Client Breaches Contract And Backs Out But Wants Deposit Back

TLDR: Building owner breaks contract to small business, pays in cash, wants $10k back with no wrongdoing on our part. Location: Indiana, USA

I run a small business, specifically commercial roofing. We have a client that paid their deposit (~30k) in *cash* a few months ago. Due to the scope of work it was made apparent that we will have to wait for good weather to be able to start the work. Building is located in the Midwest. Building owner specifically requested a clause that the project will be done by July (today is May 8th as reference).

Once we signed the contract and were ready to move forward (mid-March) everything was as normal. The building had very minimal leaks and the owner was not concerned with them given the location of the leaks.

The owner contacted me stating there has been more leaks pop up, which happens this time of year. I went out to see if I could help and mitigate these new leaks because it was still going to be about 2 months before we could get to the project. Upon arrival, I noticed the owner had had his drywall crew go on the roof and take out 10 different vents, and add a skylight without notifying me. Thus these “new leaks that popped up”. Horribly shotty work. The issue is that crew tried to “patch” the now holes with granulated ice and water shield nailed to the membrane. (Current roof is EPDM black rubber). See this I was very much taken aback as I had not been informed of these modifications.

I immediately called him to notify him that we must get these fixed because we can see his ceiling tiles through the roof, and we were not scheduled to do our project for a couple more months. Again none of this was in our original contract. We put temporary repairs on these holes as a change order with plans to have to permanently repair these areas before we provided our services.

During this time the owner decided to hire yet another roofing company for these repairs again without notifying me. A few days later (yesterday) he contacted me notifying me he no longer wanted our services out of the blue.

We did not breach our contract, the timeline was very apparent and reiterated multiple times in the process. (Such as adding an entire clause specifically for this job) Now the owner wants his money back.

This is where it gets weird.

He keeps mentioning getting his “$10,000” deposit back. Along with all receipts, invoices, etc. that have gone towards the project already. He did not deposit $10,000, it was $30,000. It’s all very strange. I have been doing this for a while and never had someone want to pay for a $90k project all in cash. We have had crews work on this, time spent, profit lost because of the breach, materials ordered, other jobs pushed off or back, etc.

Questions: Do I owe him his deposit back? Do I have to provide him any invoicing? Am I in the middle of a money laundering scheme? How do I proceed and protect myself?