A lawsuit Liberty University has filed against former President Jerry Falwell Jr. has survived its first round of legal challenges.
The university first filed the lawsuit in April in Lynchburg Circuit Court, demanding at least $10 million and alleging Falwell breached fiduciary duties to the school and entered into a business conspiracy against it.
Attorneys representing Falwell then filed court motions in early June seeking to dismiss the lawsuit, which they argued Friday before Lynchburg Circuit Judge Fred Watson.
The case centers on an affair between Falwell’s wife, Becki, and a young man named Giancarlo Granda, which Falwell has discussed in news articles and in a now-inactive lawsuit he filed against LU last year. Falwell has alleged Granda extorted the family, which Granda has denied.
Liberty claimed Falwell breached his fiduciary duty to the school by negotiating for “inflated” pay and retirement benefits in 2019 contract negotiations while withholding the extortion from LU, according to its lawyers.
Vernon Inge, a lawyer representing Falwell, said Friday such fiduciary duties don’t include disclosures of personal issues, even embarrassing ones. He also argued Falwell couldn’t be engaged in a business conspiracy with Granda against LU when Falwell and Granda were at odds.
Inge claimed many of the pictures and statements in the lawsuit are “rife with, frankly, personal attacks” that aren’t relevant to the case, and asked the court to order LU to cut out those portions of the complaint. If allowed to file the same sort of material, “we’ve got a lot of things we could say about Liberty,” he added.
Scott Oostdyk, the attorney representing LU on Friday, maintained the question of whether Falwell had a duty to disclose the alleged extortion attempts at the time would be something for a jury to decide.
Watson upheld most of the lawsuit at the close of Friday’s hearing, which lasted a little more than two hours. Falwell’s 2019 contract, vital to most of the legal arguments in the case, will remain under a seal while both sides’ attorneys file arguments over whether to keep it protected in the next two weeks.
Liberty will be able to alter sections of the lawsuit regarding digital and computer property LU alleges Falwell kept unlawfully after his resignation — attorneys said Friday he kept a computer containing more than 100,000 of the university’s files on it.