The bright side is that it sounds like everything is repairable. Now you need to motivate the contractor to make the repairs. Unfortunately you are at the point where the stick is a better motivator than a carrot, so let the contractor kno in writing that you are dissatisfied and that his or her work falls below industry standards. Giv the contractor a reasonable deadline to have the work completed and let him know that you will withhold payment and hire a replacement contractor if the remedial work is not properly completed by the deadline. Be firm but not unreasonable. Remember that if you do end up in court, you want to make sure that all of your actions appear businesslike and reasonable under the circumstances.
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Many disputes between homeowners and contractors begin with a lack of communication. Sit the owner/manager of the company down, with your copy of the contract and a list of "punch list" items in hand. Discuss it calmly and precisely, and set forth a timeline for when you would like the work to be finished. Be reasonable and (somewhat) flexible, but make him give you a time frame and then put it in writing and have both parties sign.
If the contractor continues to do sloppy work and/or be non responsive, you can withhold the next contract payment so long as you put in writing why you are doing so, and send the letter certified mail so you can prove he received it. If all of these things don't get the job done, you will need to see an attorney familiar with residential construction law here in California. California rules on this are pretty unique, so make sure you get someone that has experience! I wish you the best of luck.
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At some point you may need to bring in another contractor to correct the work. Advise your current contractor in writing that if the work is not completed to your satisfaction by a date certain (perhaps 10 days) that you intend to terminate him and hire another to correct the work and charge the current contractor for the repairs.Ask a similar question