In a shallow dish combine bread crumbs, cheese, and paprika; set aside. In another shallow dish combine egg and milk. Sprinkle chicken pieces with salt and ground black pepper. Dip chicken pieces into egg mixture, dredge through crumb mixture to coat.
In a 12-inch heavy skillet heat oil over medium-high heat until a few of the remaining bread crumbs sizzle when added to skillet. Add chicken pieces to the skillet; reduce heat to medium. Cook, uncovered, for 12 to 15 minutes or until chicken is no longer pink (170F), turning once to brown evenly. Transfer chicken to a serving platter; keep warm.
Stir flour and sage into melted butter in skillet. Add broth. Cook and stir over medium heat until thickened and bubbly; cook and stir for 1 minute. Season with salt and pepper. Serve gravy with chicken and potatoes. Makes 4 servings.