Tyczki’s journey began when, in anticipation of more stringent environmental regulations, he began the process of implementing a waterborne paint system in his shops. He agreed to buy exclusively from Sherwin-Williams; in exchange for a $275,000 advance to JB Collision in 2008, Tyczki spent $1.3 million in equipment and paint, investing $250,000 for an advance of $40,000 to JJT in 2011. In order to pay off the advances, Tyczki would receive less substantial discounts than the typical customer.
Based on court records, Tyczki agreed to the deal because he was told by a Sherwin-Williams representative that everything he bought from them would count towards the $1.3 million, but Sherwin-Williams later disputed this claim. Sherwin-Williams representatives also told Tyczki that their waterborne paint would work as well as their solvents, he told the court.
According to the lawsuit, “Specifically, Sherwin-Williams … stated to John Tyczki that its water-based paint products provided a perfect color match and did not have any defects that would cause problematic physical characteristics such as ‘dye back’ (also sometimes referred to as ‘loss of gloss’), ‘sanding scratches,’ ‘color fading,’ color match problems, ‘solvent popping,’ paint ‘shrinkage’ and ‘orange peel.’”
However, the waterborne paints did not perform as promised, and when Sherwin-Williams’ promises to fix the issue continued to go unfulfilled by the time San Diego mandated the use of waterborne paints in 2010, JB Collision had to choose between breaking the law by using solvent paints or breaking his contract with Sherwin-Williams by switching to a competing brand. Although Sherwin-Williams gave free paint products to Tyczki’s businesses for the repainting issues, the lawsuit said the shops took a loss in the labor bill, a figure estimated to be $2,000 per vehicle.
Problems continued through 2013 when JB Collision would reach the $1.3 million threshold, but Sherwin-Williams later accused Tyczki of switching brands before that threshold was met, an accusation he denied.
During the 2015 trial, the jury found that Tyczki had breached the contract but that Sherwin-Williams had misled Tyczki. The jury awarded Tyczki $3.25 million but also found that he owed Sherwin-Williams $374,448.70 for breach of contract, leaving him with $2.88 million.