Colony United Business Brokers, Inc. v. Price

THIS OPINION HAS NO
PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY
PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Colony United
Business Brokers, Inc., Respondent,

v.

Sue Price DBA
Danny's Party Shop, AKA Danny's Party Store, Appellant.

Appeal From Richland County

 L. Casey Manning, Circuit Court Judge

Unpublished Opinion No.  2008-UP-713

Heard December 3, 2008 – Filed December
16, 2008

REVERSED

Hammond A.
Beale, Jr., of Columbia, for Appellant.

James W. Poag, Jr.,  of Columbia, for Respondent.

PER CURIAM:  Sue
Price (Seller) appeals the trial court’s decision to affirm an arbitration
award.  We reverse. 

FACTS

Seller entered into a listing agreement (the Agreement) with
Colony United Brokers (Agent) for the sale of her business, Danny’s Package
Store, which also did business as Danny’s Party Store.  Pursuant to the
Agreement, Agent was required to find a purchaser for Seller’s business.  In
return, Seller agreed to pay Agent ten percent of the purchase price. 

Agent procured Thomas Gill (Buyer) to purchase the
business.  Agent facilitated appointments between Seller and Buyer, and on
September 11, 2003, Buyer made an offer of $95,000 to purchase the business.  A
few days later Seller made a counteroffer of $97,500, which Buyer accepted.  However,
Buyer and Seller were unable to close the deal. 

Agent sought its commission from Seller, but Seller
refused.  Seller maintained she mailed a letter to Agent terminating the
Agreement prior to Agent procuring Buyer.  Agent argued it never received the
letter.  Consequently, Agent instituted an arbitration action with the American
Arbitration Association (the AAA) to resolve the disagreement.  Seller objected
to the jurisdiction of the AAA on the grounds that an arbitration agreement did
not exist between the parties. 

Arbitration was conducted by the AAA.  The arbitrator found
for Agent and concluded there was a contract between Agent and Seller and
Seller had breached this contract.  Additionally, the arbitrator awarded Agent
its commission along with attorney’s fees.  Seller, through her attorney filed
a motion to vacate the arbitration award.  The trial court affirmed the
arbitration award and granted judgment in favor of Agent.  This appeal follows.

STANDARD
OF REVIEW

Determinations of
arbitrability are subject to de novo review.  MBNA Am. Bank v. Christianson,
377 S.C. 210, 213, 659 S.E.2d 209, 211 (Ct. App. 2008).   However, a circuit
court’s factual findings will not be reversed on appeal if there is any
evidence reasonably supporting the findings.  Id.

LAW/ANALYSIS

An
arbitrator does not have jurisdiction to enter an arbitration award in favor of
one party if the opposing party disputes the existence of an agreement to
arbitrate.  Id. at 215, 659 S.E.2d at 212.  In such a case, it is the
responsibility of the party desiring arbitration to petition the trial court to
compel arbitration because it is the duty of the courts rather than the
arbitrator to determine whether such an agreement exists.  Id. 

In
the present case, Agent instituted an arbitration action with the AAA to
arbitrate the issue of whether it was owed commission for producing Buyer.  In
response, Seller objected to the jurisdiction of the AAA “on the ground that
there [was] no existing arbitration agreement between the parties.”  At this
point, the AAA was without jurisdiction to enter an arbitration award because
Seller had objected on the grounds that an arbitration agreement did not exist
between the parties.  As such, the AAA did not have the authority to enter the
award, and the trial court committed reversible error when it did not grant the
motion to vacate the arbitration award.  See Simpson v. MSA of Myrtle
Beach, Inc., 373 S.C. 14, 23-24, 644 S.E.2d 663, 667-68 (2007) (stating if
one party denies the existence of an arbitration agreement a court must
immediately determine whether the agreement exists in the first place); MBNA
Am. Bank, 377 S.C. at 214-15, 659 S.E.2d at 211-12 (holding the arbitrator
lacked jurisdiction to enter an arbitration award in favor of a bank and
against a credit card holder once the card holder disputed the existence of an
agreement to arbitrate and the bank failed to petition the trial court to
compel arbitration).

Interestingly,
neither party raised the jurisdictional issue.  However, “lack of subject matter
jurisdiction can be raised at any time, can be raised for the
first time on appeal, and can be raised sua sponte by the court.”  Nix v. Columbia Staffing Inc., 322 S.C. 277, 280, 471 S.E.2d 718, 719
(Ct. App. 1996).  Moreover, the parties may not consent to subject matter
jurisdiction.  Talnall v. Gardner, 350 S.C. 135, 137, 564 S.E.2d 377,
378 (Ct. App. 2002).  Thus, it is proper for this Court to consider this issue.

CONCLUSION

Accordingly,
the circuit court’s decision is

REVERSED.

WILLIAMS and GEATHERS, JJ., and CURETON, A.J.,
concur.