Did we blow this one or not.

[canump]

I'm BU in C position with R1 on 3rd. Right handed batter, pitcher who uses tons of junk on ball, she has EXEMPTIONAL drop ball.
Pitch comes to B1 who swings and makes contact, B1 is also moving at the same time, batted ball shoots out about 10ft contacts the ground and comes straight back towards home plate, B1 had immediately let the bat go. Bat and ball make contact clearly in the air. I saw it plain as day, hesatated a second to see if my partner was going to call it then I killed the play. Partner comes out looking at me so I told him bat contacted ball. After a very brief meeting in which I told him I could not tell for sure if contact was over fair terriotory or not. He said if there was deffinet contact it was in fair,( he had said he did not see contact as B1 had started to cut in front of his view but he heard it) as he had full view of the foul line and the ball never appeared near the line so he ruled batter out.
OC comes to discuss it and he tells the coach, "My partner saw the contact & I'm 100 % sure contact was in fair terriotory so batter is out. OC says that batter was still in batters box at time of contact but PU said since bat was in the air at time of contact, not in batters hands then B! is out as long as contact is in fair.
Question 1, was this handled right mechanically as a crew.
2 if batter is still considered in box does it matter if bat is out of hand attime of contact.

I work under the CASA rule book but a lot of our rules and mechanics are the same so any feed back would be appreciated.

Dale