Is fair or foul?

[Madden]

Had this happen in my kids's game yesterday. A batter hits a pop up almost straight up. The catcher loses where it is. He virtually stays in his position behind home plate, but definitely in foul ground.

The ball when it dropped lands right in front of home plate, untouched and in fair territory. The ball bounced right up to the catcher, who catches it, and then throws the ball to first to get the batter out who never ran. The ump ruled the batter was out as the ball landed fair but never touched the ground in foul territory.

Is this correct? I thought if the ball crosses the line after bounce in fair ground even if it never touches the ground again is foul because the player is in foul ground.

Need some help on this one.