Valdepe+¦as v. Court of Appeals

FIRST DIVISION

[G.R. No. 161035. September 21, 2015.]

VICTOR B. VALDEPEÑAS, petitioner, vs. THE HONORABLE COURT OF APPEALS, CITIBANK N.A., FLOR TARRIELA, BIENVENIDO PEREZ, VICTOTICO VARGAS, MANUEL GOMEZ AND FRANCISCO RELLOSA, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedSeptember 21, 2015 which reads as follows:

"G.R. No. 161035 — VICTOR B. VALDEPEÑAS, Petitioner, v. THE HONORABLE COURT OF APPEALS, CITIBANK N.A., FLOR TARRIELA, BIENVENIDO PEREZ, VICTOTICO VARGAS, MANUEL GOMEZ AND FRANCISCO RELLOSA, Respondents.

This case refers to the claim of the petitioner to the differential of his retirement benefits that respondent Citibank, N.A. supposedly denied to him on an erroneous valuation of the fund backstopping the retirement plan for its officers and employees. Although the Labor Arbiter had ruled in his favor, the National Labor Relations Commission (NLRC) reversed the ruling. Ultimately, the Court of Appeals (CA) dismissed the petition for certiorari of the petitioner to assail the reversal by the NLRC.

On December 21, 1971, Citibank N.A. established a Retirement Plan for Officers and Confidential Employees (Retirement Plan) 1 to provide for the retirement, death, disability, and separation benefits of its eligible officers and employees, or their beneficiaries. The Retirement Plan was amended on October 1, 1991 to convert it from a contribution type fund to a benefit type plan. As a result, the Retirement Plan was classified into two funds, namely: Fund A and Fund B.

Fund A consisted of: (a) all cash on hand, on deposit, and on call, including any interest accrued thereon; (b) all bonds, bills and notes and accounts receivable (except accounts receivable representing the amount of the principal of loans extended to the officers and employees); (c) all shares of stocks subscription rights and other securities, including, without limitation, bonds, certificates and notes of the Central Bank of the Philippines owned or contracted for; (d) all stock and cash dividends, or subscriptions receivable that had been declared and were dividends to stockholders of record on or before the date when the net asset value of the Fund was determined; (e) all interests that had accrued on any interest-bearing securities owned by the Fund; and (f) all other property of every kind and nature, including prepaid expenses. 2

It is relevant to mention that in 1974, the Retirement Fund was used to acquire 70% of the capital stock of VAS Realty, Inc. (VAS Realty). 3 Later, VAS Realty purchased two parcels of land with a total area of 21,118 square meters located at the corner of E. de los Santos Avenue and Pioneer Street in Mandaluyong City. 4 In February 1977, VAS Realty leased the property to AHS (Phils) for 22 years ending in June 1999, renewable for another 25 years. 5

On the other hand, Fund B consisted of the unallocated funds that Citibank contributed to the Retirement Fund. 6 cSEDTC

Petitioner Victor B. Valdepeñas (Valdepeñas) joined Citibank in September 1974 as the Head of its Economics Department, 7 and was made a member of the Retirement Committee since then. 8 He opted for early retirement on October 5, 1993 after 19 years of continuous service as a senior officer of Citibank. 9 He was then Vice President and Country Treasurer. 10 Prior to his retirement, the Retirement Plan's investment in VAS Realty had been revalued four times on December 14, 1987, December 20, 1988, December 1989 and September 30, 1991. 11

In May 1994, Citibank paid Valdepeñas his retirement benefits in the gross amount of P5,754,652.13 12 based on the September 30, 1991 valuation of the Retirement Plan's investment in VAS Realty. The September 30, 1991 appraisal valued VAS Realty's property at P115,408,611.42, 13 70% of which, or P80,786,027.99, represented the Retirement Plan's investment. 14

Believing himself to have been shortchanged, Valdepeñas made several demands for the payment of his retirement differential. He claimed that his contingent share in Fund A had been undervalued because the retirement benefits he received were not equivalent to the fair and current value of Fund A as of his retirement on October 5, 1993; that the Retirement Committee was bound to appraise the assets of VAS Realty every two years; that since the last valuation in September 1991, an appraisal should have been scheduled in September 1993, and such appraisal should have been the basis of the computation of his retirement benefits.

Despite his demands, Valdepeñas' claim was denied. The respondents contended that the Board of Trustees had not resolved or approved the revaluation of the assets of the retirement fund in September 1993; and that the valuation of assets made in September 1991, being the most recent and available at the time of his retirement, should be the basis for computing his retirement benefits.

