The long-running dispute between Rick Olivieri and the Reading Terminal Market management ended late this morning with a settlement that gives Olivieri until Oct. 31 to vacate the space where his family business has been since 1982.

A tearful Olivieri said after the Common Pleas Court hearing that he felt compelled to settle to escape legal fees and penalties totaling more than $700,000.

Olivieri said he would stay in business, adding that he was looking at several spots to relocate Rick's Original Philly Steaks.

Olivieri broke down in tears several times as he spoke with reporters.

"It's not so much for myself, it's my employees, some of them have been with me 20 years," he said. "They're like a family."

A spokesman for the Reading Terminal management, Kevin Feeley, disputed Olivieri's claim that the eviction was retaliation for Olivieri's work as head of the merchants' group.

"It's a convenient story line but that's not the way it happened," said Feeley.

He said the market would begin now looking for someone to replace Olivieri. At one time, management said they were going to bring Tony Luke's to the market.

Luke, however, took himself out of the running until after the legal dispute with Olivieri was resolved.

The steak shop's lease at Reading Terminal Market expired last July, but Rick's has kept cooking there after filing legal challenges.

This morning, Olivieri, his attorneys and market representatives mett before Judge Mark I. Bernstein.

Attorneys for both sides spent most of the morning shuttling between separate rooms working on the terms of the settlement.

Olivieri earlier this morning had indicated the judge would try steer the parties toward a settlement.

"Hopefully, we can work something out," Olivieri, 43, said.

Last month, the judge ruled that the market had the right to evict Rick's and collect punitive damages for its overstaying the lease.

In February, Bernstein pruned away all but one of Olivieri's original 11 counts. The remaining count concerns whether Olivieri deserves compensation for renovations done after what he said was an oral promise of a new lease.

"I was guaranteed a lease," Olivieri said this morning. "I was told I was getting a lease."

Olivieri, part of the third generation of the South Philadelphia family that claims to have invented the steak sandwich, said Rick's opened in 1982 when "it rained more inside the Reading Terminal Market than it rained outside," so sawdust was scattered on the floor.

He has investigated new locations, in case he does have to leave.

"We're looking," he said, "but it's very difficult to find a place that's not already saturated with cheesesteaks."

He has said that officials at Reading Terminal Market Corp., the nonprofit that operates the historic farmer's market below the old train shed, retaliated against him after years of tough negotiations on a new general lease for the market's 70-plus retailers. Olivieri was then president of the market merchants association.

Market officials have said retaliation had nothing to do with it. They say Olivieri is now a squatter and that they assumed he was not interested in a new lease because he objected to some terms.

The protracted dispute became public early last July when the market announced that Olivieri would be replaced by Tony Luke, a South Philadelphia restaurateur who built a national reputation on roast pork sandwiches.

Seeking to avoid the controversy, Tony Luke bowed out until the fight was settled. Lawsuits were filed and since then an uneasy stalemate has settled over the market floor as both sides waited for trial.

Contact staff writer Joseph A. Slobodzian at 215-854-2985 or jslobodzian@phillynews.com.