MEMORANDUM

JAN DuBOIS, District Judge

I. INTRODUCTION

This case arises out of a property dispute between plaintiff, Phyllis J. Swails, and defendant, Karen Haberer, after the dissolution of their same-sex domestic partnership in January 2002. The parties' claims involve the following property: a four bedroom single family home located at 115 Savory Lane, North Wales, Pennsylvania, titled in plaintiff and defendant's names as joint tenants with right of survivorship; a 1999 Honda ACE motorcycle and a 2001 Harley Davidson Ultra Classic motorcycle, both titled solely in plaintiff's name; and approximately $75,000 in cash from two bank accounts held by the parties during the course of their relationship as joint tenants with right of survivorship.

The Court conducted a two-day non-jury trial on June 9-10, 2004, in which it heard evidence and argument regarding the parties' intent with respect to ownership of the property at issue and expenses related to that property. In her Complaint and on the first day of trial, plaintiff took the position that the Court should partition the Residence pursuant to Pennsylvania Rule of Civil Procedure § 1551, et seq. On the second day of trial, however, plaintiff reversed positions and argued for the first time that this Court lacked subject matter jurisdiction to partition the Residence. After the trial, the parties submitted supplemental briefing on the jurisdictional issue. The Court will address the jurisdiction issue first and then turn to the issues relating to ownership and distribution of the property.

II. JURISDICTION

Plaintiff argues that the Court does not have subject matter jurisdiction over this case because the partition of Pennsylvania real property is governed by Pennsylvania Rule of Civil Procedure § 1551, et seq. Relying on Erie R.R. v. Tompkins, 304 U.S. 64 (1938), plaintiff contends that federal courts sitting in diversity do not have jurisdiction to apply state procedural rules. Because there is no Federal Rule of Civil Procedure governing partition of real property between private individuals, plaintiff argues that this Court lacks jurisdiction to decide plaintiff's partition claim asserted in Count I of the Complaint and must, therefore, dismiss that claim without prejudice.

The Court rejects plaintiff's argument. The Court has jurisdiction over this case pursuant to 28 U.S.C. § 1332 which provides that "district courts shall have original jurisdiction of all civil actions in which the matter in controversy exceeds the sum or value of $75,000, exclusive of costs, and is between — (1) citizens of different States." The Supreme Court decision inErie does not limit this grant of jurisdiction. Indeed, far from depriving federal courts of jurisdiction to apply state procedural rules, Erie and its progeny require a district court to apply a state civil procedure rule if application of the rule would impact the outcome of the litigation. See, e.g., Fauber v. Kem Transportation and Equipment Co., Inc., 876 F.2d 327, 332 (3d Cir. 1989) (applying Pennsylvania Rule of Civil Procedure 238 to state law cause of action pursuant to Erie doctrine). The Court in Fauber noted:

The test of whether a rule of law is substantive or procedural for Erie purposes is neither its state label nor the purpose the state ascribes to it. Guaranty Trust Co. of New York v. York, 326 U.S. 99, 109 (1945). The proper inquiry `whether application of the rule would make so important a difference to the character or result of the litigation that failure to enforce it would unfairly discriminate against citizens of the forum State, or whether application of the rule would have so important an effect upon the fortunes of one or both of the litigants that failure to enforce it would be likely to cause a plaintiff to choose the federal court.' Hanna v. Plumer, 380 U.S. 460, 468 n. 9 (1965).

The fact that Pennsylvania law governing the partition of real property is codified in a state rule of civil procedure is irrelevant to the Court's subject matter jurisdiction. As there is no federal law governing the partition of property between private citizens, the Court will apply Pennsylvania Rule of Civil Procedure § 1551, et seq. to the partition claim. See Fischer v. Wurts, No. 96-6863, 1997 U.S. Dist. LEXIS 10393, *16 (E.D. Pa., July 18, 1997).

