No, you do not have to pay. You only have to pay if you were at fault in some way--e.g. you had been negligent or unreasonably careless in how you secured your dog. But if your dog was in backyard and the neighbor's dog came under a fence to attack it, you did nothing wrong--you weren't letting your dog run around loose and unsupervised, for example. Not having done anything wrong, you should not be liable.
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