EH > Avoidance, your pally is wrong and also logged out in ret gear.
Edit: your pally is also probably talking about being unhittable (aka block+miss+parry+dodge > 102.6%) not avoidance capped. Pallies get unhittable with holy shield fairly easily, warriors have a harder time with it since we ahve to be passively unhittable.
But seriously. You're pretty much doing it right. There are a few gem choices I might change, but really it comes down to prefrence and we end up quibbling over a total of like 9 stam for a tradeoff of some avoidance stats. It's an arguement that's... well... see above picture. So ya... I don't see any problems with your gemming/gearing/enchanting. It's why you're living and he's not.