Merchant Lost A Fraudulent Claim - What Now?

I sell cabinets in a small showroom. I recently sold a kitchen and unfortunately, there was an issue with the cabinet manufacturing factory not sending us a crucial cabinet. This cabinet was needed for the client to continue installation. The business owner and I immediately ordered another cabinet and were apologetic and in constant communication with the client about the status of the this cabinet. There were a few other issues but nothing that couldn’t be fixed, and was actively being addressed.

The cabinet sizes were correct and fit in the space. The cabinet finish colors and door style was also correct. At this time, we had delivered the cabinets to his home.

The client was very upset that his project was delayed and he let us know via email and phone conversations. We let him know we were doing our best to get him his cabinet as quickly as possible. The client still decided to file a dispute with his credit card company totaling around $22,000. His dispute stated that the items he received were “Damaged/Defective”. In all of our emails, not once did the client claim their cabinets were damaged or defective, so this was news to us. We responded to their claim with the email thread and a few photos he sent of the cabinets to show that there were no claims of damage or damage to the cabinets.

We just found out that we lost the claim. My boss, the owner, is out around $22,000. I’m feeling absolutely terrible as this was my client. I feel that this person has committed fraud as they’re in possession of 99% of the cabinets but haven’t paid for them. What can we do? Is suing and incurring legal fees the only option?

Location: CA

ETA: I also went out to the project and saw that around half of the cabinets had been put into place by the contractor who was installing them.