City of Darlington sues engineer, grant administrator, contractor, insurer over $3M construction 'failure'

DARLINGTON, S.C. (QUEEN CITY NEWS) -- The firms and people who helped handle the nearly $3 million Southwest Darlington Stormwater Drainage Project had nearly three months to work it all out. But, as of Jan. 12, it appears the city was finished with waiting.

The city filed a 16-page lawsuit against four entities: Hanna Engineering, Landsdown Earth and Pipe, Inc., and Developers Surety and Indemnity Company.

The fourth: Lathan Consulting Corporation.

This is the first time the city's formally detailed allegations of wrongdoing against Jannie Lathan and her consulting company related to the stormwater project. At the time of the project, Lathan was working under a contract with the city titled, 'Administration Contract.'

In response to a S.C. Freedom of Information Act request, the city disclosed a contract between Lathan Consulting Corporation and the city which detailed Lathan's responsibilities concerning the "technical and administrative services" concerning a Rural Infrastructure Authority Grant used to fund part of the Southwest Darlington Drainage Project.

City records show the city began paying Lathan on June 24, 2011, according to records obtained by Queen City News under the SCFOIA.

"She had done a lot of work for the city of Darlington, I believe, starting around 2011, 2010. But over the span of about eight years, Lathan Consulting or Janie Lathan have been paid $336,000 by the people of Darlington," Payne told Chief Investigative Reporter Joy Barr in an October 2023 interview.

Payne said Lathan wrote multiple grants where the city was awarded taxpayer funding used on public projects around the city. City council meeting records also showed Jannie Lathan played a leading role in the future development of the city's stormwater systems beginning in 2011.

Part of Lathan's work included the creation of a stormwater master plan, which council meeting minutes show was completed sometime around 2011 or 2012. The master plan was a joint venture between Lathan and the Stone Engineering Group, both entities had addresses located at Lathan's Oak Street home in Darlington at the time.

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"The final master-planning document is intended to act as a road map to focus phasing, funding, and implementation of stormwater conveyance improvements within the City, resulting in minimizing localized flooding," the master plan's "Intended Results" stated.

City meeting minutes from September 2012 also show former City Manager Howard Garland directed Lathan to draft a stormwater ordinance for the city.

The city accused Lathan of breach of contract and negligence.

"The City's investigation has also revealed that the construction of the Project performed by Landsdown and the administration of the Project by Lathan was negligent, faulty and defective in several respects," the January 2024 lawsuit stated. The city accused Lathan of "failing to properly monitor the activities of the project, failing to properly advise the city," and "failing to provide proper administration of the project," according to the lawsuit.

The new city administration first discovered evidence of problems with the project after taking over in July 2021. The evidence: sinkholes at nearly "every run of pipe," Darlington Utilities Director Charles Shugart told QCN last fall.

"Some of them have two like this one, or some of them have even more. All the way through the whole project," Shugart told QCN, "But what got me about this project was failure in practically every stretch that I looked at it. There are several sinkholes throughout this project and they're dangerous."

The city hired Applied Building Sciences, a forensic engineering firm with offices in Charlotte, to investigate the project, its funding, approvals, oversight, and the piping buried underground. The city included Steven Moore, a forensic engineer with ABS' affidavit as an exhibit in the lawsuit.

"The storm drain system is a result of poor design and/or construction. Overall, from a storm drain operational standpoint, the system is not functional, and does not appear to have the required capacity for the present stormwater loads. In fact, some of the stormwater pipes are significantly undersized," Moore said during the Oct. 11 Darlington city council meeting.

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"There are no inverts within the storm drain structures. Pipe sizes reduce as the overall drainage system basin increases, in direct contrast to what it should do," Moore told council members.

Moore told the council there were still many questions he couldn't answer in his investigation. Questions as to who managed the project, and their qualifications, "Who reviewed and approved the design that allowed for a reduction of pipe sizes as the size of the basin increased, which would require larger pipes, not smaller ones," Moore asked.

The unanswered questions also included asking who managed the project, their credentials, and who inspected work as it was completed.

Moore's analysis also found raw sewage within the stormwater system.

"In conclusion, the deficient performance of the existing stormwater system is a result of poor design and or construction installation. Issues originating from the initial construction of the system improvements are contributing to system failures such as the soil subsidence and maintenance issues. Substantial soil subsidence is contributing to unsafe conditions around the pipe and inlets, as well as reducing the capacity due to soil build-up within the system," Moore told the council on Oct. 11.

"As a result of Lathan's breach of contract, the City has suffered actual, consequential, and incidental damages, and the City is entitled to judgment against Lathan in an amount of damages to be determined by the Court," the city's outside counsel, Boone Aiken wrote in the January 2024 formal complaint.

