Sai Baba of Shirdi (1838-1918)
The Business Court has granted summary judgment to defendants in a lawsuit brought by trustees who pushed forward with an election to divest the existing board of directors from the management of the temple but didn’t amend the nonprofit corporation’s certificate of incorporation first.
Sri Shirdi Sai Baba Temple of Austin, et al. v. Shiva Lam, et al. (2026 Tex. Bus. 45; July 14, 2026) arose from a dispute between devotees of the Sri Shirdi Sai Baba Temple of Austin. The temple was established in 2007 and incorporated as a nonprofit religious institution. Its certificate of formation vested management of the temple in a board of directors and states that the temple “will have no members.” The temple’s initial bylaws conformed to the certificate. In 2015 the temple established a board of trustees to assist the directors. Some members of this board subsequently became embroiled in a scandal involving a fraudulent donation-matching scheme. The scandal resulted in the resignation of the trustees nd the installation of a new board made up Defendants in this lawsuit. The parties agreed that the 2024 board was designed to convert the temple from a board-managed corporation to a member-managed corporation, although the certificate of formation was never amended to reflect the change.
In 2024 the trustees ordered an audit of the temple’s finances in connection with the scandal. The audit’s results determined that specified temple members participated in the scheme, so the board voted to prohibit those members from having voting rights or serving as a director for the next four elections. This decision triggered a dispute over the candidacy of some members in an upcoming board election, as some of them had been fingered in the scheme. In July 2025 the 2024 board adopted amended bylaws conforming to the new structure vesting governance of the temple in the board of trustees, which, among other powers, would elect the board of directors.In September 2025 the 2024 board established a five-member election committee to oversee an election by the trustees of a new board of directors and executive committee. The board retained an attorney to advise on candidate eligibility and the conduct of the election, who advised the board that the 2025 bylaws were not effective because they conflicted with the certificate of formation. He recommended that the board delay the election so that an amended certificate could be filed with the SOS. The board subsequently met and revoked the 2025 bylaws, but a split developed over whether to delay the election.
The dissidents went forward and conducted a disputed election, which produced a new board of directors. Only about half of the temple’s trustees participated in the election. The 2024 board moved ahead with plans to amend the certificate of formation, enact new bylaws, and conduct a valid election. Shortly thereafter, the newly elected board members hired legal counsel to file the amended certificate and sued the 2024 board. Plaintiffs moved for summary judgment that the 2025 bylaws were valid on the basis of the TBOC and church autonomy doctrine. Defendants likewise moved for summary judgment on Plaintiffs’ declaratory judgment and promissory estoppel claims.
In an opinion by Judge Andrews, the court denied the motion. As to the validity of the bylaws, the court “applie[d] neutral principles of Texas corporate law and conclude[d] that the provision of the 2025 Bylaws purporting to place corporate governance in [the] hands of the trustee-members, rather than the board of directors, directly conflict with the Temple’s elections in its Certificate of Formation, and the certificate controls over the conflicting provision of the bylaws.” § 22.012, TBOC. Plaintiffs argued that the bylaws change didn’t convert the temple to member management but “‘vest[ed] the management of the Temple in the board of directors,’ and the board merely elected to delegate certain authority to the [board of trustees].” As the court pointed, while the TBOC certainly allows the board to delegate authority to the trustees, that’s not what happened in this case. Instead, the 2025 bylaws divested power from the board and gave it to the trustees. And Plaintiffs admitted as much in their pleading, which stated “that the 2025 Bylaws did convert the Temple into a member-managed nonprofit corporation.” What Plaintiffs should have done was to make the 2025 bylaws amendments effective on the effective of an amended certificate of formation. But they didn’t.
Plaintiffs next played the church autonomy card, but it didn’t work, either. The court unsurprisingly held that the “case presents a non-ecclesiastical issue of corporate governance that can be decided by neutral application of Texas corporate law, such that the Court has jurisdiction.” The court denied Plaintiffs’ MSJ.
Turning to Defendants’ MSJ, the court first held that Plaintiffs’declaratory judgment claim failed as a matter of law because the certificate of formation prevails over the 2025 by laws, as it previously ruled. As to their promissory estoppel defense, Plaintiffs tried to argue that Defendants should have amended the certificate of formation sooner, and that this “failure to act” somehow created an equitable remedy for them. As the court observed, however, Plaintiffs failed to address any of the elements of equitable estoppel in their summary judgment response. In any event, the record clearly showed that Plaintiffs were well aware of the certificate of formation problem and went ahead anyway. The court likewise rejected Plaintiffs’ waiver and ratification arguments, as if those theories could override the statutory requirements. And Plaintiffs promissory estoppel claim failed as a matter of law because Plaintiffs sought the wrong kind of relief. Plaintiffs wanted an injunction ordering Defendants to (basically) vacate the premises, rather than relief putting them back on the same position they were in before relying on Defendants’ promise. Of course, the court didn’t have to reach the question of whether Defendants made any promises to Plaintiffs in the first place. The court granted Defendants’ MSJ.
Defendants’ claim for attorney’s fees under the UDJA remains pending.
