IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JOSEPH ABRUSCATO, and TIMOTHY )

WILSON, on behalf of themselves and )

others similarly situated )

)

Plaintiffs, )

)

v. ) No. 12-cv-00322

) Judge Zagel

MEDICAL BUSINESS BUREAU, LLC; )

EQUIFAX INFORMATION SERVICES, LLC; ) 

SWEDISH EMERGENCY ASSOCIATES, PC )

)

Defendant. )

)

PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO SWEDISH

 EMERGENCY ASSOCIATES’ MOTION TO DISMISS COUNT IV

Plaintiffs, Joseph Abruscato and Timothy Wilson, respond as follows to the motion

to dismiss filed by defendant Swedish Emergency Associates, PC (“Swedish”).1

STATEMENT OF FACTS

Plaintiffs were both injured on the job while working for the Cook County Sheriff’s

Department. (Amd.Cmpt., ¶11) Plaintiffs were taken to the emergency room at Swedish Covenant

Hospital as a result of the injuries they sustained on September 25, 2008. Plaintiffs informed the

personnel at the hospital that their injuries were sustained on the job. (Amd.Cmpt., ¶12) Plaintif

Abruscato filed an Employee Accident Report with the Cook County Department of Risk

Management, Workers’ Compensation Division on September 25, 2008. (Amd. Cmpt., ¶13) 

Plaintiff Wilson filed a similar report on the same date. Id.

Under the Illinois Workers’ Compensation Act, plaintiffs’ employer was legally

responsible for all payments related to plaintiffs’ injuries, and medical providers, such as Swedish,

 1Swedish filed its motion before plaintiffs filed their amended complaint. The Court granted

plaintiff Abruscato leave to file an Amended Complaint, but also required him to respond to the

motion to dismiss on the same date. Due to this fact, plaintiffs’ citations to the Amended Compliant

will differ from Swedishes’ citations to the original Complaint.

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were not permitted to attempt to collect payments from plaintiffs. The relevant sections of 815 ILCS

305/8.2(e) provide: 

Except as provided under subsections (e-5), (e-10), (e-15), and (e-20), a provider

shall not bill or otherwise attempt to recover from the employee the difference

between the provider's charge and the amount paid by the employer or the

insurer on a compensable injury, or for medical services or treatment

determined by the Commission to be excessive or unnecessary.

(e-5) If an employer notifies a provider that the employer does not consider the

illness or injury to be compensable under this Act, the provider may seek

payment of the provider's actual charges from the employee for any procedure,

treatment, or service rendered. Once an employee informs the provider that

there is an application filed with the Commission to resolve a dispute over

payment of such charges, the provider shall cease any and all efforts to collect

payment for the services that are the subject of the dispute. 

***************

(e-15) When there is a dispute over the compensability of or amount of payment

for a procedure, treatment, or service, and a case is pending or proceeding

before an Arbitrator or the Commission, the provider may mail the employee

reminders that the employee will be responsible for payment of any procedure,

treatment or service rendered by the provider. The reminders must state that

they are not bills, to the extent practicable include itemized information, and

state that the employee need not pay until such time as the provider is permitted

to resume collection efforts under this Section. The reminders shall not be

provided to any credit rating agency. The reminders may request that the

employee furnish the provider with information about the proceeding under

this Act, such as the file number, names of parties, and status of the case. If an

employee fails to respond to such request for information or fails to furnish the

information requested within 90 days of the date of the reminder, the provider

is entitled to resume any and all efforts to collect payment from the employee

for the services rendered to the employee and the employee shall be responsible

for payment of any outstanding bills for a procedure, treatment, or service

rendered by a provider. (emphasis added)

