Well, this may be an unpopular opinion, but from a strictly moral/business point of view, you do owe this lady money for services rendered. While it's true that your female assumed all the risk associated with the pregnancy (poor thing with that c-section
), you did not have to purchase another dog with all associated expenses and time investment of raising a puppy - the owner of the stud did all that and should be compensated, even though her dog may enjoy the process. Her price may be steep, but if that's what the female puppy would have sold for had she gotten one, then she does have a right to the money, in my opinion. Should she be more understanding? Sure, but not everyone is, sadly. Anyway, I hope this works out for you. Look on the bright side, you did learn a valuable lesson - put everything in writing! Good luck.