Legal Question in Real Estate Law in California

First you need to find out why the escrow didn't close on time and compare that to the obligations of the escrow company under the escrow agreement and instructions. Not every failure to close on time is the fault of the escrow company, in fact very few are. Having funds in escrow is only one of dozens of things that must occur before an escrow can close. If all the conditions of closing are not met, the escrow company not only can't close, they would be in serious violation of their escrow duties and the law if they DID close. So there is a very good possibility they are right that they are not responsible. Without knowing the specific reason(s) it did not close on time, there is no way to evaluate whether they are right or not that they are not responsible.