McKeesport diner owner's lease dispute goes to court
The terms of a verbal lease agreement may decide the fate of Di's Kornerstone Diner as it prepares to relocate so that a Speedway fueling station can take over the lot in McKeesport.
Magisterial District Judge Eugene Riazzi said he will decide within five days whether to evict owner Diane Elias from her restaurant at 2325 Fifth Ave. or allow her to remain in business for the duration of a 2013 verbal contract with former property owner Harry R. Stewart.
Stewart, who sold the lot to Speedway LLC on Jan. 16, was not present for Monday's hearing, when Elias and cook Anita Gallaway dueled with Speedway real estate representative Bob Grieves on the witness stand.
Elias and Gallaway maintained that Elias took over a 2000 lease established between Stewart and former Kornerstone Diner owner Pat Kmetz. While Elias took over in May 2005, the original lease operated on a January through December calendar year.
Speedway attorney Jeffrey B. Balicki contended that Elias' agreement was a new verbal lease because Kmetz's lease was terminated and Elias did not assume the $38,000 debt Kmetz owed to Stewart in unpaid rent.
“No one ever paid the bills there. The place was a wreck,” Elias recalled. She agreed to take over Kmetz's lease and operate the diner rent-free for several months while making repairs to the building and property. She began paying Stewart Kmetz's scheduled $2,500 monthly payment in August 2005.
Gallaway, a partner in Kmetz's business who stayed on to work with Elias, said she worked daily without knowing the diner's financial status until Stewart stormed in demanding money in May 2005.
“He came in and told (Kmetz) she had to be out unless she gave him $10,000,” Gallaway said. “That's when I found out she wasn't paying the rent and she was $38,000 behind.”
Speedway documents acknowledge a year-to-year verbal lease between Elias and Stewart that ended in May 2013. While Elias was not legally required to dispute dates within the paperwork, Balicki said a response would be expected.
“Speedway ordered the issuance of a notice of non-renewal (of that lease),” Grieves said. “My understanding is that this communicates to Diane Elias that Speedway would not offer a renewal of her lease.”
Elias, who plans to relocate to a former Burger King building in Olympia Shopping Center, said she is not asking for a renewal under the lease cycle as she understands it. She said she hopes to have the new location open by October, three months before the full-calendar-year lease agreement ends.
Speedway, a subsidiary of Marathon Petroleum Co., approached McKeesport council in December 2012 for a public hearing on its plans to develop a 3,900-square-foot convenience store accompanied by six dispensers with 12 fueling lanes on the current Di's Kornerstone Diner site.
Elias' attorney Jessica Crown said that was the first time Speedway's plans were made public, allowing Elias to pursue options for relocating her business. Negotiations between Speedway and Stewart, she alleged, began in January 2012 with no regard for the business owner's interests.
“It's terrible what they do,” Elias said. “They're bullies — big oil companies. It's not like I'm not going. I'm just asking for four months.”
Elias said she is not interested in a financial settlement.
“I don't want their money,” she said. “I need time. I don't want to hurt my business. I worked hard to keep this place open.”
Looking at a packed dining room during Sunday breakfast hours, Elias said the issue is about more than just a diner.
“This is the community's diner,” she said. “All these people are my friends, my family. What about my customers? What about my employees?”
Waitress Cyndi James, who worked at the diner under three owners including Elias, said she can't be without work during the next four months.
“I've been here 15 years,” James said. “This is my routine. I'm here at 6:30 a.m. six days a week. It's probably seven because I'm here for breakfast on my day off.”
Terry Mooney, a customer who is retired from a legal career, told Elias she has a lot of legal ground attached to her verbal lease agreement.
“Four months is going to mean very little to a conglomerate like Marathon Oil,” Mooney said. “That's an international corporation. If they are going to push her out, they're just showing their power.”
Jennifer R. Vertullo is a staff writer for Trib Total Media. She can be reached at 412-664-9161, ext. 1956, or firstname.lastname@example.org.