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16-P-1611 Appeals Court

ACUSHNET COMPANY vs. BEAM, INC.1

No. 16-P-1611.

Suffolk. September 14, 2017. - February 2, 2018.

Present: Wolohojian, Agnes, & Wendlandt, JJ.

Corporation, Sale of assets, Subsidiary. Contract, Construction 

of contract. Sale, Contract of sale, Of corporate 

property. Taxation, Accounts receivable. Practice, Civil, 

Summary judgment, Findings by judge.

Civil action commenced in the Superior Court Department on 

March 27, 2012.

The case was heard by Kenneth W. Salinger, J.

Eric R. Breslin, of New Jersey (Sean S. Zabeneh, of 

Pennsylvania, & Bronwyn L. Roberts also present) for the 

plaintiff.

Michael J. Tuteur (Michael Thompson also present) for the 

defendant.

WOLOHOJIAN, J. At issue is the interpretation, under New 

York law, of a provision in the stock purchase agreement 

pursuant to which Beam, Inc. (Beam), sold its subsidiary, 

 

1 Formerly known as Fortune Brands, Inc.
2

Acushnet Company (Acushnet).

2 More specifically, the parties 

disagree as to which of them is entitled to $16.62 million of 

value added tax (VAT) receivables carried on Acushnet's balance 

sheet at the time of the closing. Beam took the amount as a 

postclosing setoff for its own benefit; in response, Acushnet 

brought this suit. On cross motions for summary judgment, a 

judge of the Superior Court determined that the contract 

provision was ambiguous. A jury-waived trial followed before a 

second judge, who found that the "apparent purpose of the 

parties" was to allow for the setoff. On appeal, Acushnet 

argues (1) that the motion judge erred, as a matter of law, when 

she concluded that the contract provision was ambiguous; and (2) 

that the trial judge's interpretation of the contract was 

clearly erroneous. We affirm.

Background. The following facts are either undisputed or 

taken from the trial judge's findings of fact and supported by 

the record.

In late 2010, Beam decided to sell Acushnet (a wholly-owned 

subsidiary engaged in the manufacture and distribution of golf 

products) by way of auction. The eventual winning bidder was a 

 

2 At the time, Acushnet was owned by Fortune Brands, Inc. 

(Fortune), which, following the sale of Acushnet, changed its 

name to Beam, Inc. The company was then acquired by another 

entity and changed its name to Beam Suntory, Inc. To avoid 

confusion, we simply refer to the defendant seller as "Beam" 

throughout.
3

group led by FILA Korea, Ltd. (buyer group), and, after a period 

of negotiations, the parties formalized the deal in a stock 

purchase agreement (SPA), dated May 19, 2011.3 A little over two 

months later, on July 29, 2011, the transaction closed, with the 

buyer group purchasing all of the stock in Acushnet for $1.225 

billion, subject to certain postclosing adjustments. Acushnet 

operated thereafter under its new ownership.

To ensure the sale proceeded promptly and smoothly, Beam 

decided prior to soliciting bids to remove all issues regarding 

taxes by creating a bright-line allocation of Acushnet's 

preclosing tax liabilities to itself, as seller, and of 

postclosing tax liabilities to Acushnet and its new owners. 

While no one from the Beam side explicitly conveyed that intent 

to anyone representing the buyer group,4 it was manifestly clear 

from the structure of the transaction as reflected in the SPA, 

as well as every draft of the SPA exchanged between the parties.5

 

3 The actual parties to the SPA were Fortune, see notes 1

and 2, supra, and Alexandria Operations Corp., a holding company 

created by the buyer group.

4 Each side was represented in the transaction by a team of 

its own employees and a team of outside accountants, lawyers, 

and investment bankers.

