For $700, you will be chasing your tail if you go the small claims route. All you'll end up with is fees out of pocket, a debt that's never repaid, and a judgement that is nearly impossible to enforce and could eventually expire depending on your state laws.

As for the threat, there's no telling but I would warn your dad to just stay away. If it escalates, things can only get worse and he still won't have his $700.

You probably should have reported the incident when it happened. Weeks after the fact may not do you much good, but it's worth a shot, if anything just to make things more difficult on the other owner.