LYNCHBURG, Va. — A Lynchburg judge has upheld most of a lawsuit Liberty University filed against its former leader, Jerry Falwell Jr., after an acrimonious parting last year. The lawsuit survived its first round of legal challenges Friday as Falwell’s attorneys argued motions seeking its dismissal before Lynchburg Circuit Judge Fred Watson.
Falwell’s departure from the evangelical school in Virginia founded by his father came after Giancarlo Granda, a younger business partner of the Falwell family, said he had a yearslong sexual relationship with Falwell’s wife, Becki Falwell, and that Jerry Falwell participated in some of the liaisons as a voyeur. Falwell denied the report. Falwell has alleged Granda extorted the family, which Granda denied.
Liberty claims Falwell crafted a “well-resourced exit strategy” from his role as president and chancellor at the school in the form of a lucrative 2019 employment agreement while withholding damaging information about the personal scandal that exploded into public view the following year. The agreement included a raise, which Falwell has said amounted to $250,000, and a $2.5 million severance package.
The lawsuit demanding at least $10 million alleged that Falwell breached fiduciary duties to the school and entered into a business conspiracy against it. Fiduciary duties don’t include disclosures of personal issues, even embarrassing ones, Vernon Inge, a lawyer representing Falwell, argued Friday. Falwell couldn’t be engaged in a business conspiracy with Granda against the university when the men were at odds, he argued.
Inge asked the court to order the university to cut out many pictures and statements in the lawsuit that aren’t relevant and are “rife with, frankly, personal attacks.”
The question of whether Falwell had a duty to disclose the alleged extortion attempts is for a jury to decide, said Scott Oostdyk, the attorney representing the university.
Falwell’s 2019 contract will remain under seal while 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 the university alleges Falwell kept unlawfully after his resignation. Attorneys said Friday he kept a computer containing more than 100,000 university’s files on it.