There was probably some qualification in the warranty that your 94 didn't meet. About a year ago some of the 94s started to be ineligible for warranty.
The warranty company is probably saying that the dealer shouldn't have sold the warranty to you because your car didn't meet their age or mileage limits. The person at the dealer who sold you the warranty probably just missed it.
I don't think you are going to have much luck trying to force the warranty company to pay. I'll bet there is some clause in the fine print of the warranty that will let them slip out. Something like they are "not responsible for misrepresentations" by agents selling their warranty.
The dealer sold you a worthless warranty, that's a fact. They are responsible for that. They will probably just give you your money back that you paid for the warranty. I would think that you might have to take them to small claims, or threaten to, in order to get them to pay for the condenser. In order to have a case for that, you probably should get it fixed somewhere else and take the bill for the work to court against them.
When you figure the cost of the repair minus deductible you would have had to pay the warranty company, your time, the hassle, you will probably wind up being stuck for it.