Chang v. Winklevoss

NOTICE: All slip opinions and orders are subject to formal
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18-P-329 Appeals Court

WAYNE CHANG & another1 vs. CAMERON WINKLEVOSS & others.2

No. 18-P-329.

Suffolk. December 13, 2018. - April 24, 2019.

Present: Kinder, Neyman, & Desmond, JJ.

Practice, Civil, Motion to dismiss, Motion to amend, Summary
judgment, Costs. Damages, Quantum meruit. Unjust
Enrichment. Contract, Unjust enrichment, Termination,
Joint venture, Rescission, Attorney. Partnership,
Agreement, Dissolution. Uniform Partnership Act. Attorney
at Law, Malpractice, Negligence, Conflict of interest,
Representation of differing interests.

Civil action commenced in the Superior Court Department on
December 21, 2009.

Motions 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.

1 The i2hub Organization, Inc.

2 Tyler Winklevoss, Divya Narendra, Howard Winklevoss,
ConnectU, Inc. (formerly known as ConnectU LLC), Scott R. Mosko,
and Finnegan, Henderson, Farabow, Garrett & Dunner LLP. While
originally named as a defendant, ConnectU was dismissed from the
case on March 22, 2013. The company no longer exists and is not
a party to this appeal.
2

Billings, J.; the entry of judgment was ordered by Edward P.
Leibensperger, J., and a motion for costs was heard by him.

Alan D. Rose, Jr. (Meredith W. Doty also present) for the
plaintiffs.
Matthew Murray, of California (Michael Rubin, of
California, & Max D. Stern also present) for Cameron Winklevoss
& others.
Erin K. Higgins (Christopher K. Sweeney also present) for
Finnegan, Henderson, Farabow, Garrett & Dunner LLP, & another.

KINDER, J. In this 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.

Chang's suit arises from the failed business relationship

between Chang and his company, The i2hub Organization, Inc.

(i2hub), the Winklevoss brothers, Divya Narendra, and Howard
3

Winklevoss (collectively, the Winklevoss defendants),3 and

ConnectU. Chang's complaint also included malpractice claims

against Scott R. Mosko (Mosko), an attorney who previously

represented Chang, and Mosko's law firm4 (collectively, the Mosko

defendants).

Chang 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.5 On appeal, Chang claims error in the orders of

3 For clarity, we use first names when referencing the
individual Winklevosses.

4 Finnegan, Henderson, Farabow, Garrett & Dunner LLP.

5 After entry of the judgment and Chang's notice of appeal,
a judgment for costs entered, awarding the Winklevoss defendants
$30,305.53 for deposition costs. Chang filed an amended appeal,
to include the costs award, but makes no argument in his brief
regarding the award. The argument is therefore waived. See
4

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 and Facebook.

Background. 1. Formation of the business relationship.

We 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).

Chang 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 ConnectU.

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

Mass. R. A. P. 16 (a) (9) (A), as appearing in 481 Mass. 1628
(2019).
5

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,6 and Chang accepted the terms

the next day by e-mail.

Over 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.

6 The MOU stated, in pertinent part:

"Upon completion of the integration, CU [ConnectU] will
give Wayne Chang the option to exercise a 15% stake in CU.

"This option can be exercised if and only if one of the
following conditions occurs:

"1. CU terminates its relationship with i2hub after
integration

"2. CU does not enter into a holding company with
i2hub."
6

Beginning in April 2005, the business relationship quickly

deteriorated as the parties became entangled in various

financial and ownership disputes (further described infra).

2. Termination of the business relationship. We 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.

The 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,
7

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]ll 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."

In a 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 working

together."

Chang also expressed doubts as to whether WCG or any other

holding company or partnership was ever formed. In an e-mail to
8

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
9

forward: "[Y]ou decide what you want to do. [I]f you want the

integration to go ahead, make an offer."

Finally, 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.

After 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.