5 Sections 8.01(a) and (c) of the SPA, which were largely 

unaltered during negotiations, provide, in pertinent part:

"(a) Seller shall be liable for and pay an amount equal to, 

and shall indemnify and hold harmless the Buyer Group from 

and against (i) all Taxes imposed on any Acushnet Company, 
4

That said, the parties anticipated at least two types of 

tax situations where further arrangement was required. First, 

they foresaw that some of Acushnet's postclosing tax returns 

would include preclosing tax liabilities. To deal with this 

situation, the parties agreed in the SPA that Beam would 

reimburse Acushnet for any preclosing tax liabilities included 

in Acushnet's postclosing tax returns.6

Second, the parties also anticipated the possibility that 

amounts related to preclosing tax liabilities might come into 

 

or for which an Acushnet Company may otherwise be liable, 

for, or with respect to, any taxable year or period that 

ends on or before the Closing Date and, with respect to any 

Straddle Period, the portion of such Straddle Period ending 

on and including the Closing Date . . . .

". . .

"(c) Buyer shall be liable for and pay, and shall indemnify 

the Seller Group from and against, (i) all Taxes imposed on 

an Acushnet Company, or for which any Acushnet Company may 

otherwise be liable, for, or with respect to, any taxable 

year or period that begins after the Closing Date and, with 

respect to any Straddle Period, the portion of such 

Straddle Period beginning after the Closing Date . . . ."

6 Section 8.02(a) of the SPA provides, in pertinent part:

"Buyer shall timely file or cause to be timely filed when 

due (taking into account all extensions properly obtained) 

all other Tax Returns that are required to be filed by or 

with respect to any Acushnet Company and Buyer shall remit 

or cause to be remitted any Taxes due in respect of such 

Tax Returns. . . . Seller or Buyer shall pay the other 

party for the Taxes for which Seller or Buyer, 

respectively, is liable pursuant to Section 8.01 (after 

taking into account any limitations herein), but which are 

payable by the other party (after taking into account 

estimated taxes paid by the first party) . . . ."
5

Acushnet's possession after the closing and need to be paid over 

to Beam. The parties addressed this in section 8.01(b) of the 

SPA, which provides, in pertinent part:

"Any tax refunds that are received by or with respect to 

any Acushnet Company, and any amounts credited against or 

with respect to Taxes to which any Acushnet Company becomes 

entitled, that relate to any taxable year or portion 

thereof that ends on or before the Closing Date and, with 

respect to any Straddle Period, the portion of such 

Straddle Period ending on and including the Closing Date, 

shall be for the account of the Seller, and Buyer shall pay

(or cause the relevant Acushnet Company to pay) over to the 

Seller any such refund or the amount of any such credit 

actually received in cash within thirty (30) days after the 

actual receipt thereof in the case of a refund, or within 

thirty (30) days after the filing of any Tax return in 

which the credit is used, except to the extent Seller Group 

has an indemnification or payment obligation under this 

Agreement for such Taxes that has not been satisfied . . ."

(emphasis added).

The highlighted language, the interpretation of which is at 

issue in this dispute, came to be included in the final version 

of section 8.01(b) through the combined drafting efforts of the 

parties.7

As originally proposed in the first draft of the SPA 

circulated by Beam on April 7, 2011, section 8.01(b) provided:

"Any tax refunds that are received by or with respect to 

any [Acushnet] Company, and any amounts credited against or 

with respect to Taxes to which any [Acushnet] Company 

becomes entitled, that relate to any taxable year or 

portion thereof that ends on or before the Closing Date 

and, with respect to any Straddle Period, the portion of 

such Straddle Period ending on and including the Closing 

 

7 The parties agreed in the SPA that they had both 

participated in its drafting and negotiation and that it would 

not be construed for or against either party.
6

Date, shall be for the account of the Seller, and Buyer 

shall pay (or cause the relevant [Acushnet] Company to pay) 

over to the Seller any such refund or the amount of any 

such credit within ten (10) days after receipt thereof or 

entitlement thereto, except to the extent Seller Group has 

an indemnification or payment obligation under this 

Agreement for such Taxes that has not been satisfied" 

(emphasis added).

