Delaware Court of Chancery: Order Compelling Production of Trial Witness

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE SUMMIT HEALTHCARE OPERATING PARTNERSHIP, L.P. Plaintiff, v. BEST YEARS, LLC, Defendant.)))))))))) C.A. No. 2025-1258-JTL OPINION ORDERING PRODUCTION OF TRIAL WITN ESS Date Submitted: March 3, 2026 Date Decided: March 4, 2026 Robert A. Penza, Stephen J. Kraftschik, Andrew H. Meck, POLSINELLI PC, Wilmington, Delaware; Attorneys for Plain tiff Summit Healthcare Operating Partnership, L.P. Travis S. Hunter, Richar d P. Rollo, Gabriela Z. Monasterio, Benjamin O. Allen, RICHARDS, LAYTON & F INGER, P.A., Wilmington, Delaware; Michael S. Dolu isio, DECHERT LLP, Philadelphia, Pennsylvania; David A. Herman, DECHERT LLP, New Yor k, New York; Mary H. Kim, DECHER T LLP, San Francisco, California; Attorneys for Defendant Best Years, LLC. LASTER, V.C.

The defendant asked the plaintiff to prod uce a witness at trial. The plaintiff declined. The defendant mov ed for an order compelli ng the plaintiff to produce the witness on pain of sanction, arguing that the witness i s the plaintiff ’s managing agent. This decision grants the defendant’s moti on. But the court will allow the witness either to (1) appear in -person at trial or (2) testify remotely for no mor e than two hours at a time within the next two weeks. I. FACTUAL BACKGROUND The facts come from the parties’ submi ssions in connection with the motion to compel. 1 Given the p rocedural postu re, this dec ision does not make formal findings of fact i n the post-trial sense. Instead, the following summary reflects how the record appears at this stage of the proceedings for purposes of this ruling. A. The Joint Venture Summit Heal thcare Operating Partnership, L.P. (“Summit”) is a Delaware limited p artnership. Summit’s general partner is Summit Healthcare REIT, Inc. (the “REIT”), a Maryland corporation. As Summit’s general partner, the REIT manages Summit’s affairs. Best Years, L LC is a Del aware limi ted liability company. Best Years’ parent is Union Life Insurance Co., Ltd. (“Union Life”), a Chinese insurance company. 1 Citat ions i n the form “Ex. __ at _” refer to exhibits to the defendant ’s motion to compel. See Dkt. 71. Citations i n the form “JX _ at __” refer to tria l exhibits. Citations i n the form “[Name] Dep.” refer to wi tness testimony from a deposition transcript.

2 In April 2015, Summit and Best Years established a joint venture to own skilled nursing, assisted living, memory care, and independent living facilities. They formed Summit Union Li fe Holdings, L LC (“Holdco”) a s the vehicle for the joint venture. Summit owns a 10% me mber i nterest in Holdco, and Best Years owns a 90% member interest. B. The Negotiations In April 2025, Summit proposed to buy Best Years’ ownership interest i n five skilled nursing facilities. Summit and Best Years began negotiating terms. On June 19, 2025, Bin Feng, Best Years’ sole employee, emailed El izabeth Pagliarini, Summit’s CEO. He tol d her Best Years wa s “aligned on moving forward at the $16 million purchase price” b ut wanted “a brief summary memo outlining the key business terms to hel p ensure mutual understanding and support our internal review and approval process.” 2 Feng told Pagliarini tha t Best Years “wi ll begin our internal approvals p romptly while y our counsel proceeds with d rafting [a transaction agreement]. ” 3 On June 20, 2025, Pagliarini emailed the summary memo to Feng. On June 25, Feng texted Pagliarini that Best Years had “a few questions a bout the memo. ” 4 2 JX 69. 3 Id. 4 JX 49.

3 He a sked for responses as soon a s possible because Union Li fe’s investment committee (the “Committee”) was slated to discuss the proposed sale the next day. 5 From J uly 5 to July 31, 2025, Summit and Best Years exchanged drafts of a Membership Interest Purchase Agreement (the “Agreement”). On July 31, Pagliarin i asked Feng if he “still need[ed] to get final [Committee] approval before signing.” 6 Pagliarini then sent a n “execution version” of the Agreement. 7 On August 1, 2025, Feng told Pagliarini that “there shouldn’t b e any further [Committee] approvals needed,” and “[i]t’s just going through the usual review steps before we get the final signature.” 8 But Feng added, “L et’s wait to hear ba ck from our attorney.” 9 On August 12, 2025, Feng noti fied Pagliarini that Union Life wa s “still reviewing” the proposed sale, which was “still going through the internal a pproval process.” 10 On September 3, Feng reported to P agliarini that “the approval’s been delayed since regulation got stricter and they need more review time.” 11 5 Id. 6 JX 118. 7 JX 121. 8 JX 124. 9 Id. 10 JX 132. 11 JX 141.

