Do I have to refund a deposit and pay for a project correction when they shut me out of the job?

I am a handyman/unlicensed contractor, and this job is based off a quote and verbal agreement. A then "good friend" licensed contractor of mine encouraged me to take a large residential concrete job that had contacted him, to get me working when business was slow for me. He was going to "teach" me to do large patios. The day of the concrete pour, he ran the show, but the quality of the job ended up very bad and he left. Following that, the client would not let me attempt to resurface it to bring it to acceptable quality, or later, would not let me return to demo and remove the concrete. They refused my dumpster delivery, and the day of demo, called me and told me never to come to their house again. Now, 6 weeks after, they have sent me a demand of payment letter, demanding their deposit back, and for me to pay the cost of them hiring another contractor to demo the concrete and remove it. I would like to know what tights they have in this matter, because they did not allow me to try to bring the job up to an acceptable level of workmanship, or allow me to demo and remove at my expense. Additionally, they have received a portion of the promised service which should be acceptable (excavation of dirt and grass, leveling, compacting) which was not separately priced, and even if I were to refund the deposit I believe I should be compensated partially for.