was not designed to create such a wasteful incentive. See id. at 661 (finding no joint client exception, in part because it "would unjustifiably require parties far too often to bear the expense and strain of retaining two sets of lawyers").
Accordingly, the Court concludes that the joint client exception to the attorney-client privilege is not applicable to the documents between Payne Thompson and Plaintiff or the trust funds which Defendant seeks to inspect.
Defendant further argues that Plaintiff has waived he right to assert the attorney-client privilege by failing to assert the privilege and by stipulation. A waiver cannot be inferred from the alleged failure by Plaintiff's counsel to assert the privilege at the deposition. Counsel's actions were based on a representation made by Defendants' attorney, which Plaintiff's counsel apparently later learned was incorrect. Furthermore, the deposition questions which the witness was permitted to answer were limited to a single exhibit and did not intrude into areas protected by the privilege.
The Court has broad discretion in deciding whether to hold the parties to a stipulation. See Seymour v. Summa Vista Cinema, 809 F.2d 1385, 1388 (9th Cir. 1987). The Court may relieve a party from a stipulation entered into it by inadvertence, where the opposing party would not be prejudiced. See United States v. McGregor, 529 F.2d 928, 931-32 (9th Cir. 1976). At the time the stipulation purporting to reorganize a joint client relationship was made, Plaintiff's counsel appears to have had difficulty ascertaining the real nature of Payne Thompson's role in the construction loans, because discovery against Payne Thompson had been stayed. A facsimile transmission, but no executed copy of the stipulation, was sent to Defendant; Plaintiff rescinded shortly thereafter. The authority of Plaintiff's attorney to even enter into the stipulation is unclear. Nor has Defendant shown reliance such that it will be prejudiced if the stipulation is set aside. Given these reasons, the importance of this issue, and the Court's view that no joint relationship existed, the Court will not hold the parties to the stipulation. Defendant's motion to compel is denied.
Dated February 27, 1996
United States Magistrate Judge