When is something considered stolen personal property?

I dropped my cell phone at my friend's house. Keep in mind that we live 45 minutes apart. I am also a private investigator, and I have confidential phone numbers on the phone, and I am currently awaiting several calls from court hearings, etc...attached to that phone. He later found it, and emailed me (I was already home and had not realized the phone was missing). The screen was broke from being in the rain, so he could not call my contacts (wife). He emailed me and told me. So, I called "my" phone from my wives and his wife answered it. So I told here to shut if off so no one calls - and maybe the screen might dry-out and work. So she did. The next day, I emailed him to ask if my phone's screen was maybe now working. He told me that his toddler baby has it and they can not find it. He blames me for it since I told them to shut it off and they can not hear it ring. Days went by, email after email, to see if he located my phone yet. He tells me that he can not look for it. If he searches through the child's stuff, she will see, and she will put all here stuff back they way it was, and he will not know if he looked there or not??? That was simply crazy, and pretty darn pitiful. At this point I realize my friend is not rapped too tight. Keep in mind, he is about 40 years old - not a kid. Now, he is saying, as quoted, "I`m not tearing my house apart to find something that will show up someday. I should have left it in the rain and let the scrap guy run it over BUT I`m nice enough to pick it up. What would have happened if I woundn`t have picked it up??????" So, he is using that against me? A friend would have picked the phone up, yes, but he now lost it. So, at what point do I show up with the police? I called the police and they said they would go to the house with me and "claim my property", and he would be charged accordingly. What would you guys do? He also told me we are not friends anymore, ever since I told him, find the phone or pay for it.