Can the 2nd Defendant file any kind of counter suit against me? The 2nd Defendant threatened to sue me for their lawyer fees.
And now for a legally ACCURATE response (versus the 'gee, I don't know' response you just got).
Yes, the party can pursue their legal fees against you.... and yes, it can even be done without concerns for having to surrender to the jurisdiction of your 'home court'.
Let me tell you how I would do it....
First, I wouldn't file in small claims. I would file in the 'Court of Common Pleas'. Yes, you could file your counter-claim there... but you would be at a huge disadvantage since you wouldn't know the formal 'Rules of Court' and 'Rules of Evidence'. You would very quickly get swamped.
Of course, the entire issue really depends on how much they are threatening you with. Far more likely that this is just an idle threat and I wouldn't waste much time worrying about it.