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Did you get a release from the neighbor when you gave them money?
Was it signed by the neighbor?
You need their signature on a release. If they sign the release then they can not sue you for more money.
If you gsve them money without a signed release then they can sue, but you are entitled to a credit for whatever you have already paid.
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They still have to prove negligence on your part to make a claim, but if there was no release then they are entitled to make their case in court. You can demand they prove their claim in the court case.
I realize this is probably not the answer you were hoping to receive. Also, please remember that this is not necessarily a moral judgement on my part. As a professional, however, I am sometimes placed in the position of having to deliver news which is not favorable to a customer's legal position, but accurately reflects their position under the law. I hate it, but it happens and I only ask that you not penalize me with a bad or poor rating for having to deliver less than favorable news.
You will need to defend the suit. It is advisable to retain an attorney to appear for you in court. If the neighbor wants to sue then you can not stop them.
If they can prove you were negligent and the court finds you negligent then they can get a judgment against you for the damage from the fire. I think if you are sued you will need to retain local counsel to defend you. Also, do not pay any money to them unless they will release all claims.
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