, it is necessary for the court to make findings of facts and law that would bring the case within the exception and justify the grant

of such award, and in all cases it must be reasonable.

To the same effect was the ruling in Mindex Resources Development, vs. Morillo, G.R. No. 138123, 12 March 2002 where the Supreme Court also held:

In the absence of stipulation, a winning party may be awarded attorney's fees only in case plaintiff's action or defendant's stand is so untenable as to amount to gross and evident bad faith." Indeed, respondent was compelled to file this suit to vindicate his rights. However, such fact by itself will not justify an award of attorney's fees, when there is no sufficient showing of petitioner's bad faith in refusing to pay the said rentals as well as the repair and overhaul costs.

In Philippine Phosphate Fertilizer Corporation, Petitioner, vs. Kamalig Resources, Inc., G.R. No. 165608, 13 December 2007, the long-standing rule was again applied viz:

The general rule is that attorney's fees cannot be recovered as part of damages because no premium should be placed on the right to litigate. In short, the grant of attorney's fees as part of damages is the exception rather than the rule, and counsel's fees are not awarded every time a party prevails in a suit.

Yet, notwithstanding the foregoing arguments, the Labor Arbiter a quo still awarded 10% attorneys fees for the simplest reason stated in the assailed Decision. This is a clear case of abuse of discretion, which warrants correction to be ordered by the Honorable Commission.

PRAYER

WHEREFORE, premises considered, respondents-appellants most respectfully pray that the Decision dated 18 March 2011 of the

Honorable Labor Arbiter a quo be REVERSED and SET ASIDE and another one entered DISMISSING the Complaint with prejudice due to lack of legal and factual basis.

Such other reliefs as may be just and equitable under the circumstances are likewise prayed for.

Makati City for Quezon City, 07 April 2011.