According to the rule book for Domination, on pg 4, in the multiplayer rules it states "...you may pass if one or more of your opponents has more active creatures than you, you may pass. If none of the other players have more active creatures than you, you cannot pass."
So basically I'd say it works pretty similarly to a regular 2 player game, though it sounds like both you and one of your opponents had less creatures than your friend's horde of Bitterwood Foxes. In that case, you both should have been able to pass until they had the same amount of active creatures as you.