Upload & Sell: Off
His line about "standard practice" is nonsense. It may have been his expectation and his typical practice, but it's not standard practice across the industry. Like most others here, I pay my seconds the day of the gig, and when I second, I typically expect to be paid at that time, as well. There's nothing left for the second to do after that point, so there's nothing on which payment depends (unless file delivery takes place later, which as you experienced increases risk and hassle).
Having said that, since you did handle file transfer after the fact, waiting until he was satisfied he had the files was reasonable. Having received the files, I suppose he might simply not have gotten around to looking them over to be sure he actually had them.
Going nuclear at day 12 was probably unnecessary (I'd be perplexed and annoyed, but I'd probably have waited another week or two before sending lawyer letters), but still I don't think it was completely outrageous. He was unprofessional in his communication. Sorry you had that experience. I don't think you need to worry about being finished in this business as a result.