4 On September 5, 2 025, Feng noti fied Pagliarini that “[t]he regula tor wants to pause the sale.” 12 Internally, Union Life was concerned ab out macroeconomic and geopolitical factors, as wel l as ob taining regulatory approval from China’s National Financial Regulatory Administration. Summit and Best Years never executed the Agreement. C. This Litigation On October 10, 2025, Summit demanded that Best Years perform under the Agreement or face a lawsuit. On October 2 4, Best Years disputed Summit’s contentions and represented that its review process remained ongoing. On October 31, 2025, Summit filed this lawsuit. 13 Summit seeks declaratory relief establishing that (i) Summit and Best Years formed a binding contract, (ii) Best Years breached the c ontract, and (iii) Best Years is not excused from performing. Summit separately asserts that Best Years breached a contract under which Best Years was oblig ated to execute the Agreement, deliv er closing documents, cooperate with the U.S. Department of Housing and Urba n Development, escrow funds, and ultimately sell its i nterests in the fiv e facilities to Summit. Alternatively, Summit asserts that Best Years’ conduct breached the implied covenant of good faith and fair dealing. Summit seeks a decree of specific performance. Trial is scheduled for March 6, 2026. 12 JX 142. 13 Dkt. 1.

5 D. Th e Motion On February 23, 2026, Best Years moved to prevent Summi t from relying affirmatively at trial on the deposition of Brenda Daw. 14 The court denied the motion, finding that Summit could use the depositi on under Rule 32 because there was no showing that Summit procured Daw’s absence from Delaware. 15 On March 2, 2026, Be st Y ears moved to compel Summit to bring Daw to testify live at trial on March 6. 16 II. LEGAL ANALYSIS “Through its j urisdiction over a corporation, a court can compel the biological persons who ser ve as its directors, office rs, and managing agents to a ppear as witnesses at trial or for a deposition in a particular l ocation.” 17 In other word s, “ [t]he 14 Dkt. 52. 15 Dkt. 65. 16 Dkt. 71. 17 In re Dole Food Co., Inc. S’holder Lit ig., 110 A.3d 1257, 1262 (Del. Ch. 2 015). See In re Activision Blizzard, Inc., 86 A.3d 531, 552 (Del. Ch. 2014) (“Through its jurisdiction over Vivendi, this court can compel Vivendi’s directors, officers, and managing agents to a ppear at trial or for a deposition in a particular location.”); Hamilton P’rs, L.P. v. Englard, 11 A.3d 1180, 1214 (Del. Ch. 2010) (“[T]hrough its jurisdiction over NYHC and Bio Balance, this Court can compel production of (i) documents in the entities’ possession, custody, or control, (ii) corporate representatives pursuant to Rule 30(b)(6), and (iii) officers, directors, and managing agents of the firms p ursuant to Rule 30 (a).... T hrough its jurisdiction ov er NYHC and Bio Balance, this Court similarly can co mpel the appearance at trial of directors, officers, and managi ng agents of the corporate entities. ”); Hoechst Celanese Cor p. v. Nat’l Union Fire Ins. Co. of Pitts b urgh, Pa., 1997 WL 716898, at *1 (Del. Super. Aug. 18, 1997) (“It is within the power of this Court to compel the live testimony of a non - resident officer, director or managing agent of a Dela ware corporate [party] whi ch has availed itself to the jurisdiction of th i s Court.”); Dalton v. Am. Inv. Co., 1981 WL

