Legal Question in Personal Injury in Georgia

Dog Bite/Personal Injury

I am in Fulton County Georgia. Someone alleges that my dog bit their son on his way home from school. They are now telling me that I owe them $$ to replace a cell phone and iPod that they say were dammaged. I have a copy of the police report that was filed and there was no mention of these items and the wound was classified as superficial and minor. As far as I know, there is no proof that these are dammaged and if they are, that they were dammaged because of the bite. Through certified letters, they have stated that they are not seeking compensation for medical costs, pain & suffering, or lost time from work, only for the item they say were dammaged. I have offered to pay for their repair, but they are seeking $$ for a replacement because they are scratched. After much coorispondance back and forth (all through certified mail) they have now demanded payment for these items or there will be litigation and will seek $$ for lost time, legal fees, psycholigical dammage, medical costs, as well as replacement of these items. It is not a lot of $$, but I do not feel that I am responsible for full replacement. Should I just pay and get it over with, or should I let them persue legal action. Would they have a case?

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