page of music) from the song that the British army band played en
route to the surrender at Yorktown: “The World Turned Upside
Down.” It is obvious that any correlation between the use of
“associates” in a name and the identification of that name as
denoting a law firm requires a level of sophistication, rather
than the converse. That facet of Zaborac’s argument is just
plain folderol (a conclusion also reached as to P&C in Rumpler v.

Phillips & Cohen Assocs., Ltd., 219 F.Supp.2d 251, 257 (E.D. N.Y.

2002)).

That obvious conclusion is further bolstered by P&C’s
documentation in P. Exs. E and F, through a variety of publicly
available statistics, that the term “associates” is in no way
limited to law firms but is used as well by a wide variety of
businesses not engaged in the practice of law. If the
hypothetical unsophisticated consumer were to venture out into
the world for any period of time, he or she would quickly
encounter a whole slew of businesses and professionals other than
law firms that make use of “associates.”

Zaborac’s second argument is that the signature block on
P&C’s dunning letter also contravenes Section 1692e because P&C
CEO/Chairman Adam Cohen (“Cohen”) signed it “Adam S. Cohen, Esq.”
To be sure, the honorific “Esq.” is (in cur modern parlance at
least) used almost exclusively to refer to attorneys--so much so

that the term’s original meaning has been altered to the extent

13


On December 10 P&C placed an immediate hold on all
collection efforts for Zaborac’s debt until it was verified
(Stip. 95). On that same day Philipps telephoned P&C (in
response to P&C’s voice message from the previous day) to advise
that Zaborac was contemplating filing for bankruptcy (Stip. 96).
During that conversation the P&C representative offered to settle
the Zaborac debt for 70% of the amount due, and Philipps
countered with an offer to settle at 20% of the amount due (id.).
On December 13 P&C faxed Philipps a letter declaring its
willingness to accept 20% of the amount due to settle the debt
(Stip. 910). Three days later Philipps told P&C that his client
would accept the offer and make the 20% settlement payment
immediately--but only if the debt was “zeroed out” on his credit
bureau reports (Stip. 911).

Negotiations apparently stalled, and on the following day
(December 17) Philipps (again in response to a voice message from
a P&C representative) called P&C to reiterate his position that
Zaborac disputed the debt and wanted validation (Stip. 412). At
that time Philipps also said that he believed P&C had violated
Section 1692g(b) (id.). P&C then closed Zaborac’s account and
made no further attempts to collect on the debt (Stip. 413).

This action ensued.



that Section 1692g(b) somehow bars what Section 1692c(a) (2)
specifically directs.

In sum, Section 1692g(b) cannot be read to prohibit what P&c
did in conformity with the mandate of Section 1692c(a) (2). After
Zaborac’s lawyer Philipps disputed his client’s debt and
requested verification, P&C placed a formal hold on its
collection efforts, ceased all communication with him and
communicated only with Philipps. Its ensuing efforts to
negotiate a settlement did not become retrospectively tainted
because no settlement was ultimately reached. P&C’s Rule 56
motion is granted as to Count I, and Zaborac’s motion is of
course denied.

Section 1692q(a) (1

Zaborac next asserts, in his Count II, that P&C violated
Section 1692g(a) (1) by not stating the amount of his debt in its
initial dunning letter. To comply with that provision “a dunning
letter must state the amount of the debt sufficiently clearly
that the recipient is unlikely to misunderstand it” (Taylor v.
Cavalry Inv. L.L.C., 365 F.3d 572, 574 (7 Cir. 2004)).

To that end a court considers whether the meaning of a
dunning letter can be gleaned easily by an “unsophisticated
consumer” who, while “uninformed, naive or trusting,” still
possesses an “objective element of reasonableness” and does not

occupy “the very last rung on the sophistication ladder” (Gammon


explicitly define “collection of the debt,” and because no other
federal court has previously given content to that concept, this
Court must start from scratch in fleshing out just what
activities are included within the scope of that language.
Needless to say, the first step is to look to the plain
meaning of Section 1692g(b). That meaning controls unless its
“literal application...will produce a result demonstrably at odds

with the intentions of its drafters” (Greenfield Mills, Inc. v.

Macklin, 361 F.3d 934, 954 (7 Cir. 2004)). While the statute
commands a debt collector to cease demanding payment from the
consumer until a requested validation is obtained, its language
is certainly not expansive enough to create a ban on all
communications between a consumer’s lawyer and a debt collector.
If that had been Congress’ goal, it could have used a locution
such as “shall cease all communications,” or it could have
carried its prohibition beyond speaking solely of the consumer
and the debt collector.