Valdepeñas brought his complaint for payment of his full retirement benefits, damages and attorney's fees in the NLRC. 15

On August 31, 1999, the Labor Arbiter ruled in favor of Valdepeñas, 16 finding that Valdepeñas had been unjustly deprived of his fair and complete retirement benefits under the Retirement Plan; that his contingent share in Fund A should have been computed on the net asset value as of September 20, 1993, the immediately preceding valuation date prior to his retirement on October 5, 1993, instead of on the valuation in 1991; and that to represent the fair and realistic value of the net assets of the fund at the time of his retirement, his unpaid retirement benefits should be based on the valuation made and approved by respondents on March 20, 1994, which had been already available prior to the actual payment of his retirement benefits, 17 to wit:

Year		Value of VAS Realty & land assets in the Book, 70% of
		which is awarded by the Retirement Fund
1994	-	P198,835,536.20	=	70% of P284,050,766.00
1991	-	80,786,508.21	=	70% of P115,408,611.42
		––––––––––––––
		P118,049,508.21	=	amount not considered in the
				computation
		x 2%	=	complainant's contingent share
		––––––––––––––
		P2,360,990.16	=	Retirement benefits differential

 

The ruling of the Labor Arbiter disposed as follows:

WHEREFORE, respondents are ordered to pay complainant the following:

1. P2,360,990.16 representing his unpaid retirement benefits.

2. P3,000,000.00 as and by way of moral damages;

3. P3,000,000.00 as and by way of exemplary damages, and

4. Ten percent (10%) of the total award by way of attorney's fees.

SO ORDERED. 18

The respondents appealed to the NLRC, which promulgated its decision on June 20, 2000, 19 setting aside the ruling of the Labor Arbiter and dismissing the petitioner's complaint for unpaid retirement benefits and damages for lack of merit.

The NLRC denied the petitioner's motion for reconsideration under the resolution promulgated on April 5, 2001. 20

Valdepeñas instituted in the CA his petition for certiorari, asserting that the NLRC thereby committed grave abuse of discretion amounting to lack or excess of its jurisdiction.

As earlier said, the CA dismissed Valdepeñas' petition for certiorari on June 20, 2003; 21 and later on denied his motion for reconsideration on November 28, 2003. 22

In his appeal, Valdepeñas insists that:

I.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT RULED THAT THERE IS A DEARTH OF EVIDENCE ON RECORD TO PROVE THAT THERE WAS A SCHEDULED VALUATION OF THE VAS PROPERTY IN SEPTEMBER 1993.

II.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT RULED THAT THE PROPER VALUATION APPLICABLE TO THE COMPUTATION OF PETITIONER'S RETIREMENT BENEFITS WAS THE SEPTEMBER 1991 VALUATION OF THE VAS PROPERTY IN SPITE OF THE FACT THAT THE SAID VALUATION IS NOT REFLECTIVE OF THE TRUE, REALISTIC, AND FAIR VALUE OF THE PROPERTY AT THE TIME PETITIONER RETIRED ON OCTOBER 5, 1993. SDAaTC

III.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT RULED THAT THE EXECUTIVE LABOR ARBITER A QUO ERRED WHEN HE USED THE MARCH 1994 VALUATION OF VAS PROPERTY IN THE COMPUTATION OF PETITIONER'S RETIREMENT BENEFITS.

IV.

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT BLINDLY ADHERED TO THE CONTENTION OF PRIVATE RESPONDENTS THAT THE CORRECT METHOD IN COMPUTING THE VALUE OF THE VAS PROPERTY IS THE LEASE FEE ESTATE METHOD NOTWITHSTANDING THE OVERWHELMING EVIDENCE ON RECORD WHICH FIRMLY ESTABLISHED THAT THIS METHOD HAS LONG BEEN ABANDONED BY F.F. MIRAVITE, INC.

V.

CONSISTENT WITH THE FOREGOING, THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT AFFIRMED THE FINDINGS OF THE NLRC THAT PETITIONER IS NOT ENTITLED TO MORAL AND EXEMPLARY DAMAGES AS WELL AS ATTORNEY'S FEES. 23

Simply stated, the issue is whether or not Valdepeñas was entitled to recover deficiency retirement benefits and damages.

Ruling

The Court denies the petition for review.

Article 287 of the Labor Code provides that in case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements.

