Sounds like she is being reactive from losing a bunch of business which is understandable. However, policies are policies and if it's in writing she has no leg to stand on. It's a contract. And in that contract is the cancellation policy which you both agreed to and sounds like you honored. If it's worth it I would contact an attorney, but I imagine the attorney fees would eclipse any money returned. Post a review on google. That has some power. Google reviews are mixed with a few stating that the owner is difficult to deal with. Not sure why some people get in the people business if they aren't good with people.