Heard: December 13, 2018.
action commenced in the Superior Court Department on December
to dismiss, filed on May 7 and 18, 2010, were heard by Peter
M. Lauriat, J., and a motion for reconsideration, filed on
May 26, 2011, was considered by him; a motion for summary
judgment, filed on April 28, 2014, was heard by Thomas P.
Billings, J.; the entry of judgment was ordered by Edward
P. Leibensperger, J., and a motion for costs was
heard by him.
D. Rose, Jr. (Meredith W. Doty also present) for the
Matthew Murray, of California (Michael Rubin, of California,
& Max D. Stern also present) for Cameron Winklevoss &
K. Higgins (Christopher K. Sweeney also present) for
Finnegan, Henderson, Farabow, Garrett & Dunner LLP, &
Present: Kinder, Neyman, & Desmond, JJ.
case we examine the dismissal of contract and tort-based
claims brought by software developer Wayne Chang against
brothers Cameron and Tyler Winklevoss, the creators of
ConnectU, Inc. (ConnectU), a social networking website that
was a competitor to The Facebook, Inc. (Facebook). This
action was filed following the settlement of protracted
multistate litigation between Mark Zuckerberg, the founder of
Facebook, and the Winklevoss brothers, Zuckerberg's
pre-Facebook collaborators. Chang's complaint alleged
that he was entitled to a share of the proceeds of the
settlement between the Winklevoss brothers and Zuckerberg --
$65 million in cash and stock tendered by Facebook in
exchange for ConnectU.
suit arises from the failed business relationship between
Chang and his company, The i2hub Organization, Inc. (i2hub),
the Winklevoss brothers, Divya Narendra, and Howard
Winklevoss (collectively, the Winklevoss defendants),
and ConnectU. Chang's complaint also included malpractice
claims against Scott R. Mosko (Mosko), an attorney who
previously represented Chang, and Mosko's law
firm (collectively, the Mosko defendants).
asserted contract and tort claims against the Winklevoss
defendants, claiming that they had breached at least one of
two agreements entitling him to a portion of the Facebook
settlement proceeds. Alternatively, Chang claimed that, in
the absence of an enforceable agreement, he was entitled to
recover damages through equitable claims, including quantum
meruit and unjust enrichment. Chang's equitable claims
were dismissed for failure to state a claim, and his
remaining contract and tort claims were subsequently
dismissed on summary judgment. The professional negligence
claims against the Mosko defendants were also dismissed on a
motion pursuant to Mass. R. Civ. P. 12 (b), 365 Mass. 754
(1974), and final judgment entered for all
defendants. On appeal, Chang claims error in the
orders of dismissal and the decision on the defendants'
motion for summary judgment. We affirm, principally because
we agree that the business relationship between Chang and the
Winklevoss defendants ended long before the commencement of
the settlement negotiations between the Winklevoss brothers
Formation of the business relationship.
summarize the facts alleged in Chang's complaint,
accepting them as true for the purpose of our review of the
rule 12 (b) dismissal of the quantum meruit and unjust
enrichment claims. Harrington v.
Costello, 467 Mass. 720, 724 (2014).
launched i2hub, a peer-to-peer, file-sharing
"platform," in March 2004. ConnectU, a social
networking site in competition with Facebook, was founded by
Cameron and Tyler Winklevoss. At some point, Divya Narendra
and Howard Winklevoss (Cameron and Tyler's father) also
became coowners of Connect U.Seeking to increase
ConnectU's user base, Cameron and Tyler contacted Chang
in October of 2004, to explore forming a business
relationship. The parties agreed to integrate i2hub software
into ConnectU's social networking website, and discussed
forming a jointly owned holding company, later referred to as
the Winklevoss Chang Group (WCG), which would own both
companies as well as other Internet-based entities that they
would jointly develop. The parties further agreed that, upon
completion of the integration, Chang would be given the
option to acquire a fifteen percent ownership interest in
ConnectU. On November 23, 2004, Cameron sent Chang a
memorandum of understanding (MOU) via e-mail,  and Chang
accepted the terms the next day by e-mail.
the next several months, the parties worked collaboratively,
holding themselves out as partners in the development of
ConnectU, i2hub, and other Internet entities. Chang and the
Winklevoss defendants opened an office in Amherst run by
Chang, with a small staff paid for by Cameron and Tyler.