In this case, Valdepeñas' retirement benefits were governed by the Retirement Plan, particularly Article V, Section 2 (a), to wit:

Section 2 — Early Retirement Benefit

Upon early retirement, a Member shall be entitled to a lump sum benefit equal to the sum of: AaCTcI

(a) A percentage of his Fund "A" individual account balance accumulated to the most recent Valuation Date. The percentage payable shall be as follows:

xxx xxx xxx 24

Under Article XI, Section 4 of the Retirement Plan, the net asset value of Fund A should be determined by the Board of Trustees as of the close of business hours on the 20th day of every month unless such day falls on a holiday, in which case the determination should be made as of the close of business hours on the last business day immediately preceding. 25

Valdepeñas asserts that due to the significant appreciation in the value of the VAS Realty properties, the Retirement Committee sought the opinion of F.F. Miravite, Inc., its consulting actuary, regarding the equitable valuation of the Retirement Plan's investment in VAS Realty; that upon the recommendation of the actuary, the Retirement Committee abandoned the lease estate fee method as the basis of the computation of the net asset value of the Fund in favor of the average value over a fixed number of years and application of the present value method; that the Retirement Committee approved the re-appraisal of the VAS Realty property every two years to update its value; and that a September 1993 valuation of the VAS Realty property was decided upon by the Board of Trustees during its meeting on June 10, 1993.

On the other hand, the respondents argue that the determination of when to revalue the VAS Realty property pertained to the Board of Trustees, which, however, did not reach a decision during its June 1993 meeting to revalue the VAS Realty property in September 1993; that the VAS Realty property was revalued only four times, the latest of which was on September 30, 1991; and that the Board of Trustees correctly computed Valdepeñas' retirement benefits based on the latest valuation made in September 1993.

The petitioner's assertions deserve scant consideration.

It is a basic rule in evidence that the parties must prove their respective affirmative allegations. Although technical rules of procedure are not strictly followed in labor cases, this does not mean that the rules on proving one's allegations are entirely ignored. Every party knows that bare allegations are not enough, but must be supported by substantial evidence at the very least. 26

Valdepeñas did not prove that a valuation of the VAS Realty property had been done in September 1993, and such valuation should serve as the basis for the computation of his retirement benefits. The most recent and only available valuation of the Retirement Plan's investment in VAS Realty when Valdepeñas retired on October 5, 1993 was the valuation of September 1991. Moreover, the records did not show that the Retirement Committee was bound or agreed to conduct a valuation of its investment in VAS Realty on September 1993, or every two years for that matter. In fact, the four previous valuations had not been regularly conducted every two years.

We agree with the NLRC's interpretation of Article XI, Section 4 of the Retirement Plan regarding the monthly valuation of the net assets in Fund A, to wit:

. . . Section 4 does not require the retirement committee to determine the FMV of the VAS property on the 20th day of every month. It only provides that the net asset value of Fund A "shall be determined by the Trustees as of the close of business hours on the 20th day of every month" (par. A); that it shall do so "by valuing the assets of Fund A on such date and thereafter subtracting from the amount thus determined the liabilities of Fund A on the same date" (par. B). Evidentially, the terms "net asset value" and "valuing" used in Section 4 are actuarial/accounting terms that have uniquely actuarial and accounting meanings, which do not mean or require a monthly determination of the FMV of real estate properties; that what they mean or require is only for the Retirement Committee to book or assign a value in its books to the VAS property. . . . 27

The minutes of the June 10, 1993 meeting of the Board of Trustees of the Retirement Plan disproved the claim of Valdepeñas that a valuation to be made in September 1993 was approved. At best, the two-year regular valuation, which would commence in September 1993, was a mere proposal that remained as such by the time of his retirement. We quote below pertinent portions of the minutes of the meeting:

VAS Realty

xxx xxx xxx

b. The Board wanted another revaluation after the latest appraisal report done by Cuervo. The amount will be decided in the next meeting after which it will be referred to the actuarian for review and validation.

The effectivity date of the proposed revaluation was discussed at length. One opinion was to make the revaluation on a fixed date, i.e., September 30 this year (or two years after the last revaluation) and every two years thereafter. The other view was to make it effective immediately and every time a "major" fluctuation happens.

Due to lack of consensus, however, no decision was arrived at by the Board. Cuervo will be asked to quote if a monthly review will be affordable to the Fund.

xxx xxx xxx 28 (Emphasis supplied.)

In that regard, the CA correctly observed that:

The Trustees, as administrators, have the power to promulgate rules and regulations to carry out the provisions of the Plan and to settle all questions involving interpretation of the provisions of the Plan and questions of entitlement to benefits among others. In effect, the determination on the frequency of revaluing the VAS property rests on the Trustees' shoulders.

In fact, a perusal of the arguments of both parties will reveal that the VAS property was revalued or re-appraised only four (4) times that on December 14, 1987, December 29, 1988, December 1989 and September 30, 1991. The latter valuation was used as the basis for computing petitioner's retirement benefits during the time of his retirement in October 1993. It even belies the holding of the petitioner in interpreting Section 4, Article XI of the Retirement Plan which, according to him, requires the reappraisal of the VAS property every 20th day of every month.

Anent the contention of petitioner that a revaluation of the VAS property was scheduled on September 1993, we do not subscribe to this view.

