Take another look at the sentence:
Madison slept at the very edge of the bed, one leg dangling over the side, because Yo-Yo, her little dog, lay stretched out in the middle of the quilt and bitt any limb that invaded her territory.
The third verb, bitt, is the problem. The sentence requires the simple past. Bit is the correctly spelled form.
|Verb||Simple Present||Simple Past||Past Participle|
|bite||bite(s)||bit||bit or bitten|
Lay, the verb you chose, is perfectly correct. Before you continue, review the rules for irregular verbs.