Comptroller of the Treasury v. J/Port, Inc.

DAVIS, J. The Comptroller of the Treasury (Comptroller), appellant, denied a request by J/Port, Inc., appellee, for a refund of ⁶¹³ certain admissions and amusement taxes and sales and use taxes imposed on fees charged by appellee in relation to its sailing and boating club. Appellee sought judicial review of this decision in the Maryland Tax Court (Tax Court) (Martz, C.J.). After a hearing on the merits held on April 18 and May 30, 2007, the Tax Court affirmed the Comptroller’s denial of the refund request. Appellee noted an appeal and oral arguments were held on the matter before the Circuit Court for Anne Arundel County.

On March 7, 2008, the circuit court (1) vacated the Tax Court’s judgment as to both the admissions and amusement and the sales and use tax 1 and (2) affirmed the Tax Court’s determination that appellee’s constitutional argument was without merit. The Comptroller noted his timely appeal of the circuit court’s judgment and presents two questions for our review, which we have rephrased and reorganized as follows: I. Did the circuit court err by ruling that the Tax Court’s legal conclusion that appellee’s membership fees are subject to an admissions and amusement tax was not supported by substantial evidence?

II

Did the circuit court err by ruling that the Tax Court’s legal conclusion that appellee’s membership fees are subject to a sales and use tax was not supported by substantial evidence? For the reasons that follow, we answer both questions in the affirmative. Accordingly, we reverse the judgment of the Circuit Court for Anne Arundel County and affirm the decision of the Tax Court. ⁶¹⁴ FACTUAL BACKGROUND Appellee was incorporated in 1992 to sell boats. Appellee also operates the J/Port Sailing Club and the Chesapeake Boat Club (the Club).

The Club represents approximately half of appellee’s gross profits. The boat sale operations, the Club and a sailing school are all operated out of a marina leased by appellee. The only taxes at issue in this case are those related to Club membership fees. From 2002 to 2005, the time covered by appellee’s refund request, appellee maintained a fleet of fourteen sailboats and four Albin powerboats.

The fleet of sailboats was comprised of eight J/80’s (twenty-six-foot day sailers), three J/105’s (thirty-four and one-half-foot day sailers/overnighters) and three J/32’s (overnight cruisers). 2 Appellee maintains that, during this time, the Club had between 142 and 171 members. Informational material produced by appellee describes the Club as follows: The concept of J/Port Sailing Club was founded in 1993 out of the needs of our own clients — to have easy-to-sail, high performance J/Boats available on short notice and at a fraction of the cost you might anticipate for this much FUN! Becoming a member is a perfect way to get on the water and enjoy sailing with minimal expense and hassle. There are various levels of membership in the Club, each of which allow use of certain boats at certain periods of time.

Generally, Level One membership allows unlimited use of the J/80, with a smaller annual fee for members seeking unlimited “midweek” use of the J/80 Monday through Friday. Under Level One membership, three session slots are available for use of the boats, which may be reserved up to seven days in advance. ⁶¹⁵ Level Two membership generally allows access to larger boats. A member of Level Two is allowed unlimited day sailing of the J/80 plus fourteen days of guaranteed advance reserve time that can be used for extended cruising aboard the J/105, J/32 and J/28. Level Two membership also provides unlimited standby days, allowing, inter alia, reservations to be made within twenty-four hours of sailing.

Level Two’s annual fee is approximately double that of Level One. Level Two membership is also available for a period of two years. Both Level One and Level Two require a mandatory sea tow insurance fee along with one time charges for an orientation fee and a refundable deposit. In addition, appellee charges an annual fee for membership in the Chesapeake Boat Club, which allows use of the Albin powerboat.

With this type of membership, a member receives points that can be applied towards the scheduling of boats. Appellee further offers combination sail and powerboat memberships. Mikulski testified that all Club members, regardless of membership level, retain unlimited access to club vessels as long as a vessel is available and subject to the terms of membership. Reservations are made via a “complex” on-line system that indicates which boats are reserved at various times.

Two club members testified that this system was a “tremendous value” and a “great help” in enabling use of the boats. Appellee emphasizes that all members within each membership level pay the same annual dues regardless of how many times the member actually uses the boats. There are no additional fees for using the Club’s boats, although members remain responsible for covering the cost of “running expenses,” such as fuel. Mikulski testified that appellee had one operating account where all member contributions are placed, such that the fees paid by any member may be used to cover expenses for a boat to which a member is not necessarily allowed access.

