IMHO as a LA myself, $250 is absurd to begin with for an all-over design! Also, if she saw the top wasn't going to lie flat and felt that she couldn't do it, she should have contacted you to come get it. She should never have started it and then left it partially unfinished. I have - so far - only had to return one top unquilted, and it was very poorly constructed, but the customer knew it and has since taken it apart to redo.
This was very unprofessional on the part of your LA; not only would I stop payment, I would definitely find a new person to quilt my quilts!