Unless you put holes in the walls, painted, had kids drawing on walls or otherwise did anything to cause the unit to be painted then she cannot charge you for it at all. Unless you did something to it the unit should not need to be painted after a 3 mo tenancy.

EDIT: Yes it could be retaliatory but not in any way that's illegal. She never had any legal obligation to allow you to paint it yourself so taking away that right is not braking any laws.

The fact remains it is illegal to charge a tenant to paint the walls just because. You need to dispute the charges in court.

If you painted the apartment you must paint it back the way it was or pay the charges landlord is asking. $700 is a good price to paint a whole apartment.

You cannot be charged for normal "wear and tear" so unless you damaged the walls in some way, she cannot keep your deposit. Google California landlord/tenant laws and become familiar with your rights.

Retaliation isn't illegal. That said, she cant' charge you to paint the place unless it's damaged.

yes you can do it