Swedish knew that plaintiffs’ employer was the responsible party and billed the

employer. (Amd. Cmpt. Ex. A). Although some of plaintiffs’ hospital bills were paid, one medical

bill relating to plaintiff Abrascato’s injury was not paid, due to an employer error. Instead of

attempting to collect the bill from the employer, as it was legally required to do, Swedish sent the

account to a collection agency to attempt to collect the bill from plaintiff. When Swedish sent the

account to a collection agency, it falsely informed the collection agency that the account was a “self2

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pay” account, despite being fully aware that it was not a “self-pay” but instead an account covered

by workers’ compensation. (Amd.Cmpt., ¶17) One of plaintiff Wilson’s bills was similarly not paid

promptly, and Swedish assigned his accounts to Medical Business Bureau, LLC (“MBB”) for

collection in July, 2009, despite being fully aware that the account was covered by workers’

compensation. (Amd.Cmpt., ¶18)

In October 2009, plaintiff Abruscato saw that there was a negative “tradeline” on his

credit report from MBB listing the Swedish account, and contacted MBB. MBB had reported Mr.

Abruscato’s accounts to the credit bureaus for the purpose of coercing him into paying it. (Amd.

Cmpt., ¶¶19, 20) Reporting a debt to a credit bureau is "a powerful tool designed, in part, to wrench

compliance with payment terms. . . ." Rivera v. Bank One, 145 F.R.D. 614, 623 (D.P.R. 1993). This

is especially true now, after the severe tightening of credit standards, and it is virtually impossible

to get a mortgage now with a recent outstanding or disputed collection account on your credit report. 

Pursuant to the Fair Credit Reporting Act, an adverse account can remain on a consumer’s credit

report for up to seven years.

On November 12, 2009, plaintiff Abruscato received a collection letter from

defendant MBB informing him that his medical bill had been assigned for collection. (Amd.Cmpt.,

Ex. B) . MBB reported plaintiffs’ accounts to the credit bureaus as if they were delinquent

obligations of plaintiffs. After receiving the collection letter from MBB, Mr. Abruscato contacted

MBB in an attempt to resolve the situation, although it was actually Swedish’s responsibility to do

so. He asked for a copy of the bill, and was provided only a copy of an internal MBB document. 

When Mr. Abruscato asked MBB for the actual bill he was told he would “never” get it from MBB.

(Amd.Cmpt., ¶24)

Abruscato therefore contacted Swedish in December, 2009 to try to obtain a copy of

the bill. He informed them that it was a workers’ compensation bill and that he was not responsible

for payment. The Swedish representative informed plaintiff that the bill had been submitted to the

employer a few times and had not been paid, so they sent it to collections. (Amd.Cmpt., ¶25)

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Swedish did not take any actions to remove the account from collections, despite being informed

by Mr. Abruscato in December, 2009, that the bill was covered by worker’s compensation. Nor did

Swedish take any actions to inform MBB that the bill was not a “self-pay,” as it had initially falsely

informed MBB. (Amd.Cmpt., ¶26) In December 2009, although it was actually defendants’ Swedish

and MBB’s responsibility to do so, plaintiff Abruscato resubmitted the bill he obtained from

Swedish to his employer, and the bill was paid to Swedish within sixty days. (Amd.Cmpt., ¶27) 

Plaintiff Wilson also repeatedly resubmitted the bills to his employer for payment, despite the fact

that it was Swedish’s obligation to do so, and the accounts were eventually paid in early 2011.

(Amd.Cmpt., ¶28) Even after the medical bills were paid, the accounts continued to appear on

plaintiffs’ credit reports as adverse collection accounts. (Amd.Cmpt., ¶29)

In March 2010, plaintiff Abruscato contacted MBB directly to ask that the account

be removed from his credit report and was informed that the account would be removed from his

credit report only if he paid them directly. (Amd.Cmpt., ¶30) Plaintiff Abruscato informed MBB

that the account was for an injury compensable under the Illinois Workers’ Compensation Act. 

