Soured Deal Spotlights Beverly Hills Medical World : Court: The buyer of a posh eye clinic in the ‘Golden Triangle’ sued after profits slid, claiming the previous owner had improperly inflated earnings. But the doctor who sold the business prevails in trial.

Even in Beverly Hills’ Golden Triangle, where hundreds of luxury medical practices treat the Westside’s sick and famous, the Cooperman Eye Center offered an extra touch of pizazz.

Red Skelton pitched the high-volume cataract practice in television spots. Cross-town patients received free limousine rides to the office. Dr. Steven G. Cooperman, the ophthalmologist who ran it, put together a personal collection of museum-quality art with the profits.

To Dr. David A. Wallace, 43, who ran a much smaller practice around the corner, it looked like a 6,000-patient cash cow. When he heard Cooperman’s business was for sale, he agreed to buy it in April 1989 for up to $1.3 million--setting the stage for a legal spat that has provided an unusual window into the economics of the Golden Triangle and the lives of the doctors who heal the stars.

Three years after the eye clinic changed hands, Wallace filed suit in Los Angeles Superior Court, alleging that it had been profitable only because Cooperman bilked insurance companies and performed unnecessary surgeries. But Cooperman, 53, recently prevailed in court after contending that Wallace simply failed as a medical entrepreneur when he took over.

In the years since their deal went sour, each doctor has come to see the other as the worst kind of businessman. In courtroom arguments, Wallace derided Cooperman as a “sociopath,” a scam artist who dumped a dirty practice on an unlucky sucker. In return, Cooperman blasted Wallace in court as a petty child who fell in over his head and then filed the lawsuit to weasel out of the deal.

Cooperman also countersued, and this week he won when a jury ruled that Wallace had to pay him an additional $430,000 plus punitive damages. The verdict came after a contentious four-month trial in which lawyers for the doctors fumbled one day over technical terms like “trabeculectomy” and bickered the next about the true value of office space in the Beverly Hills medical market.

The Golden Triangle’s gleaming white office towers and venerable brick shops have been crammed with doctors’ offices since the mid-1960s. While tourists gawk at price tags on Rodeo Drive, which slices through the middle of the Triangle, some of the city’s most famous faces--and the plastic surgeons who maintain them--conduct daily business a few blocks away.

American Medical Assn. officials estimate there is one doctor in the United States for every 400 people. But in Beverly Hills, the ratio is closer to one for every 40.

Bounded by Wilshire and Santa Monica boulevards and Crescent Drive, the Triangle reached its peak as a medical mecca in the late 1980s, just as Cooperman and Wallace were about to close their agreement.

The Cooperman Eye Center opened two decades ago in a suite in a four-story brick building on Roxbury Drive, just up the street from Neiman Marcus. To promote his practice, Cooperman paid regular visits to senior citizens centers and distributed health newsletters to potential patients, said his lawyer, Richard Purtich.

Cooperman, who suffers from heart disease, retired six years ago and moved to Connecticut. Records show he is more than familiar with the rough-and-tumble of the business world, having filed shareholder lawsuits against public corporations in at least eight states in recent years, alleging negligence by company officers.

An avid art collector in the 1980s, Cooperman once owned Pablo Picasso’s “Nude Before a Mirror” and Claude Monet’s “Customs Officer’s Cabin at Pourville,” but the paintings, estimated by some insurance companies to be worth $12.5 million, were reported stolen from his Brentwood home in 1992. The theft made national art news.

In court, Cooperman sat calmly, brow furrowed, hands resting on the table, thick fingers interlaced.

Across a wooden table sat Wallace. The son of a judge, Wallace appeared on edge during the trial, occasionally losing his temper on the witness stand.

Like Cooperman, Wallace is an art fan, but his only Picasso is a print.

Before buying Cooperman’s practice, Wallace co-founded an ophthalmological equipment company (in which Cooperman was one investor) and ran his office in an optical specialty building on Wilshire Boulevard.

The court spotlight showed that neither doctor had an unblemished record. Cooperman had been a defendant in more than two dozen malpractice and insurance fraud lawsuits and had been directed to reimburse Medicare for hundreds of thousands of dollars for false billing. He once conceded that he had forged a patient’s surgery consent form.

