I am a house owner in Pennsylvania. I had hired a PA to help with an electrical unit replacement claim. The PA then called the restoration company to rip off the drywall and install moisture sucking machine to find the potential leak that caused the unit replacement. They were unsuccessful in finding the cause and then we got a local handyman to fix it for us for just $150. We were told that that the claim would pay for all the expenses but the work authorization contract we signed with the restoration company had a line that said I will be responsible to pay the company if the claim gets rejected. The PA also created an inflated bill for future repairs such as repainting the drywall and carpet replacement and sent it to our insurance company which eventually got denied. The restoration company wants us to pay the inflated bill of $8000 for one day's worth of work (ripping drywall (in ~100sqft area) and sent us a notice of lien. How do I deal with this? I do not want to get into any legal battles.
If you did not agree to pay them $8,000 for the work, then the contractor should not be able to sucecssfully file a lien for that amount. Contractors in PA can file a lien based on a verbal contract, but the burden is on them to show that one existed (i.e., they showed you a written proposal for $8,000 and you verbally directed them to proceed). They cannot just submit a bill and say that you gave them verbal approval to proceed absent any dollar limit or estimated cost. You should get notice of any lien claim from the contractor, so it's improtant that you respond in a timely manner.
It's possible that the restoration contract was not in conformance with the components that PA home improvement contractors are bound to follow. See http://www.krautharris.com/documents/hicpa-seminar-utpcpl.pdf. A letter from a lawyer threatening to file suit against them may persuade them to abandon the effort.