On May 2, 2011, the buyer group responded and provided Beam with 

proposed changes throughout the SPA, including the following 

proposed additions and deletions to section 8.01(b):

"Any Tax refunds that are received by or with respect to 

any [Acushnet] Company, and any amounts credited against or 

with respect to Taxes to which any [Acushnet] Company 

becomes entitled, that relate solely to any taxable year or 

portion thereof that ends on or before the Closing Date 

and, with respect to any Straddle Period, the portion of 

such Straddle Period ending on and including the Closing 

Date, shall be for the account of the Seller, and Buyer 

shall pay (or cause the relevant [Acushnet] Company to pay) 

over to the Seller any such refund or the amount of any 

such credit actually received in cash within tenthirty

(1030) days after the actual receipt thereof or entitlement 

theretoin the case of a refund, or within thirty (30) days 

after the filing of any Tax return in which the credit is 

used, except to the extent Seller Group has an 

indemnification or payment obligation under this Agreement 

for such Taxes that has not been satisfied" (strikeout and 

emphasis original).

Beam accepted all of these proposed changes except for the 

addition of the word "solely." When the buyer group did not 

insist on the inclusion of that word, therefore, section 8.01(b) 
7

was complete. The parties never communicated about section

8.01(b) other than through the exchange of drafts.

8

Nor did the parties discuss value added taxes (VAT) during 

their negotiations. Nonetheless, it was undisputed that value 

added taxes were included in the term "Taxes," as defined in the 

SPA.9 And the buyer group was aware from the outset that 

Acushnet conducted business in countries that, unlike the United 

States, utilize a VAT system.

A VAT is a consumption tax, akin to a sales tax, that is 

imposed, in supposed recognition of the "value added," at each 

stage of the production or distribution chain. Each initial and 

intermediary vendor or retailer in the chain, such as Acushnet, 

pays VAT on its own purchases of raw materials and other 

necessary products from its suppliers (input VAT), and then 

bills and collects VAT from its own customers (output VAT), with 

 

8 The buyer group's outside tax attorney recalled one 

conversation with Beam's outside tax attorney regarding section

8.01(b), but could not recall any specifics.

9 As defined in the SPA, "Taxes" included:

"[A]ll federal, state, local, foreign and other income, 

gross receipts, sales, use, production, ad valorem, 

transfer, franchise, registration, profits, license, lease, 

service, service use, withholding, payroll, employment, 

unemployment, estimated, excise, severance, environmental, 

stamp, occupation, premium, property (real or personal), 

real property gains, windfall profits, customs, duties or 

other taxes, fees, assessments or charges of any kind 

whatsoever, together with any interest, additions or 

penalties with respect thereto and any interest in respect

of such additions or penalties."
8

the final customer in the chain, often a consumer, paying the 

entire amount of the VAT. At the end of each VAT tax period, 

which can be monthly, quarterly, or annually depending on the 

jurisdiction, each vendor or retailer along the chain, other 

than the final customer, reports and pays to the applicable 

taxing authority all of the output VAT that it has billed to its 

customers during that period, after taking a credit for all of 

the input VAT that it has paid during the same tax period. 

Output VAT is reported and paid to the taxing authority even if 

the tax has not yet been collected from customers. In theory, 

each vendor or retailer in the chain, other than the final 

customer, should be placed in a "net zero" position with respect 

to VAT by (1) taking a credit on a VAT tax return for the input 

VAT it has paid and (2) collecting from its customers the output 

VAT that it has paid to tax authorities.10

Typically, a vendor or retailer does not report the amount 

of VAT it is owed as a separate figure or asset on its balance 

sheet, but instead includes it within its over-all "accounts 

receivable." Starting as far back as 2003, however, Acushnet 

had recorded VAT receivables in a separate line item on its 

 

10 If some portion of the VAT billed to customers proves 

uncollectible, a vendor or retailer can still be "made whole" by 

taking a credit for the loss on a future VAT tax return.
9

balance sheet, labeled "VAT receivable-trade."

11 Since Acushnet 

was not always in a position to calculate the amount of 

outstanding VAT receivables with precision in every jurisdiction 

where it collected VAT, the figure reported in that line was, to 

a certain extent, an estimate. At the time of closing, the 

estimated amount reported in the "VAT receivable-trade" line 

item was $16.62 million.

