Bunt hits batter!!!

[WayneG]

Had this situation in a C-team game the other night. R1, batter attempts bunt, ball strikes in front of plate, comes straight up and hits batter-runner as he's leaving the box. I immediately call foul ball. Head coach of defensive team comes out to challenge the call. I immediately give him the stop sign to wait as I feel that I need to ask for help from my partner help. I ask my partner and he tells me that the batter was half in-half out of the batters box. With this information, I change my call to batter-runner out. Now I have the other head coach coming out, I tell him that the batter was hit out of the box and says that there is no way my partner can help with this call because of his location. "B" position. After the half inning, his assistant, who claims to also be an umpire where he lives, claims that there is a little rule that states that as long as the batter still has one foot in the batters box, he is considered to still be in foul territory, making it a foul ball. I don't agree with that, couldn't find it in the Fed. rule book. Just looking for some insight from y'all. Thanks.