The best way is to answer the lawsuit and assert your defense that the cabinet maker did not perform his obligations under the contract and is thus not entitled to payment. At that point, there are two different routes you could take:
1. Remove the cabinets and all materials and give them back tot he cabinet maker.
2. Find out the exact amount owed for what he spent on the cabinet materials and offer this to him to settle the dispute; or offer him the opportunity to come over and take the cabinets out.
I'm assuming that this case is going forward in small claims
court. If my assumption is correct, then when you get to the court hearing, you tell the judge you have offered to pay the cabinet maker for his materials or remove the cabinets, but he has refused. Then state your defense that he did not install them correctly and they are not what you ordered, so you are not going to pay for work you did not agree to or a finished product that isn't what the cabinet maker promised. You would also ask that the judge order the lien removed from you property
If the judge does not dismiss the case, then he might have a finding against you. At that point you would pay whatever the judgment is and have the cabinet maker sign a "release of judgment" or "settlement" which you would then file with the court. This will prevent there from being a negative report on your credit. In the settlement or release, you also have him agree to remove the lien as the payment will satisfy the lien.
I expect the judge will order you to pay for the cost of the cabinets and order him to remove the lien. You would want to have a document stating that payment satisfies the judgment and certifies that he agrees to remove the lien.