Even though boat usage within each level may vary according to the member, all members within a level ⁶¹⁶ are charged the same annual fee. A member is not charged additional money to bring a guest or to enter the Club’s marina, which includes picnic tables and a covered shelter. The Club further provides sailing lessons, organizes social events and races, and conducts community outreach activities for its members. Mikulski acknowledged that appellee used the same premises to conduct both its Club operations as well as its other business operations.

Purchasers of boats are considered “honorary members” of the Club and may use Club facilities and participate in Club events. Request for and Denial of Tax Refund The primary issue in this case is whether the annual fees paid by members of the Club are subject to both (1) an admissions and amusement tax and (2) a sales and use tax as codified in Maryland’s Tax-General Article (T.G.). 3 In a letter dated December 1, 1994, the Comptroller advised the Club that annual member dues were subject to both of these taxes: [TJhere are two taxes that may apply to the fees being paid to the Club: admissions and amusement tax and sales and use tax. The admissions and amusement tax is imposed on the gross receipts for any admission and amusement charge, specifically defined to [include] charges for the use or rental of recreational equipment, of which sailboats are a common example. The use of the terms “club,” “dues” and “members” does not alter or disguise the fact that the transaction you described in your letter, and that we discussed on the phone, constitutes sailboat rentals.

Therefore, the fees charged to your members are subject to the admissions and amusement tax. [...] If the transactions are bareboat rentals, as opposed to captained charters, then the transactions are retail sales, also subject to the. 5 percent sales and use tax. In this case, the admissions and amusement tax is capped at 5 percent, in that the total of the two taxes cannot exceed 10 percent. ⁶¹⁷ In your letter, you indicate that a membership in [the Club] parallels that of a health club. However, I see no correlation between the two. As an example, the J/110 membership agreement allows 14-days use of the sailboat for the cost of the annual dues.

The members are charged additional fees for additional uses. This is, plain and simple, a rental of a sailboat. Appellee has persistently maintained that neither tax is applicable to dues paid by Club members. On December 30, 2005, appellee filed for a refund of both taxes paid from 2002 to 2005. 4 Appellee argued that the money paid by Club members was not subject to either tax because the fees paid by Club members were not used to “rent” boats.

Rather, according to appellee, these fees entitled members to various privileges of the Club, which include use of boats, use of the marina and participation in Club-organized activities. On March 6, 2006, the Comptroller denied appellee’s request for a refund, stating that “the contracts submitted to the State of Maryland describe boat rentals” and “[u]sing the term ‘member or membership’ does not alter that fact.” 5 Tax Court Appeal Appellee appealed the Comptroller’s denial of its tax refund request to the Maryland Tax Court. During the Tax Court ⁶¹⁸ proceedings, Mikulski and Cheryl Keyworth, appellee’s office manager, testified on behalf of appellee. Appellee also presented Arthur Savage and Harold Brown, two Club members.

They both stated that membership in the Club was a cost effective way to be able to sail boats as well as participate in other club activities. Savage testified that the “main purpose” of joining the Club was “to go sailing when I want to go sailing.” Brown stated that he became a member for the opportunity to sail. The Comptroller’s case consisted of the testimony of Theresa Trentler, the Comptroller’s Refund Supervisor, Patricia David, the Comptroller’s Field Audit Manager, and Daniel Riley, an Assistant Director of the Compliance Division. Trentler, who reviewed appellee’s refund request, testified that the request was denied because the agreements entered into between the Club and its members involved boat rentals.

Trentler based this determination on the “terminology used in the contracts,” which included use of the word “demise.” According to Trentler, it is the Comptroller’s position that a rental occurs when a fee is paid in exchange for the transfer of control or possession over tangible goods. Trentler did not know of any regulation or any other statute that set forth this particular definition of “rental.” Relying on T.G. § 4-101, Trentler determined that the Club’s membership dues were used to rent recreational equipment. During cross-examination, Trentler conceded that the Comptroller did not investigate whether the Club’s members were only allowed to use the boats on a definite number of occasions or the conditions or limitations placed upon a member’s use of a boat. David’s testimony established that the Comptroller has consistently maintained the position that agreements, such as appellee’s Club-member agreements, involve the transfer of tangible personal property, subject to both the admissions and amusement tax and the sales and use tax.

David distinguished the use of equipment in a health club from the use of appellee’s boats. According to David, the former did not involve the transfer of control over tangible personal property because a health club member would use a machine on the ⁶¹⁹ health club floor. David had no knowledge as to whether the Club’s dues were directly related to the use of the Club’s facilities or equipment. Riley testified that the sales and use tax is a transactional tax.

