Product: Debt collection

I bought a puppy ( dog ) and paid the breeder via PayPal - one ( 1 ) payment of {$600.00} as a deposit then another payment of {$1100.00} to complete the purchase. however, with the {$1100.00} payment PayPal subtracted {$32.00} for service fee - So, i now owed the Breeder {$32.00}. So, i went into paypal to send the breeder {$32.00}. previously sending {$1100.00} i just edited the {$600.00} ( sent as the deposit ) to {$1100.00}. so this time i tried to edit the {$1100.00} ( previously sent ) to {$32.00} but instead of letting me edit the notice popped up {$1100.00} has been sent to the merchant. so, another {$1100.00} was being process which should not have happened. Basically i stopped the payment with my bank and tried to explain to paypal what happened in which they have no understanding and have threaten to send the {$32.00} to debt collection and loss of my Paypal account. I told them since i could not get them to cancel this transaction i paid the merchant with a separate transaction of {$50.00} a little more just in case Paypal was going to take a fee out of the {$50.00} - so the merchant has been paid. but now i have a negative balance of {$32.00} Paypal is demanding i pay. My last communication to them is who do i owe this to? I have not received a response but keep getting these notifications about debt collection and loss of usage of my papal account- below is the actual communication thru their Resolution Center. 

Trans ID - XXXX ( XX/XX/XXXX ) I mistakenly authorized this payment thinking setting it up would allow me to edit the amount to {$32.00}. However, the payment went in for {$1100.00} and I could not cancel it. I tried to explain and transaction XXXX was created but this was on the assumption {$1100.00} had been sent to XXXX XXXX there was no money sent or received because I had no choice but to stop payment from my bank account as this was the wrong amount. Ive been asking you to cancel both of these transactions. On XX/XX/XXXX I paid XXXX XXXX {$50.00} via Trans ID - XXXX to make her whole for the {$32.00} I owed her. Paypal you dont get to fleece me for {$32.00} for using your system to pay a merchant with no way to fix or change it. If PayPal is still insisting I owe this merchant {$32.00} Please cancel my account and I look forward to having a governmental agency take care of this and if you refer a non-actionable charge to a collection agency it will cost you dearly as you know how they can be in stressing the general public out over payments. Again all you have to do is cancel/erase Trans ID - XXXX and XXXX and show me with a {$0.00} balance. By the way who do I owe the {$32.00} to? As XXXX XXXX has been paid with a {$600.00}, {$1100.00}, then a {$50.00} Payments look at the activity. You have done a terrible job in resolving this and if you were forthright in researching the matter youd understand but sticking to telling me what how Paypal will send this to collection etc.. will not go over very well when I begin to write Paypal Corporate Leadership. 
( This is what i keep getting from Pay pal ) " This email contains important information about your PayPal account. Our records indicate that your PayPal account has been negative for 29 days or more. The amount owed today to resolve your negative balance is {$32.00} ''.