FUN FACTORY'S FUTURE TO BE DECIDED IN APPEALS COURT

The fate of the Fun Factory is in the hands of three judges.

Missouri's Eastern District Court of Appeals heard attorneys' arguments Tuesday regarding a lawsuit that the owner of the Cape Girardeau entertainment center has said will put him out of business.

K's Merchandise won its original lawsuit last August when it said the Fun Factory violated a restrictive easement agreement. The 1988 restrictive easement stipulates that several types of enterprises, including businesses with video games and pool tables, could not operate on a large tract of land where K's Merchandise owns the central parcel.

The three-judge panel convened Tuesday at the Common Pleas Courthouse to hear several cases originating in Cape Girardeau County, including the appeal by the Fun Factory and developer Sandy Donley, formerly Sandy McLane.

Numerous prohibitions in the restrictive easement were not intended to block a business like the Fun Factory, which caters to children and families, attorney Daniel Finch said.

K's Merchandise, which bought its property in 1996, is trying to preserve the integrity of the easement, attorney Steven Hamburg said. The company believes that preservation of the easement makes it more likely that a national retailer would be attracted to build on the quarter-mile length of land that separates K's Merchandise from the Fun Factory.

"Good or bad, that's their reservation against the Fun Factory," Hamburg said.

The property's history has not encouraged retail growth, Finch told the judges. Two projects envisioning an expensive strip mall and a shopping mall failed to materialize, and the central business in the original easement, Central Hardware Co., went bankrupt, he said.

Finch also said that the term "amusement center" is broad and hard to define. Judge Richard Teitelman said he found it hard to see much difference between an "amusement center" and a "fun factory."

Judge James Dowd questioned the intention behind the exhaustive list of excluded operations in the restrictive easement. Finch noted the only person still living to sign the agreement, Charles Blattner of Cape Girardeau, had told the trial court that the Fun Factory was not the type of business property owners intended to stop.

Hamburg contended that developer Donley, who leased the property to Fun Factory, should have been aware of the easement since she had signed a consent decree in 1996 acknowledging the easement.

Hamburg asked the judges to dismiss the appeal, as frivolous.

Fun Factory owner Marion Williams of Olive Branch, Ill., filed a lawsuit against Donley in January contending that she should have made him aware of the restrictive easement. The suit is scheduled for trial before Cape Girardeau Judge John Grimm on Aug. 22.

Finch, who represents Donley, filed a countersuit asking for more than $37,000 in unpaid real estate taxes, property maintenance fees and rent.