To determine the applicable transaction in this case, the Comptroller analyzed appellee’s membership agreement, which provided that the transaction involved the “demise,” or rental, of a boat. He asserted that T.G. § 11-101, which sets forth relevant definitions under the sales and use tax statute, does not define the term “rental.” Accordingly, the Comptroller relies on the common usage of the word in addition to other case law. As for the admissions and amusement tax, Riley maintained that the membership fee, even if paid once a year, constituted a periodic payment for the rental of equipment, which was taxable under T.G. § 4-101(b)(l)(iv). Riley noted that the membership agreement did not describe appellee’s other Club “benefits.” Riley conceded that he was not aware if anyone from the Comptroller’s office conducted an on-site visit or investigation of appellee’s operations.

Tax Court’s Ruling In an oral ruling from the bench, the Tax Court affirmed the denial of appellee’s request for a refund, ruling that both the admissions and amusement tax and the sales and use tax were applicable to the Club’s membership dues. The Tax Court recognized that Club privileges include sailing lessons as well as access to a crew database, an on-line reservation system and other social activities and community outreach events. Nonetheless, the Tax Court found “that these activities are really incidental to the main purpose of the club, which is to provide sailboats and powerboats to members of the public who join the club on an annual basis.” The Tax Court emphasized that members of the Club paid different annual dues based upon the type of boat and varying levels of access to the boat. The Tax Court found that the on-line reservation system serves the purpose of the Club, “which is to rent boats to its members.” ⁶²⁰ As to the applicability of the sales and use tax, the Tax Court referred to § 11 — 101(i) of the Tax-General Article, which defines a sale as a “transaction for a consideration whereby title or possession of property is transferred or is to be transferred absolutely or conditionally by any means, including by lease, rental, royalty agreement, or grant of a license for use[.]” The Tax Court ruled that the membership agreement constituted a “complete and full demise of the vehicle or vessel to its members, who shall, at the member’s own expense, navigate and operate the vessel,” adding that “members have full and exclusive control over the vessel during the time in which the member is using the vessel.” Citing to T.G. § 4-101, the Tax Court further ruled that, “where there’s a transfer or use of rental equipment, the admissions and amusement tax applies.” The Tax Court opined that the authority relied upon by appellee, namely, Twinbrook Swimming Pool Corp. v. Comptroller of Treasury, 274 Md. 88 , 333 A.2d 49 (1975) and Md.Code Regs.

(COMAR) 03.06.02.01, 6 was inapposite, because that authority applied only where the taxable transaction involved a charge for an admission to a place, “such as a golf course, tennis court, swimming pool or similar place.” The Tax Court emphasized that the transaction at issue here is the renting of boats. Finally, the Tax Court ruled that appellee’s constitutional argument, positing that T.G. § 4-101 and COMAR 03.06.02.01 were unconstitutionally vague, was without merit. Appellee appealed the Tax Court’s judgment to the circuit court, which vacated and remanded as to the imposition of both the admissions and amusement and sales and use tax. The circuit court affirmed the Tax Court’s ruling as to appellee’s constitutional argument.

This appeal by the Comptroller followed. Additional facts will be discussed infra as warranted. ⁶²¹ STANDARD OF REVIEW On an appeal from the decision of a circuit court affirming or reversing a Tax Court’s decision, we review the Tax Court’s judgment for error and not the judgment of the circuit court. 7 Comptroller of Treasury v. Clise Coal, Inc., 173 Md.App. 689, 697 , 920 A.2d 561 (2007). The Tax Court is an administrative agency and our review of its decisions is very limited. Comptroller of Treasury v. Clyde’s of Chevy Chase, Inc., 377 Md. 471, 481 , 833 A.2d 1014 (2003); see also T.G. § 13-532(a). “Accordingly, in this case, we are limited to determining the legality of the decision of the Tax Court and whether there was ‘substantial evidence’ in the record to support its findings and conclusions.” Clyde’s of Chevy Chase, 377 Md. at 482 , 833 A.2d 1014 (quoting Supervisor of Assessments of Baltimore County v. Keeler, 362 Md. 198, 207-08 , 764 A.2d 821 (2001) (internal citations omitted)).

