Live or Dead ball?

[Spine13]

So in our game yesterday we had our batter lay down a bunt. The catcher fielded the ball and tried to throw out our runner at 1st. The catcher hit the first baseman who was charging, in the mask. The ball roles foul near the first base fence but in play. Our girl runs to 2nd on the play and prob could have gotten 3rd. The umpire call a dead ball and returns my girl from 2nd to first. My question is: Should play have been stopped with a dead ball? And is so shouldn't my runner at least be awarded the base she would have gotten?