Enhabit, Inc. v. Nautic Partners IX, L.P.

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
LORI W. WILL LEONARD L. WILLIAMS JUSTICE CENTER
VICE CHANCELLOR 500 N. KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19801-3734

Date Submitted: October 10, 2023
Date Decided: October 12, 2023

Srinivas M. Raju, Esquire Lewis H. Lazarus, Esquire
Kyle H. Lachmund, Esquire Albert J. Carroll, Esquire
Naseeba Saeed, Esquire Barnaby Grzaslewicz, Esquire
Richards, Layton & Finger, PA Samuel E. Bashman, Esquire
920 North King Street Morris James LLP
Wilmington, Delaware 19801 500 Delaware Avenue, Suite 1500
Wilmington, Delaware 19801

Kenneth J. Nachbar, Esquire
Megan Ward Cascio, Esquire
Alexandra M. Cumings, Esquire
Emily C. Friedman, Esquire
Morris, Nichols, Arsht &
Tunnell LLP
1201 North Market Street
Wilmington, Delaware 19801

RE: Enhabit, Inc., et al. v. Nautic Partners IX, L.P., et al.,
C.A. No. 2022-0837-LWW

Dear Counsel:

This letter resolves the three discovery motions currently pending before me

in this matter. I will dispense with a discussion of the background and refer to the
C.A. No. 2022-0837-LWW
October 12, 2023
Page 2 of 7

description in my September 8, 2023 letter decision.1 Oral argument on the motions

is unnecessary. Each of the motions is granted.

I. SCHUPPAN DEPOSITION

The plaintiffs have moved to compel the continued deposition of David

Schuppan of The Vistria Group.2 Schuppan was deposed on August 16, 2023 in

both his individual capacity and as a Rule 30(b)(6) designee on a total of 31 topics.3

The night before his deposition, he produced nearly a year’s worth of his phone

records.4 After the deposition, Vistria produced a number of documents—including

those that I ordered to be produced in my September 8 decision.

A continued deposition in Schuppan’s individual capacity is appropriate given

that a significant number of relevant documents were produced after his deposition

and others were produced hours before. The plaintiffs may depose Schuppan on his

1
Dkt. 315. Undefined capitalized terms used herein have the meaning given in the
September 8 letter decision. Id.
2
Pls.’ Mot. to Compel Continued Dep. of David Schuppan (Dkt. 323) (“Schuppan Mot.”);
see id. Exs. 7, 8; see also Dkts. 337, 346.
3
Schuppan Mot. ¶¶ 2, 9.
4
Id. ¶ 9.
C.A. No. 2022-0837-LWW
October 12, 2023
Page 3 of 7

belatedly produced phone records, the newly produced documents insofar as they

involve or relate to Schuppan, and the subject matter those documents cover.5

The plaintiffs may also depose Schuppan on the topics for which he was the

Rule 30(b)(6) designee but provided incomplete testimony. For example, he did not

provide an adequate answer when asked about the structure of TopCo or the roles of

entities within TopCo’s organizational structure—topics on which he was

designated to testify.6 Rule 30(b)(6) designees are expected to provide “full and

complete answers on behalf of the organization” on whose behalf they are

testifying.7 Further, to the extent that the newly produced documents bear on

Schuppan’s Rule 30(b)(6) testimony, additional questioning is permitted.

5
See Mechel Bluestone, Inc. v. James C. Just. Cos., Inc., 2014 WL 7011195, at *11 (Del.
Ch. Dec. 12, 2014) (permitting a party to re-depose witnesses who authored and received
relevant documents produced after the court granted a motion to compel).
6
E.g., Schuppan Mot. Ex. 10 at 69-70, 192-94.
7
See, e.g., Fitzgerald v. Cantor, 1999 WL 252748, at *3 (Del. Ch. Apr. 5, 1999)
(explaining that an organization fails to comply with its obligation to prepare a 30(b)(6)
representative if, “at the time of the deposition, the person or persons it designates as
witnesses are unaware of the organization’s full knowledge of a matter set forth [in the
notice] and, therefore, are unable to provide full and complete answers on behalf of the
organization”); ADT Hldgs., Inc. v. Harris, 2017 WL 3635303, at *2 (Del. Ch. Aug. 24,
2017) (observing that where an organization fails to fulfill its duty to prepare a Rule
30(b)(6) deponent, the deposing party “can demand that the organization produce an
adequate witness, either by educating the previously proffered witness or by naming a
supplemental witness”).
C.A. No. 2022-0837-LWW
October 12, 2023
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The additional deposition (both individual and Rule 30(b)(6)) shall be limited

to a total of five hours on the record. The parties shall meet and confer in advance

about the precise scope of the Rule 30(b)(6) deposition.

