Yes you can sue. Whether or not you have a case is not clear from your facts. You appear to have a confusing and complicated situation. Your best bet is to retain an attorney, but if there is not enough money involved, small claims court is an option.
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You should strongly consider sitting down with an attorney and discussing the facts surrounding your situation. An attorney who handles contract disputes should be able to help you determine whether there is recourse. It sounds like your situation may have some complicated facts that need to be parsed out more methodically.
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