If the Tax Court’s decision is based on a factual determination, we must affirm that decision if it is supported by substantial evidence in the record. Ramsay, Scarlett & Co. v. Comptroller of Treasury, 302 Md. 825, 834 , 490 A.2d 1296 (1985). Moreover, “ ‘the interpretation of tax law can be a mixed question of fact and law, the resolution of which requires agency expertise.’ ” Comptroller of Treasury v. Science Applications Int’l Corp., 405 Md. 185, 204 , 950 A.2d 766 (2008) (quoting Comptroller of Treasury v. Citicorp Int’l Commc’ns, Inc., 389 Md. 156, 164 , 884 A.2d 112 (2005)). “[D]eterminations involving mixed questions of fact and law must be affirmed if, after deferring to the Tax Court’s expertise and to the presumption that the decision is correct, a reasoning mind could have reached the Tax Court’s conclusion.” NCR Corp. v. Comptroller of Treasury, 313 Md. 118, 133-34 , 544 A.2d 764 (1988) (internal citations and quotations omitted); see also ⁶²² Science Applications Int’l Corp., 405 Md. at 204-05 , 950 A.2d 766 . We may overturn the Tax Court’s decision if it is based on an erroneous conclusion of law.

Comptroller of Treasury v. Blanton, 390 Md. 528, 534-35 , 890 A.2d 279 (2006). Nonetheless, “an administrative agency’s interpretation and application of the statute which the agency administers should ordinarily be given considerable weight by reviewing courts.” Id. at 533-34 , 890 A.2d 279 . This case also requires us to review various provisions of the Tax-General Article. The cardinal rule of statutory interpretation is to ascertain and effectuate the intent of the legislature.

Miller v. Comptroller of Maryland, 398 Md. 272, 282 , 920 A.2d 467 (2007) (quoting Rockwood Casualty Ins. Co. v. Uninsured Employers’ Fund, 385 Md. 99, 108-09 , 867 A.2d 1026 (2005)). The first step in determining the intent of the legislature is to examine the statutory language and give effect to the clear, unambiguous and plain meaning of the words of the statute, construed according to their common and every day meaning. Id.

(quoting Rockwood Casualty Ins. Co., 385 Md. at 108 , 867 A.2d 1026 (internal citations omitted)). We give statutes their “most reasonable interpretation, in accord with logic and common sense” and seek to “avoid a construction not otherwise evident by the words actually used.” Greco v. State, 347 Md. 423, 429 , 701 A.2d 419 (1997); see also Miller, 398 Md. at 283 , 920 A.2d 467 . In addition, a reviewing court may not extend the reach of a tax statute “beyond the clear import of the language employed,” and where there is doubt as to such a statute’s scope, it should be construed “most strongly” in favor of the taxpayer.

A strict construction must nonetheless be fair, reasonable, and consistent with the legislative intent. The canon in favor of strict construction “is not an inexorable command to override common sense and evident statutory purpose.” Director of Finance for Mayor & City Council of Baltimore v. Charles Towers P’ship, 104 Md.App. 710, 717 , 657 A.2d 808 ⁶²³ (1995), aff'd, 343 Md. 567 , 683 A.2d 512 (1996) (internal citations omitted). With these standards of review in mind, we turn to the substantive issues presented. I Sales and Use Tax Section ll-102(a) of the Tax-General Article provides that, except as otherwise provided in the statute, a tax is imposed on (1) a retail sale in the State; and (2) a use, in the State, of tangible personal property or a taxable service.

Section 11-101(h) defines “retail sale” as, inter alia, the sale of tangible personal property. The term “sale” is further defined under T.G. § 11 — 101(i)(2)(i) as “a transaction for a consideration whereby ... title or possession of property is transferred or is to be transferred absolutely or conditionally by any means, including by lease, rental, royalty agreement, or grant of a license for use[.]” Section ll-103(a) establishes a rebuttable presumption that “any sale in the State is subject to the sales and use tax imposed under § ll-102(a)(l) of this subtitle.” T.G. § ll-103(b) places the burden of proving that a sale is not subject to the sales and use tax on the person required to pay the tax. The Comptroller argues that the Tax Court was correct in ruling that the transaction at the core of appellee’s membership agreement is the rental of boats, even if appellee chooses to characterize the annual fee paid by Club members as “club dues.” According to the Comptroller, the money charged by appellee for the rental of its boats is subject to the sales and use tax because it constitutes a retail sale. Appellee argues that the Tax Court’s decision was “legally erroneous and not supported by substantial evidence in light of the entire record.” Appellee maintains that the Tax Court erred in ruling that the Club “rents its boats on a yearly basis to its members subject to certain restrictions as to time slots and number of days in usage,” because, according to appellee, “[t]he transfer of possession is only during a reserved time, ⁶²⁴ and therefore cannot be for the entire year.” Appellee emphasizes that it does not charge members a per-use cost for the boats, distinguishing Club members’ access to appellee’s boats from other rental situations, noting that, “when one rents a car, one only pays for the time one is in possession of it; whereas the dues paid by the Boating Club’s members entitle them to the use of a vessel, regardless of whether or not they actually take possession.” Appellee further argues that the Club’s annual membership dues pay for more than mere use and possession of the Club’s boats, providing also for member access to appellee’s complex on-line reservation system along with the ability to participate in social activities and other events organized by appellee.

