Petition for Relief from Judgment

Cagayan Economic Zone Authority (CEZA) v. Meridian Vista Gaming Corporation

Facts:

The Meridian Gaming (Corporation) applied for and was granted franchise with the
CEZA as operator of certain gaming activities like jai alai. The OGCC (Office of the Government
Corporate Counsel) issued an Opinion that the CEZA could not grant the franchise as it is not
expressly provided by law. Thus the CEZA ordered the Corporation to stop its activities. The
latter then sued the CEZA whose OGCC counsel is Atty. Baniaga. Atty. Baniaga filed a joint
manifestation submitting the case for decision based on the pleadings without informing
CEZA. The RTC ruled in favor of the Corporation.  After he received a copy of the ruling, he
did not even bother to inform his client CEZA and the OGCC of the adverse judgment. He
did not file an appeal and allowed the judgment to lapse into finality.  Later, the CEZA
sought a new OGCC counsel who filed a Petition for Relief from Judgment, before the RTC,
alleging honest mistake or excusable neglect on the part of Atty. Baniaga. The RTC denied it
and ruled that the negligence of CEZA’s former counsel, Atty. Baniaga,  was binding on his
client and could not be used as an excuse to revive the right to appeal which had been lost.
The CA affirmed it. Thus CEZA’s Petition.

Issue:

Should the Petition for Relief from Judgment be granted?

Ruling:

Yes, Petition for Relief from Judgment should be granted because of Atty. Baniaga’s
gross negligence.

Under case law, relief from judgment cannot be granted if the loss of the remedy at
law is because of the negligence of the client’s counsel. However, it can be granted in cases of
gross and palpable negligence of counsel and of extrinsic fraud;

Under case law, the unconscionable failure of a lawyer to inform his client of his receipt
of the trial court's order and the motion for execution, and to take the appropriate action
against either or both to protect his client's rights amounted to connivance with the prevailing
party, which constituted extrinsic fraud.

Here, after he received a copy of the ruling, Atty. Baniaga did not even bother to
inform his client CEZA and the OGCC of the adverse judgment. He did not file an appeal
and allowed the judgment to lapse into finality. This is extrinsic fraud which is a ground
for Petition for Relief from Judgment.