I am a longarm quilter but I can't begin to answer your question without seeing pictures. Depending on the density of the quilting which is what generally sets the price of custom quilting, it's hard to know whether or not it was a fair price. At $.03 per sq inch the price would be $355.68 plus tx and batting and thread. I charge that rate for more complex designs/dense quilting and depending I may add another half a cent per sq inch.
It's sad that you are unhappy and I'm sure the longarm quilter is unhappy as well. Hopefully you'll be able to come to an agreement so you'll all be happy. In the future you should write down exactly how you want it to be done in order to avoid a repeat of this situation. Also you should know in advance what the price of the quilting will be. Good luck