Appellee asserts that the Club’s on-line reservation service “is the dominant reason that members join the Club.” The Tax Court’s determination that Club membership fees constitute boat rental charges subject to the sales and use tax involves a mixed question of law and fact. As we explained in the preceding section, we defer to the Tax Court’s expertise on mixed questions of law and fact and apply the presumption that the Tax Court’s decision was correct. We affirm that decision if a reasoning mind could have reached the same conclusion. For the reasons we set forth below, we hold that the Tax Court’s conclusion was legally correct and supported by substantial evidence in the record.

A. Appellee’s argument is premised on two main propositions. The first is that Club membership fees do not constitute boat rental charges because they are used to pay for Club services as well as the ability to use Club boats. The second is that Club membership fees do not constitute boat rental charges because the fees are assessed on an annual basis, whereas actual possession of a boat is only transferred to a member upon request and based on vessel availability. We are aware of no Maryland case that addresses the issues presented in the specific factual context before us.

However, the Court of ⁶²⁵ Appeals decision in Quotron Systems, Inc. v. Comptroller of Treasury, 287 Md. 178 , 411 A.2d 439 (1980), provides an appropriate framework for our analysis. In addition, because appellee argues that the Tax Court misapplied the “Quotron standard” and the Comptroller attempts to distinguish Quotron, we deem it useful to examine the Quotron holding in some detail. In Quotron, 287 Md. at 180 , 411 A.2d 439 , the Court of Appeals addressed whether a company that provides information services, such as a financial or news updates, via computer hardware provided to its subscribers, is subject to a use tax 8 on the portion of the company’s monthly charges attributable to the use of the hardware. While the transactions between appellee and its Club members are factually distinguishable from the services and hardware provided in Quotron , the Court’s analysis in Quotron is instructive in a determination of the applicability of a sales and use tax where a taxpayer maintains that its club membership fees pay for both club services and a member’s use of the club’s vessels. 9 In Quotron , the Court of Appeals held that, in order to determine whether a sales tax can be imposed when a company provides both a service and related equipment, a two-step analysis must be employed.

First, the overall function must be characterized by the examination of ⁶²⁶ various factors as either a rental or transfer of possession, or a service. Secondly, it must be determined whether that function is subject to a sales tax. Id. at 184 , 411 A.2d 489 . The Court discussed its previous holding in Comptroller of Treasury v. Chesapeake & Potomac Telephone Co., 241 Md. 345 , 216 A.2d 717 (1966), where the Court used this two — step analysis to determine that a monthly charge from a telephone company providing both teletypewriter equipment and services to its subscribers did not constitute a rental of equipment and was not subject to the sales and use tax.

Id. at 183, 411 A.2d 439 . The Court explained: In C & P, the Court expressly relied upon two standards, the control of the equipment and the dominant purpose of the contract, in characterizing C & P’s single, overall function as a service. The Court, however, also took into account the relationship between the equipment and the service when it found that the sole function of the equipment was to transmit and receive communications and that it had no utility in and of itself. Courts in other jurisdictions which similarly have examined the relationship between equipment and services in characterizing an overall function, have applied a third standard.

This standard was expressed by the Supreme Court of Illinois in Snite v. Department of Revenue, 398 Ill. 41, 46 , 74 N.E.2d 877, 879-80 (1947), as follows: “If the article sold has no value to the purchaser except as a result of services rendered by the vendor and the transfer of the article to the purchaser is an actual and necessary part of the service rendered, then the vendor is engaged in the business of rendering service and not in the business of selling at retail. If the article sold is the substance of the transaction and the service rendered is merely incidental to and an inseparable part of the transfer to the purchaser of the article sold, then the vendor is engaged in the business of selling at retail, and the tax which he pays for the privilege of engaging in such ⁶²⁷ business is measured by the price which the purchaser pays for the article and the service incident thereto.” In our view, this standard, like the standards of the control of the equipment and the dominant purpose of the contract, is applicable when characterizing the overall function of a company which provides both a service and related equipment. Id. at 185 , 411 A.2d 439 (emphasis added). i Discussing Quotron , appellee maintains that the “Tax Court’s finding that the overall function of the Boating Club’s operation was the rental of boats is not supported by substantial evidence in light of the record.” We disagree. That the “dominant purpose” of the membership agreement, by which the member was obligated to pay the annual membership fee, is the member’s use of appellee’s boats is supported by the record.

