Tenant suing us for deposit

Original lease date 8/2012-9/30/2013, Lease Addendum additional 6 months, no rent increase. 4/1/14 new 1 year lease additional $25 month with same Move in/ Move out check list in effect listed in new lease agreed signed and initialed.

On 6/9/14 Tenant sent email stating please consider this my notice to vacate the property. I will have the property ready to show on 6/14/14. He had informed me that his daughter which was now living with them and not name on their lease had just had a baby and had hearing problems and due to high sound exposure they couldnt stay in the condo. (No note from a Doctor, etc.) The unit is quiet inside! I believe this was an excuse.

I responded They were responsible for the lease until I found another Tenant. Also, that it must be in the same condition as when it was rented to them in. They stained the carpet with black tea and understood they were responsible for carpet replacement. I also informed them to have it professionally cleaned to expedite the showing process.

On 6/15/14 when we arrived to complete the Move out checklist we were in shock with the condition of the property. It was not only beyond dirty, carpet destroyed, kitchen and both bathroom granite counter tops stained beyond salvaged, the master bathroom had a major plumbing leak that they stated had always been there. Then they argued with us and said they believed the condo was in perfect condition for us to rent! The entire unit was dirty, kitchen cabinets greasy, food crumbs inside, floors, mirrors, windows, blinds, everything! The check list indicates Replace or Not Clean just about everything. They agreed, signed and dated the check list and understood we had repairs to do as well as new carpet to install and professional cleaning. They received their copy.

We thought we could salvage the 2 bedrooms of carpet and just replace the living room and hall which we originally did. We replaced the granite countertops; keeping the original ones showing the damage from them spilling huge amounts of cooking oil that soaked down through to the plywood darkening and staining the granite. In the bathrooms spilling perfume or another liquid of some kind soaking through as well.

We had the bedroom carpets cleaned which not only would not clean but brought up additional stains; the carpet cleaning company stated possible bleach, wood, or hair dye stains???? We then had to find other carpet for the bedrooms to match as close as possible to the living room carpet that we had purchased at a close out price. When the tenants moved in we had expensive designer carpet in good condition now we have average carpet and 2 different types, quality and colors that dont match!

We did not charge them for the carpet cleaning of $120. It took us over 3 weeks to complete the repairs in the unit and the cleaning, etc. I rented the unit as quickly as possible; the new lease started on 8/1/14. He was not entitled to his security deposit refund of $1350.

I sent the Tenants their Security Settlement Statement on 7/21/14 via USPS Certified Mail which was Return to sender Not Deliverable. I sent it to the address they gave me during the Move Out. I contacted their daughter and she gave me their correct address and I resent it USPS Certified Mail Return Receipt was received on 8/02/14.
Our Security Settlement Statement to the Tenant is for $4098.00. We gave him 30 days to pay or to contact us to make a payment plan. Instead he went to Small Claims Court and is suing us for their Security Deposit of $1350. Stating that when they extended the lease they may be moving out early because their daughter was having a baby due to the loud fire station nearby. They never said anything of that sorts; they should have moved and not signed another lease. They state they sent a formal moving out notice on 6/9/14. Is an email attachment that reads: PLEASE CONSIDER THIS MY NOTICE TO VACATE THE PROPERTY. AS STATED IN MY EMAIL ON 6/6/14 I WILL HAVE THE PROPERTY READY TO SHOW ON 6/14/14. We have a legal and binding lease that they are responsible for, an acknowledged Move in Move Out List that hes stating we harassed them and that they kept the house unclean. We didnt force them to sign it they signed it volunteering. They claim we should not charge them anything and that these things should be normal wear and tear.

Lastly, we passed the 21 day deadline to refund their security deposit and to send their settlement statement, which we couldnt do until we completed the repairs and re-leased the unit.

Please inform us of the CA state law of this situation of going past the 21 day period if the Landlord doesnt owe the Tenant a refund.