While the words "VAT receivables" do not appear in the SPA, 

those receivables were referenced in the accompanying disclosure 

schedules. By agreement of the parties, a "working capital 

adjustment" was to be made for any difference between Acushnet's 

"base working capital"

12 and the actual amount of its working 

capital at the time of closing, with a corresponding postclosing

payment made by, as appropriate, the seller or buyer.13 To that 

end, there were two accounting notes in the "working capital 

calculation" section of the disclosure schedules indicating that 

VAT receivables had been reclassified as "other current assets" 

and were not included in accounts receivable; this meant that

 

11 This was because, when Beam would examine the "working 

capital efficiency" of its various subsidiaries, Acushnet, as 

the only one that collected VAT, always appeared to have 

inordinately large accounts receivable.

12 The base working capital was established in the SPA.

13 The actual working capital at closing exceeded the base 

working capital and, as a result, the buyer group paid Beam an 

additional $62 million.
10

VAT receivables would not be included in the working capital 

adjustment. Beam included the accounting notes to clarify how 

Acushnet historically classified VAT receivables. The parties 

never specifically discussed VAT receivables or the accounting 

notes prior to the closing.

On October 20, 2011, almost three months after the closing, 

Acushnet, now under its new ownership, sent Beam a demand

pursuant to the SPA, for reimbursement of $19.29 million in 

taxes that Acushnet had paid, postclosing, to various tax 

authorities for preclosing tax liabilities. Of the $19.29 

million, approximately $3 million was for VAT.14 On November 1, 

2011, Beam reimbursed Acushnet for only $2.67 million, after 

taking a setoff of $16.62 million -- the amount that was 

reflected in the "VAT receivable-trade" line item at the time of 

closing.15 According to Beam, it was entitled to the setoff 

under section 8.01(b) of the SPA because VAT receivables were 

"amounts credited against or with respect to Taxes" for 

preclosing tax periods. Acushnet disagreed, and this suit, 

 

14 Acushnet, on Beam's behalf, had paid the $3 million in 

VAT to tax authorities in various countries after applying 

credits for approximately $5 million in input VAT that Acushnet 

paid to its suppliers prior to the closing against approximately 

$8 million in output VAT that Acushnet billed to customers, 

again, prior to the closing.

15 Beam does not dispute that the $19.29 million was 

otherwise due and owing.
11

seeking a declaratory judgment and asserting claims of breach of 

contract and violation of G. L. c. 93A, followed.16

Discussion. 1. Ambiguity of the contract provision. We 

turn first to the motion judge's denial of the cross motions for 

summary judgment on the ground that section 8.01(b) of the SPA

is ambiguous.17 "Whether an agreement is ambiguous is a question 

of law for the courts," Riverside S. Planning Corp. v. 

CRP/Extell Riverside, L.P., 13 N.Y.3d 398, 404 (2009) (quotation 

omitted), and is subject to our de novo review. See Balles v. 

Babcock Power Inc., 476 Mass. 565, 571 (2017).18 Ambiguity is 

assessed "by looking within the four corners of the document, 

not to outside sources. . . . [C]ourts should examine the 

entire contract and consider the relation of the parties and the 

circumstances under which it was executed. Particular words 

should be considered, not as if isolated from the context, but 

in the light of the obligation as a whole and the intention of 

the parties as manifested thereby. Form should not prevail over 

 

16 Acushnet does not appeal from the trial judge's allowance 

of Beam's motion for a directed verdict on Acushnet's claim for 

alleged violations of G. L. c. 93A.

17 Acushnet wrongly ascribes the ambiguity ruling to the 

trial judge. The sole focus of the trial was, as the trial 

judge himself noted, "to decide the meaning of a single phrase 

in a contract that [the motion judge] has ruled is ambiguous."

18 In conducting that review, we apply New York law. 

Section 11.08(a) of the SPA provides, in part: "This Agreement 

shall be governed by and construed in accordance with the 

internal laws of the State of New York."
12

substance and a sensible meaning of words should be sought." 