MBB continued to insist that plaintiff pay it himself. (Amd.Cmpt., ¶31) Beginning in March 2010,

plaintiff Abruscato sent three dispute letters to Equifax in an attempt to have the account removed

from his credit report. On June 1, 2010, June 30, 2010, and July 22, 2010, Equifax responded to

plaintiff Abruscato’s disputes by informing him that the debt had been verified as belonging to him.

(Amd.Cmpt., Ex.t C). On May 10, 2011, after receiving further disputes from Mr. Abruscato, Mr.

Abruscato was informed by Equifax that MBB was reporting a zero balance for the account, but not

removing it. (Amd.Cmpt., Ex. E). On May 18, 2011, plaintiff Abruscato again wrote to Equifax

explaining that the account was covered by a workers’ compensation claim, and thus, belonged to

his employer, and again requested that the account be removed from his credit report. (Amd.Cmpt.,

Ex. F). Equifax contacted MBB about Mr. Abruscato’s dispute and requested that MBB check its

records and report back to it about the accuracy of the information it was reporting about him. By

letter dated June 1, 2011, Equifax informed plaintiff that MBB had verified the debt as belonging

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to him. (Amd.Cmpt., Ex. G) 

Mr. Wilson discovered that MBB had reported the Swedish account as being a

collection account that was his responsibility when he applied for a student loan for his son. He was

denied a loan by the original lender, and had to apply with another lender, because the MBB

collection account was on his credit report. (Amd. Cmpt., ¶43) 

Plaintiffs have suffered actual damages as a result of defendant’s conduct, along with

the distress of being subjected to collection attempts and adverse credit reporting for debts that were

not legally their responsibility. Plaintiff Abruscato had to postpone plans to refinance his home due

to this adverse account. Abruscato’s credit limits on existing credit cards have been lowered 

(Amd.Cmpt., Ex. I). Abruscato was also denied for a new credit card due to the adverse credit

reporting. Abruscato also suffered emotional distress and spent extensive time attempting to correct

the problem, and also expended time and money on postage and phone calls both in an attempt to

both get the bill paid (which was not his responsibility pursuant to Illinois law) and get the item off

his credit report. Plaintiff Wilson also had to spend time and money attempting to get the bill paid

(which was not his responsibility pursuant to Illinois law) and to get the item off his credit report.

(Amd. Cmpt., ¶45)

Illinois public policy provides that employees should be able to receive medical care

for injuries sustained on the job, that the care should be paid for by their employers, and that medical

providers are not permitted to attempt to collect the resulting medical bills directly from the

employees or to report those bills to the credit bureaus. Illinois public policy also places the burden

of collecting payments for injuries covered by worker’s compensation on medical providers, and not

employees. (Amd.Cmpt., ¶87) Plaintiffs have alleged that Swedish engaged in unfair and deceptive

acts and practices, and violated Illinois public policy, 820 ILCS 305/8.2 and 815 ILCS 505/2, when

it hired a collection agency to attempt to collect directly from patients bills for which claims had

made under the Illinois Workers’ Compensation Act.

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I. PLAINTIFFS HAVE STATED A CLAIM FOR

VIOLATION OF THE ILLINOIS CONSUMER FRAUD ACT.

Swedish contends that plaintiffs have not stated a claim for violation of the Illinois

Consumer Fraud Act (“CFA”) because they have not alleged any deceptive conduct committed by

Swedish directly. The Amended Complaint does allege deceptive conduct by Swedish, namely that

when Swedish hired a collection agency to collect on plaintiffs’ workers’ compensation related

accounts, Swedish informed that collection agency that the accounts were “self-pay” accounts,

which was untrue under the circumstances

Moreover, the CFA expressly prohibits “unfair” as well as “deceptive” acts and

practices. Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403, 775 N.E.2d 951 (2002). Plaintiffs

allege both. In determining whether an act or practice is "unfair," courts consider “whether the

practice . . . offends public policy as it has been established by statutes, the common law, or

otherwise”, (2) “whether it is immoral, unethical, oppressive or unscrupulous”, and (3) “whether it

causes substantial injury to consumers (or competitors or other businessmen).” Robinson, citing

FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 244-45 n. 5 (1972). Furthermore, “All three

criteria do not need to be satisfied to support a finding of unfairness. A practice may be unfair

because of the degree to which it meets one of the criteria or because to a lesser extent it meets all

three.” Robinson, 201 Ill.2d at 418, 775 N.E.2d at 961. 