But the short answer is that Congress did neither of those
things, nor did it choose to enact a more expansive prohibition
in any other respect. Thus the explicit, and in this sense
restricted, language of Section 1692g(b) is strong evidence that
it precludes only debt collection efforts targeting a consumer,
not all communications between the debt collector and the

consumer’s lawyer (once the lawyer has entered the picture).


Applicability or Inapplicability of Act Provisions

Section 1692q(b

Zaborac’s Count I claims P&C violated Section 1692g(b) by
engaging in settlement discussions with Philipps after Zaborac
disputed the debt but before verification of the debt was
provided to Zaborac. Section 1692g(b) (emphasis added) reads:

If the consumer notifies the debt collector! in writing
within the thirty-day period described in subsection
(a) of this section that the debt, or any portion
thereof, is disputed, or that the consumer requests the
name and address of the original creditor, the debt
collector shall cease collection of the debt, or any
disputed portion thereof, until the debt collector
obtains verification of the debt or a copy of a
judgment, or the name and address of the original
creditor, and a copy of such verification or judgment,
or name and address of the original creditor, is mailed
to the consumer by the debt collector,

Thus a consumer has the statutory right to dispute his or
her debt. At that point a debt collector has two options:
either (1) provide verification of the debt and then continue
collection activities or (2) cease collection efforts entirely

(Jang v. A.M, Miller & Assocs., 122 F.3d 480, 483 (7 Cir.

1997)).
At the heart of the matter, then, is whether the interchange
between Philipps and P&C can be considered “collection of the

debt” under Section 1692g(b). Because that statute does not

4 It is undisputed that within the Act’s definitions

Zaborac is a consumer and P&C is a debt collector (P. Resp. 413-
4).


of which Section 1692g(b) is a part. And subpart (3) of Section
1692a defines “consumer” as “any natural person obligated or
allegedly obligated to pay any debt.”

Any expansion of that definition to encompass a consumer’s
lawyer would impermissibly flout the congressional definition.
Indeed, that conclusion is further buttressed by the fact that
Section 1692c, which sets out a number of prohibitions against
communications with “consumers,” found it necessary to provide an

expanded definition of the terms for that section only--and

subpart (d) of that section enlarged the “consumer” concept to
“include[ ] the consumer’s spouse, parent (if the consumer is a
minor), guardian, executor, or administrator” (but not, it should
be noted, the consumer’s lawyer). Both provisions--Sections
1692g(b) and 1692c(d)--plainly call the principle embodied in the
familiar maxim “expressio unius est exclusio alterius” into play.

Moreover, it is not at all overkill to point as well to
another part of Section 1692c, its subpart (a) (2), which requires
a debt collector to cease communications with a “consumer” (as
just defined) if the debt collector knows the consumer has
retained an attorney and knows or has the means to learn how to
get in touch with that attorney. Not only does that provision
logically contemplate communications with the attorney instead of
the consumer--it expressly calls for such communication. It

would be extraordinarily bizarre to accept Zaborac’s contention


{ite Ordeorm (0697

United States District Court, Northern District of Illinois

Name of Assigned Jud; i Sitting Judge if Oth
ie Magistrate Judge Milton I, Shadur than Assigned Judge
CASE NUMBER 03 C 1146 DATE 8/2/2004
CASE Daniel Zaborac vs. Phillips & Cohen Assoc.
TITLE

[In the following box (a) indicate the party filing the motion, e.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

of the motion being presented.]

qa)

MOTION:

DOCKET ENTRY:

ql) ia) Filed motion of [ use listing in “Motion” box above.]

(2) im Brief in support of motion due

(3) a Answer brief to motion due____. Reply to answer brief due____

(4) oO Ruling/Hearing on setfor_ sat

(5) oO Status hearing[held/continued to] [set for/re-set for]on__———ssetfor_— at.

(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on set for at.

(7) Oo Trial[set for/re-set for] on____at

(8) oO [Bench/Jury trial] [Hearing] held/continued to___—_aat.

(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
COFRCP4(m) Local Rule 41.1 CFRCP41(a)\(1) CO FRCP41(a)(2).

do) ff [Other docket entry] Enter Memorandum Opinion and Order. For the reasons stated, Phillips and

Cohen’s motion for summary judgment is granted in part and denied in part, (14-1) while Zaborac’s is
correspondingly denied in part and granted in part. (13-1) This action is set for a status hearing at 8:45

a.m. August 9, 2004 to discuss the future course of this litigation.

a [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required, umber of notice

. Document...
Number.