In support of this contention, petitioner presented Exhibit 1-VV Subpoena, a November 17, 1988 letter, which according to him established the fact that as of that date the Retirement Committee has approved to have a regular valuation of the VAS properties every two years to update its value. The pertinent portion of the letter is hereby quoted, to wit:

"xxx xxx xxx

Last December 14, 1987, the Committee approved a revaluation on the books of VAS Realty of the land owned by the company from P3.5 million to P5.8 million. The 70% share of the Fund on the appraisal increment translated to an increase in the fund's unit value of around 15 centavos or 1.5 effective January 20, 1988. IT WAS ALSO AGREED THAT THE PROPERTY WILL BE REAPPRAISED EVERY TWO YEARS TO UPDATE ITS VALUE."

Granting arguendo that it was agreed upon by the Retirement Committee to reappraise every two years the value of the VAS property, nowhere in the allegations of petitioner would categorically state that indeed a September 1993 valuation was made.

Petitioner did not even bother to present proof that the Retirement Committee has approved a revaluation of the VAS property in September 1993.

To further buttress petitioner's claim, he presented Mr. Justo A. Ortiz' affidavit, who was then the Chairman of the Retirement Committee. The pertinent portion of Mr. Ortiz affidavit states that:

"xxx xxx xxx

9. In said meeting Mr. Victor B. Valdepenas moved that the Retirement Fund be valuated in June 1993.

10. However, Mr. Dante Santos, another committee member, objected thereto. He noted that it is not proper to conduct a valuation prior to my retirement as the outgoing Chairman. He added that the Committee should not change the valuation date and advance the same from September 1993 to June 1993 out of delicadeza. The Committee might be accused of changing its rules to suit a Committee member. Inasmuch as previously agreed upon in a prior meeting, the June valuation as suggested by Mr. Valdepenas was not pushed through."

A perusal of the allegations of Mr. Ortiz in his affidavit will show that while in June 1993 a meeting was held by the Retirement Committee, the said allegations are bereft of any conclusive proof or indication which categorically show that a September 1993 valuation of the VAS property was conducted. At best, Mr. Ortiz' allegations remain as unproven allegations and could not be considered as evidence. Well-settled is the rule that allegations must be proven by sufficient evidence, mere allegation is not evidence. SDHTEC

Hence, absent any concrete proof that a September 1993 valuation of the VAS property was undertaken, the September 1991 valuation which was decided by the Retirement Committee on January 13, 1992, is the proper valuation applicable to the computation of petitioner's retirement benefits.

xxx xxx xxx

As previously discussed, the application of the September 1991 valuation of the VAS property in computing petitioner's retirement benefits was proper. It follows then that the March 1994 valuation, which was beyond petitioner's retirement date, does not apply to petitioner.

xxx xxx xxx

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit.

SO ORDERED. 29

Under the circumstances, the CA rightly dismissed Valdepeñas' petition for certiorari, and upholding the reversal of the Labor Arbiter by the NLRC. His claim for the differential retirement benefits had no factual and legal bases. Thus, Citibank and its co-respondents did not act without legal and factual bases in denying his claims for the benefits.

WHEREFORE, the Court DENIES the petition for review; AFFIRMS the decision promulgated on June 20, 2003 by the Court of Appeals; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED." PERLAS-BERNABE, J., on official leave; JARDELEZA, J., acting member per S.O. No. 2188 dated September 16, 2015.

Very truly yours,

 

(SGD.) EDGAR O. ARICHETADivision Clerk of Court

 

Footnotes

1. Rollo, pp. 73, 99.

2. Id. at 111.

3. Id. at 21.

4. Id.

5. Id. at 22 and 73.

6. Id. at 108.

7. Id. at 15.

8. Id. at 20.

9. Id. at 29, 409-410.

10. Id. at 9.

11. Id. at 763-764, 953-956.

12. Id. at 29, 409.

13. Id. at 336.

14. Id. at 33, 337.

15. Id. at 88.

16. Id. at 611-632.

17. Id. at 628.

18. Id. at 632.

19. Id. at 758-781.

20. Id. at 817-818.

21. Id. at 72-84; penned by Associate Justice Eugenio S. Labitoria (retired), with Associate Justice Andres B. Reyes, Jr. (now the Presiding Justice) and Associate Justice Regalado E. Maambong (retired/deceased) concurring.

22. Id. at 86.

23. Id. at 13-14.

24. Id. at 104.

25. Id. at 111.

26. Mcleod v. National Labor Relations Commission, G.R. No. 146667, January 23, 2007, 512 SCRA 222, 245.

27. Rollo, p. 774.

28. Id. at 339.

29. Id. at 78-84.