Certificate of Formation Controls Over Conflicting Bylaws in Nonprofit Governance Dispute
Judge Melissa Davis Andrews
Decided July 14, 2026
Mem. Op.
Summary Judgment
In Sri Shirdi Sai Baba Temple of Austin v. Lam, Division 3 granted summary judgment for defendants, holding that a nonprofit corporation's certificate of formation stating it "will have no members" and vesting management in the board controls over 2025 bylaws purporting to convert the entity to a member-managed corporation. The court rejected any jurisdictional bar from the church-autonomy doctrine, finding the dispute presented a non-ecclesiastical issue of corporate governance decidable by neutral application of Texas corporate law.
Court Staff Summary
A religious organization's Certificate of Formation vests management of the organization in its board of directors and states that the organization “will have no members.” Bylaws adopted in 2025 purported to convert the organization from a board-managed corporation to a member-managed corporation. The conversion fails because the Certificate of Formation controls over the conflicting provisions of the 2025 Bylaws. This case presents a non-ecclesiastical issue of corporate governance that can be decided by neutral application of Texas corporate law, such that the church-autonomy doctrine does not divest the Court of jurisdiction. Plaintiffs’ promissory-estoppel claim is based on an alleged promise to amend the Certificate of Formation to convert the organization to a member-manager corporation. The claim fails because it does not seek to put Plaintiffs in the position they were in before they relied on Defendants’ alleged promises.
Background: A Religious Nonprofit's Governance Crisis
Sri Shirdi Sai Baba Temple of Austin, a Texas nonprofit corporation operating as a religious institution, was founded in 2007 with a certificate of formation vesting management in its board of directors and expressly stating the Temple "will have no members." The 2007 bylaws consistently placed management authority in the board's hands. In 2015, the Temple established a board of trustees, though the certificate of formation and 2007 bylaws did not contemplate such a board or vest any power in it. In 2024, following discovery of a fraudulent donation-matching scheme, the Temple's prior directors resigned and a new board (the "2024 Board") took over, consisting of defendants Shiva Lam, Raj Gadde, Pammy Razdan, Narayana Koduri, and Ravi Orugunty. The parties agreed the 2024 Board was intended to convert the Temple to a member-managed corporation with trustees as managing members.
The Attempted Conversion and Legal Advice
In 2025, the 2024 Board adopted amended bylaws (the "2025 Bylaws") that purported to shift corporate management from the board of directors to the trustee-members. The board simultaneously informed trustees it would "file the necessary paperwork to convert the temple into a member-based organization." However, after an attorney reviewed the corporate documents, he advised that the 2025 Bylaws were ineffective because they conflicted with the certificate of formation. The 2024 Board then voted to revoke the 2025 Bylaws and reinstate the 2007 Bylaws, triggering this litigation over a disputed trustee election.
The Court's Holdings
The court granted defendants' motion for summary judgment and denied plaintiffs' motion, resolving three key issues. First, the court held that the certificate of formation controls over conflicting bylaws provisions:
The Business Organizations Code provides a clear and simple answer: to the extent there is a conflict between the certificate of formation and the bylaws, the certificate of formation controls. The Court thus holds that the Temple's certificate of formation controls over the provisions of the Temple's 2025 Bylaws purporting to shift corporate management from its board of directors to its trustee-members.
Second, the court rejected any jurisdictional bar from the church-autonomy doctrine, finding the dispute presented "a non-ecclesiastical issue of corporate governance that can be decided by neutral application of Texas corporate law, such that the church-autonomy doctrine does not divest the Court of jurisdiction." Third, the court dismissed plaintiffs' promissory-estoppel claim based on alleged promises to amend the certificate of formation, holding the claim failed because it did not seek reliance damages to put plaintiffs in the position they were in before the alleged promise.