Wallace admitted that he once performed surgery on the nearly blind left eye of a patient when he was scheduled to operate on the right eye, and acknowledged in court that he had split certain fees with another physician, a legally murky practice under Medicare laws. The finance corporation that loaned him the money to buy Cooperman’s practice has sued him for failing to repay the loan quickly enough. That suit is still pending.

Wallace said he first learned Cooperman’s center was for sale from a medical practice broker, and became interested when a management company offered to enter a joint contract to buy it. But when the company backed out, Wallace decided to pursue the deal on his own.

All Wallace ever wanted, said his lawyer, Fred Rucker, was to find a practice where he could be “busy and productive.” When he purchased Cooperman’s center, Wallace said, he thought he had found one. He made an initial payment of $300,000 and began making regular installments on the lease of the office’s medical equipment.

But on Day 1, Wallace testified, he discovered that a key piece of equipment, an argon laser, was broken. And six months after he took over the practice, he testified, he found something more disturbing when he received a newspaper article describing a state medical board investigation of Cooperman.

Four months before the doctors signed their deal, the state Board of Medical Quality Assurance had accused Cooperman of forging documents and performing sham surgeries on three patients. In one case, the accusation stated, he damaged a woman’s eye with a laser to force her to need another operation. Before the board had finished hearings on whether to revoke his license, Cooperman allowed it to expire. He has never tried to have it reinstated.

When Wallace read the newspaper report about the allegations, he said, he immediately asked the board for a copy of its accusation. “It was like a bomb went off,” he told the jury.

Wallace quit writing checks to the older ophthalmologist in November 1989. By then, he had paid Cooperman $360,000 for the practice and the lease of its equipment.

In his first year at the new practice, Wallace reported making $1.2 million in revenue--far less than the $2.2 million Cooperman had reported taking in during the previous year. And Wallace said his profits quickly dipped in the years that followed, until he was barely breaking even.

In his lawsuit, filed in 1992, Wallace alleged that Cooperman intentionally withheld the medical board information and tax records that would have been “material” to anyone buying the practice. Claiming fraud and breach of contract, he sought return of the $360,000 and punitive damages.

Cooperman denied the allegations and countersued, charging that Wallace had breached the contract when he halted payments. Cooperman also said Wallace illegally kept a few pieces of mail--including a check--intended for him.

In his defense, Cooperman testified he told Wallace that he had “some problems with the medical board” before selling the practice. His lawyer, Purtich, presented two witnesses, both former office employees, who testified that Wallace knew about Cooperman’s legal problems long before he claimed.

Purtich charged that the younger ophthalmologist was lying about the timing of his discovery of the accusation because he would be prevented from filing a fraud claim--under a three-year statute of limitations--if he had known about Cooperman’s problems earlier.

The practice actually faltered, Cooperman’s lawyer said, because Wallace didn’t have the business savvy or the chair-side manner to succeed in big-money medicine. He presented reports from a medical management consultant who visited the practice several times after the sale. The consultant, who was hired to increase productivity, found that Wallace took too long to treat individual patients and did not attract enough new ones to the office.

Purtich said Wallace also failed to follow through with Cooperman’s media promotion efforts. He presented colorful graphs showing how Cooperman attracted 22.8% of his patients with television ads, 19.4% with a newsletter mailing and 16% with visits to senior citizen centers.

“The real source of the problem is that Dr. Wallace didn’t have the abilities or the capabilities to run the practice well,” Purtich told the jury.

Wallace acknowledged that he dropped the television spots after one year, did not pursue the mailings and had an aide visit senior citizen centers instead of going himself. He also conceded that he held onto Cooperman’s mail, but said he turned it over when his lawyers told him to.

The feud turned out to be no easy matter for the jurors. It took them nearly six weeks to reach their verdict: that Wallace had broken the deal when he stopped paying Cooperman and that he had broken the law by withholding the retired doctor’s mail.

The jury ordered Wallace to pay about $430,000 in back payments, and on Monday instructed him to pay another $50,000 in punitive damages for keeping Cooperman’s mail.

With the testimony ended, Cooperman went back home to Connecticut.

Wallace filed for bankruptcy protection for his medical practice while planning to return to work, for the time being, in the clinic.

“The Golden Triangle,” he said the other day, “ain’t so golden.”