Colony United Business Brokers, Inc. v. Price ( 2008 )

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.

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Appeal From Richland County
L. Casey Manning, Circuit Court Judge

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Unpublished Opinion No.  2008-UP-713
Heard December 3, 2008 – Filed December 16, 2008

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REVERSED

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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.