Dk Arena, Inc. v. Eb Acquisitions I, LLC

112 So.3d 85 (2013)

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Nature of the Case

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Facts

EB (D) entered into a written contract with P to purchase a property for $23 million. D had to place an initial deposit of $1 million into an escrow account. The contract also called for a due diligence period of sixty days from the date of the contract's signing. D was permitted to conduct any inspections of the property it deemed necessary. If D gave notice of cancellation during those 60 days, the contract called for the return of D's deposit. Closing was to occur within thirty days of the expiration of the due diligence period. Any modifications to the contract would 'not be binding unless in writing, signed and delivered by the party to be bound.' An addendum to the contract clarified that D was permitted to terminate the agreement at any time during the due diligence period and stated that if D did not give notice of termination within the sixty-day period, the deposit would be released to P. D and 'and its principal, Mr. Don King,' were required to participate in the process of seeking local government approval for D's development project and to participate in the project's marketing and promotion. Almost immediately upon signing D offered a partnership agreement with P. On September 13, 2004, the parties executed a written amendment to the contract extending the due diligence period by fourteen days. The parties worked out the key terms of the partnership agreement, which D said King agreed to. In his own testimony, King disputed d's claim that he agreed to the joint venture, explaining that while he listened to D's proposal and passed it on to his lawyers for review, he never agreed to it. The day the extended due diligence period was to expire, the parties and their respective attorneys met at King's office. According to D, P agreed to hold the due diligence period in indefinite 'abeyance' until the joint venture agreement could be completed. P asserted that while he agreed to an extension of the due diligence period, the extension was limited to one week and the deposit was to be due on October 11 unless D canceled the contract before that date. The parties failed to make any written memorandum of the alleged agreement. P and D attended a meeting of the Mangonia Park Town Council. A future meeting was set for October 26. P failed to attend the October 26 town council meeting. P sued D for the release of the deposit. D counterclaimed for breach of contract, breach of an oral joint venture agreement, and breach of fiduciary duty. The trial court issued a finding in favor of Don all claims. The trial court held that a written contract may be modified by an oral agreement if the parties have accepted and acted upon the oral agreement in a manner that would work a fraud on either party to refuse to enforce it. The trial court held that P's failure to attend the town council meeting on October 26 constituted a breach of P's obligations under the contract. The trial court concluded that the understanding reached by the parties at the October 4 meeting resulted in the creation of an oral joint venture agreement, which entailed, at minimum, a duty to deal 'in good faith to conclude modified partnership documents containing the final details of the partnership.' It awarded D an additional $500,000 in damages. On appeal, the court held that D was entitled to the return of the escrow deposit. It held there was insufficient evidence to support the trial court's conclusion, stating: 'At best, P and D had an 'agreement to agree' on a joint venture in the future, which does not give rise to a contract that entitles a party to recover damages for breach.' P appealed.