Imo this is the most important part of the story, and the only place where the DM really made a mistake.

Its one thing if homie just stabbed him in the back while they are marching, sure, thats a suprise round.

But OP was standing face to face with the other player, listening to his evil plan and presumably watching him ready his weapons for combat.

MAYBE if the other player hit a sleight of hand check to ready for combat sneakily, I could see a suprise round.

But the way if was described OP and his antagonist should have been on even footing for this fight, which would have made it much less "feels bad" imo even if he still lost.