Florida Supreme Court Watch: DK Arena, Inc. v. EB Acquisitions, LLC
By Kluger Kaplan April 9, 2013
This week, Todd Levine comments on the recent Supreme Court case of DK Arena, Inc. v. EB Acquisitions, LLC.
On March 28, the Florida Supreme Court issued an opinion in DK Arena, Inc. v. EB Acquisitions, LLC, which upheld the Statute of Frauds in the face of a claim of equitable estoppel. My colleague, Alan Kluger, previously blogged about a Third District court of Appeals decision, LaRue v. Kalex Construction Development, Inc., et. al., that tackled a similar issue.
In that case, the Third held that the Statute of Frauds barred plaintiff’s claim despite her argument that she fully performed under the contract. In this case, EB Acquisitions entered into an agreement to purchase real estate from Don King. The agreement called for a $1 million deposit by EB and contained strict due diligence periods. After the due diligence period expired, DK Arena was to receive the deposit. The contract required all modifications to be in writing. As the parties began due diligence, they discussed entering into a joint venture with Don King. EB claims that King agreed verbally to extend the diligence period to negotiate a joint venture agreement. Nothing was ever memorialized in writing and after the due diligence period expired, King demanded disbursement of the deposit.
At trial, EB argued that although the agreement was not put in writing, it detrimentally relied on the oral promise to extend the due diligence period. While the trial court and Fourth DCA agreed, the Florida Supreme Court did not. On appeal, the highest Court held that “the doctrine of promissory estoppel cannot be used to circumvent the statute of frauds.” While the Court did leave open the doctrine of waiver, because a party may voluntarily waive a contractual right. Let this holding serve as a cautionary tale to be sure to put modifications in writing in order to memorialize it. The Statute of Frauds is alive and well in Florida and will be enforced by the courts if contractual obligations that should be reduced to writing are instead made orally in less formal meetings or other conversations.