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Meehan v. PNC Financial Services Group, Inc.

United States District Court, E.D. Missouri, Eastern Division

June 12, 2019




         This matter is before the Court[1] on Defendant PNC Financial Services Group, Inc.'s (“PNC”) motion for summary judgment on the action for wrongful discharge in violation of public policy filed by Plaintiff Joseph Meehan. [ECF No. 49] Meehan opposes the motion. [ECF No. 62] For the reasons set forth below, the Court grants the motion.

         I. Background

         The record establishes the following facts, which are undisputed, except as noted: Meehan, a state-certified general appraiser, began working as an appraisal reviewer for National City Bank in 2004. [ECF No. 63 at ¶¶ 2, 3] PNC acquired National City Bank in 2009, and Meehan transitioned to PNC's Real Estate Valuation Services (REVS) Group. [Id. at ¶¶ 5, 17]

         PNC's REVS Group consisted of two teams - the procurement team and review team - which served “as a system of checks and balances to avoid any improper indication of bias in the real estate valuation process.” [Id. at ¶ 18] The procurement team ordered real estate appraisals from a list of approved, third-party certified appraisers and managed the process from beginning to end, utilizing the review team at a certain point in the process before final submission. [Id. at ¶ 19] The review team was solely responsible for reviewing appraisals to ensure compliance with federal regulations and the Uniform Standards of Professional Appraisal Practice (USPAP).[2] [Id. at ¶ 20] Meehan was an appraisal reviewer and member of the review team until he was discharged on October 20, 2015.

         Meehan's job as an appraisal reviewer was to “ensure that the appraisal report, ” completed by the third-party appraiser, “conforms to the regulations, USPAP, and [PNC] Policy and provides a reasonable opinion(s) of value.” [Id. at ¶ 27 (quoting REVS Commercial Real Estate Procedure Guide)] Upon completion of an appraisal review, an appraisal reviewer could: (1) accept the appraisal report; (2) address concerns with the appraiser; or (3) reject the report. [Id. at ¶ 28] If the appraisal reviewer accepted an appraiser's report, a supervising appraiser from the procurement group would review the report, “so that there is another check in the process to ensure that ‘all the things that were necessary to be addressed were addressed.'” [Id. at ¶ 31; see also ECF No. 64-2 at 10, 19, 37]

         In his petition, Meehan alleged that “PNC supervisors would routinely require him to ignore [state, federal, and professional licensing] standards when reviewing appraisals” and his “refusal to do so contributed to his termination.” [ECF No. 4 at ¶ 13] For example, Meehan claimed that, in January and April 2011, PNC “removed” Meehan from appraisal reviews after he “expressed serious concerns” about one appraisal and “refused to approve” another.[3] [ECF No. 64 at ¶¶ 7-8, 10]

         In September 2015, PNC assigned Meehan to review the appraisals of two childcare properties in New Jersey. [ECF No. 63 at ¶ 71] According to Meehan, the appraisals were deficient “because the appraiser did not address or identify the licensed capacity of the facilit[ies] as regulated and authorized by the State of New Jersey, nor did he apply the most appropriate and recognized methodology for analyzing the market value, price per licensed child.” [ECF No. 4 at ¶ 14] At Meehan's direction, the appraiser revised the appraisals, calculating the properties' values based on price per licensed child, as opposed to price per square foot, which lowered the property valuations from $5.8 million to $5.4 million and $2.1 million to $1.9 million, respectively. [Id. at ¶¶ 14-15]

         Diana Pockar, PNC's supervisory appraiser, questioned the revised appraisals for the daycare facilities. [ECF No. 51-14] Pockar explained her concerns to Meehan in an email dated October 15, 2015, stating:

I was thinking more about this report over the last day and actually called the vendors based on our conversation last evening…that properties in this market do not sell on a per child license basis. I am concerned that the valuation is not significantly supported, as the analysis appears to not be supported.
…This is a strong market and I am afraid that if the appraiser's [sic] have not seen analysis like this, ever, it is just not credible. I am not able to get my arms around it entirely, but was just thinking, what if the number of licenses change, either for the property or the comparables, the value is a moving target. Do the licenses get issued to the business or do they run with the real estate? One of the comps, page 50 states that the property is licensed for 457 children, but rent is based on actual enrollment, which we know can change at any time.

[Id. at 3-4] Based on these considerations, Pockar “suggest[ed]” Meehan “revert back to the original analysis and accept the basis for which the appraisers originally concluded.” [Id. at 3] She concluded her email: “Please let me know if we have your approval to just go back to the original analysis, which is what was completed last year.” [Id. at 4]

         Meehan “continued to push back” [ECF No. 4 at ¶ 16], responding that “[t]he [relationship manager] is OK with the lower value” and reiterating his position that licensed capacity was the proper basis for valuing childcare facilities. [ECF No. 51-14 at 2-3] The next day, Meehan learned that one of the daycare properties had been reassigned to Paul Higgins, the appraisal review team's supervisory manager, for “a second review[.]” [ECF No. 64-12 at 32] Higgins completed another appraisal review, in which he mentioned that PNC had considered and rejected a price per licensed student sales comparison approach:

An additional sales comparable analysis based on a sale price per licensed child in addition to sales price per square foot of GBA was initially requested during the review process. However, this analysis was later determined not necessary to fill the evaluation requirement of this request. In addition, the sale price per licensed child did not consider the mix of infant, toddler, or preschool day care, nor did it have credible impact on the value conclusion. The appraisal as currently presented adequately supports the value conclusion.

[Id. at 29] The final appraisal report did not include the price per student analysis recommended by Meehan. [ECF Nos. 51-1 at 43; 64-12 at 49-131] At his deposition, Meehan testified that while he could have reported ethical concerns to his superiors in the REVS Group and/or PNC's ethics department, [4] he did not do so. [Id. at 13, 23]

         The record reflects that, in the months preceding Meehan's termination, the REVS Group experienced a decreased volume of appraisals and, in August 2015, Meehan's supervisor mentioned to Meehan the possibility of a reduction in force, or work restructuring plan (“WRP”). [ECF No. 63 at ¶¶ 77-78] Adam Barone, the senior vice president responsible for managing the REVS Group, and Jeff Mazur, the review team's manager, together with PNC's human resources department, “reviewed the work volume and looked at the staffing that we had and came away with an understanding that we no longer needed three positions, ” specifically two REVS specialist positions and a part-time administrative position. [ECF Nos. 64-2 at 29; 63 at ¶ 79]

         To implement the WRP, Barone and Mazur identified and weighed the “core competencies” upon which each REVS specialist would be rated. [ECF No. 63 at ¶ 80] Higgins rated the ten individuals on his team by the identified core competencies. [Id. at ΒΆ 83] Meehan received the lowest ratings for teamwork and customer ...

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