Are you still offering paypal as a payment option or do you state NO paypal accepted?

You can say cash on pick up is ok but you can not deny a buyer from paying with paypal.

Not accepting paypal can cause a suspension and save your money and do not worry about going to a lawyer as it will cost you more than it is worth and on what grounds would you be going to one for?

You have agreed to ebay's rules when you decided to use it.