3. The Facebook litigation. On 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
10

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. vs. Connect U, Inc., No. 5:07-CV-01389 (N.D.

Cal.) (California action). (We refer to the Massachusetts and

California actions collectively as the Facebook litigation.)

Chang was eventually named as a defendant in the California

action.

Facebook and ConnectU agreed to a global settlement of all

pending litigation at a February 22, 2008 mediation. Pursuant

to the terms of the settlement, Facebook received one hundred

percent of ConnectU's stock in exchange for $20 million in cash

and over one million shares of Facebook stock for a total value

of approximately $65 million. Subsequent disagreement over the

terms of the settlement led to further litigation. The

settlement was eventually deemed enforceable, and the California

and Massachusetts actions were dismissed with prejudice,

including all claims against Chang in the California action.

See Facebook, Inc. v. Pacific Northwest Software, Inc., 640 F.3d

1034 (9th Cir. 2011); ConnectU, Inc. vs. Facebook, Inc., No. 07-
11

CV-10593 (D. Mass. July 22, 2011) (order of dismissal);7 Facebook

Inc. vs. Connect U, Inc., No. 5:07-CV-01389 (N.D. Cal. Dec. 15,

2008) (order of dismissal).

Chang filed the present action on December 21, 2009,

claiming that, by virtue of his fifty percent interest in WCG,

he was entitled to a fifty percent share of the settlement

proceeds.8

4. The Mosko defendants' representation of Chang. For the

purpose of our review of the Mosko defendants' motion to

dismiss, we again accept the facts alleged in the complaint as

true. Harrington, 467 Mass. at 724. We include facts derived

from documents, e-mails, and other materials referenced or

relied upon in the complaint. See Harhen v. Brown, 431 Mass.

838, 839-840 (2000). We also take judicial notice of court

orders pertaining to the Facebook litigation settlement. See

Reliance Ins. Co. v. Boston, 71 Mass. App. Ct. 550, 555 (2008).

The Winklevoss defendants and ConnectU retained the Mosko

defendants to defend them in the California action. When Chang

was named as a defendant in that action, the Winklevoss brothers

7 This case was a sequel to the earlier Massachusetts
filing; the two cases were consolidated.

8 Chang alleged in the alternative that, pursuant to the
MOU, he was entitled to a fifteen percent share of the
settlement. On appeal, he pursues only his theory as to his
alleged fifty percent ownership of WCG.
12

and their father, Howard, arranged and paid for Mosko to also

represent Chang. Chang claimed that, while the Mosko defendants

were aware of the MOU between Chang and ConnectU, as well as

Chang's partnership in WCG, he and the Mosko defendants never

discussed any potential claims he might have against ConnectU or

the Winklevoss defendants.

The Mosko defendants' representation of Chang was

memorialized in an engagement agreement, signed by Chang on

March 1, 2007. The agreement stated in detail that Mosko was

concurrently representing the Winklevoss defendants; that the

Winklevoss defendants were his "primary client[s]"; and that he

agreed to additionally represent Chang "[a]s an accommodation"

to the Winklevoss defendants. The agreement further provided

that Chang would "waive any current or future conflicts that

. . . may exist in the future by [virtue of the Mosko

defendants'] representation [of both Chang and the Winklevoss

defendants]."

The complaint alleged that while Mosko had informed Chang

by e-mail on January 29, 2008, about an upcoming mediation

(which Mosko attended), Mosko never provided Chang with any

specific information about the date, time, or place of the

mediation, or, after the mediation, the terms of the settlement

agreement. In the January 29 e-mail, Mosko stated that

"[u]nless I hear objection, I will move forward with this
13

mediation." On February 25, 2008, Mosko sent Chang a second e-

mail informing him that, as a result of the mediation, the

parties had reached a global settlement of the Facebook

litigation, and stated, "The effect [of the settlement] on you

will be a dismissal of the [California action] with prejudice."

