Doctor Who Was Stripped of His License Gets Reprieve : Malpractice case: Plastic surgeon Dr. Michael Elam may keep practicing pending the outcome of his appeal, but his practice must be monitored, and he must attend an ethics class.

NEWPORT BEACH —  Cosmetic surgeon Dr. Michael Elam, stripped of his medical license last month by state regulators, has won an 11th-hour judicial reprieve that lets him keep practicing--under tight restrictions--while he contests the punishment.

Elam was supposed to close up shop today at his chic Fashion Island office. But instead of packing up his scalpels and liposuction vacuums, the 42-year-old cosmetic surgeon who helped redo Phyllis Diller’s face is gearing up for what could be a years-long legal battle to prove that he is not the dangerous and deceitful doctor the state medical board has declared him to be.

A judge in Sacramento Tuesday temporarily stayed the decision the Medical Board of California made last month to revoke Elam’s license after it found that he had forged insurance billings, botched a “tummy tuck” and gave a former Mrs. California an unwanted nose job and cheek implants.

“I’m just relieved I have a second chance to put this thing behind me and am optimistic that when this is all done, I’ll be vindicated,” Elam said in an interview.

Attorneys in the case were still haggling Wednesday over the wording of the restrictions that Elam must observe to keep his license. But they say the gist of it, as detailed orally by Sacramento Superior Court Jeffrey L. Gunther during a conference call with attorneys Tuesday, is that Elam can keep practicing for the duration of his appeals so long as he takes a medical ethics course and allows his entire practice to be monitored in the months ahead by a state-appointed doctor.

It is an unusual proviso and one that troubles the man who has been trying to put Elam out of business.

Deputy Atty. Gen. Barry Ladendorf said he cannot understand how Gunther could find that Elam would pose no threat to the public by continuing his practice while at the same time ordering him to undergo the monitoring and to complete an ethics course.

“The judge never explained--that’s the problem,” Ladendorf said. “This order is in itself contradictory, and we disagree with it completely.” He promised to seek an order overturning it, perhaps early next week, from the state Court of Appeal in Sacramento.

In the meantime, Elam gets to keep on doing nose jobs, tummy tucks and liposuction. Elam earned a national reputation through his 1983 work on Diller and on other wealthy patients and also for his role in helping to found several national cosmetic surgeons associations.

The result of the reprieve was already apparent Wednesday, as Elam received checks from about half a dozen patients who had scheduled surgeries over the next few weeks but had withheld payment until it had been determined whether he would still be practicing after Sept. 6, Elam said.

The Medical Board of California, acting on the recommendation of Administrative Law Judge Rosalyn M. Chapman, had given Elam until that date to give up his practice. Revoking a doctor’s license is the harshest penalty the state agency can impose, and it did so in only 45 of the roughly 2,300 malpractice cases it investigated last year .

Chapman, after a three-week hearing that ended in May, said Elam was a liar and concluded that he was “a dangerous person to be licensed as a physician and a surgeon.”

Buoyed by what he called his “big victory,” Elam said he now aims to prove Chapman wrong during the course of arguments and testimony presented in Superior Court in Sacramento in the coming months. It could be two years before the case is resolved, lawyers say.

In the administrative hearing before Chapman, “I couldn’t get a fair trial,” Elam said. “She was extremely biased against me by people who hated my guts, and she relied on unfounded hearsay.

“A lot of the things done in the court with Miss Chapman you couldn’t get away with in a real court. There were some real constitutional principles missing--like innocent until proven guilty,” he added.

Sacramento lawyer Richard Turner--who called the medical board’s decision “a grave mistake” in appeal papers filed on Elam’s behalf--said the key factor in the judge’s decision to stay the license revocation may have been the 75 letters of support submitted by physicians around the country. The letters, he said, “confirmed that Dr. Elam is a pioneer in cosmetic surgery and that it would be a shame to have someone of his pre-eminence taken out of practice.”

Of the stipulation that Elam take an ethics course, Turner said: “That’s just a bone thrown to the attorney general’s office. But as long as we get that order stayed, they can make him take a course in Russian lit. for all I care.”

The hearing before Chapman in Los Angeles included allegations of threats by Elam against his detractors, attacks against the doctor by his former partner and emotional testimony by two local women who said Elam had unduly scarred them.

But the coming appeal in Sacramento could prove nastier still.

Turner said he plans to introduce evidence that he said shows former Mrs. California Bonnie Luebke of Trabuco Canyon taking part in a beauty pageant last spring just days after she tearfully testified that Elam had drugged her to force her to sign consent forms and scarred her face with unwanted reconstruction.

“We’ve got photographs,” Turner said. “Instead of being this hobbling recluse, she’s up there looking all pretty and smiling and emceeing this beauty contest, having a great time.”

Luebke, however, said she does not know what Elam or his attorney is talking about and that she has not taken part in a pageant in at least eight months. She said she is disappointed by the Sacramento judge’s ruling and that she is proceeding with a separate civil claim seeking damages against Elam in Orange County Superior Court.

“I guess justice has to take its course, and he’ll eventually get what’s coming to him,” said Luebke, who was a runner-up in the 1984 Mrs. America pageant. “I just hope he learns his lesson and cleans up his act.”