When is a Forum Shopping Certificate Required for Counterclaims in the Philippines?

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TLDR: This case clarifies that while initiatory pleadings like original complaints and permissive counterclaims require a certificate of non-forum shopping, compulsory counterclaims, which arise from the original claim, generally do not need a separate certificate for claims intrinsically linked to the main case. However, claims for damages in the counterclaim, being considered independent, may still require certification. Understanding this distinction is crucial to avoid procedural dismissals and ensure efficient litigation.

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[G.R. No. 129718, August 17, 1998] SANTO TOMAS UNIVERSITY HOSPITAL VS. CESAR ANTONIO Y. SURLA AND EVANGELINE SURLA

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Introduction

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Imagine a scenario where a hospital, facing a lawsuit for alleged negligence, includes a counterclaim for unpaid medical bills in its answer. Suddenly, this counterclaim is dismissed, not because of its merits, but due to a procedural technicality – the lack of a certificate of non-forum shopping. This was the predicament faced by Santo Tomas University Hospital in this landmark case, highlighting a critical aspect of Philippine civil procedure: when exactly is a certificate of non-forum shopping required for counterclaims?

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This case arose from a complaint filed by the Surlas against Santo Tomas University Hospital for damages, alleging negligence when their premature baby fell from an incubator. In response, the hospital filed an Answer with a counterclaim, seeking to recover unpaid hospital bills and damages for what they deemed a malicious lawsuit. The trial court dismissed the hospital’s entire counterclaim because it was not accompanied by a certificate of non-forum shopping, a requirement under Administrative Circular No. 04-94. This decision, upheld by the Court of Appeals initially, was eventually challenged before the Supreme Court, leading to a crucial clarification of the rules on forum shopping and counterclaims.

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The Legal Landscape: Forum Shopping and Administrative Circular 04-94

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Forum shopping, in Philippine legal practice, is the unethical tactic of litigants who initiate multiple suits in different courts or tribunals, hoping to secure a favorable judgment in one while disregarding unfavorable rulings in others. To combat this abuse and ensure judicial efficiency, the Supreme Court issued Administrative Circular No. 04-94. This circular mandates that complaints and other “initiatory pleadings” must be accompanied by a sworn certification stating that the party has not filed similar cases elsewhere.

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The circular explicitly lists “counterclaim” as an initiatory pleading requiring this certification. However, the circular does not differentiate between types of counterclaims. This is where the crux of the legal issue in the Santo Tomas University Hospital case lies. Are all counterclaims, whether compulsory or permissive, subject to the forum shopping certification requirement?

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Administrative Circular No. 04-94 states:

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“The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint, counterclaim, cross-claim third (fourth, etc.) – party complaint or complaint-in-intervention, petition, or application wherein a party asserts his claim for relief.”

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This provision seems straightforward, including