Kass v. Kass, 91 N.Y.2d 554, 566 (1998) (quotation omitted). "A 

contract is unambiguous if the language it uses has a definite 

and precise meaning, unattended by danger of misconception in 

the purport of the agreement itself, and concerning which there 

is no reasonable basis for a difference of opinion." Greenfield

v. Philles Records, Inc., 98 N.Y.2d 562, 569 (2002) (quotation 

omitted). Ambiguity "arises when the contract . . . fails to 

disclose its purpose and the parties' intent . . . , or where 

its terms are subject to more than one reasonable

interpretation." Universal Am. Corp. v. National Union Fire 

Ins. Co. of Pittsburgh, Pa., 25 N.Y.3d 675, 680 (2015) 

(quotations omitted).

Acushnet argues that the phrase "amounts credited against 

or with respect to Taxes" in section 8.01(b) clearly means --

and can only mean -- credits applied on a tax return filed with 

a tax authority.19 This interpretation, Acushnet suggests, is 

mandated by the language later in section 8.01(b) that required 

it to pay Beam "the amount of any such credit . . . within 

thirty (30) days after the filing of any Tax return in which the 

credit is used." In other words, Acushnet maintains that the 

 

19 Beam, meanwhile, has abandoned the position it took at 

the summary judgment stage and asserts that the motion judge 

"appropriately concluded" that section 8.01(b) is ambiguous. It 

has also withdrawn its cross appeal.
13

language later in section 8.01(b) narrows the substantive scope 

of the language appearing earlier in the section. And, 

according to Acushnet, VAT receivables are not credits taken, 

used, or applied on a tax return filed with a tax authority. 

Instead, the VAT receivables reported on Acushnet's balance 

sheet only represent a "snapshot in time" of the estimated 

amount of VAT still due to Acushnet from customers, without 

regard to the tax period in which the underlying output VAT had 

been billed to customers and reported and paid to the applicable 

tax authority.

We start by reviewing the plain language of section

8.01(b). In that regard, Acushnet rightly insists that we must 

interpret the disputed provision and contract as a whole. At 

the same time, however, it effectively asks us, through its 

proffered interpretation, to read the phrase "with respect to" 

out of section 8.01(b). This we cannot do. See Vermont Teddy 

Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 475 (2004) 

("[C]ourts may not by construction add or excise terms, nor 

distort the meaning of those used and thereby make a new 

contract for the parties under the guise of interpreting the 

writing" [quotation omitted]).

By its ordinary meaning, the phrase "with respect to," like 

other similar phrases (e.g., "relating to," "in connection 

with," "associated with," "with reference to"), suggests an 
14

"expansive sweep" and "broad scope." California Div. of Labor 

Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 

U.S. 316, 324 (1997). See Coregis Ins. Co. v. American Health 

Foundation, Inc., 241 F.3d 123, 128-129 (2d Cir. 2001); Kamagate

v. Ashcroft, 385 F.3d 144, 154 (2d Cir. 2004). At the same 

time, we must avoid applying a "hyper-literal approach" to our 

interpretation of what can seem to be an open-ended phrase. See 

Greater N.Y. Metropolitan Food Council, Inc. v. Giuliani, 195 

F.3d 100, 106 (2d Cir. 1999) (Giuliani). With all of this in 

mind, we start from the premise that the phrase "with respect 

to" as utilized in section 8.01(b) must be taken to expand the 

scope of the amounts that are "for the account" of Beam, as 

seller, beyond those "credited against . . . Taxes." So too, as 

the parties agreed, the word "Taxes" was defined in the SPA to 

include VAT. VAT receivables, in turn, are amounts owed by 

customers for VAT. In short, we cannot conclude that the 

language in section 8.01(b) has such a definite and precise 

meaning as to exclude VAT receivables, even though we understand 

that the VAT receivables reported on Acushnet's balance sheet 

were not necessarily synonymous with the output VAT reported on 

a particular tax return.

