Laying Down QQ Preflop

[stu55]

I was playing in an $11 today and came across this odd situation, well, odd or me still fixing leaks. I am UTG and raise $120 with QQ in a 15/30BB level. Another person (I think MP1) reraises $400. This is the first place I think I messed up, I think I should have folded here, but my thinking is only 2 other hands beat me. Then the flop comes all rags with a flush draw, I bet 200, he rams, so I call, go into KK and lose. I told myself I should have folded there, but I see no reason to cause of my great hand, slim chance of them holding. I think the correct play is lay down, but I dont see any fault in auto-calling. What do I do?