No other details concerning the terms of the settlement were

included. The terms of the settlement agreement did not specify

any particular apportionment of the proceeds among those with an

ownership interest in ConnectU.

On April 28, 2008, Mosko sent Chang a third e-mail, which

summarized their telephone conversation earlier that day

regarding the continuing acrimony between Facebook and the

Winklevoss defendants over the settlement. Mosko's e-mail

stated, "We also discussed at least the possibility that . . .

you may be in a position to disagree with ConnectU's decision to

dispute the enforceability of the settlement agreement. To the

extent there may be a conflict between you and ConnectU, I

advised that it might be a good idea for you to get a separate

attorney to look at this. . . . For now, you have told me that

you are willing to sit on the side lines without raising a

conflict, while ConnectU and Facebook fight this recent battle."

By November of 2008, pursuant to an order of the District

Court enforcing the settlement agreement, the proceeds of the

settlement were transferred to a special master. Soon
14

thereafter, pursuant to an amended judgment ordering specific

performance of the settlement agreement, the special master was

ordered to transfer Facebook's payment of cash and stock to

Boies, Schiller & Flexner LLP (BSF), a law firm representing the

Winklevoss defendants and designated to act as trustee of the

proceeds. The court ordered that, upon transfer to BSF, the

proceeds were to be held "in trust for [BSF's] clients and any

lawful claimant." A year later, in 2009, Chang filed the

complaint in this action. The settlement proceeds continued to

be held in trust until the litigation (including the appeal)

over the enforceability of the settlement agreement was resolved

in December 2011. Chang did not file any pleading seeking

consideration as a "lawful claimant."9

Discussion. 1. The equitable claims. a. The Winklevoss

defendants' motion to dismiss and Chang's motion for

9 We note that additional facts not before the judge, but
included in the record, confirm that Chang failed to take any
action to assert that he was a lawful claimant. On November 1,
2011, the District Court ordered all "parties seeking
disbursement of funds" to file motions and appear before the
court at a hearing to be held on November 28, 2011. BSF
forwarded the order to Chang's then-attorneys (he was no longer
represented by the Mosko defendants) and advised them of Chang's
options. On December 5, 2011, the District Court ordered
disbursement of the settlement proceeds to the claimants,
including the Winklevoss defendants and others. Chang never
filed a claim and therefore was not included in that court's
order of disbursement.
15

reconsideration. We review the allowance of a motion to dismiss

pursuant to Mass. R. Civ. P. 12 (b) (6) de novo, accepting the

allegations in the complaint as true and drawing all reasonable

inferences in the nonmoving party's favor. Curtis v. Herb

Chambers I-95, Inc., 458 Mass. 674, 676 (2011). "The ultimate

inquiry is whether [Chang] alleged . . . facts . . . so as to

plausibly suggest an entitlement to relief" (citation omitted).

Baker v. Wilmer Cutler Pickering Hale & Dorr LLP, 91 Mass. App.

Ct. 835, 842 (2017).

Relying on MCI WorldCom Communications, Inc. v. Department

of Telecommunications & Energy, 442 Mass. 103, 116 (2004), and

Fox v. F & J Gattozzi Corp., 41 Mass. App. Ct. 581, 589 (1996),

a Superior Court judge (first judge) issued a consolidated order

on April 28, 2011, dismissing the quantum meruit and unjust

enrichment claims, and stating simply, "Chang has asserted both

tort and breach of contract claims which, if the Winklevoss

defendants are held liable, will adequately compensate him for

any losses." Upon reconsideration, the judge revised his

grounds for dismissal, stating that "[t]he court has already

determined that the complaint alleges sufficient facts as to the

existence of a contract to withstand a motion to dismiss." We

interpret the judge's succinct rulings as an application of the

well-settled principle that a claim of unjust enrichment or

quantum meruit will not lie "where there is a valid contract
16

that defines the obligations of the parties" (citation omitted).