II. COLTHARP DEPOSITION

Certain of the defendants have moved to compel additional deposition

testimony from Douglas Coltharp, an officer of Encompass Health Corporation.8

Coltharp was deposed on July 25, 2023 in both his individual capacity and as a Rule

30(b)(6) designee of the plaintiffs on certain topics.9 After the deposition, the

plaintiffs and the plaintiffs’ advisor Citigroup, Inc. produced thousands of

documents.10 Many documents include Coltharp or reference his involvement in key

issues.11

The defendants are permitted to depose Coltharp in his individual capacity on

the newly produced documents and the subject matter those documents cover.12

8
Defs. Vistria Fund III, LP, The Vistria Group LP, David Schuppan, TVG NP Homecare
Topco, LP and Chris Walker’s Mot. to Compel Additional Dep. of Douglas Coltharp (Dkt.
324) (“Coltharp Mot.”).
9
Id. ¶ 12.
10
See Defs. Vistria Fund III, LP, The Vistria Group LP, David Schuppan, TVG NP
Homecare Topco, LP and Chris Walker’s Reply in Supp. of Their Mot. to Compel
Additional Dep. of Douglas Coltharp (Dkt. 345) 2.
11
Id.
12
See Mechel Bluestone, 2014 WL 7011195, at *11.
C.A. No. 2022-0837-LWW
October 12, 2023
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More specifically, the scope of Coltharp’s additional deposition will include

“documents produced after his deposition that involve him or relate to his work with

Citi, as well as relevant documents that Citi and plaintiffs improperly withheld or

redacted.”13

To the extent that the newly produced documents are relevant to categories of

testimony on which Coltharp was the Rule 30(b)(6) designee, the parties shall meet

and confer about the scope of any further deposition. The testimony sought must be

limited to the newly produced documents and their subject matter insofar as they

relate to the topics on which Coltharp was designated to testify.

The deposition (both individual and Rule 30(b)(6)) must be limited to a total

of 90 minutes on the record.

III. AT&T SUBPOENA

Finally, defendant Christopher Corey seeks to quash a subpoena to non-party

AT&T Mobility, LLC as untimely.14 The scheduling order in this action states that

fact discovery concluded on July 21, 2023.15 The parties agreed to a limited

13
Coltharp Mot. ¶ 16.
14
Def. Christopher Corey’s Mot. to Quash Subpoena Duces Tecum to AT&T Mobility
LLC (Dkt. 331) (“Corey Mot.”).
15
Dkt. 22.
C.A. No. 2022-0837-LWW
October 12, 2023
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extension of the fact discovery deadline until August 25,16 and then to September 12

to resolve outstanding disputes.17 The subpoena to AT&T Mobility was served on

September 12.18

Although the plaintiffs reserved their rights “to seek additional discovery

based on resolution of outstanding issues” and “to add disputes based upon

subsequent discovery,”19 the subpoena concerns neither. After Corey produced

responsive text messages on June 20, the plaintiffs did not raise any issues or request

a broader production of texts. There is nothing in the record indicating that the

parties continued to engage on Corey’s texts between June 20 and August 25. In

fact, the dispute was never raised with Corey anew after he agreed to a time frame

for phone record production on April 10.20 The dispute was not outstanding as of

August 25; it had been dropped.

In any event, the subpoena was served on the final day of the extended

discovery period, leaving Corey no time to respond.21

16
Corey Mot. Ex. 1.
17
Corey Mot. Ex. 3.
18
Dkt. 321.
19
Corey Mot. Ex. 3.
Pls.’ Opp’n to Def. Christopher Corey’s Mot. to Quash Subpoena Duces Tecum to
20

AT&T Mobility LLC (Dkt. 341) Ex. 2.
21
See, e.g., Jackson v. Copeland, 1995 WL 54434, at *4 (Del. Ch. Jan. 25, 1995)
(concluding that discovery requests filed on the day fact discovery closed were untimely).
C.A. No. 2022-0837-LWW
October 12, 2023
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The subpoena is therefore untimely and quashed.22

IV. CONCLUSION

For the reasons set forth above, the motions are granted. To the extent

necessary for this decision to take effect, IT IS SO ORDERED.

Sincerely yours,

/s/ Lori W. Will

Lori W. Will
Vice Chancellor

22
See In re ExamWorks Grp., Inc. S’holder Appraisal Litig., 2018 WL 1008439, at *6 (Del.
Ch. Feb. 21, 2018) (explaining that “Delaware courts strictly adhere to discovery cut-off
dates”).