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I don't think mid-morning sightings are all that uncommon. I only hear the 'yotes at night, but I've often seen them (thru a scope when I'm lucky) as late as 11 am and occasionally much later in the day. We're fairly rural on 9 acres with a creek, some woods and the fields so it's good habitat despite the hwy that runs next to the far end of our property. Coyotes are incredibly adaptable though and can be found almost anywhere, including urban areas.
You've got a good dog! My lab mix will chase them off, but didn't learn about stopping before the tree line until after she ran into a pack of them. She got lucky that time and knows better now.