The civil demand letter you received does not create an independent obligation to pay if not followed by a lawsuit, which (almost) never happens.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
Do a brief search here on civil demand letters and feel free to actually read Penal Code 490.5. The reality is these letters are scams mainly perpetrated by a Florida law firm Palmer, Reifler & Associates. They are not licensed in California and have never filed a single lawsuit in California. They send out millions of these in hopes of getting paid. Throw it away.
Mr. Driessen is a former Deputy DA in Orange County with over 8 years of criminal law experience. Nothing stated on this site shall in anyway be construed as legal advice, or as creating any attorney client relationship. If you would like to hire Mr. Driessen, feel free to contact him at www.theocduiguy.com.