Conduct which violates Illinois law and public policy can form the basis of a CFA

claim. Glen Ellyn Pharm., Inc. v. Meda Pharms., Inc., 2011 U.S. Dist. LEXIS 5531 (N.D. Ill. Jan.

13, 2011) (violation of state and federal law prohibiting the sending of “junk” faxes also violated

the CFA); R. Rudnick v. G.F. Protection, Inc., 2009 U.S. Dist. LEXIS 3152, 2009 WL 112380 (N.D.

Ill. Jan. 15, 2009) (same); G.M. Sign, Inc. v. Stergo, 681 F.Supp.2d 929, 935 (N.D.Ill. 2009); Hill

v. Sisters of St. Francis Health Servs., 2006 U.S.Dist. LEXIS 92874, at **3-5 (N.D.Ill. Dec. 20,

2006) (hospital’s practices which violated public policy as expressed in the Illinois Revenue Code

constituted an unfair practice under the CFA); Hill v. PS Ill. Trust, 368 Ill.App.3d 310, 319-20, 856

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N.E.2d 560, 568 (1st Dist. 2006) (storage facility violated protections provided for by the Illinois

Storage Act).

Defendant’s conduct is clearly unfair under the Sperry test. The fact that the conduct

violates the Illinois workers’ compensation statute makes it apparent that the conduct is against

public policy. It is also obviously immoral, unethical, or oppressive to hire a collection agency to

pursue an employee for debt which Swedish is only permitted to collect from the employer. In Mr.

Abruscato’s case, Swedish’s employees admitted to Mr. Abruscato that they knew it was a workers’

compensation account, but they sent it to collections anyways. (Amd.Cmpt., ¶89) When he called

Swedish to complain about being subjected to the collection activity and having the account appear

on his credit report, Swedish took no action to remove the account from collections or remedy the

situation. Id. Swedish was instead shifting the burden of collecting workers’ compensation accounts

from the employer, to plaintiffs, in clear violation of Illinois law. Swedish’s actions resulted in

employees such as plaintiffs being subjected to harassment by a collection agency, and in damage

to their credit reports. This is precisely the type of problem the Illinois legislature was trying to

prevent, when it amended the Illinois Workers’ Compensation Statute to add the provisions barring

medical providers from collecting from employees. Swedish’s conduct causes substantial injury to

the public, as it subjects consumers such as plaintiffs to collection efforts, and damage to their credit

scores. Both plaintiffs suffered actual damages, including the denial of credit applications as a result

of the Swedish accounts showing up on their credit reports.

Swedish also argues that it cannot be held liable for the actions of MBB merely on

an agency theory. However, as explained above, plaintiffs are not relying merely on agency, but

are instead relying on Swedish’s own conduct. It was a violation of Illinois law for Swedish to hire

MBB to collect the accounts in question directly from the consumer. Swedish cannot direct a debt

collector to perform conduct which violates Illinois law, and then claim it is not liable because the

debt collector, and not itself, performed the actual collection activities. None of the cases Swedish

relies on which found that a creditor cannot be liable for a debt collector’s conduct based purely on

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an agency theory involved a situation like this one, where the creditor had no right to hire the

collection agency in the first place. Scally v. Hillco Receivables, LLC, 392 F.Supp.2d 1036 (N.D.Ill.

2005), involved a situation in which the plaintiff was attempting to hold the creditor liable for the

collection agency’s violation of the FDCPA, over which it had no control. In this case, on the other

hand, plaintiffs are seeking to hold Swedish liable for its own conduct in hiring MBB in the first

place, to collect accounts directly from plaintiffs, when it was prohibited by state law from doing

so.