Notices mailed by judge’s staff. AUG 03 2004

Notified counsel by telephone. date docketed

Docketing to mail notices.

Mail AO 450 form. docketing deputy inkials

Copy to judge/magistrate judge

37272008

wo)

date mailed notice

24
courtroom 2-9 note
SN deputy’s

initials

SN

“> Datostinhe: received in
+ centtal Clerk's Office mailing deputy nals



invalidation in Chuway v. Nat’l Action Fin. Servs. Inc., 362 F.3d

944, 947 (7 Cir. 2004), which explained Miller in these terms:

Both parties appeal to our decision in Miller, but it

is not on point. The dunning letter in that case

listed the "unpaid principal balance” of $178,844.65

but added that "this amount does not include accrued

but unpaid interest, unpaid late charges, escrow

advances or other charges....The amount to reinstate or

pay off your loan changes daily. You may call our

office for complete reinstatement and payoff figures.”

An 800 number was listed. We held that the letter

violated the Act because it did not state the amount of

the debt owed by the plaintiff, since the debt was not

limited to the unpaid principal.

In sum, the sina qua non of a statute-compliant dunning
letter is its inclusion of a specific amount that constitutes the
consumer’s present debt.® If that is lacking, it is irrelevant
that the letter may also contain additional explanatory phrases
or qualifications that inform the consumer as to what types of
items are or may be omitted from the figure or figures stated in
the letter, or that tell the consumer where and how the actual
amount of the debt can be learned (see Miller, 214 F.3d at 875;
Chuway, 362 F.3d at 947).

Like the letter in Miller, the one that Zaborac received
stated a “Balance”--but that figure admittedly did not state the

amount of the debt. Instead it referred to a number of items

that were not included, and it followed that with a phone number

& That identical proposition is embodied in the safe-harbor
collection letter prescribed by our Court of Appeals in Miller,
214 F.3d at 876.

11


v. GC Servs. Ltd. P’ship, 27 F.3d 1254, 1257 (7 Cir. 1994)).

If it is obvious from the letter’s language “that not even a
significant fraction of the population would be misled by it,” a
court should reject a Section 1692g(a) (1) claim outright (Taylor,
365 F.3d at 574-75).

Here this Court does not write on a clean slate. In the
course of our Court of Appeals’ consideration of variations on
the same theme, its opinion in Miller v. McCalla, Raymer,

Padrick, Cobb, Nichols & Clark, L.L.C., 214 F.3d 872, 875-76 (7%

Cir. 2000) invalidated a debt collector’s letter substantively
indistinguishable from the one that P&C sent to Zaborac here,
stating:

The statement does not comply with the Act (again we
can find no case on the question). The unpaid
principal balance is not the debt; it is only a part of
the debt; the Act requires statement of the debt. The
requirement is not satisfied by listing a phone number.
It is notorious that trying to get through to an 800
number is often a vexing and protracted undertaking,
and anyway, unless the call is recorded, to authorize
debt collectors to comply orally would be an invitation
to just the sort of fraudulent and coercive tactics in
debt collection that the Act aimed (rightly or wrongly)
to put an end to. It is no excuse that it was
"impossible" for the defendants to comply when as in
this case the amount of the debt changes daily. What
would or might be impossible for the defendants to do
would be to determine what the amount of the debt might
be at some future date if for example the interest rate
in the loan agreement was variable. What they
certainly could do was to state the total amount
due--interest and other charges as well as
principal--on the date the dunning letter was sent. We
think the statute required this.

And that lesson was reinforced earlier this year by a like

10



Such a plain-meaning statutory reading comports fully with a
key underlying purpose of Section 1692g(b): stopping debt
collectors from attempting to collect either from the wrong
consumer or from consumers who have already paid their debts (see
S. Rep. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N.
1695). And that plain-meaning reading is also aligned with the
Act's primary purpose: to protect consumers from abusive,
deceptive and unfair debt collection practices at the hands of

debt collectors (Section 1692a(e); Bass v. Stolper, Koritzinsky,

Brewster & Neider, S.C., 111 F.3d 1322, 1324 (7 Cir. 1997)).°

But such generalized aids to statutory construction pale
beside the powerful support provided by other-~and closely
related--pieces of the statutory scheme itself (see Jenkins v.
Heintz, 124 F.3d 824, 833 (7 Cir. 1997)). For one thing,