Aiken, a Greenville attorney, works for the law firm of Haynesworth, Sinkler, Boyd and is co-counsel in the case alongside Nick Nicholson. Nicholson was the attorney who attended the Oct. 11, 2023, city council meeting.

"Lathan undertook and were [sic] under a duty to construct the project in accordance with applicable building codes and industry standards in a diligent and workmanlike manner, free and clear of any and all latent defects, and failed to comply with such duties," Aiken wrote in the complaint.

Aiken and the city did not detail the amount of money sought in the pleading, but they're looking to recover, "...damages including the cost of investigation, actual damages stemming from repair plans and associated repairs, direct, indirect, incidental, consequential, and special damages in an amount to be determined."

Lathan did not respond to a message Barr sent her on Jan. 15 seeking an interview with her to allow her to refute and address the allegations against her in the lawsuit. Queen City News' message included a copy of the city's complaint and an affidavit filed in the civil suit.

Lathan did not respond to our outreach and still has not responded.

Queen City News first tried to interview Lathan following an Oct. 11, 2023, council meeting where the city made public the results of an investigation into the stormwater project - an investigation the city said revealed a "total failure" of the nearly $3 million project.

Lathan was the only contractor present at the meeting.

"I have no comment about this project," Lathan told Barr. "You heard what they said tonight, it was a failure," Barr replied. "I heard what they said and I have no comment on this project," Lathan said.

Lathan later clarified her role in the Southwest Darlington Drainage Project as that of grant administrator.

"There is no basis to blame me for a project that I did not manage," Lathan wrote in an Oct. 22 statement emailed to Barr in response to questions concerning her role in the project.

"I was responsible for successfully getting the grant money for the city to undertake the project, and I continued to assist in the administration of the grant during the project," Lathan wrote in the statement. Lathan wrote that the inclusion of her and her company into the discussion concerning the stormwater project's failure is politically motivated.

"I do not believe this much‐needed infrastructure project was a failure as it is now being characterized by people with different agendas. I also believe they are making numerous other false statements about the project, the project engineer, and the construction company," Lathan wrote to QCN.

The Darlington County civil court's online docket shows Lathan has not yet answered the lawsuit. Lathan and the three other defendants have 30 days from the date of service to file a response with the court.

MULTIPLE FAILURES OF ENGINEER, CONSTRUCTION COMPANY

The city accused Hanna Engineering and Landsdown Earth and Pipe, both of breaching their contracts with the city and negligence in building and designing the project.

The lawsuit accused Landsdown Earth and Pipe, a Monroe, NC contractor, of 12 elements the city believes show the builder breached its construction contract. Those elements are:

1. In failing to adequately install drainage structures, including instances of soil subsidence and improperly joined or sealed components, which resulted in soil loss and compromised structural integrity;

2. In failing to provide comprehensive as-built drawings post-construction, which are essential for future maintenance and verification of the work performed;

3. In failing to adopt proper construction practices, leading to overgrown vegetation and blockages around key drainage sites, which contributed to restricted water flow and system inefficiency;

4. In failing to comply with contract specifications regarding the construction of open drainage channels, especially in relation to rip rap installations and the required profile for efficient drainage;

5. In failing to effectively manage sediment within the storm drainage system, leading to excessive sediment buildup and standing water, indicative of poor construction joints and grading;

6. In failing to include necessary safety features like steps or ladders in the construction of drop inlet structures, compromising maintenance safety and accessibility; and

7. In failing to properly install Reinforced Concrete Pipes, as evidenced by the lack of inverts to direct flow and improper trimming, which hinders maintenance access and system functionality.

8. In installing materials and equipment that were not in accordance with the plans and specifications;

9. In installing materials and equipment in violation of the manufacturer instructions;

10. In failing to properly supervise employees, agents, and subcontractors to ensure all work proceeded in accordance with the plans and specifications and conformed with industry standards;

11. In providing deficient and defective workmanship and/or materials and equipment without proper inspection to ensure the work was correct and in conformity with the customary industry standards, plans and specifications and manufacturer instructions; and

12. In failing to act as a reasonably prudent contractor would under the same or similar circumstances.

The city also accused Landsdown of negligence and breach of implied warranties, "Landsdown and its agents, servants, employees, and/or subcontractors were negligent, careless, reckless, willful and wanton in failing to construct the Project in accordance in accordance with applicable building codes and industry standards in a diligent and workmanlike manner," Aiken wrote in the complaint.

"Landsdown held itself out as specifically qualified to install and construct the Project, including all associated components and improvements pertaining to stormwater drainage. The Project, including all associated components and improvements pertaining to stormwater drainage, is not currently functioning properly as set forth above and as evidenced by, among other things, defective piping installation resulting in areas of significant soil subsidence, drainage structures retaining significant amounts of sediment, and lack of structural components necessary for proper maintenance, and thereby, Landsdown has failed to meet the implied standard of workmanlike construction contained in applicable building codes, industry standards, contract documents, and expected similarly situated contractors," the complaint stated.

