Sounds like you were hunting with the dogs, so you were ok to be where you were and your dog was off lease as they would be while hunting.

Sounds like you are in the clear, but I assume you were on public land hunting? If so, is it legal for him to be shooting random coyotes on that land? I assume not. The only way he is not in the wrong would be if he was on his own land.

With that said, sounds like you are entitled to compensation, but I don't know if I would seek it unless it was a dog you spent money for professional training or you had to pay a Vet to attempt to save it's life.