III. FINDINGS OF FACT

Based upon the evidence submitted during the two-day non-jury trial, the Court makes the following findings of fact:

1. Plaintiff is an adult citizen domiciled in Germantown, Maryland

2. Defendant is an adult citizen domiciled at 115 Savory Lane, North Wales, Pennsylvania.

3. The property at issue is valued at more than $75,000.

4. Plaintiff and defendant began a same-sex domestic partnership in 1997 while they resided in Florida.

5. In June 1998, defendant relocated to Pennsylvania to accept a new job at Prudential at an annual salary of $100,000.

6. In July 1998, plaintiff joined defendant in Pennsylvania.

7. While residing in Pennsylvania, plaintiff did not obtain gainful employment.

8. Plaintiff's sole source of income while residing in Pennsylvania was $450 she received monthly as rent of a trailer she owned in Florida.

9. On June 23, 1999, plaintiff and defendant purchased a four bedroom single family home at 115 Savory Lane, North Wales, Montgomery County, Pennsylvania ("Residence").

10. Title to the Residence was transferred to the parties as "joint tenants with right of survivorship and not as tenants in common."

11. Prior to purchasing the Residence, the parties consulted an attorney to obtain advice regarding the legal ramifications of purchasing a house as joint tenants with right of survivorship.

12. Prior to purchasing the Residence, the parties consulted a manual entitled "A Legal Guide for Lesbian and Gay Couples," which provided advice regarding the legal ramifications of purchasing property as joint tenants. The Guide states, in pertinent part:

Joint tenancy means you share the property ownership equally, and that each of you has the right to use the entire property. Joint tenancy also comes with something called a `right of survivorship.' It fact, the deed sometimes reads `joint tenancy with the right of survivorship.' This means that if one joint tenant dies, the other one automatically receives the deceased person's share. And when joint tenancy property passes to the other joint tenant at death, there's no need for any probate proceedings . . . Joint tenancy can't be used if a house is owned in unequal shares. It's appropriate only when each joint tenant owns the same portion. This means that you and your lover could put a house you owned 50-50 in joint tenancy or that three people could have a joint tenancy with each owning one-third of the property. If you own 65% of a house, however, and your lover owns 35%, joint tenancy won't work . . . Even if you are equal owners taking title as joint tenants, you can still provide compensation if one of you contributed more to the down payment. But in order to avoid undermining the basic framework of joint tenancy — which is inherently 50-50 — set a dollar value for reimbursement rather than adjusting ownership percentages.

13. Before purchasing the Residence, defendant read the Guide and was very familiar with it.

14. Defendant understood that titling the Residence as a joint tenancy with right of survivorship would transfer ownership of the Residence to the parties in equal shares.

15. The purchase price of the Residence was $317,782.92.

16. Of the purchase price, $240,000 was financed by a mortgage in which both plaintiff and defendant were obligors. The remaining $78,390.59 of the purchase price was paid from the proceeds of the sale of defendant's home in Florida.

17. The parties lived together at the Residence from June 1999 to January 2002, when the parties terminated their relationship and plaintiff moved to Maryland

18. The fair market value of the Residence as of January 2002 was $365,000. That fair market value was based upon an appraisal by Christopher L. Meszaros, dated March 5, 2004, which was commissioned by defendant.

19. As of January 2002, the outstanding mortgage on the Residence was approximately $233,366.36.

20. In February 1999, defendant purchased a 1999 Honda ACE motorcycle for approximately $11,000 and titled the vehicle in plaintiff's name alone.

21. In June 2000, defendant purchased a 2000 Harley Davidson motorcycle and titled the vehicle in plaintiff's name alone.

22. Plaintiff was the exclusive operator of the motorcycles. Defendant rode the motorcycles only occasionally as a passenger.

23. During the course of their relationship, the parties maintained a joint money market account at Providian National Bank ("Providian account").

24. During the course of their relationship, the parties maintained a joint checking account at First Union Bank ("First Union account").

25. The Providian and the First Union accounts were titled in both parties' names as joint tenants with right of survivorship. Both parties had authority to withdraw funds.

26. From June 1999 to October 2001, the Providian account was funded primarily from defendant's salary, bonus, and savings, with the exception of approximately $450 a month from the rental of plaintiff's trailer in Florida.

