I believe that in all states pedestrians have the right of way over bicycles and that bicycles must obey road laws - also in most states a cross walk is implied at all intersections, marked or not. This means you should fully stop (and your friend should have too) and waited for the pedestrian to cross to the midline of the road as soon as they had step out into street (just as if you were a car) before you started again - well actually you should have stopped anyway given the 4-way stop.
As I read you were totally in the wrong.
Al