"Pool lights were 13” and 6” under water like but need to be 18”, there were electrical wires grounded to plastic and to my heater cover, there is rebar sticking out through the gunite in the pool."
If he will fix these, then have him do it. I don't think you could get this done for $6000. You got burned! Cut your losses and learn from the experience. But get the structural issues, code violations and inspection failure items fixed.
If would not be in my nature to "cut my losses." And "learning" anything from doing so would not be an acceptable trade. That's me. The stress of all this does have a price tag, and for that reason alone some people are better off walking away. I can't do that myself. But you do bring up an interesting notion, even if inadvertently, which is to get what you can out of the contractor first, then go after him for the rest.
Part of the strategy can be how to manipulate the situation (and the contractor) in your favor. For example, I did. My contractor paid for the plaster he ruined. But I upgraded to pebble and paid the difference myself. Not unethical (IMO), but I didn't advertise that to the contractor, which would have just inflamed the situation and made him dig in his heals even more than he did. How much of the remaining work do you want him to do? Maybe all of it. Or none of it. Or a portion. Do you want him to do the work, based on his skill level? Or do you want the work done better, by someone else, so that the quality is better? Or maybe you get the contractor to do what he's willing to do, then have someone else do the rest. All the while keeping an eye on the budget. By that I mean: in CA the Small Claims Court limit is 10K. Say you need 15K of work. So maybe you suffer through another 5K of work from the original contractor. Maybe the portion you know he can handle. Then you get the other 10K of work done by another contractor, like the plaster and tile. And then sue the PB in Small Claims for the balance (negating the cost of an attorney). We haven't heard any estimates, but I'm guessing the remaining work is not enough in dollars to warrant a lawyer. They can really chew into a budget, and unless you have a contract that stipulates it, you don't usually get attorney's fees. Point is, do what ya gotta do to get the most for your pool for the least out of pocket.
But remember, the original contractor
has to refuse to do the work before you get somebody else involved. He has to be notified of what there is to do, given time to do it, and he has to walk away from that. You may be in a Good Faith Dispute, but you are still obligated to honor the contract and allow the contractor to complete the work. You can only use someone else after you've satisfied the due process. Well, that's if you want to get paid! You can hire someone to do the tile, for instance, and not ask the contractor to pay for it. You eat some dough, but you get the quality you want that the PB has not been able to deliver. You can't necessarily sue someone for not providing a level of quality to your liking. It can be a grey area. There are standards, but they can be open to interpretation. And judges don't like to get into that.
Lots of ways to end up satisfied. Just a matter of coming to terms with what you're willing to do to get that satisfaction, or live with it if you don't...