I can relate to your upset about the dog damaging the quilt you made. I would be sick about it and furious at them.
The dog is now gone - do they have another one?
When people see adds for "any size hand-quilted quilt for $39.99" in the newspapers, it probably should not be a surprise that a non-quilter does not have any idea how much it costs - just in materials - to make a quilt.
If they are consistently careless, give them store-bought things.
In this case, I think I'd wait for a bit before going to the next step.