
Based on what you've written, I think the chance of you being found liable for the neighbor's dog's medical bills is slight. I don't read anything which would lead me to consider that you and your husband have been negligent in the management of your dogs, and you must be negligent before you can be found liable.
It is good to step back and apply some common sense to this matter: when another dog invades your dog's space, why is it unreasonable to believe that your dog will protect her space? Why are you at fault because your dog follows her nature, bred into her after thousands of years? My evaluation might change if your dog had gotten out, went next door, and attacked the neighbor's dog, or if you had let your known aggressive dog get loose in the neighborhood where it attacked a neighbor's dog.
If you have homeowner's insurance you should consider providing them the information about the potential claim and allow them to do their work to adjust or deny the claim. I suggest that you follow their suggestions.
Brian Chase,
BISNAR|CHASE, Personal Injury Attorneys.
http://www.BestAttorney.com
http://www.ProductDefectNews.com
800-956-0123.