Landlord not returning security deposit!

[Amandeep Sawhney]

Hi.. Please guide me.
My landlord is this old couple so all their dealings are done by their daughter who is a very difficult woman. We vacated our apt as per lease ending on 31-Aug.. I went with my realtor on 1-Sep to the house to get something i had forgotten there. The old lady let us in. The daughters husband is a contractor and was already working in the house. She told me she has 30 days to return deposit so i didnt diturb her. on the 31st day when i asked her, she said shes waiting for some quotations for repairs. So i sent her a demand letter and on 9th oct i filed a small claims case. 1 day later i got a check with $1800 deducted from the deposited and a long letter full of lies saying why shes deducted. Im really confused as to what to do? We left the house really well and have a video of that too. She had also given us a reference letter just a month before leaving and we have our previous landorlds reference letter too stating we take great care of the house. Should i encash the balance amount shes sent me? Please guide me