6 same j urisdictional authority exercised in connection with the discovery process empowers the Court to issue trial subpoenas to officers, directors, a nd managing agents of a corporate party.” 18 The Court of Chancery Rules recognize this authority. They provide that a party can call a director, officer, o r managing agent of an adverse party to testify at trial and interrogate the witness using leading questions: A party to the record in any action or judicial proceeding may interrogate any unwilling or hostile wi tness by leading questions. Such party may call... an officer, director or ma naging agent of a public or private corporation or of a p a rtner ship or association which is an adverse party, and interrogate the witness thus ca l led by leading questions and contradict and impeach the witness in all respects as if the witness had been called by the adverse party. 19 7619, at *1 (Del. Ch. June 9, 1981) (noting court’s discretionary authority to order deposition at a partic ular location); Lasher v. Sterwin Lab ’ys, 1980 WL 10017, at *1 – 2 (Del. Ch. Jan. 28, 1980) (ordering defendant corporation to produce witnesses for deposition in Delaware); 7 Daniel R. Coqui llette et al., Moore’s Federal Pra ctice— Civil § 30.03, LexisNexis (database updated 2026) (“ When the deponent is a corporation, the person designated to be deposed on behalf of the c orporation must be an officer, dire ctor, or ma naging a gent of the corporate deponen t.... Furthermore, since only a party may be compelled to give testimony pursuant to a simple notice of deposition, it is important to determine whether a person is an officer, director, or managing agent of a corporate party or other entity. If not deposed as a representative of the corporate party, the witness must be subpoenaed. ”); 8A Charles Al an Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 2107 (3d ed. 2010), Westlaw (database updated Sep. 2025) hereinafter Wright & Miller. 18 Hamilton P’rs, 11 A.3d at 1215. 19 Ct. Ch. R. 43(b).

7 Federal authorities have reached the same conclusion. 20 The power to compel operates agai nst the party, not the out -of-state individual. “As during the discovery process, any consequence for the individual ’s failure to appear, including sanctions, a dverse i nfer ences, or other ruli ngs, falls on the corporation, not the individual whom the cor poration was compelled to produce.” 21 Those principles apply equally to LLCs. The court has jurisdiction over Summit. Thr ough the c ourt’s jurisdiction over Summi t, the cour t can compel Summit to appear at trial through its managing agent. If Daw is a managing agent, then the court can compel Summit to produce her. A. Managing Agent Status A managing agent is “one who has general power involving the ex ercise of judgment and discr eti on.” 22 “It is not necessary that the managing agent should have sole control of the corporation’s affairs, nor be a general manager, nor have unli mited discretion.” 23 An i ndividual need not qualify as a managing agent for all purposes. 20 See Hamilton P’rs, 11 A.3d at 1215 n.19 (collecting authorities). 21 Id. at 1215 – 16. S ee Ct. Ch. R. 37(b)(2); accord Fed. R. Ci v. P. 37(d) advisory committee’s note to 1970 amendment (“The failure of an officer or managing agent of a party to make disco very as required by present Rul e 37 (d) is treated as the failure of the party.”). 22 Goldman v. Shahmoon, 208 A.2d 492, 494 (Del. Ch. 1965) (citing 9 William Meade Fletcher et al., Fletcher Cyclopedia of the Law of Corporations § 4416). 23 9 William Meade Fletcher et al., Fletche r Cy clopedia of the Law of Corporations § 4416, Westlaw (database updated Sep. 2025) (footnotes omitted).

8 The indivi dual need only qualify as managing agent with respect to events that are significant to the claims at issue. 24 The test is functional, not formalistic. In Goldman, this court adopted a three-part test to determine whether an individual “may be considered a ma naging agent and not a mere employee.” 25 T he test asks whether the employee i s “ (1) invested with power to exercise personal judgment and discretion in corporate matters; (2) ma y b e depended on to carry out his employer’s d irection to testify when called upon b y an adversary, and (3) i s expected to identify his interests with those of the corporation rather than those of other parties.” 26 “[D]oubts about an individual’s status as a ‘managing agent,’ at the pre - trial discovery stage, are resolved in favor of the examining party.” 27 24 See 8A Wright & Miller, s upra, § 2107 n.2 (“ Although employees may not be managing agents regarding their everyday duties, they may nonetheless be managing agents about testimony concerning important activities at issue in the litigation. ”). 25 Goldman, 208 A.2d at 494. 26 Id. (citing Rubin v. Gen. Tire & Rubber Co., 18 F.R.D. 51, 55 (S.D.N.Y. 1955)); accord Phila. Indem. Ins. Co. v. Fed. Ins. Co., 215 F.R.D. 492, 49 4 (E.D. Pa. 2003) (“ To determine whether an employee is a managing agent, courts consider whether the individual is: ‘ (1) invested wi th power to exercise his discretion and j udgment in dealing wi th corporate matter, (2) can b e depended upon to c arry out employer ’ s direction to give required testimony, and (3) has an alignment of i nterests wi th the corporation rather than one of the other parties. ’ ” (quoting M.F. Bank Restoration Co. v. Elliott, Bray & Riley, 1994 WL 8131, at *2 (E.D. Pa. Jan. 11, 1994))). 27 In re Honda Am. Motor Co., Inc. De alership Rels. Litig., 168 F.R.D. 535, 540 (D. Md. 1 996); accord AngioDynamics, Inc. v. Biolitec AG, 99 1 F. Supp. 2d 283, 296 (D. Mass. 2014), aff’d, 780 F.3d 429 (1st Cir. 2015).

