Court Opinion

ID: 4242220
Source: CourtListenerOpinion
Date Created: 2018-02-05 13:13:08.648113+00
Date Added: 2024-06-11T07:48:02.871055
License: Public Domain

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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.