DK Arena, Inc. v. EB Acquisitions I, LLC

Celebrity boxing promoter Don King owned a corporation, DK Arena, Inc. (DK) (plaintiff). DK entered into a written contract to sell a piece of Florida property to EB Acquisitions I, LLC (EB) (defendant) for $23 million, with EB putting $1 million into escrow as a down payment. Under the contract, EB had 60 days to perform due diligence and potentially cancel the sale. If EB did not cancel the sale by the end of the due-diligence period, then EB agreed to release the $1 million down payment to DK, and the parties would work to close on the sale. During the initial due-diligence period, the parties signed a written agreement extending the due-diligence period for an additional 14 days to October 4. On October 4, the parties met to discuss the possibility of King joining with EB to develop the property as a joint venture. No agreement of any sort was put in writing during this meeting. EB later claimed that the parties had agreed to extend the due-diligence period indefinitely to work on a joint-venture agreement. King claimed that he had never agreed to the joint venture or an indefinite extension, but rather that he had agreed only to an additional one-week extension of the due-diligence period. One week went by and EB did not cancel the sale or release the $1 million to DK. DK sued EB for breach of the sale contract. The trial court found that, on October 4, the parties had verbally agreed to extend the due-diligence period indefinitely. The trial court also found that, even though the statute of frauds required a real estate extension to be in writing, the doctrine of promissory estoppel was an exception to the statute of frauds and estopped DK from denying this verbal extension. DK appealed.