Fight between Centerline, Harley Franco reaches the courtroom

Both sides are claiming victory after an initial courtroom battle involving Harley Franco and the towing company he founded more than 30 years ago.

In June, a 12-person Seattle jury ruled Macquarie Capital, Macquarie Marine Services and a company executive must pay Franco $75.1 million in damages stemming from claims of defamation and tortious interference that Franco raised in a 2018 lawsuit.

However, King County Superior Court Judge Suzanne Parisien set aside the jury verdict and award, citing a legal principle that says claims made in a court filings cannot be the basis for a defamation lawsuit. 

Franco and his attorneys believe that they won on the merits of the case, while suggesting Macquarie and the other co-defendants prevailed on a technicality. Franco’s attorneys asked Parisien to reconsider her ruling setting aside the verdict, which she denied. They have vowed to appeal the case. 

Centerline CEO Matt Godden, in a prepared statement issued soon after Parisien’s ruling, said he and other defendants prevailed on all counts and look forward to putting the matter behind them.

Franco started Harley Marine Services in 1987 with a single tugboat and leased barge and built it into a national brand focused on ship assist, bunkering and petroleum transport. Macquarie, a large Australian bank, invested in Harley Marine in 2008. The bank ultimately owned just under half of the company, with Franco maintaining a controlling stake.

Harley Marine executives voted to fire Franco in July 2018, alleging in court documents that he stole two Markey towing winches worth $1.25 million. He formally separated from the company early in 2019.

The winch allegation featured prominently in Franco’s 2018 lawsuit that named Macquarie Capital, Macquarie Marine Services, another investor known as Mihi Inc., Godden and Macquarie executive Tobias Bachteler as defendants. The suit argued the company concocted scandalous allegations to get rid of Franco. Specifically, Franco alleged defamation, tortious interference, breach of contract and breach of fiduciary duty.

Details about Franco’s departure and the events that preceded it are unknown. They are the subject of multiple lawsuits making their way through the court system. Macquarie has alleged Franco embezzled and misappropriated company assets — claims the former chairman vehemently denies.

Franco, in a brief interview, said the jury’s verdict and its decision to award $75.1 million in damages comes as vindication against those accusations. Although the jurors were not specifically asked to decide those questions, Franco said they considered those claims and found them insufficient when they awarded him damages.

Attorneys representing the defendants disagree with that assessment.

After a monthlong trial, the King County jury ruled Macquarie Capital, Macquarie Marine Services and Bachteler defamed Franco, and they awarded $4.1 million in damages. The jury also called for Macquarie Capital and Macquarie Marine Services to pay Franco $71 million for tortious interference, which effectively means the defendants upset other potential business agreements.

Jurors rejected Franco’s claims of breach of contract and breach of fiduciary duty.

Parisien and other judges initially sided with Franco’s attorneys on the question of litigation privilege before Parisien reversed herself midway through the trial. Based on that ruling, she set aside the jury’s verdict and the $75.1 million award.

As it stands now, Franco will receive no damages from any defendant. Franco declined to comment on the case in early July. 

Harley Marine rebranded as Centerline in 2020. The company has divested most of its ship-assist assets and expanded its reach in the West Coast bunkering trade. It also acquired nearly half of the former Bouchard Transportation ATB fleet.