Revenue generated by i2hub and other Internet entities Chang
worked on was redirected to ConnectU. Chang also began
working to integrate the i2hub software into ConnectU, and
claimed he completed the integration in February, 2005. The
complaint did not indicate what, if any, compensation Chang
received. Beginning in April 2005, the business relationship
quickly deteriorated as the parties became entangled in
various financial and ownership disputes (further described
Termination of the business relationship.
summarize the undisputed facts which relate to the Winklevoss
defendants' motion for summary judgment. The business
collaboration between Chang and the Winklevoss defendants was
short-lived. The parties do not dispute that they never
executed a written agreement to form WCG; nor is there any
evidence of any agreement on the specific terms of a working
partnership or holding company. Several months after the
relationship commenced in the fall of 2004, it became
antagonistic due to intensifying financial and ownership
disputes. In April of 2005, Cameron and Tyler informed Chang
that they had ceased funding him and the Amherst office. They
also claimed that Chang was in debt to them for expenses in
the amount of approximately $18, 000 and demanded repayment
or equity in i2hub.
record contains substantial documentation in the form of
e-mail messages and online discussions (instant messaging)
exchanged during April and May of 2005 between Chang and the
Winklevoss brothers, as well as between Chang and John Taves,
a principal of a company hired to work on the integration of
ConnectU and i2hub. These communications indicate that both
parties sought to end their business relationship. On April
23, 2005, Chang told Taves that he had "no desire to
continue to work with them" and that he was
"figur[ing] out how to get funding, wash myself of the
Winklevosses, and move onto the next venture." The next
day, Chang further stated to Taves, "[A] 11 I want is
i2hub . . . [I'm] willing to take just i2hub, rather than
keeping my hands in connectu." Chang reiterated this
position in an e-mail to Taves on April 25, stating that his
"end goal" was to retain ownership of i2hub and, on
April 28, he again told Taves that he had "no wish to
continue to work with them," adding that he had
"already begun disintegration."
lengthy instant message exchange on May 25, 2005, Chang and
Tyler discussed the status of their working relationship and
Chang's alleged debt. Focusing on an upcoming press
release concerning i2hub, Tyler told Chang to "make sure
you take our names off of anything to do with i2hub."
Chang responded, "[M]ake sure you remove i2hub from
connectu." The conversation continued with Tyler asking,
"[W]hy would you want our names on the press release if
we are no longer working together?" Chang responded,
"[I] don't," adding that he also did not
"want i2hub associated with connectu anymore," and
ended by stating that i2hub and Connectu were "no longer
also expressed doubts as to whether WCG or any other holding
company or partnership was ever formed. In an e-mail to Tyler
on April 23, 2005, Chang stated that WCG "was never
fleshed out," that he was "sent a draft of the
agreement, but nothing was done on that . . . [and that it
was] something that hasn't been created." In an
instant message exchange with Taves on April 24, Chang
referred to WCG as "a non-existent holding
company," claiming he "never agreed to [a] holding
company," and that no "merger" had occurred
because he "didn't agree to the terms [Cameron and
Tyler] set out." In an e-mail to Taves on the same day,
he further asserted that "the parent company was never
formed." In another e-mail to Taves in late May, he
stated: "The umbrella corporation never materialized. So
both companies have been separate, but working jointly."
In the same May 25 instant message exchange noted above, in
response to Tyler's admonishing him to fulfill his
agreements, Chang countered by saying, "[S]how me the
agreement." Chang further stated that until the dispute
over the debt was resolved, "there is no deal in
place." He went on to explain that "there is no
agreement" and, therefore, when the funding stopped, he
"stopped working with connectu's interest in
mind," and that there was "no reason for [him] to
continue when connectu has no desire to." Chang
continued to reiterate that "theres [sic] no
agreement in place." Chang ended the exchange by stating
that the financial dispute needed to be resolved before he
would go forward: "[Y]ou decide what you want to do.
[I]f you want the integration to go ahead, make an
while Chang claimed in his complaint that he had completed
the integration, he indicated to Tyler in the May 25 instant
message exchange that the integration was "never
completed." He explained that he had stopped working on
integration because Cameron and Tyler ceased funding him, and
would continue to withhold his services until the dispute
over the debt was resolved.
May 25, 2005, there was little contact between the parties.
The parties do not dispute that the Winklevoss defendants
continued operating ConnectU without Chang. Likewise, Chang
continued to operate i2hub until he shut it down six months
later on November 14, 2005.
The Facebook litigation.
September 2, 2004, prior to Chang's involvement with the
Winklevoss defendants, ConnectU filed an action in the United
States District Court for the District of Massachusetts
against Zuckerberg, Facebook, and others, asserting, inter
alia, misappropriation of trade secrets. See ConnectU LLC vs.
Mark Zuckerberg, No. 04-CV-11923 (D. Mass.) (Massachusetts
action). Chang was not a party to the action. Almost a year
later, in August 2005 (after Chang and the Winklevoss
defendants had ended their business collaboration), Facebook
brought an action in the California Superior Court against
ConnectU and the Winklevoss defendants alleging that one of
the websites Chang had helped develop misappropriated
Facebook's proprietary information and user data. The
case was later removed to the United States District Court
for the Northern District of California (District Court). See
Facebook Inc. ...