Savage and Brown, both testifying on behalf of appellee, stated that they became members of the Club to use the Club’s boats. The language of various 2003, 2004 and 2005 membership agreements, submitted as exhibits by appellee, also support a finding that the dominant purpose of the Club-member transaction was the transfer of the right to use appellee’s vessels. For example, a 2003 Level 1 Membership Agreement includes the following language: This annual membership agreement [is] made between [appellee], herein called JPSC, and the undersigned member, of said association, herein called MEMBER, for the purposes of chartering [appellee’s] vessels. MEMBER receives unlimited day sailing aboard a J/80.

MEMBERS interested in racing must achieve [appellee’s] approval. This membership agreement is valid for one (1) year. [...]. This Agreement is a full and complete demise of the vessel to the MEMBER who shall, at Member’s own expense, navigate and operate the vessel. MEMBER shall have full and exclusive control over the vessel during the time in which the MEMBER is using the vessel. ⁶²⁸ The above name[d] person, having satisfactorily completed the Preliminary Checkout and having paid in full all Season Charges, is hereby accepted as a member of JPORT SAILING CLUB and is accorded all rights and privileges thereof.

(Emphasis added). This language was repeated in other membership agreements, with language added or deleted in order to convey a substantive difference in the degree of member access to different vessels, consistent with the multiple “levels” of membership offered by appellee. These substantive differences were reflected in the annual membership fee, which increased or decreased accordingly. Moreover, the membership fee itself was directly related to the use of the boats, as Mikulski testified that the price of the membership agreement was established by calculating the total expense of the boats, including insurance and maintenance costs, determining a suitable profit margin and dividing that total amount by the number of anticipated members for the coming year.

In addition, the terms of the membership agreement, embodied in “Schedule A” of the membership agreement, consistently set forth restrictions on a member’s use of the vessel. Schedule A included a section entitled “General Club Policies” that addressed exclusively a member’s use and treatment of the vessel and cancellation of reservations. Apart from conditions placed on a member’s use and care of the vessel, these membership agreements discussed no other benefits or privileges of Club membership. With respect to the control of the equipment, the membership agreements indicated that appellee chartered and demised its vessel to the member who retained full and exclusive control of the vessel during its use.

C.f. Quotron, 287 Md. at 187-88 , 411 A.2d 439 (observing that the “contract between Quotron and its subscribers did not provide for the rental of hardware” and “repeatedly characterized Quotron’s activities as a service”). These two terms, when used in conjunction with the transfer of a right to use a vessel, have specific meanings. In Brittingham v. Tugboat Underwriting Syndicate, 262 Md. 134, 137-38 , 277 A.2d 8 (1971), a case construing ⁶²⁹ the term “owner” as used in a maritime insurance policy, the Court of Appeals discussed the meaning of the word “demise.” After stating that “it is well established that a bareboat charterer is for many purposes an owner during the demise,” the Court quoted from Gilmore and Black, The Law of Admiralty §§ 4-20 and 4-23 (1957), which state, in pertinent part: The demise, in practical effect and in important legal consequence, shifts the possession and control of the vessel from one person to another, just as the shoreside lease of real property shifts many of the incidents of ownership from lessor to lessee. 262 Md. at 137 , 277 A.2d 8 .

Black’s Law Dictionary 250 (8th Ed.2004) refers to a “demise charter” as a “bareboat charter,” defining both as a “charter under which the shipowner surrenders possession and control of the vessel to the charterer, who then succeeds to many of the shipowner’s rights and obligations.” To be sure, Mikulski testified that the “demise” language originated from earlier contracts where appellee chartered vessels, adding that, as a practical matter, appellee did not “demise” boats to Club members. While we agree with appellee that the mere use of the word “demise” or “charter” is not dispositive as to the nature of the Club-member relationship, the use of these terms, under these circumstances, highlights what is established by the entire contract, namely, that the Club-member transaction revolved around transferring the right to use and control appellee’s boats during distinct periods of time. While appellee may have