The city accused Hanna Engineering of "unjustifiably" failing to perform under the contract. The city presented 10 elements to support its claims the Florence, SC engineering firm breached the construction contract:

1. In failing to comply with established construction codes, prevailing industry standards, and customary practices effective at the time of the Project's execution;

2. In failing to incorporate in the design storm drainage structures with essential maintenance access features;

3. In failing to address design flaws leading to inadequate stormwater flow, thus contravening necessary hydrological and engineering principles;

4. In failing to include inverts in storm drain structures, a critical component for directing water flow effectively;

5. In failing to ensure adequate sizing of drainage pipes, characterized by a reduction in diameter in contradiction to the expanding catchment area of the drainage system;

6. In failing to provide a comprehensive stormwater report, including essential design calculations and reference standards, prior to the commencement of construction activities;

7. In failing to properly assess grade and manage terrain around key drainage points, leading to ineffective water flow and drainage issues, as observed near multiple drop inlets on or near Coker Street and adjacent streets;

8. (h) In failing to conduct necessary soil tests and provide reports, a critical component for assessing the feasibility and safety of the Project's infrastructure;

9. (i) In failing to implement appropriate measures to prevent contamination of the stormwater system with sanitary sewer discharge, evident from biological growth and observed discharge in certain areas; and

10. (j) In failing to act as a reasonably prudent engineer would under the same or similar circumstances.

Hanna Engineering is also accused of professional negligence by, "failing to design the Project free from defects and in compliance with the applicable building codes and industry standards, free and clear of any and all latent defects, and failed to comply with such duties by virtue of, without limitation, the following particulars:

1. In failing to comply with established construction codes, prevailing industry standards, and customary practices effective at the time of the Project's execution;

2. In failing to incorporate in the design storm drainage structures with essential maintenance access features;

3. In failing to address design flaws leading to inadequate stormwater flow, thus contravening necessary hydrological and engineering principles;

4. In failing to include inverts in storm drain structures, a critical component for directing water flow effectively;

5. In failing to ensure adequate sizing of drainage pipes, characterized by a reduction in diameter in contradiction to the expanding catchment area of the drainage system;

6. In failing to provide a comprehensive stormwater report, including essential design calculations and reference standards, prior to the commencement of construction activities;

7. In failing to properly assess grade and manage terrain around key drainage points, leading to ineffective water flow and drainage issues, as observed near multiple drop inlets on or near Coker Street and adjacent streets;

8. In failing to conduct necessary soil tests and provide reports, a critical component for assessing the feasibility and safety of the Project's infrastructure; and

9. In failing to implement appropriate measures to prevent contamination of the stormwater system with sanitary sewer discharge, evident from biological growth and observed discharge in certain areas.

10. In providing deficient and defective workmanship and/or materials and equipment without proper inspection to ensure the work was correct and in conformity with the customary industry standards, plans and specifications and manufacturer instructions; and

11. In failing to act as a reasonably prudent engineer would under the same or similar circumstances.

"Hanna and its agents, servants, employees, and/or subcontractors were negligent, careless, reckless, willful, and wanton in failing to construct the Project in accordance in accordance with applicable building codes and industry standards in a diligent and workmanlike manner, thereby breaching the aforementioned duty by engaging in, without limitation, the particulars set forth above," Aiken wrote in the city's lawsuit.

Michael Hanna would not agree to an interview with QCN during our first 'Drained' report in November. Hanna did not agree to an interview for this report, instead had his attorney provide this statement:

It is unfortunate that the City has chosen to sue Hanna Engineering, as Hanna has not caused the isolated issues the City claims to be experiencing with the drainage system. Hanna's system design was appropriate. Notably, the City representatives from the time of the project who were involved in, and familiar with, the project details have all since retired or been terminated. Factors outside of Hanna's responsibility and control have created, and in some cases exacerbated, the current drainage system issues, including the City's ill-advised decision to pay its contractor in full when the project was not yet satisfactorily completed (despite Hanna's recommendations to the contrary), lack of proper maintenance of the system, and improper use of various system components. Hanna values its relationship with the City. Indeed, the City recently hired Hanna for its engineering expertise on another project. Hanna vehemently denies liability in this matter and looks forward to the exoneration of its design in a court of law.

J. Patrick Norris, attorney for Hanna Engineering

Attempts to reach a press contact, phone number, or physical address for Developers Surety and Indemnity Company were unsuccessful. The bond records contained in the city's files show a post office box for the insurance company but do not contain a physical address or phone number for Daniel Young, Senior Vice President, or Mark Lansdon, Vice President.

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As of this report, none of the named defendants have submitted answers to the complaint. Each has 30 days from the date of service to respond to the city.