Perhaps it is none of our business, but since you've been airing everything else out, it got me wondering. Of the 19k that you've held payment on, how much of that amounts to blatantly defective work, like improperly installed parts? SAR is a small shop now, and that amount of money, or lack thereof, can interrupt cash flow, so I can definitely understand why he would ask for 16k (even though that seems bold considering your track record with billing - it isn't like he would have to worry about getting the money). Threatening you for it though, clearly wasn't a good business decision.
I'm with Dave. If it were me, I'd just pay what was fair and walk away. Maybe you're not as big of an A-hole as you give yourself credit for being. Not many of us would stick around to see if things could be made right on the third attempt. Then again most of us wouldn't fight it out until the end with lawyers. So, maybe you're just more stubborn than the rest of us.
If you're dealing with a similar ego to the Riddler winning one that I've dealt with, then if things get ugly I will be living vicariously through you.
I hope it never gets to that point though.
Matt