27. In June 2000, plaintiff was involved in a serious motorcycle accident.

28. In October 2001, plaintiff received approximately $127,000 in settlement of personal injury and property damage claims arising from the motorcycle accident.

29. Plaintiff used approximately $23,000 of the settlement proceeds to purchase a 2001 Harley Davidson motorcycle to replace the 2000 Harley Davidson motorcycle that was destroyed in the accident. The remainder of the settlement proceeds was deposited in the First Union account. Prior to that deposit, the balance in the First Union account was $2,831.27.

30. Plaintiff did not intend to make an immediate gift to defendant of any portion of the settlement proceeds.

31. On or about October 21, 2001, plaintiff transferred $90,000 of the settlement proceeds from the First Union account to the Providian account, leaving $12,000 of the settlement proceeds in the First Union account. Prior to that transfer, the balance in the Providian account was $449.09.

32. In March 2001, defendant was laid off by Prudential, and has since remained unemployed.

33. From the time the parties purchased the Residence in June 1999 until they separated in January 2002, they paid the following amounts in mortgage payments, real estate taxes, insurance and maintenance costs: (a) 1999 — $18,126.61; (b) 2000 — $30,306.24; (c) 2001 — $21,469.69.

34. From the time the parties purchased the Residence in June 1999 until their separation in January 2002, the parties contributed to the mortgage, real estate taxes, insurance, and maintenance, at the following rate: approximately eighty-three percent by defendant and approximately seventeen percent by plaintiff.

35. Since the parties' separation in January 2002, defendant has paid all expenses related to the Residence, including mortgage, real estate taxes, insurance and maintenance costs.

36. The Residence is not capable of division into purparts.

37. Wells Fargo Home Mortgage, Inc., ("Wells Fargo") is the current mortgagee of the Residence. The balance due on the mortgage as of the date of the trial was $205,490.33.

38. Excepting only Wells Fargo, the parties are the only individuals with an interest in the Residence.

39. At the time the parties separated in January 2002, the balance in the Providian account was $76,670 and the balance in the First Union account was $2,831. All of this money was traceable to the settlement funds paid to plaintiff as a result of her motorcycle accident.

40. Shortly after the parties separated, defendant transferred $70,831 from the Providian and First Union Accounts into an interest bearing account at ING Direct ("ING account") solely in defendant's name. The balance of the ING account as of the date of trial was $74,743.

41. At the time the parties separated, plaintiff retained $8,670 from the Providian account.

42. Defendant currently possesses the title to the 1999 Honda motorcycle. Plaintiff currently possesses the title to the 2001 Harley Davidson motorcycle.

43. Plaintiff currently possesses both the 1999 Honda and the 2001 Harley Davidson motorcycles.

IV. CONCLUSIONS OF LAW AND DISCUSSION

A. The Court's Preliminary Ruling at the Conclusion of Trial

At the close of trial on June 10, 2004, the Court issued an informal ruling relating to the appropriate distribution of the property. The Court stated that it had not yet determined the grounds that it would rely upon in its final order, but that it had preliminarily decided, based upon a rough approximation of the parties' respective contributions to the Residence, that the Residence would be awarded to defendant. The Court further stated that the bank accounts and motorcycles would be awarded to plaintiff.

The Court's formal ruling memorialized in this Memorandum and Order is, in general, similar to its preliminary ruling issued at the close of trial. To the extent that the two rulings differ, the formal ruling of the Court, based upon a close review of the record and additional research, including a case decided by the Pennsylvania Superior Court after the close of trial, Nicholson v. Johnston, 2004 PA Super 279, *15 (Pa.Super. 2004), supercedes the informal ruling.

B. The Residence

1. Mutual Mistake

It is defendant's position that plaintiff is not entitled to half of the net value of the Residence because the deed granting title of the Residence to both parties as "joint tenants with right of survivorship and not as tenants in common" was based upon a mutual mistake of fact. Defendant argues that the parties intended to remain domestic partners for life or, at minimum, for a substantially longer period than the approximately two and a half years the parties lived together in the Residence. According to defendant, the joint tenancy with right of survivorship was predicated upon the fulfillment of this intention and enforcing the strict terms of the deed when the domestic partnership dissolved just two and a half years after they purchased the Residence would be contrary to the parties' intent. Thus, defendant argues that she should be awarded the Residence.