Metropolitan Life Ins. Co. v. Cotter, 464 Mass. 623, 641 (2013)

(unjust enrichment). Boston Med. Ctr. Corp. v. Secretary of the

Executive Office of Health & Human Servs., 463 Mass. 447, 467

(2012) (quantum meruit).

However, the existence of a contract is a question of fact.

LeMaitre v. Massachusetts Turnpike Auth., 70 Mass. App. Ct. 634,

637 (2007). At the pleading stage, that factual question had

not been resolved. Although damages for breach of contract and

unjust enrichment are mutually exclusive, "it is accepted

practice to pursue both theories at the pleading stage." Zelby

Holdings, Inc. v. Videogenix, Inc., 92 Mass. App. Ct. 86, 93

(2017), quoting Lass v. Bank of Am., N.A., 695 F.3d 129, 140-141

(1st Cir. 2012).10 Thus, dismissal of Chang's equitable claims

on these grounds at the pleading stage, where the claims were

properly pleaded in the alternative, was error, "as it

presuppose[d] the existence of a valid underlying contract."

10Chang properly pleaded an alternative basis for relief
pursuant to Mass. R. Civ. P. 8 (e) (2), 365 Mass. 749 (1974),
which "permits a party to state as many separate claims or
defenses as may be properly available, 'regardless of
consistency and whether based on legal or equitable grounds.'"
Zelby Holdings, 92 Mass. App. Ct. at 92.
17

Zelby Holdings, supra.11 Upon our de novo review, however, we

affirm the dismissal on different grounds.12

To prove claims for quantum meruit and unjust enrichment,

Chang would be required to demonstrate that he had conferred a

measurable benefit on the Winklevoss defendants through the

services he rendered and that he had a reasonable expectation of

receiving compensation for those services. See Finard & Co.,

LLC v. Sitt Asset Mgt., 79 Mass. App. Ct. 226, 229 (2011). Such

compensation is the "fair and reasonable value" of the services

provided. J. A. Sullivan Corp. v. Commonwealth, 397 Mass. 789,

797 (1986). Here, instead of seeking the fair and reasonable

value of the services he provided to the Winklevoss defendants

during their short collaboration, Chang sought the value of his

alleged ownership interest in either ConnectU or WCG, ConnectU's

parent company.13 Thus, Chang's asserted entitlement to a

11We need not analyze Chang's quantum meruit and unjust
enrichment claims separately as, in this context, these quasi-
contract claims are indistinguishable. See Liss v. Studeny, 450
Mass. 473, 479 (2008).

12"We may affirm the judgment on any ground apparent on the
record that supports the result reached in the [trial] court"
(quotation and citation omitted). Lopes v. Commonwealth, 442
Mass. 170, 181 (2004).

13Chang did not set forth any facts in his complaint
regarding the fair and reasonable value of his services beyond a
general reliance on his ownership stake in ConnectU and in the
partnership, although in an affidavit subsequently submitted he
stated that the Winklevoss defendants had paid him a stipend and
reimbursed him for certain expenses.
18

portion of the Facebook litigation settlement proceeds was

premised entirely on ownership interest(s) that were

contractually created and defined. As a matter of law, "a party

does not recover on the contract itself under quantum meruit [or

unjust enrichment]." Finard, 79 Mass. App. Ct. at 229, quoting

Liss v. Studeny, 450 Mass. 473, 480 (2008). Accordingly,

Chang's equitable claims did not provide a legally plausible

basis for relief.

b. Chang's motion to amend the complaint. After the first

judge dismissed the equitable claims, Chang moved to amend his

complaint. The motion was denied by the same judge. We review

the denial of a motion to amend a complaint for abuse of

discretion, Nguyen v. Massachusetts Inst. of Tech., 479 Mass.

