LG electronics LG won't make good on warranty for LG esteem mobile phone. Huntsville, Alabama

I have a problem please help! I purchased and LG esteem smart phone on November 30, 2011 that had a glitch from the very start, it restarts itself several times a day including when you're on telephone calls (just Google Lg esteem restarts), it's very annoying and I tried updating the software etc. nothing worked for forcing me to send the phone back to the manufacture (LG). LG instructed me to remove my personal property such as any chips etc. Prior to sending the phone back so I made sure to remove my SB card and started to remove the Sim card however there is a note on the card that said very clearly "do not remove", so I put the chip back in the phone and sent it on its way. Approximately weeks later I received my phone back from LG but cannot activate it because there is a missing sim card when I called LG to ask them what they did with my Sim card so it;s my fault, they explained that they have to destroy Sim cards that are sent in with phones and that my phone is now worthless and cannot be re-activated. They explained that they clearly told me to remove the card and they are hiding behind this excuse for not giving me a phone, for one thing I was not even clear what they were talking about I have never owned a smart phone and did not even sure what a sim card was, it's hard for me to believe that a phone with a one-year warranty cannot be made operable because of a missing sim card. I asked speak with a manager and have a case that has been ongoing for approximately 5 days of being put on hold for 30 to 60 minutes at a time, nobody calls me back when they say they're going to and I get the feeling that LG just wants me to go away. Please help, what is my best course of action?