Certainly, if the intent had been to limit Beam's rights 

under section 8.01(b) to tax credits taken or used on a tax 

return, that could have been stated differently. Clearly, the 
15

parties could have deleted the words "or with respect to." They 

also could have replaced the words "amounts credited against or 

with respect to Taxes" with the phrase "tax credits." The 

phrase "Tax refunds" appears in section 8.01(b),20 but not "Tax 

credits." This is notable given that the parties used the 

phrase "Tax refund or credit" in other parts of section 8.01.21 

We have to assume, therefore, that they were aware of the phrase 

"tax credits" and would have used it had they intended to impose 

the same meaning in section 8.01(b). See International Fid. 

Ins. Co. v. Rockland, 98 F. Supp. 2d 400, 412 (S.D.N.Y. 2000) 

("Sophisticated lawyers . . . must be presumed to know how to 

use parallel construction and identical wording to impart 

identical meaning when they intend to do so, and how to use 

different words and construction to establish distinctions in 

meaning"). Instead, the parties used a phrase that lends itself 

to ambiguity. See Giuliani, 195 F.3d at 105 ("[A]mbiguity 

resides . . . in the open-ended language . . . 'with respect 

to'").

 

20 There is no dispute that the VAT receivables did not 

qualify as "tax refunds" under section 8.01(b).

21 Sections 8.01(e) and (f) address tax audits or amendments 

of tax returns that result in an increase or decrease in, among 

other things, the amount of a "Tax refund or credit to which 

[Beam] is entitled under Section 8.01(b)." Acushnet argues that 

this bolsters its argument that Beam is only entitled to "Tax 

refunds or credits" under section 8.01(b). Given the context in 

which that phrase is used in sections 8.01(e) and (f), however, 

it does not appear reasonable to draw such an inference.
16

The language later in section 8.01(b), relied upon by

Acushnet, is also not a model of clarity. When read in full, it 

requires Acushnet to pay Beam "the amount of any such credit 

actually received in cash . . . within thirty (30) days after 

the filing of any Tax return in which the credit is used" 

(emphasis added). The attorney who inserted that language on 

behalf of Acushnet testified that it was not "artfully drafted," 

given that a tax credit is typically not received in cash but, 

rather, taken as an offset.22 Inartfully drafted or not, 

however, the language cannot be ignored.

Finally, Acushnet argues that its interpretation of section

8.01(b) is the only one consistent with the transaction as a 

whole. Specifically, Acushnet notes that, in return for the 

payment of $1.225 billion, the buyer group purchased all of the 

stock and, thus, all of the assets of Acushnet. As per the 

accounting notes that Beam inserted in the disclosure schedules, 

VAT receivables were identified as one of Acushnet's "other 

current assets"; and nowhere in the contracting documents were 

VAT receivables excluded from the sale. Hence, according to 

Acushnet, the VAT receivables were one of the assets purchased 

by the buyer group.

 

22 Acushnet's attorney testified that he intended the words 

"actually received in cash" to refer to tax refunds.
17

The transaction, however, was also structured to allocate 

Acushnet's tax liabilities and benefits to Beam and the buyer 

group on a pre- and postclosing basis, respectively. And, once 

again, while the $16.62 million in VAT receivables on Acushnet's 

balance sheet were not "Taxes" per se as defined in the SPA, 

they were related to preclosing taxes. In addition, as we have 

noted, because the VAT receivables were classified under "other 

current assets," Acushnet did not pay any additional amounts for 

those assets as part of the postclosing working capital 

adjustment.23 Acushnet then proceeded, postclosing, to collect 

nearly all of the VAT receivables from customers.24 The net 

effect of Acushnet's interpretation, therefore, would be to hold 

Beam responsible for paying to the tax authorities the output 

VAT related to preclosing VAT receivables while barring it from

recouping those amounts through the postclosing collection of 

the same VAT receivables. Such an interpretation is at odds 

with the over-all tax allocation structure of the transaction.

We accordingly conclude that the intent of the parties is 

not clearly expressed within the four corners of the contract

 

23 Admittedly, this appears to have been a product of 

Acushnet's historical reclassification of VAT receivables and 

not an act undertaken for the express purpose of removing VAT 

receivables from the transaction due to any arguable relation to 

taxes.