436, 461 (2018), and Chang has the burden to show that the judge

exceeded the bounds of his discretion. Mancuso v. Kinchla, 60

Mass. App. Ct. 558, 572 (2004). Although leave to amend should

be "freely given when justice so requires," Mass. R. Civ. P. 15

(a), 365 Mass. 761 (1974), such leave may be denied where

amending the complaint would be futile. Nguyen, supra. An

amended complaint is futile if the amended claims would not

survive a motion to dismiss for failure to state a claim.

Mancuso, supra.
19

In his motion to amend, Chang sought to add facts showing

that, as a result of his work, ConnectU gained more than 20,000

users and was able to obtain and import additional user

information. Chang argued that these facts supported his

contention that his services provided a benefit to ConnectU.

However, the proposed amendments did not set forth any facts

relating to the fair and reasonable value of the services Chang

rendered, and they did not alter his theory of recovery, which

remained grounded in his contract-based ownership interests.

For these reasons, we cannot say that the judge "made a clear

error of judgment in weighing the factors relevant to the

decision . . . such that the decision [that the amended

complaint was futile] falls outside the range of reasonable

alternatives." L.L. v. Commonwealth, 470 Mass. 169, 185 n.27

(2014).

2. Chang's partnership claim against the Winklevoss

defendants. The Winklevoss defendants subsequently moved for

summary judgment on Chang's contract claims. The motion was

allowed by a second Superior Court judge. We review the

allowance of a motion for summary judgment de novo. Targus

Group Int'l, Inc. v. Sherman, 76 Mass. App. Ct. 421, 428 (2010).

In doing so, we look to the "same record as the motion judge"

and determine "whether the evidence, viewed in the light most

favorable to the losing party, establishes all material facts
20

and entitles the successful party to a judgment as a matter of

law." Id.

While Chang's contract claims encompassed a number of

related causes of action, on appeal he argues only that it was

error to dismiss his claim that the Winklevoss defendants

breached a partnership or joint venture agreement to create WCG,

the holding company that was intended to own ConnectU, i2hub,

and other ventures, and in which he claims to have had a fifty

percent ownership stake (partnership claim). Pursuant to the

partnership claim, Chang asserted an entitlement to fifty

percent of the Facebook litigation settlement proceeds.

The second judge concluded that the undisputed material

facts established that, while the parties may have entered into

some semblance of an oral agreement to form a partnership,

"whatever partnership there may have been (if any) was at an end

by the mutual agreement of both sides" as of May 25, 2005. The

judge concluded that the undisputed material facts showed that

the parting was mutual, as both sides sought to "extract

themselves from one another and their shared business venture."

We discern no error in the judge's reasoning.

Chang contends that the judge erred by failing to apply the

Massachusetts Uniform Partnership Act, G. L. c. 108A (MUPA),

governing dissolution of at-will partnerships. Under MUPA, a

partnership will continue to exist until the winding up of its
21

affairs is concluded. See G. L. c. 108A, § 30; Loan

Modification Group, Inc. v. Reed, 694 F.3d 145, 151 (1st Cir.

2012) (applying Massachusetts law). "Winding up" is defined as

a process occurring between dissolution and termination wherein

"work in process is completed, partnership assets are sold,

creditors are paid, and the business of the partnership is

brought to an orderly close." Reed, supra, quoting Anastos v.

Sable, 443 Mass. 146, 151-152 (2004). Here, the summary

judgment record established that whatever winding up was

necessary for this short-lived partnership, the process was

complete as of December 2005.

By the end of May 2005, the parties had mutually agreed to

dissolve whatever partnership they may have had. Chang's claim

that "[t]here remained ongoing disputes about the finances of

the partnership, including the Winklevoss [d]efendants' claim

that Chang owed them $18,000, and Chang's claim that the

Winklevoss [d]efendants had an ongoing duty to fund his work for

the business," is not supported by the summary judgment record.

