Background
In August 2011 we selected a local contractor to install a driveway and sidewalk at our home in Central Texas.
After the job was completed we were not happy with the way the control joints were installed and the poor craftsmanship on the sidewalk and refused to make payment for the work until the control joints had been rectified and the sidewalk torn out and re-poured.
I did tell their representative that if he would tell me this was their best work I would write a check for the total amount.
Since then, the sidewalk and the driveway have started experiencing major cracking that I believe is greater than normal surface cracking and cracking that would have been less severe if the control joints had been installed properly.
The contractor had agreed to replace the sidewalk because of cracking and the poor craftsmanship and insufficient design of the expansion joints.
Now the contractor wants us to make a payment of $6650 of the original balance of $7870 before they will proceed.
I have held the position that we will pay them in full as soon as the control joints in the driveway are re-cut to look more aesthetic and after the sidewalk is re-poured.
We do not have a signed contract with the contractor but all of the documentation has been via emails. Also most of the negotiations over the past 6 months have been through email.
Last week they responded to an email from me in which I stated that I would not make payment until they had corrected the deficiencies. They in turn responded with an e-mail threatening to withdraw their offer to re-pour the sidewalk and stated that they were going to seek a judgment against us.
They now claim the sidewalk does not need to be re-constructed and they were only doing it to appease us so they could get their payment.
I then called the contractor on the phone and told him we should be talking face to face and not through email. They are demanding $6650 before starting. I offered to pay $5650 when they showed up to demolish the sidewalk and start re-cutting the expansion joints on the driveway but they insisted we pay $6650. (They came up with $6650 by subtracting an arbitrary number of $1250 for the sidewalk plus an extra $200 that I had agreed to pay to add more steel and concrete to the sidewalk when it was re-poured).
At the end of our phone conversation I told the contractor I needed time to consider what response I would make and I also wanted them to come back with a dollar amount lower than the $6650 that they would accept before proceeding with the work.
NOTE:: Before we started construction last year I asked the contractor if we should wait until after the drought we were having and he stated it wouldn't matter because the ground is always moving.
Now he states part of the problem was the drought!!. Also he now claims that what he meant when he stated we didn’t need to wait until after the drought was that they could construct the driveway regardless of the weather and ground conditions and was not claiming the driveway would not be affected by ground movement due to the drought.
Also the contractor now claims they are not concrete experts and therefore not responsible if the design was not sufficient enough to withstand the forces put on it because of our drought last year.
So my question is.
What kind of judgment can they get?
Can they put a lien on our property? I think not on our homestead but we have some property that is not covered by homestead.
Also can they touch any non IRA funds in our bank if the judgment is granted?
If a judgment is granted do I have the opportunity to file a lawsuit to remove it?.

Optional Information:
State/Country relating to question: Texas

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