G.R. No. 230527 , June 14, 2021
Pacific Ocean Manning, Inc., Barker Hill Enterprises, S.A., and Elmer Pulumbarit, Petitioners, vs. Feliciano M. Castillo, Respondent.

FACTS

Respondent Feliciano M. Castillo was hired as a fitter by petitioner Pacific Ocean Manning, Inc. for its foreign principal, Barker Hill Enterprises, S.A. He boarded the vessel MT Tequila on May 9, 2012. On October 25, 2012, he consulted the on-board doctor due to pain in his right knee and was diagnosed with “Damage of the Meniscus of the Right Knee.” He was repatriated on October 28, 2012. Upon arrival, he was referred to company-designated physicians who diagnosed him with chondromalacia patella, right or patellofemoral syndrome. He underwent treatment and follow-up consultations. On March 27, 2013, Castillo consulted a personally-appointed physician, Dr. Manuel Magtira, who issued a medical report stating he was unfit for sea duties with a partial permanent disability rating of Grade 10. On April 11, 2013, the company-designated physician, Dr. Fidel Chua, issued an interim disability assessment of Grade 10. On May 8, 2013, Dr. Chua declared Castillo’s condition work-related with a final disability rating of Grade 10. Castillo had further check-ups until August 2, 2013, when his physiotherapy was stopped. On October 2, 2013, Castillo consulted another personally-appointed physician, Dr. Venancio Garduce, who gave a disability rating of Grade 6. Castillo filed a complaint for total and permanent disability compensation. The parties agreed to refer Castillo to a third and independent physician, Dr. Edsel Arandia, who diagnosed him with valgus knee 2° to moderate-severe degenerative osteoarthritis, declared him unfit to work as a seafarer, and gave a disability rating of Grade 7. Petitioners offered to pay US$20,900.00 (Grade 7 under the POEA-SEC), but Castillo refused. The Labor Arbiter granted Castillo total and permanent disability compensation of US$93,154.00 under the CBA. The NLRC reversed this, awarding only Grade 7 disability compensation. The Court of Appeals reinstated the Labor Arbiter’s decision. Petitioners filed the instant Petition for Review.

ISSUE

Whether the Court of Appeals correctly ruled that Castillo is entitled to the full amount of total and permanent disability compensation under the CBA and attorney’s fees.

RULING

No. The Petition is partially granted. The Supreme Court ruled that the third doctor’s finding of Grade 7 disability is final and binding on the parties pursuant to Section 20(A)(3) of the POEA-SEC. The medical report of the third doctor, Dr. Arandia, which gave a Grade 7 rating and declared Castillo “unfit to work as a seaman,” must be upheld in its entirety. The declaration of unfitness does not automatically convert a partial permanent disability into a total and permanent one; the disability rating provided by the third doctor controls. Furthermore, Castillo is not entitled to the higher disability benefits under the CBA for injury due to an accident. The claim that his injury resulted from bumping his knee on a stair was not substantiated by evidence and was a mere afterthought, as it was not reported in the medical records or initially alleged in his Position Paper. However, the award of attorney’s fees is proper as Castillo was compelled to litigate to recover his disability benefits. The NLRC decision is reinstated with modification: petitioners are solidarily liable to pay Castillo partial permanent disability compensation of US$20,900.00 and attorney’s fees of US$2,090.00.