There was no evidence of any effort to follow up on these

"disputes" after May 25, 2005. While there was some suggestion

during an online discussion on May 25 of a further conference

call, there was no evidence that such a call occurred. When

Chang suggested to Tyler, "Decide what you want to do [and] if

you want the integration to go ahead, make an offer," no offer
22

was forthcoming. In fact, after May 25, 2005, the parties had

almost no contact.14 In short, the summary judgment record did

not raise a triable issue of fact on these issues. The winding-

up process was complete and the partnership was terminated well

before the Winklevoss defendants entered into settlement

negotiations with Facebook in February of 2008.

The parties' undisputed words and conduct demonstrate that

by at least the end of 2005 they had mutually agreed to rescind

any partnership, and that their relationship going forward would

be as if no partnership had ever existed, with Chang retaining

full control over i2hub and the Winklevoss defendants retaining

full control over ConnectU. "An agreement to rescind a contract

need not be made in any formal, express terms. Rather, mutual

assent to a rescission may be inferred from the attendant

circumstances and conduct of the parties." Puma v. Gordon, 9

Mass. App. Ct. 489, 495 (1980). See Flaherty v. Goldinger, 249

Mass. 564, 567 (1924). Here, even when the facts are viewed in

the light most favorable to Chang, the undisputed evidence

established that the parties agreed to take their respective

companies and "simply to walk away." For these reasons, we

14The record shows only a single e-mail from Cameron to
Chang dated December 21, 2005, in which Cameron informed Chang
of an outstanding bill of $3,820 owed to the Pioneer Valley
Transit Authority for advertisements. Chang paid the bill.
23

discern no error in the allowance of the Winklevoss defendants'

motion for summary judgment.15

3. Legal malpractice claim against the Mosko defendants.

To prevail on a claim for legal malpractice, a plaintiff must

establish the existence of an attorney-client relationship, a

breach of the duty of care, actual damages, and that the breach

proximately caused such damages. See Williams v. Ely, 423 Mass.

467, 475-476 (1996). Chang's allegations, taken as true, "must

be enough to raise a right to relief above the speculative

level." Iannacchino v. Ford Motor Co., 451 Mass. 623, 636

(2008), quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007). "A complaint is insufficient if it rests on 'naked

assertions' devoid of 'further factual enhancement.'" Doe v.

American Guar. & Liab. Co., 91 Mass. App. Ct. 99, 105 (2017),

quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In allowing the motion to dismiss the claims against the

Mosko defendants for lack of subject matter jurisdiction

pursuant to rule 12 (b) (1), the first judge focused on Chang's

failure to demonstrate any cognizable harm he sustained as a

result of the Mosko defendants' representation, reasoning that

"any injury as a result of missed settlement opportunities is

15Given the result we reach, we need not address the
defenses of repudiation and equitable estoppel raised by the
Winklevoss defendants.
24

far too speculative, and any causal connection to the

defendants' conduct far too attenuated, to confer standing."

The judge further concluded that "[a]ny claim to the proceeds

rests, of necessity, on Chang's claim of ownership rights in

ConnectU." The judge added that dismissal was also appropriate

under rule 12 (b) (6) for Chang's failure to state a claim.

While we agree that Chang failed to set forth any

cognizable harm resulting from professional negligence, we rest

our determination on Chang's failure to state a claim under rule

12 (b) (6). On appeal, Chang argues that he was injured by the

Mosko defendants' negligence in both failing to adequately

protect his interests and in subordinating his interests to

those of the Winklevoss defendants during the Facebook

litigation mediation. In support thereof, he points to a number

of alleged negligent acts, including failing to sufficiently

inform him of, or include him in, the Facebook litigation

settlement discussions in which he had a direct and substantial

interest, thus depriving him of the opportunity to participate

so as to obtain a more favorable outcome. Chang further claims

that the Mosko defendants agreed to a release of his claims

without his authorization, and failed to advise him of both

potential conflicts of interest arising from the Mosko

defendants' dual representation of him and the Winklevoss
25

defendants, as well as his right to independent counsel or

possible claims against the Winklevoss defendants.

