One question I have is this: What does that "Record Payment" control do? Does it trigger a modal of some sort with more tasks, take the user out of the context of this page (not what I would expect), etc?
If it triggers a function that opens a modal context then I would avoid using a modal solution to house this information - "hot modal on modal action" is not a good thing in a UI context ;-) Also, it looks as if there is quite a lot going on in that panel, it might be a bit much for a modal.
The expandable row direction is a good one because it is a common UI pattern for people that keeps them in the context of the work they are doing, and if appropriate can allow them to compare expanded rows. If you need to pop a modal out from within a row expand, that is a perfectly reasonably thing to do over a page (rather than another modal).
I personally LOVE a good slide-in side panel... modal but more scalable than a modal box, configurable... but it does have the same issue of being bad form to open a modal ON TOP of an already modal experience - too "Inception" - so if that "Record Payment" function is something that needs to happen as a modal experience on this page I would shy away from this direction.
I really appreciate your prototypes but they are moving a little fast for me to assess all of what is in them... I'm not sure I am seeing the evidence of expandable areas WITHIN your expandable area/modal - it might help us all to explain what the core problem is that your client is having with the expand you provided before.