I know their service was bad and they didn't do what the contact says. But on the other hand, you thought you could save some money and you didn't. You've learned your lessons. It's time to move on.
My suggestion is,
1. Pay the money, and
2. Make complaint to the BBB and state's attorney general's office,
3. If you really have time, sue them for fraud.
This way, they don't have ground to sue you. But you have all ground to sue them.