These allegations are either insufficiently supported or

contradicted by the evidence relied on or referenced in the

complaint. For example, Chang's engagement agreement with the

Mosko defendants is contrary to Chang's claim that he was not

made aware of any potential conflicts of interest. The

agreement expressly stated that Mosko was concurrently

representing the Winklevoss defendants, that they were his

"primary client[s]," and that Chang was agreeing to "waive any

current or future conflicts" stemming from the representation.16

Chang agreed to the representation on these terms. Pursuant to

Mass. R. Prof. C. 1.7 (b), as appearing in 471 Mass. 1335

(2015), a lawyer may represent a client in the face of a

possible risk of a conflict of interest as long as the lawyer

reasonably believes that the representation will not adversely

affect the client and the client gives informed, written

consent. Moreover, Chang's complaint noted that he never

discussed his ownership interests in ConnectU or WCG with the

16The engagement agreement was drafted to reflect the
original purpose of the representation, which was "solely in
connection with a deposition and document subpoena" Chang had
received in the California action. The representation continued
once Chang was named as a defendant in that action.
26

Mosko defendants.17 Even if the Mosko defendants were aware of

Chang's ownership interests in ConnectU and WCG, the

representation was limited to defending him against claims of

misappropriation of proprietary information and user data

brought by Facebook in the California action. Pursuant to Mass.

R. Prof. C. 1.2 (c), as appearing in 471 Mass. 1313 (2015), "[a]

lawyer may limit the scope of the representation if the

limitation is reasonable under the circumstances and the client

gives informed consent."

The e-mails Mosko sent to Chang show that Mosko kept Chang

reasonably updated on the negotiations and informed him of

relevant details of the settlement -- for example, that the

settlement procured a dismissal of Facebook's claims against

Chang in the California action. The e-mails also show that

Chang was given ample opportunity to request additional

information. In one e-mail, Mosko advised Chang of potential

conflicts of interest arising from the dual representation, as

well as Chang's right to independent counsel.

Finally, the terms of the settlement agreement, which are

set forth in the District Court's order enforcing the agreement,

17The complaint alleged only that the Mosko defendants were
"aware of" the MOU, "aware of the existence" of WCG, and aware
that Chang and the Winklevoss defendants had operated as
partners.
27

did not apportion the proceeds among any of the ConnectU

stakeholders. Nor did Chang allege that the Mosko defendants

should or could have altered the terms of the agreement to

explicitly apportion to Chang any such share. The assertion

that the Mosko defendants' negligence caused Chang not to

receive his fair portion of the settlement proceeds is further

belied by the fact that, at the time Chang filed his complaint

and for almost two years thereafter, the settlement proceeds

were held in trust as ordered by the court in the California

action for "any lawful claimant." Accordingly, Chang's right to

a portion of the settlement proceeds, if any, remained intact

and was not impaired by any conduct of the Mosko defendants.18

Chang does not explain his failure to submit a claim to the

settlement proceeds.

Simply put, Chang failed to allege facts to plausibly

suggest that he "probably would have obtained a better result

had the attorney exercised adequate skill and care," as he must

to prevail on a professional negligence claim. Fishman v.

Brooks, 396 Mass. 643, 647 (1986).19

18Chang claimed that the "any lawful claimant" language was
inserted for the specific purpose of allowing the Winklevoss
defendants' former counsel to submit a claim for payment of
their fees. However, court orders and correspondence between
the trustee and Chang's then-attorneys (no longer the Mosko
defendants) show that Chang could have, in fact, submitted a
claim of entitlement.
28

Judgment affirmed.

Judgment for costs
affirmed.

19 "Other points, relied on by [Chang], but not discussed in
this opinion, have not been overlooked. We find nothing in them
that requires discussion." Commonwealth v. Domanski, 332 Mass.
66, 78 (1954).