24 Acushnet had, at least by the time of trial, collected 

$15.54 million of the $16.62 million in VAT receivables.
18

and that, as a matter of law, section 8.01(b) is ambiguous in so 

far as it concerns postclosing rights to preclosing VAT 

receivables.

2. Findings at trial. What remains, therefore, is 

Acushnet's argument that certain subsidiary findings of the 

trial judge are clearly erroneous and therefore his ultimate 

finding as to the parties' intent with respect to the allocation 

of preclosing VAT receivables must be reversed. See M. O'Neil 

Supply Co. v. Petroleum Heat & Power Co., 280 N.Y. 50, 55-56 

(1939) (when the language of a contract is ambiguous, it is for 

the fact finder to ascertain and give effect to the intention of 

the parties).

"To prevail on appeal on the basis of an assault on a 

judge's factual findings is no easy matter, for we accept the 

judge's findings of fact as true unless they are 'clearly 

erroneous.'" Millennium Equity Holdings, LLC v. Mahlowitz, 456 

Mass. 627, 636 (2010) (quotation omitted) (Millennium). We "do 

not review questions of fact if any reasonable view of the 

evidence and the rational inferences to be drawn therefrom 

support the judge's findings . . . [and we will] uphold the 

findings of a judge who saw and heard the witnesses unless we 

are of the definite and firm conviction that a mistake has been 

made." Martin v. Simmons Properties, LLC, 467 Mass. 1, 8 (2014) 

(quotation omitted).
19

"When a term or clause is ambiguous, the parties may submit 

extrinsic evidence as an aid in construction . . . ." Dobbs v. 

North Shore Hematology-Oncology Assoc., P.C., 106 A.D.3d 771, 

772 (N.Y. 2013) (quotation omitted). For example, evidence may 

be submitted concerning "conversations, negotiations and 

agreements made prior to or contemporaneous with the execution" 

of the agreement, 67 Wall St. Co. v. Franklin Natl. Bank, 37 

N.Y.2d 245, 248-249 (1975); the predispute conduct of the 

parties, Innophos, Inc. v. Rhodia, S.A., 38 A.D.3d 368, 375

(N.Y. 2007) (McGuire, J., concurring in part and dissenting in 

part), aff'd, 10 N.Y.3d 25 (2008); and industry custom and 

usage, see Reuters Ltd. v. Dow Jones Telerate, Inc., 231 A.D.2d 

337, 343-344 (N.Y. 1997) (Reuters). Evidence concerning a 

party's uncommunicated subjective intent, however, is 

irrelevant. Nycal Corp. v. Inoco PLC, 988 F. Supp. 296, 302 

(S.D.N.Y. 1997), aff'd, 166 F.3d 1201 (2d Cir. 1998). "The 

purpose of contract interpretation . . . is to determine the 

intentions of the parties . . . by examining [their] objective 

manifestations." Id. at 301.

Here, after a six-day trial at which the parties presented 

hundreds of exhibits and the testimony of numerous witnesses, 

the trial judge found that the parties' purpose was to include 

VAT receivables among the "amounts credited against or with 

respect to Taxes." This ultimate finding was soundly anchored 
20

to several subsidiary findings, namely: (1) while the parties 

submitted the subjective interpretations of individuals involved 

in the underlying negotiation and drafting, there was no 

evidence of communications regarding section 8.01(b) beyond the 

exchange of drafts of the SPA; (2) there was no evidence that 

the phrase "amounts credited against or with respect to Taxes" 

is a term of art or that it has any recognized and accepted 

meaning as a matter of industry custom and usage; and (3) there 

was no evidence of any subsequent course of performance between 

the parties that would demonstrate a shared understanding of the 

disputed phrase. Moreover, the judge's interpretation of the 

contract is consistent with both (a) the division of tax 

liability and benefits under the SPA, and (b) the premise that a 

vendor or retailer will be left in a net zero position with 

respect to VAT.

