The Massachusetts Auto Damage Appraisers Licensing Board (ADALB or Board) has revoked Justin Forkuo’s automobile damage appraiser license due to fraud allegations against an insurance company. A hearing was conducted by the ADALB to consider the revocation of Forkuo’s license following a Massachusetts Superior Court judge’s insurance fraud finding in a lawsuit that Preferred Mutual Insurance filed against 290 Auto Body, Inc., Forkuo’s auto body shop.
The Board oversees the licensing of motor vehicle damage appraisers, sets the eligibility requirements for licensing, approves related training programs, and formulates guidelines for the issuance, renewal, suspension, and revocation of licenses.
Massachusetts requires that all auto damage appraisers for automobile insurers or body shops hold a license issued by the ADALB. The Board has the authority to revoke such licenses and cancel registrations “if an individual is found guilty or convicted of submitting fraudulent automobile damage reports, as determined by a court.”
The Preferred Mutual Judgment against 290 Auto Body
In June 2018, a Preferred Mutual customer had their Honda Civic brought to 290 Auto Body for repairs. The Honda was an obvious total loss.
Forkuo, as president of 290 Auto Body, submitted invoices to Preferred Mutual fraudulently overcharging for 290 Auto Body’s work on the Honda Civic. 290 Auto Body, through Forkuo, charged $9,250 to release the Honda to Preferred. Preferred Mutual paid the amounts demanded by Forkuo and filed suit against 290 Auto Body for fraud, deceit, and unfair business practices.
After a jury-waived trial in the Worcester Superior Court, the judge hearing the lawsuit made findings against Forkuo as the owner and controlling person of 290 Auto Body. According to the judge’s decision, Forkuo knowingly fabricated fraudulent invoices sent to Preferred Mutual, which grossly misrepresented the auto body work performed.
Specifically, the judge determined that Forkuo falsely claimed charges for 290 Auto Body doing a teardown of the vehicle requiring 32 hours of labor at $100 per hour. However, based on the Honda clearly being deemed a total loss on initial inspection, this extended teardown was wholly unnecessary. Additionally, the invoices billed for other fees that the judge found unjustified or improper included a gate fee, a hazardous waste fee, a blueprint fee, an administration fee, and a collision access fee.
The judge found Forkuo intentionally inflated the invoices to Preferred Mutual with excessive fees for work not performed, including seeking reimbursement for legal fees that 290 Auto Body never incurred.
Ultimately, the court concluded that Forkuo, representing 290 Auto Body, fraudulently charged Preferred Mutual $9,250 for services reasonably valued at only $1,050.
The hearing before the Board on Forkuo’s responsibility in the Preferred Mutual case
On October 23, 2023, the Board held a hearing to review the potential revocation of Forkuo’s license based on implicit findings made against him in the Preferred Mutual lawsuit’s decision.
At the hearing, Forkuo, through counsel, stipulated the decision of the Superior Court in the Preferred Mutual lawsuit against 290 Auto Body. However, Forkuo’s lawyer argued the judge’s findings did not apply to Forkuo individually since the lawsuit was against 290 Auto Body only and did not identify actions by Forkuo acting as an appraiser.
Following Forkuo’s defense, the board members debated whether Forkuo’s actions as the owner of 290 Auto Body were sufficient grounds for revoking his appraiser license. Two members of the Board suggested the Preferred Mutual lawsuit was about excessive billing practices, not fraudulent appraisals.
Another member, though, pointed out the findings in the lawsuit about Forkuo misrepresenting repair work done and overcharging based on nonexistent or exaggerated damage. For example, billing $3,200 for a full vehicle teardown when the car was clearly a total loss.
After a motion was made and seconded to revoke Forkuo’s license, the Board voted 3-to-2, with the chair casting the deciding vote, to permanently revoke Forkuo’s license for fraud and misrepresentations. The majority of the Board found his conduct came within the Board’s statutory mandate to revoke a license for fraudulent automobile damage reports.
Thirty days to appeal the revocation to the Superior Court
The ADALB formally notified Forkuo of the revocation decision on October 30, triggering the commencement of his thirty-day appeal period.”
The revocation of licenses by an administrative body like the ADALB is subject to the Massachusetts Administrative Procedure Act, M.G.L. c. 30A. Under this statute, any person whose state-issued license is revoked, subject to some professional license exceptions, may appeal the revocation within thirty days to the Superior Court.
On appeal, the Superior Court has the jurisdiction to affirm the decision of the agency or remand the matter for further proceedings before the agency or the court may set aside or modify the decision or compel any action unlawfully withheld or unreasonably delayed if it determines that the substantial rights of any party may have been prejudiced because the agency decision is—
(a) In violation of constitutional provisions; or
(b) In excess of the statutory authority or jurisdiction of the agency; or
(c) Based upon an error of law; or
(d) Made upon unlawful procedure; or
(e) Unsupported by substantial evidence; or
(f) Unwarranted by facts found by the court on the record as submitted or as amplified under paragraph (6) of this section, in those instances where the court is constitutionally required to make independent findings of fact; or
(g) Arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with law.
About the ADALB
The Automobile Damage Appraiser Licensing Board (ADALB) is an independent board situated within the Division of Insurance.
Of its five members, the Governor appoints four, two of whom must be from the insurance industry and two from the auto body repair industry. The Commissioner of Insurance appoints the fifth member, who cannot be affiliated with either the auto body industry or the insurance industry, to act as the Board’s chair.
The Board oversees the licensing of motor vehicle damage appraisers, sets the eligibility requirements for licensing, approves related training programs, and formulates guidelines for the issuance, renewal, suspension, and revocation of licenses. The suspension or revocation of a license involves a hearing process that can be triggered by complaints presented to the Board.