9 The moti on seeks to compel a witness to app ea r at trial, so Best Years does not get the benefit of the doubt. Best Years must carry its burden of meeting all three elements. It has for Daw. 1. The Individual’s Power To Exercise Judgment And Discretion The first factor i s w hether the entity has invested the individual with the power to exercise judgment and discretion on its behalf. 28 This factor takes into account the “ func ti ons, respons ibilities and authority of the individual involved respecting the s ub ject ma tter of the liti ga tion.” 29 The ri g ht to secure testimony from a managing agent would “ be an empty right indeed if onl y those persons came within the category of ‘managing agent’ whose rank in the corporate hierarchy was so exalted that they would be extremely unlikely to have any knowledge of the day to day dealings.” 30 Here, Summi t invested Daw wi th the power to exercise j udgment and discretion on its behalf on matters relating to Holdco. Daw is the REIT’s sole asset manager, a nd the REIT manages Summit a s its general partner. Daw handles all of the portfolio reporting for Summit’s assets, arranges and conducts site v isits, and 28 Goldman, 208 A.2d at 494 (citing Rubin, 18 F.R.D. at 55). 29 M.F. Bank Restoration Co., 1994 WL 8131, at * 3 (emphasis in original) (internal quotation marks omitted). 30 Rubin, 18 F.R.D. at 55.

10 maintains the dashboard. She handled “just ab out ev erything” relat ed to the properties that the REIT buys and sells. 31 Daw is Summit’s principal repr esentative at Holdco. She often engages with Feng, Best Years’ sole employee, and is generally the only Summ it representative on the regular monthly calls to discuss Holdco a ssets. Daw served as the primary point of contact at Summit for Best Year s on several key transactions. Through those experiences, she became familiar with the internal a pproval processes at Best Years and Union Life. Summit contends that Daw was not Summit’s ma naging agent for purposes of the Agreement. According to Summit, Daw ’s responsibilities relate to operational matters at the five facilities, not whether the parties reached a deal. Tha t is too fine a distinction. For purposes of the managing agent inquiry, Summit ha s entrusted Daw with the power to exercise judgment and d iscretion on its behalf for pu rposes of matters relating to Holdco. That is sufficient for purposes of this case. 2. The Individual’s Reliability The second factor is whether the i ndividual “may be depended on to carry out his employer’s dire ct ion to testify when called upon by an a dversary.” 32 That cumbersome framing gets at whether an objective observer would regard the 31 Pagliarini Dep. 21. 32 Goldman, 208 A.2d at 494 (citing Rubin, 18 F.R.D. at 55).

11 individual as a ble to speak on the entity’s behalf wi th respect to the matters in dispute. A court’s a bility to compel an entity to pr oduce a director, officer, or ma naging agent recognizes the persistent reality that a j ural entity “is an artificial being, invisible, intangible, and existing only i n contemplation of law.” 33 “[B]eing a purely metaphysical creature, having no mind with which to think, no wi ll with which to determine and no voi ce wi th whi ch to spea k,” a j ural entity “must depend upon the faculties of natural persons to determine for it its policies and direct t he agencies through whi ch they are to be effectuated.” 34 “ Because of its lack of a body and mind, a corporation only can act through human agents. ” 35 That is just as true for testimony. “Notwithstanding this definition and the various commercial and economic contexts in which the la w a pprop riately personifies corporations, the Rules of Evidence make clear that a witness must be a biological person.” 36 But b ecause an entity lacks mind, b ody, and voice, a n entity c annot testify. 37 33 Trustees of Dartmouth Coll. v. Woodward, 17 U.S. 518, 636 (1819). 34 N. Assur. Co. v. Rachlin Clot hes Shop, 125 A. 184, 188 (Del. 1924). 35 Dole Food Co., 110 A.3d at 1261 (collecting authorities). 36 Id. at 1260. 37 Id. at 1261.

