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Free Play Arcade Sued by Landlord Over Lease 'Impossible to Honor'

A custom-made pinball machine called Denton Heat that's based on Gottlieb's Hollywood Heat sits in the now former location of Free Play Arcade's franchise in Denton.EXPAND
A custom-made pinball machine called Denton Heat that's based on Gottlieb's Hollywood Heat sits in the now former location of Free Play Arcade's franchise in Denton.
Corey Hyden

Things seemed to be slowly turning around for Free Play Arcade, the North Texas video game arcade chain.

The company reopened all of its four locations across Dallas-Fort Worth with new safety guidelines such as  mask requirements and occupancy limits, and were able hire back some of the staff that had to be furloughed at the start of the pandemic.

Then, in July, the company announced on its Facebook page that it would have to indefinitely close its Denton location just three days after it opened.

Corey Hyden, the owner and founder of Free Play Arcade, says the problem with Denton wasn't just the pandemic. He was also having trouble coming to a viable legal agreement with Denton Hickory Street, the landlord company that owns the now empty building on West Hickory Street.

"It's definitely just another hassle or another problem during this pandemic for the company," Hyden says.

Now, Hyden's company is facing a lawsuit that's seeking up to $100,000 in damages over its Denton lease. Denton Hickory Street filed a lawsuit against Hyden and his arcade chain company in a Denton County district court in late August, according to court records.

The lawsuit alleges that Hyden's company breached its contract when it moved out of the Denton building in late July and defaulted on its lease.

Hyden denies the landlord's claims. He says the coronavirus pandemic that started business closures across the country in March nullifies their lease causing a "frustration of purpose," a legal term for an unforeseen event that causes an unavoidable contract breach.

"We informed them that even though we were shut down by the government, we couldn't meet our rent obligations and we'd have to work something out," Hyden says. "As the first few weeks turned into a couple of months, we were saying to the landlord that this may take a while."

Hyden says at first it appeared that his Denton landlord could come to some kind of agreement after the state forced him to shut down all of his arcade locations across DFW. However, the deal and negotiations were not settled by July, when Free Play Denton would have to close for a second time due to issues with the landlord. 

Free Play Arcade's Denton location on West Hickory Street closed permanently in July just three days after it reopened.
Free Play Arcade's Denton location on West Hickory Street closed permanently in July just three days after it reopened.
Corey Hyden

"The landlord is unwilling to work out a deal and honestly, we thought we had a deal and then they sent a brand new deal that was totally impossible," he says. "It was a totally different negotiation for the last three or four weeks. Then I thought the landlord doesn't care about having us there or he's going to try and sue us or evict us."

Free Play Denton's lease required the company to remain open seven days a week, an obligation that Hyden says he couldn't meet during the first statewide shutdown and became more difficult as they tried to negotiate a new lease for its reopening.

The Denton space is also considerably smaller than its other arcade locations and socially distancing requirements would make it even more difficult to keep the place and the lease financially viable.

"Their defense is towards honoring the contract," Hyden says. "If a contract is impossible to honor, the contract is void."

Hyden also alleges the landlord is in breach of its own agreement "because they can't give us a place where we can be open seven days a week."

"We have deals at every other single location and the landlords are good and understanding and saw some value in us," Hyden says. "We want to work something new out and make sure we can survive. To me, it doesn't make a lot of sense where the landlord puts a tenant in a position where they can't pay especially during a pandemic.

"The landlord, in my opinion, couldn't get out of their own way in forcing us to leave the space," Hyden adds.

Hyden says he's confident he can overcome his company's latest legal hurdle.

"The good thing is before I was running Free Play," he says, "I was a cutthroat litigator."

Attempts were made to reach a representative of Denton Hickory Street but no one could be reached for comment. 

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