I am a contractor who is currently being sued. I took a 10% deposit as I always do. The customer and I signed a contract and I proceeded to work on the project. I provided drawings and applied for, and was granted, a building permit. The project was a deck. We tore down the deck. The customer needed some landscaping done as well as some drainage issues that needed to be done. This needed to be done after we removed the deck due to low height of the deck. We returned a week later after the landscapers were done to begin work. We spent the day laying out our footings to discover that the homeowner had landscapers install a retaining wall where some of our footings needed to be dug. This obviously was an issue. The homeowner asked that we suspend work. He was very upset that we were walking where the deck was going and causing "craters like the surface of the moon". We left.
I informed him that I was no longer interested in building his deck and issued him a refund. There were numerous other issues that I won't get into but needless to say there were communication issues between him and I, his wife would tell me one thing while he would say something different. I had a bad feeling about this job and this only magnified it. I withheld the fees for the permit and the fees for the demolition and dump. He is suing me for the entire amount of his deposit. We did work on his house and I feel I am entitled to pay for the work. I didn't keep the whole amount, just the hours we worked and fees that I paid. Does he have a case? Any advice?