Section 1692a sets out the definitions for the entire subchapter

5 Reading “collection of the debt” to apply only to
consumers, and not to all of their attorneys’ communications with
the debt collectors, is sound because a consumer’s attorney is
quite properly considered an intermediary between the debt
collector and the consumer, and as such has his or her own
responsibility for protecting the consumer (Kropelnicki v.
Siegel, 290 F.3d 118, 128 (2d Cir. 2002)). Indeed, Philipps
himself is most likely already familiar with the principle that
“the underlying rationale of the statute--protecting
unsophisticated consumers--does not support a ban on
communications with consumer’s attorneys”: it appears that he
was counsel in an earlier case announcing that very proposition
(Phillips v. N. Am. Capital Corp., No. 98 C 7538, 1999 WL 299872,
at *3 (N.D. Ill. Apr. 30))--though counsel’s name there is
spelled “David Phillips,” no such listing appears in Sullivan’s
Legal Directory.



letter on November 15, 2000 that read in pertinent part (2. St.

GTIS-6) :
Client: eCAST SETTLEMENT CORP
Original Creditor: MBNA
Balance: $32745.06

Dear Daniel Zaborac:

Your account has been referred to our office for
collection on behalf of our above referenced client.
To resolve this matter and prevent any further
collection activity, full payment must be made.

You are hereby notified that the above balance
does not include the most recent late charges assessed,
any applicable over the limit fees, or you [sic] most
recent late charges assessed, any applicable over the
limit fees [sic], or you [sic] most recent daily
charges. In order to obtain your most current balance
information, please call 1-888-344-0900 or write to
eCAST Settlement Corporation, PO box 7247-6934,
Philadelphia, PA 19170-6934.

IT IS NOT IN YOUR BEST INTEREST TO NEGLECT THIS
ACCOUNT ANY FURTHER! IF YOU HAVE ANY QUESTIONS,
IMMEDIATELY CONTACT OUR OFFICE AT THE ABOVE TELEPHONE
NUMBER.

Sincerely,

Adam S. Cohen, Esq.

Co-Chairman / CEO
After receiving that letter, Zaborac’s attorney David Philipps
(“Philipps”)? faxed P&C a response on December 9, 2002 disputing
the debt and requesting that P&C provide validation of the debt

(Z. St. 7).

3 As chance would have it, Zaborac’s lawyer bears a name

similar to the first name in P&C’s firm. But both because the
names are spelled differently and because the “Phillips” in P&C
played no part in this matter, the usage in the text should
create no confusion.


of its increasing adoption to follow the names of women lawyers
too. But while Cohen’s use of the term in addition to properly
setting out his corporate officer status appears gratuitous (and
it seems that P&C could avoid further litigation and save itself
legal fees by omitting the suffix from Cohen’s signature),
Zaborac has not carried his evidentiary burden (even with the
benefit of favorable inferences) that an unsophisticated consumer
would find the usage here confusing.’

In that respect it is noteworthy that two widely separated

District Courts have rejected identical claims against P&C

(Rumpler, 219 F.Supp.2d at 257; Troy v. Phillips & Cohen Assocs.,
No. 02 € 7147 (N.D. Ill. Sept. 2, 2003)). With Zaborac’s counsel
being only too well aware of that,® he clearly should not have
sought to cast his lot solely on Zaborac’s own affidavit stating
that he himself was confused (Z. Aff. 94). Our Court of Appeals
has said more than once that because judges may perhaps not be
able to enter the minds (figuratively, of course) of the

theoretical unsophisticated debtor, plaintiffs’ counsel could

7 Because P&C is not actually a law firm, Zaborac cannot

successfully appeal to cases holding that businesses that provide
dual services as both law firms and debt collection agencies, and
that send out dunning letters on stationary using words such as
‘“attorney-at-law” or “counselor,” violate Section 1692e (see,
e.g., Nielsen v. Dickerson, 307 F.3d 623, 634-40 (7% Cir.

2002)).

® Philipps also represented plaintiff in the Troy case,

which is now on appeal.

14


Rule 56 Standards
Every Rule 56 movant bears the burden of establishing the
absence of any genuine issue of material fact (Celotex Corp. v.
Catrett, (477 U.S. 317, 322-23 (1986)). For that purpose courts
consider the evidentiary record in the light most favorable to
nonmovants, drawing all reasonable inferences in their favor

(Lesch_v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir.

