We're suing them and they want to challenge our complaint with a "Demurrer." Essentially, they are claiming that the Complaint we served on them is somehow defective. Before they can file that, they have to try to "meet and confer" with you to go over their proposed objections. Generally, it is just a stall tactic, or they are hoping to gain the judge's favor. It is essentially legal technicalities.
When they file a Demurrer, we have to file and Opposition to their Demurrer, defending the Complaint and pointing out their errors in challenging the Complaint. If we don't challenge the demurrer, the judge could just throw out your case, and you lose. If we do file the Opposition, they can file a Reply to challenge what we claim in the Opposition. In the end, there is a hearing, and the judge makes a decision. In almost all instances, it is important to file an Opposition to their Demurrer.
Because it involves any number of issues, it is hard to predict what the actual cost would be, but the $500 cost is the minimum it takes to review their Demurrer, research, and write your Opposition.