Upon move out, we told the owner to use the deposit for any damages that were done and he is charging us $10,000 more!!

You should always conduct a walk-through inspection before moving out so that the owner can survey the damage (if any) and advise you to repair/clean accordingly. If the owner is accusing you of $10,000 in damages, make sure he provides you with proof of the damages and compare that to any photos you took prior to moving out. He will proceed against you in court. Because the amount in controversy is over the small claims maximum of $7,500, and if the owner does not waive the excess ($2,500), you will not be in small claims court and I would recommend obtaining a lawyer.

You don't indicate in your question the amount of security deposit, or whether this was a residential or commercial tenancy. Nevertheless, if you told the landlord to use the deposit, this tells me that you were aware of causing damage to which the landlord would be entitled to keep at least the security deposit amount. As Attorney Dhillon indicated in his response, unless you conducted a final walk-through upon moving out, it is going to be difficult for you to defend yourself. The landlord can proceed in small claims court for up to $7500, or pursue a regular limited jurisdiction superior court action. See if you can settle this matter. To facilitate resolution, it may be helpful if you ask the landlord to meet at the property to go over the items of alleged damage.