Batter out?

[mook11]

All-
Good morning. I am a first time poster although I have viewed this board quite often.
I have a question about a ruling in a championship game in which I played last night. I protested but I want to make sure I have a leg to stand on...
USSSA rules
Bases empty.
Batter hits a pop up to the pitcher. B-R begins to run to first base. F1 attempts to make a play about 1/2 way down the line. F1 is standing in fair territory about 5 feet away from the B-R when the ball hits his glove, then hits the ground, then hits the runner. PU rules that the batter is out based on 8.4.A - B-R is out when he comes into contact with a batted ball.

My contention is that once the fielder comes into contact with the ball and re-directs it into the runner, the runner should not be out, although I cannot find the specific rule that would apply.

Any help would be greatly appreciated.