Do I have to pay a penalty for using a copyrighted image on my personal blog?

I used to write a personal blog that was publicly viewable (on the Google Blogger platform). 4 years ago, I posted a professional photo (that I downloaded from a news site) that turns out to be copyrighted. Today I received a letter from the photographer's lawyer demanding not only that I "cease & desist" (take down the photo) BUT also pay a $250 "termination-license fee." Do I really have to pay that? Isn't it enough that I take down the photo immediately. Is it fair to expect a warning before being charged to pay anything? Again, this is a personal blog for my personal writing and not for profit.