Any lawyers in the house?

Long-time member here, but I'm posting this here anonymously because you can never be too paranoid.

The other day, my 11-mo puppy (leashed and by my side) jumped up and nipped my neighbor's sweater as we were walking towards each other in the hall. The neighbor yelled at my dog, I apologized, she continued to walk off down the hall, and I went back into my apt.

Later that night, an officer from the humane society came to my apt and told me that apparently my dog had actually bitten my neighbor's arm and broken the skin. The officer put the dog on 10-day house quarantine (he's up-to-date on shots), and I immediately went over to my neighbor to apologize again and offer to pay for tetanus shot and doctor's visit. I also saw the "bite" and it was more like one of his teeth had scraped her skin; no stitches needed.

The next day, her daughter comes knocking on my door, and is demanding that I reimburse them a laundry list of medical expenses. She threatened to take me to small claims court if I refused. She also said that she had consulted some legal coworkers and they told her that she had a "big case" and could get "big money," which I saw as a thinly veiled attempt at intimidation.

Her claims included:

• Her mother was a diabetic and the incident caused her blood sugar to rise.
• Her mother suffers from hypertension and the incident caused her blood pressure to rise.
• The above two required new/changed medications. (?? I'm not a doctor, but this doesn't make sense to me.)
• Her mother was now severely traumatized from the incident and may require psychiatric care.
• Her mother could not go to work due to the fear of dogs now. (Our building has lots of dogs, and she claims her mother is too scared to walk down the hall anymore.)

I live in CA, where it's strict liability for dog bites. I know that I'm responsible for my dog's actions, and I'm more than willing to pay for reasonable and relevant medical costs relating to the incident.

However, I feel like this neighbor is trying to take advantage of me and milk me for as much as they can. She even asked me if I had renters insurance, which to me says that they're seeing big $$$ in their eyes. I suspect that the daugher is trying to get me to pay for some of her mother's regular medical expenses.

Given the circumstances, does this neighbor have a legitimate claim to be reimbursed for all those expenses? To me, these claims seem outrageously disproportionate to the actual incident. Even the Humane Society officer felt this was a minor incident. Will an objective judge see the same, or am I on the hook due to the strict liability statute?

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(TL;DR short version: My puppy jumped up and nipped my neighbor; broke skin, no stitches, just a scrape. I offered to pay for doctor's visit. Neighbor demanded that I pay for medications to treat her diabetes + hypertension, claimed severe emotional trauma, and is asking me to pay for psychiatric care. Is this reasonable in the eyes of the law?)