2002)). But to avoid summary judgment a nonmovant “must produce
more than a scintilla of evidence to support his position” that a

genuine factual issue exists (Pugh v. City of Attica, 259 F.3d

619, 625 (7th Cir. 2001)) and “must set forth specific facts that
demonstrate a genuine issue of triable fact” (id.). Thus summary
judgment is ultimately warranted only if a reasonable jury could
not return a verdict for the nonmovant (Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)).

In the case of cross-motions Rule 56 principles dictate a
dual perspective that may well result in the denial of both
motions. But here each party’s submissions point to a definitive
outcome as to each issue, although the outcomes sometimes favor
P&C and sometimes favor Zaborac.

Facts

After Zaborac became indebted to his credit card provider,

it sold Zaborac’s debt to a third party that then assigned it to

P&C for collection (P. St. 9194, 6). P&C sent Zaborac a dunning



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DANIEL L. ZABORAC,
Plaintiff,
v. No. 03 C 1146

PHILLIPS AND COHEN ASSOCIATES,
LTD.,

DOCKETED

AUG 0 3 2004

Defendant.
MEMORANDUM OPINION AND ORDER
Daniel Zaborac (“Zaborac”) has sued Phillips and Cohen

Associates, Ltd. (“P&C”) for the claimed violation of numerous
sections of the Fair Debt Collection Practice Act (“Act,” 15
U.S.C. §§1692-16920).+ Each party now seeks summary judgment
pursuant to Fed. R. Civ. P. (“Rule”) 56 and has complied with
this District Court’s LR 56.1.* For the reasons stated
hereafter, P&C’s motion is granted in part and denied in part,
while Zaborac’s is correspondingly denied in part and granted in

part.

1 This opinion cites to Act provisions as “Section --,”

using the Title 15 numbering rather than the Act’s internal
numbering.

2 LR 56.1 requires parties to submit evidentiary statements
and responses to highlight which facts are disputed and which
facts are agreed upon. This opinion uses “Z.” for Zaborac and
“Pp.” for P&C to designate all of the litigants’ documents. Their
LR 56.1 statements are cited “St. q--,” and their responses are
cited “Resp. §--.” Where either party’s LR 56.1 statement is
undisputed by the opponent, the opinion includes only a citation
to the original statement. “Stip. 9I--” refers to the stipulation

to which both parties agreed.



or address that had to be reached “[i]n order to obtain your most
current balance information.” That mirrored almost verbatim the
language held to be unacceptable in Miller. And because P&C’s
letter contained the same deficiencies that caused the Miller
letter to be ruled a violation of Section 1692g(a) (1), Zaborac’s
Rule 56 motion is granted as to Count II, while PsC’s
corresponding motion is of course denied.

Section 1692e(3) and (9

Finally, Zaborac asserts in Count III that P&C violated the
Section 1692e(3) prohibition against any “false representation or
implication that any individual is an attorney or that any
communication is from an attorney” and the Section 1692e(3)
prohibition against any written communication “which creates a
false impression as to its source, authorization, or approval.”
Those contentions challenge P&C’s conduct in two respects.

First, Zaborac contends that P&C’s name--Phillips and Cohen
Associates, Ltd.--runs afoul of Section 1692e because the word
“associates” inherently conveys the appearance that P&C is a law
firm. As with claims under Section 1692g(a), that contention
must be evaluated under the “unsophisticated consumer” standard
that ascribes a base level of worldly knowledge to consumers and
shields debt collectors against liability for outlandish, bizarre
or idiosyncratic interpretations (Gammon, 27 F.3d at 1257).

Under that standard Zaborac’s counsel has taken a page (a

12



best look to presenting objective evidence (such as survey
results) showing confusion, rather than simply relying on a
plaintiff’s own self-interested attestation that he or she was
confused (see, e.g., Taylor, 265 F.3d at 575 and cases cited
there). Zaborac has just not done that, and his statement as to
his personal and subjective confusion does not suffice to sustain
his claim (id. at 574).
As with Count I, then, P&C prevails as to Count III. It too
is dismissed.
Conclusion
For the reasons that have been stated in this opinion:
1. P&C’s Rule 56 motion is granted as to Counts I and
III (which are accordingly dismissed) and is denied as to
Count II.
2. Zaborac’s Rule 56 motion is granted as to Count II
and denied as to Counts I and III.
This action is set for a status hearing at 8:45 a.m. August 9,

2004 to discuss the future course of this litigation.

Milton I. Shadur
Senior United States District Judge

Date: August 2, 2004

15