12 To overcome that problem, “rules of procedure enable parties to obtain testimony from a knowledgeable... representative or to compel a corporation to produce an officer, director, or managing agent whose testimony wi ll bind the entity.” 38 For an individual’s testimony to fairly bi nd the entity, however, the individual must be someone who can speak on the entity’s b ehalf on the matter at issue. That does not mean an entity can defeat an application to prod uce an individual as a managi ng agent simply b y denying the individual authority. The i nquiry is necessarily objective. Summit has demonstr ated tha t Daw can speak on its behalf for purposes of matters relating to Holdco. Daw’s day - to -day authority over Holdco matters demonstrates that. Li kewise, in this litigation, Summit listed Daw in its interrogatory responses as both a person with knowledge and a person who assisted in preparing the responses themselves. 39 Summi t’s counsel also represented Daw during her deposition. 3. No Misalignment Of Interests The third factor asks whether the individual would identify w ith the interests of the entity rather than an adverse party. 40 Because the managing ag ent’s testimony operates as testimony on behalf of the entity, fairnes s demands that the managing 38 Id. at 1262. 39 Ex. A at 12, 14. 40 Goldman, 208 A.2d at 494 (citing Rubin, 18 F.R.D. at 55).

13 agent not be aligned wi th the adverse party. The i nquiry is again obj ective. A party cannot simply claim that it susp ects the witness would go r og ue. “[T]his requirement should b e l iberally interpreted because the determinati on that the corporation is or is not bound by the testimony of a person who was examined as its managing agent is to be made by the trial court.” 41 The same indications tha t show Daw can speak reliably on behalf of Summit demonstrate that her interests are aligned with Summit’s. As an employee of the REIT, she is the REI T’s agent a nd owes a duty of loy alty to her employer. The REIT in turn serves as S ummit’s general partner and owes a d uty of loyalty to Summit. No one has pointed to any reason to thi nk that Daw’s interests would be aligned with Best Years. B. Exercise Of The Court’s Discretion Daw is therefore Summit’s managing agent. But that does not mean the court must exercise that authority. 42 Delaware Rule of Evidence 611(a) states: “The court should exercise reasonable control over the mode and order of examini ng witnesses and p resenting evidence so as to: (1) make those procedures effecti ve for determining the truth; (2) avoid wasting time; a nd (3) protect witnesses from ha rassment or undue 41 Rubin, 18 F.R.D. at 56. 42 See Saxe v. Brady, 1 961 WL 62158, at *1 (Del. Ch. Oct. 20, 1961) (recognizing that power exists to order the appearance at trial of non-resident officers and managing agents but declining to exercise authority).

14 embarrassment.” 43 Here, those considerations call for compelling Daw to testify, but also giving her the option to do so i n a manner that avoids a last minute cross -country flight to appear in person in two days. Daw’s testimony is likely to be probative on matters that will help the court determine the truth and resolve the case. Her fun ctions, responsibilities, and authority as Summit’s ass et manager make her testimon y significant. Her understandings about how Best Years has enga ged in d eals wi th Summi t in the p ast could be important. She is also one of two principal Summit witnesses with personal knowledge of the even ts. Daw received nearly every relevant written communicati on beyond Paglia rini and Feng’s text me ssage ex changes. She also attended a monthl y dashboard call where Best Years raised the status of the sale and Daw cited Summit’s readiness to sue. She need not have negot iated the Agreement personally or been the ultimate decisionmaker for her testimony to be relevant and helpful. Summit also points out that even if the court declined to require Da w to appear, Best Years would still have a witness to question. Summit is bringing Pagliarini to tr ial. On top of being Summit ’s CEO and a d irector, P agliarini is (according to Summit) its most knowledgeable representative about the deal. That might well be true, but Best Years is not required to accept only the witness that Summit proffers. Best Years c an call on this court to use its subpoena power to secure testimony from other wi tnesses. Daw i s a managing a gent, so Best 43 D.R.E. 611(a).

15 Years can seek to ha ve the court compel Da w to testify, even though P agliarini is coming to trial. Because Best Years should have the ab ility to present i ts case as it wishes, subject to Rule 6 11, Best Years’ desire to elicit Daw’s testimony c arries heavy weight. 44 The court will therefore direct Summit to p roduce Daw for trial. But the court will not require Daw to testify on March 6, 2026. Trial is currently scheduled for one day. If Summit wishes to prod uce Da w for t ria l on March 6, that is fi ne. But Summit has the op tion of producing Daw to testify remotely for no more than two hours (s plit equally between the parties) at a convenient time within the next two weeks. III. CONCLUSION Summit must produce Daw to testify at trial. By 9:00 a.m. on March 5, 2026, Summit must inform Best Years whether Da w will appear for trial on Friday or testify remotely. 44 Rubin, 18 F.R.D. at 55 – 56 (rejecting similar argument).