Do I have a leg to stand on after receiving our order in a damaged packaging?

My company ordered $3100 worth of product from a supplier. The product showed up and there was damage in the packaging. Approximately one week later, I received an invoice for $4100. The supplier stated that they shipped more product than we ordered. Our company did issue a hard copy purchase order prior to the supplier shipping the order. I realize we probably should have rejected the order because of the damage but we brought the skid into our warehouse and we spent money on repacking the product. One year later, the supplier has filed a law suit against us. Throughout the last year, I explained to the supplier multiple times the situation. I am not even sure if we received the full amount ordered on a PO because product was lost because of the damaged packaging.