The Court rejects defendant's argument. The language of the deed provides that the parties own the Residence as "joint tenants with right of survivorship and not as tenants in common." To challenge the express terms of the deed, defendant must demonstrate the parties' mutual mistake of fact by "clear, precise and convincing evidence." Central Transp., Inc. v. Board of Assessment Appeals, 490 Pa. 486, 494 (1980) (citations omitted). Defendant has failed to meet this high burden.

Defendant admitted at trial that, prior to purchasing the Residence, the parties consulted an attorney and a manual entitled "A Legal Guide for Lesbian and Gay Couples" to determine how the parties should title the deed to the Residence. The Guide states in relevant part:

Joint tenancy means you share the property ownership equally, and that each of you has the right to use the entire property. Joint tenancy also comes with something called a `right of survivorship.' It fact, the deed sometimes reads `joint tenancy with the right of survivorship.' This means that if one joint tenant dies, the other one automatically receives the deceased person's share. And when joint tenancy property passes to the other joint tenant at death, there's no need for any probate proceedings . . . Joint tenancy can't be used if a house is owned in unequal shares. It's appropriate only when each joint tenant owns the same portion. This means that you and your lover could put a house you owned 50-50 in joint tenancy or that three people could have a joint tenancy with each owning one-third of the property. If you own 65% of a house, however, and your lover owns 35%, joint tenancy won't work . . . Even if you are equal owners taking title as joint tenants, you can still provide compensation if one of you contributed more to the down payment. But in order to avoid undermining the basic framework of joint tenancy — which is inherently 50-50 — set a dollar value for reimbursement rather than adjusting ownership percentages.

Defendant admitted at trial that she read the Guide and was "very familiar" with it. Defendant also testified that she understood that, if she and plaintiff terminated their relationship, plaintiff would have the right to have her interest in the Residence sold.

The Court concludes that defendant has not established by clear and convincing evidence that the parties intended the joint ownership of the Residence be predicated upon a long-term relationship. To the contrary, the Court determines that defendant understood titling the Residence as a joint tenancy with right of survivorship would transfer ownership of the Residence to the parties in equal shares. The Court will thus enforce the express terms of the deed.

2. Partition

a. Applicable Law

The partition of real property in Pennsylvania is governed by Pennsylvania Rules of Civil Procedure §§ 1551-1590. Pennsylvania Rule of Civil Procedure § 1570 provides in pertinent part:

(a) The adjudication shall include findings of fact as follows:

(1) whether the property is capable of division, without prejudice to or spoiling the whole, into purparts proportionate in value to the interests of the co-tenants;

(2) the number of purparts into which the property can be most advantageously divided, if partition proportionate in value to the interests of the parties cannot be made;

(3) the value of the entire property and of the purparts;

(4) the mortgages, liens and other encumbrances or charges which affect the whole or any part of the property and the amount due thereon;

(5) the credit which should be allowed or the charge which should be made, in favor of or against any party because of use and occupancy of the property, taxes, rents or other amounts paid, services rendered, liabilities incurred or benefits derived in connection therewith or therefrom;

(6) whether the interests of the parties who have not appeared in the action, or of defendants who have elected to retain their shares together shall remain undivided;

(7) whether the parties have accepted or rejected the allocation of the purparts or bid therefor at private sale confined to the parties; and

(8) whether a sale of the property or any purpart not confined to the parties is required and if so, whether a private or public sale will in its opinion yield the better price.

