Client refused to pay after I fixed their typo, who's in the wrong here?

Met with a client in Denver last month, small business owner, paid me $400 upfront for a contract review. I found a typo in the non-compete clause that would've let a former employee steal their client list for 6 months. I fixed it and sent the revised doc. They flipped out, said I changed the meaning without asking, and demanded a refund. I told them the typo made the clause useless, but they said I should've called first. I sent the refund because I didn't want the fight, but now I'm second-guessing. Should I have held the line since the fix protected them, or was I out of line editing without approval?

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