1) You're owed the money legally. No question about it. You can probably even get it. California takes a very hard line on unpaid wages.
2) In the grand scheme of the situation do you feel good about fighting them over the unpaid wages?
#1 is easy. You file a claim. You have a decent chance of getting your money.
#2 is harder and it's impossible to know from the outside. I think it's perfectly reasonable to let people off the hook in some rare circumstances. Only you can make the call if this is one of those times. It doesn't make you weak or a fool to treat people better than they strictly deserve.
It sounds though, like you've already made up your mind that you want to go after the unpaid wages. So give them a final warning (written, certified mail, return receipt) and then file a claim.