The best next step for Josh would be:
C. file a civil lawsuit against Hanley Inc. for breach of contract.
This option is appropriate because warranties are contractual obligations, and if Hanley Inc. is not honoring their warranty by refusing to replace the broken blender, it constitutes a breach of contract. Filing a civil lawsuit would be the correct legal recourse in this situation. Filing a criminal lawsuit would not be applicable here, as breach of warranty is a civil matter, not a criminal one.