(b) The decree shall include:

(1) an appropriate award of the property or purparts to the parties subject to the owelty required;

(2) if owelty is required, the amount of the awards and charges which shall be necessary to preserve the respective interests of the parties, the purparts and parties for or against which the same shall be changed, the time of payment and the manner of securing the payments;

(3) the protection required for life tenants, unborn and unascertained remaindermen, persons whose whereabouts are unknown or other persons in interest with respect to the receipt of any interest; and

(4) an order for a public or private sale of the property or part thereof where required.

b. Distributive Shares

Based on the Court's finding that plaintiff did not contribute to the expenses related to the Residence after January 2002, when the parties terminated their relationship and plaintiff moved to Maryland, the Court will use the fair market value of the Residence in January 2002 to determine the parties' distributive shares of the Residence.See Nicholson v. Johnston, 2004 PA Super 279, *15 (Pa.Super. 2004) (affirming trial court's use of property's fair market value at the time of the parties' separation rather than the time of trial because party seeking partition had not contributed to property-related expenses after the parties separated).

The fair market value of the Residence in January 2002 was $365,000. The outstanding mortgage on the Residence as of that date was $233,366.36. Thus, the net value of the Residence at the time of the parties' separation in January 2002 was approximately $131,633.64. Based upon the Court's ruling that the parties own the Residence in equal shares as joint tenants with right of survivorship, the Court concludes that each party's distributive share of the Residence, prior to calculating expense credits pursuant to Pennsylvania Rule of Civil Procedure § 1570 (a)(5), is half of the net value of the Residence, or $65,816.82.

c. Expense Credits

The parties are entitled to a credit for their respective share of the expenses related to the Residence, including mortgage, property taxes, insurance and maintenance costs.

Pa. R. Civ. P. § 1570 (a)(5); Fischer v. Wurts, No. 96-6863, 1997 U.S. Dist. LEXIS 10393, *16 (E.D. Pa., July 18, 1997).

Crediting defendant's testimony that she paid approximately eighty-three percent of expenses related to the Residence and her uncontested testimony that she paid the entire down payment on the Residence in the amount of $78,390.59, the Court finds defendant's total contribution to the Residence was $150,732.72, including interest, and plaintiff's total contribution to the Residence was $13,131.19, including interest. Each party is entitled to a credit of half of their contribution to the Residence-related expenses. Thus, plaintiff is entitled to a credit of $6,565.60 and defendant is entitled to a credit of $75,366.36. These amounts will be credited against each party's distributive share of the net value of the Residence.

d. Use and Occupancy Credits

While Pennsylvania Rule of Civil Procedure § 1570 (a)(5) permits a credit for the use and occupancy of the Residence, the Court concludes that, because plaintiff did not contribute to any of the expenses related to the Residence after the parties' relationship ended in January 2002, she is not entitled to a credit for the period in which defendant exclusively occupied the Residence after the parties' separation in January 2002. See Nicholson v. Johnston, 2004 PA Super 279, *15 (Pa.Super. 2004) (affirming trial court's denial of use and occupancy credits to a party who did not contribute to property-related expenses after the parties' separation).

e. Equitable Distribution

Defendant's total credit for Residence-related expenses is $75,366.36. Plaintiff's total credit for Residence-related expenses is $6,565.60. After subtracting plaintiff's credit, defendant's adjusted credit is $68,800.76.

Plaintiff's distributive share of the Residence is $65,816.82. Subtracting defendant's credit from plaintiff's distributive share of the Residence leaves defendant with a net credit of $2,987.94. As plaintiff's distributive share of the Residence has been entirely reduced by defendant's credited expenditures, the Court concludes that the Residence should be awarded to defendant and that, in addition, she should be awarded $2,987.94 as reimbursement for her Residence-related expenses under Pennsylvania Rule of Civil Procedure § 1570 (a)(5).

C. Bank Accounts

The parties had two joint accounts during the course of their relationship — the First Union and the Providian accounts. At the time the parties separated in January 2002, the Providian account had a balance of $76,670 and the First Union account had a balance of $2,831. Shortly after the parties separated, defendant transferred approximately $70,831 from the joint accounts into the ING account in her name alone. The balance in the ING account as of the date of trial was $74,743.

