I was sitting here watching Gremlins with my roommate and we where talking about all the crazy movies we have seen this one came up but I couldn't remember the name either. But what triggered this memory of the movie was the lady that played the b*tch in the movie gremlins. She also played the mom of the 'kid in a can' or Konrad.
I searched the lady in gramlins on IMDB and went through all her 80's films and found this. The hyper link keep messing up the address so just cut and paste
http://www.imdb.com/title/tt0167240/
The move is called "Konrad" it was made in 1985, now both of our minds can be put to rest.