Your friend factory reset the phone and put their own password on it? To be fair to Google, they should refuse - if they agreed to wipe someone else's account that would be a HUGE breach of protocol based just on your word. What would keep people from selling used phones and then calling Google to deactivate them? Or just calling Google and deactivating random phones?

If your "friend" refuses to log out and re-reset it then the correct thing to do here is to report it to your homeowners insurance. Your friend basically stole your phone. Insurance should pay for it and then they can go after your friend to get their money back.