Seller Taking Buyer To Small Claims Court!

Well, the story thickens as it's been 3 weeks since the escrow tragedy on 9/11. The buyer will not release the deposit as "liquidated damages" for backing out of the sale. The seller will file a small claims court action today. After several letters going back and forth between buyer and seller, the buyer has offered half the $4000 deposit to the seller. The seller will not accept anything except the entire deposit as damages. Since no agreemnet could be made, the seller is forced to file the small claims lawsuit, and I applaud that action. In fact I am interested in the process and want to learn from it. There have been times in past experience when we just let a buyer back out and get his money back, but this time is different. We were wronged by this man, and there may be some blame to lay on the buyers agent as well. Apparently the buyers agent was aware of the "secret contingency". The buyer wanted the home to be home care facility business with approval permitted from governmental agencies. This was not in the purchase contract that the buyers agent prepared, although he was aware of it. To us, this constitutes a fraud, since the sellers were not made aware of this. We would not have accepted these terms in the original contract, and the fact that the buyer removed all contingencies in writing, and we lost a backup buyer makes the whole scenario worse. We have consulted an attorney looking over the file and he says we should win this case easily. Apparently there is only a small fee of about $26 to file a small claims court action. We will have our day in court!