******* Legal Advice Needed ASAP ********

Shawn said

I would write him a conciliatory letter, documenting your side of what happened, and expressing a desire to resolve it--and politely stating that if he doesn't want to resolve it, you'll just keep the work and call it a day.

And I'd be willing to take $1000.00 and consider myself lucky.

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This sounds like the best advice yet. It gives him a chance to make it right, and a chance for you to get some of your money out of the deal. It might not be what the total bill was, but in this case a settlement that is worked out between the two of you might be the best and easiest option, with the least amount of baggage.

I'll never forget this client I had who asked for some extra work done on some cover letters, and after the work was completed, she apologetically said that she had just been laid off earlier than she expected (hence the need for a resume and extra cover letters), and she offered me a ton of skin care samples that she had from a part time venture she had. I took the skin care products, and wow what a deal. I loved the stuff...got a lot more out of that than I would have gotten out of the cover letter fees, LOL. She was happy and so was I. I know you started out with such a barter-type deal, but now simply trying to settle with this guy for less than the charged amount but more than the paltry $700 he offered might be the least painful, most positive-for-all option. JMO...:)