I would have allowed attacks of opportunity. As long as people are aware of each other and not flatfooted they can use attacks of opportunity.
Flat-Footed: At the start of a battle, before you have had a chance to act (specifically, before your first regular turn in the initiative order), you are flat-footed. You can't use your Dexterity bonus to AC (if any) while flat-footed. (This fact can be very bad for you if you're attacked by rogues.) Barbarians and rogues have the uncanny dodge extraordinary ability, which allows them to avoid losing their Dexterity bonus to AC due to being flat-footed. A flat-footed character can't make attacks of opportunity.
Had Fetor used his greater teleport or dimension door scroll? I would have teleported him away, and used a skirmish tactic against the party.