Supreme Court
S. Methodist Univ., v. S. Cent. Jurisdictional Conf. of the United Methodist Church
- Case number: 23-0703
- Legal category: Corporations
- Subtype: Nonprofit Corporations
- Set for oral argument: January 15, 2025
Case Summary
At issue in this case is whether a nonmember nonprofit corporation may amend its articles of incorporation when those articles provided that no amendments shall be made without the prior approval of a religious conference.
Southern Methodist University is a nonprofit corporation founded by a predecessor-in-interest to the South Central Jurisdictional Conference of the United Methodist Church. Since its founding, the University’s articles of incorporation stated that it was to be owned, maintained, and controlled by the Conference and that the Conference possessed the right to approve all amendments. In 2019, without the Conference’s approval, the University’s board of trustees amended its articles to remove these provisions and filed a sworn certificate of amendment with the secretary of state. The Conference sued the University, seeking declaratory relief and asserting breach of contract, promissory estoppel, breach of fiduciary duty, and a statutory claim alleging that the University filed a materially false amendment certificate.
The trial court dismissed some of the Conference’s claims before granting summary judgment for the University on the remaining claims. The court of appeals affirmed in part and reversed in part, holding that the Conference was authorized to challenge the University’s amendments under the Business Organizations Code, that both statements of opinion and fact could be actionable as materially false filings, and that plaintiffs can recover damages for nonpecuniary losses caused by those filings.
The University petitioned for review. It argues that the Conference is barred from bringing its breach-of-contract claim, that the University’s articles cannot constitute a contract with the Conference, that the complained-of statements in the University’s amendment certificate were good-faith legal opinions that cannot be materially false, and that the Conference could not have suffered the damages requisite for its statutory claim. The Supreme Court granted the petition.
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