Under the Illinois CFA, principals can be held liable for their agent’s CFA violations. 

Lang v. Consumer Ins. Services, 222 Ill. App. 3d 226, 238-9, 583 N.E.2d 1147, 1156 (2d Dist.

1991) (reversing in part summary judgment where complaint stated sufficient allegations to hold

both principal and agent liable under the CFA). See also, Washington Court Condominium

Association-Four v. Washington Golf Corp., 267 Ill.App.3d 790, 816, 643 N.E.2d 199, 217 (1st Dist.

1994) (principals held liable under CFA for tortious conduct by agents); Warren v. LeMay, 142

Ill.App.3d 550, 491 N.E.2d 464 (5th Dist. 1986)(residential realty vendors’ broker and the

exterminator hired by vendors liable to buyers for negligent termite inspection report; emphasizing

broad construction of the CFA in light of its “broad remedial purposes”). 

Moreover, plaintiffs have alleged sufficient facts to allege an agency relationship,

unlike the plaintiffs in Tribett v. BNC Mortgage., 2008 U.S.Dist. LEXIS 3573 (N.D.Ill. Jan. 17,

2008). Plaintiffs alleged that Swedish hired MBB to collect plaintiffs’ accounts on its behalf. The

letter sent by MBB to plaintiff Abruscato, attached as Ex. B to the Amended Complaint, provides

that the Swedish account “has been assigned to us for collection,” and it lists the date Mr. Abruscato

was treated at Swedish, along with Swedishes’ internal account numbers. It is clear from these facts

that Swedish hired MBB to be its agent to attempt to collect plaintffs’ accounts from plaintiffs, and

Swedish cannot claim to be unaware, after hiring MBB to collect the accounts, that MBB would

indeed do what it was hired to do.

Given the facts alleged in the Amended Complaint, the motion to dismiss filed by

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Swedish should be denied.

CONCLUSION

For the reasons stated above, plaintiffs request that this Court deny the motion to

dismiss Count IV filed by Swedish.

/s/ Tara L. Goodwin 

Tara L. Goodwin

Daniel A. Edelman

Tara L. Goodwin

Rupali R. Shah

EDELMAN, COMBS, LATTURNER

& GOODWIN, LLC

120 S. LaSalle Street, 18th Floor

Chicago, Illinois 60603

(312) 739-4200

(312) 419-0379 (FAX)

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CERTIFICATE OF SERVICE

I, Tara L. Goodwin, hereby certify that on March 27, 2012, a true and accurate 

copy of the foregoing document was filed via the Court’s CM/ECF system and notification of

such filing was sent to the following parties:

Michael D. Douglas

Lewis P. Perling

Barry Goheen

King & Spalding LLP

1180 Peachtree Street

Atlanta, Georgia 30309-3521

(404) 572-3079

FAX: (404) 572-5172

David M. Schultz

Corinne C. Heggie

Hinshaw & Culbertson LLP

Suite 300

222 North LaSalle Street

Chicago, IL 60601

(312) 704-3527

FAX: (312) 704-3001

Benjamin B. Folsom

David B. Goroff

Foley & Lardner LLP

321 N. Clark St., Suite 2800

Chicago, IL 60654

312-832-4500

Jeremy S. Unruh

Rodney Lewis

Polsinelli Shughart, PC

161 N. Clark St.

Chicago, IL 60601

312-819-1900

/s/ Tara L. Goodwin 

Tara L. Goodwin

Daniel A. Edelman

Tara L. Goodwin

Rupali R. Shah

EDELMAN, COMBS, LATTURNER

& GOODWIN, LLC

120 S. LaSalle Street, 18th Floor

Chicago, Illinois 60603

(312) 739-4200

(312) 419-0379 (FAX)

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