Pennsylvania Consolidated Statutes Annotated, Title 20, Section 6303(a) provides that a "joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sum on deposit, unless there is clear and convincing evidence of a different intent." The Court concludes that all of the money in the joint accounts at the time the parties separated is traceable to the settlement proceeds from plaintiff's motorcycle accident. Thus, unless defendant can demonstrate by clear and convincing evidence that plaintiff intended to make an immediate gift to defendant of a portion of the settlement proceeds, the money from the joint accounts should be awarded to plaintiff. See Lessner v. Rubinson, 527 Pa. 393, 400 (1991) To meet this burden, defendant must demonstrate that plaintiff intended to make a "gift inter vivos by clear, precise, direct and convincing evidence." Id. (citing Hosfeld Estate, 414 Pa. 602, 605, 202 A.2d 69, 71 (1964).

To constitute a gift inter vivos there must be shown an intention to make an immediate gift and such an actual or constructive delivery to the donee (a) as to divest the donor of all dominion and control, or (b) if a joint tenancy is created, as to invest in the donee so much dominion and control of the subject matter of the gift as is consonant with joint ownership or interest therein.

The Court concludes that defendant has failed to establish by clear and convincing evidence that plaintiff intended to make an immediate gift of any of the settlement proceeds. Defendant did not present any direct evidence at trial that plaintiff intended to make such a gift. As indirect evidence of plaintiff's intent, defendant testified that the parties' course of conduct was to treat all money in the joint accounts, contributed almost exclusively by defendant before plaintiff's settlement, as jointly-owned funds. This argument, however, is inconsistent with defendant's position that she paid the majority of the Residence-related expenses and was entitled to reimbursement of those expenses. If defendant had intended to make an immediate gift of half of the money she deposited into the joint accounts, she would not have a valid claim under Pennsylvania Rule of Civil Procedure § 1570 for reimbursement of the Residence-related expenses which she paid. Defendant's position demonstrates that, despite the parties' use of the money in the joint accounts for their joint expenses, neither party intended to make an immediate gift to the other party of their respective contributions to the joint accounts. Accordingly, as the plaintiff contributed all of the money that remained in the joint accounts at the time the parties separated, defendant must return to plaintiff the money she removed from the accounts, plus the interest that has accrued on that money, which at the time of trial was $74,743.

D. Motorcycles

The Court concludes that the two motorcycles purchased by defendant were gifts to plaintiff. Defendant testified that plaintiff was the only operator of the motorcycles and that defendant rode the motorcycles only occasionally as a passenger. The fact that defendant chose to title the motorcycles in plaintiff's name alone is further evidence that defendant intended the motorcycles to be a gift to plaintiff. Accordingly, the Court awards the 1999 Honda ACE and the 2001 Harley Davidson motorcycles to plaintiff and orders defendant to return to plaintiff the title to the 1999 Honda ACE motorcycle.

IV. CONCLUSION

Based on the foregoing, the Court concludes that the parties owned the Residence in equal shares as joint tenants with right of survivorship. Based upon the net value of the Residence at the time of the parties' separation, the Court concludes that each party's distributive share of the Residence is $65,816.82. The Court finds that defendant is entitled to a credit under Pennsylvania Rule of Civil Procedure § 1570(a)(5) for $68,800.76, representing plaintiff's half of the Residence-related expenses that were paid by defendant. As defendant's credit is greater than plaintiff's distributive share of the Residence, the Court awards the Residence to defendant and orders plaintiff to pay defendant $2,987.94 in reimbursement of Residence-related expenses paid by defendant.

Based upon the Court's finding that all of the money in the Providian and the First Union accounts at the time the parties separated in January 2002 is traceable to the proceeds of the settlement of plaintiff's motorcycle accident claims, and that defendant has not demonstrated by clear and convincing evidence that plaintiff intended to make a gift of any portion of the settlement proceeds to defendant, the Court concludes that the money transferred by defendant from the joint accounts into the ING account in her name alone, totaling $74,743 at the time of trial, must be returned to plaintiff.

Based upon the Court's finding that the 1999 Honda ACE and the Harley Davidson motorcycles were gifts from defendant, the Court awards the motorcycles to plaintiff and orders defendant to return the title of the 1999 Honda ACE motorcycle to plaintiff.

An appropriate order follows.