An independent auto body repair shop wont pay for accidental damages they caused, what should I do?

I went to get a quote to get some things fixed on my car at an auto repair shop. While there, through a freak accident, a nut flew off a hand hand buffing tool that a worker was using about 10 feet from my car which hit my car leaving a noticeable 1/8" deep dent, breaking through the paint, and exposing the raw metal underneath.

The Arabic/Middle Eastern owner wants to fix the damage on the quarter panel instead of cashing me out. I received 6 estimates from other shops to fix this, who quoted 0-600 to fix it, most around 0. The shop who did the damage is known for being the cheapest (lowest priced) shop around. They gave me varying answers on the paint warranty, first 2 years, then 1 year. Other shops said the price low-ballers use lower quality paint that won’t last. I don’t trust this shop who did the damage and also worry if the paint won’t match the other part of the car. When I insisted he cash me out for 0, which is far less than any of the other shops quoted he still refused. He tried to tell me its the guys fault who was using the tool that hit my car, because he’s a contractor. I call BS. All his employees were wearing similar uniforms. I told the owner my relationship was with his shop, not one of his employees and he needs to take responsibility for his workers. I told him it would be far cheaper for him to settle than this becoming a legal matter. He tried to blow me off, took my number and said the "contractor" who did the damage would call me. Of course he never did. I didn’t see a business license posted, as I believe required by law.

What should I do? Call the police? I know its a civil matter, but would they come? Would it scare him into submission? Would the police come in order to force him to produce his ID to me? Take him to small claims court in Houston TX? Post on Craigslist where he advertises to warn others until he settles with me? Go to his shop and refuse to leave until he pays me off? Other options? Filing with the BBB is worthless as all the would do is forward my complaint to him.

I am moving later this week to Dallas about 4 hours away, so to return to Houston for court would be prohibitively expensive and time-consuming. How do I get him to make this easy for both of us?
Insurance agents commonly say that you are not required to take it to a particular shop to get it fixed. As the consumer, you can choose. It is not sensible that one be forced to go to a shady shop.

Would you want the doctor that made a mistake on you to be the one to "fix" it, especially after a dispute with him?

Editor’s Comment:
We include all types of opinion from people who have had both good and bad experiences with auto warranties. In the end, you must make up your own mind. One way is to talk with an auto warranty expert who can give you a quote for your vehicle. Then at least you have the information to make an informed decision. Click Here for an Auto Warranty Quote