Brian: I would have told the owner (not the dog) to sit down, stay, don't speak and then to reach into his wallet and give you $10 bucks. THEN if he was good, you'd photograph the dog but that's just his sitting fee. The dog is extra plus prints, of course.
I recommend the same technique if parents ask me to photograph their kids. I tell them to sit, stay, and fetch. The dual messages always throw parents a huge curve.