Consumer Protection Law
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You are NOT LIABLE TO PAY HIM for work not specified in your contract and for materials not specified in your contract, he is seeking to scam you. Yes, you are liable for replacing the nails, but otherwise you are liable for only completing the job as specified in the contract. You need to send him a letter explaining what was in your contract and that he is now submitting a claim for items not in your contract and for which you are not liable. Tell him he is in breach of the contract for failure to allow you to cure the nail issue and as such you will pursue legal action against him. Also send him a lien notice letter at this point as well and put a contractor's lien on the home.This guy would not win this type of claim asking for 3 times more work than was originally bid and trying to make you pay for more work than contracted. So let him huff and puff, because a judge would not go for this type of claim.