Legal Question re: Contractor fraud

[Amy King]

A friend of mine met a guy this summer who said he was a contractor and did remodeling work. In June she verbally agreed/began to use his services for a bathroom remodel. He had her sign his bid in July and she gave him over $2000 up front because he said he needed that. (This next part is the one she has the question about) On the bottom of the bid she signed it says "any disagreements will go through mediation" which she will pay for). Throughout end of summer, she contacts him and he is unable to come out due to other jobs words words words.  She told him she needed the work done by 2nd week August.(not in writing)  He did nothing. She has since asked for him to return he deposit. He refuses. Can she legally take him to small claims court or is she obligated to go to/hire mediation still b/c of the contract she signed. He did no work!?