Nonetheless, Acushnet claims that the trial judge did not 

understand what version of the contract was at issue. To 

support this argument, Acushnet points to the fact that the 

trial judge never quoted the final version of section 8.01(b) in 

his decision, but instead quoted from a draft of section 8.01(b) 

that was prepared by the buyer group, was never shared with 

Beam, and did not include the modifying language upon which 

Acushnet relies, which appears toward the end of section 
21

8.01(b).

25 All of this is true.26 The final version of section

8.01(b) and Acushnet's argument based on it, however, were not 

lost on the trial judge, both having been addressed ad infinitum 

at trial in various filings, by numerous witnesses, and in 

Acushnet's closing brief and argument. Throughout the trial, 

the judge demonstrated that he had a firm grasp of the issues, 

the language of the final version of section 8.01(b), and the 

parties' respective contentions. His comments during closing 

arguments, referencing "credits . . . applied on a tax return," 

 

25 As we have noted, that language provides that Acushnet 

was required to pay Beam "the amount of any such credit . . . 

within thirty (30) days after the filing of any Tax return in 

which the credit is used."

26 The draft of section 8.01(b) quoted by the judge 

provided:

"Any tax refunds that are received by or with respect to 

any [Acushnet] Company, and any amounts credited against or 

with respect to Taxes to which any [Acushnet] Company 

becomes entitled, that relate solely to any taxable year or 

portion thereof that ends on or before the Closing Date 

and, with respect to any Straddle Period, the portion of 

such Straddle Period ending on and including the Closing 

Date, shall be for the account of the Seller, and Buyer 

shall pay (or cause the relevant [Acushnet] Company to pay) 

over to the Seller any such refund or the amount of any 

such credit actually received in cash within ten thirty

(1030) days after the actual receipt thereof [**] or 

entitlement thereto, except to the extent Seller Group has 

an indemnification or payment obligation under this 

Agreement for such Taxes that has not been satisfied"

(strikeout and emphasis original).

This version of the draft does not include the phrase appearing 

in the final draft at **: "in the case of a refund, or within 

thirty (30) days after the filing of any Tax return in which the 

credit is used,".
22

in particular, demonstrate that he was basing his decision on 

the correct contract language.

27 For these reasons, although the 

judge did not quote the correct contract language in his 

decision, we are not left with a "definite and firm conviction 

that a mistake has been committed."

28 Millennium, 456 Mass. at 

637 (quotation omitted).

Acushnet further argues that the trial judge erred when he 

discounted certain opinion testimony that the phrase "amounts

credited against or with respect to Taxes" is limited to tax 

credits. However, the judge was not required to accept the 

experts' testimony. Evidence of industry custom and usage "is 

not admissible to influence the construction of a contract 

unless it appears that it be so well settled, so uniformly acted 

upon, and so long continued as to raise a fair presumption that 

it was known to both contracting parties and that they 

contracted in reference thereto. That one party had knowledge 

of the usage, and supposed that it would enter into the 

contract, is not sufficient." Reuters, 231 A.D.2d at 343-344 

(quotation omitted). Moreover, Acushnet's "expert" and 

 

27 The judge commented, "As I understand Beam's position, 

their position is that [section] 8.01(b) is not limited to tax 

credits that are applied on a tax return. I understand if I 

agree with Acushnet on that point, then [Acushnet] should win." 

(Emphasis supplied.)

28 Acushnet did not to seek clarification or reconsideration 

from the trial judge after he issued his decision.
23

"professional" witnesses' opinion testimony was imperfect at 

best. They had not seen the exact contract language used 

elsewhere; they could not identify other transactions in which 

they had seen the same phrase or term; and they acknowledged it 

was not a defined phrase under Generally Accepted Accounting 

Principles. In sum, the evidence of industry custom and usage 

was underwhelming and the trial judge, therefore, did not commit 

clear error by discounting it. It does not matter that the 

evidence was not rebutted. See McDonough v. Vozzela, 247 Mass. 

552, 558 (1924) (judge "not bound to give credit to testimony 

even though uncontradicted").

Judgment affirmed.