What is the shops hourly labor rate? If R&R of a honda engine is 10 hours book time, he can legally get away with charging you half of that for just pulling the motor, so lets say 5 hours. If his posted labor rate is $100 an hour then it is justified. It all depends on what was agreed upon before the work started.

$500 is definitely alot for pulling a honda engine, I used to charge about $500-600 for a motor swap. If a customer bailed on the job after I pulled the engine I would definitely charge $300 for time spent and also any bit of my time that was wasted.