Blah again. I redid my calculations and I was correct in the first place, lol.
Basically, if you have 50% armor reduction and the mob hits for 2000 damage:
2000 damage * 50% (armor) = 1000 damage
1000 damage * 90% (Defensive Stance) = 900 damage
So in the end, you take 900 damage from a 200 damage hit.