I am with tuckervill - I wouldn't settle but then I am not in a financial position to eat $500. small claims court is pretty painless and they can go to their insurance company - yes their rates will go up for a couple of years but that is the price they pay for owning a dog that runs loose
On a related note I learned the VERY hard way to never go directly to the dogs owners to work out the problem. I was dealing w/ my next door neighbors who never had shelter for their lab even in -25 weather, the dog would sleep on the ice and snow, also it would bark all night.
As things are normally done in this neck of the woods I tried talking to the owners first (who are from out of state) on numerous occasions with no results.
I finally told them I had called the Humane Society and would be calling the police and animal control in the future. In response they filed a tresspassing notice on me and also a disorderly conduct (claimed I came barging in their house
) - they lied all the way through it and no one EVER asked my side - it finally got thrown out - after I had been arrested, posted bail, and spent $500 on a lawyer.
Luckily they have rid themselves of the dog
So moral of the story is start with the police
It's about the journey and being in the moment, not about the destination