Image Copyright Infrignement = Invoice

I have a not-for-profit client that posted a image of a Las Vegas hotel on their website (where they are holding a conference). The hotel provided the image, but it turns out the hotel didn't own the rights for the image. We revived a $900 invoice from the image owner (Destination360) threatening a lawsuit. We explained the situation and agreed to remove the image, but they still want the $900 or else. Should we pay the $900? There was no previous DMCA notice or any other previous contact. I know this is not a legal forum, but others may have had similar situations.