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Depending on what state you live in, if a dog even rips an article of clothing of someone unlawfully in your yard, neither you nor your dog are liable. There should be local ordinances that you can look up online regarding such laws.
I would not say she was 'defending' your property, since she was probably merely greeting the stranger. In court, or any public appearance, don't use words that imply your dog is possibly dangerous. Stay away from defending, guarding, etc.
Good luck. Find yourself a good lawyer. There's no reason your dog should be deemed vicious. Your dog was not acting in an aggressive manner. It was not being a public nuisance. This woman was on your property, and she bore the risk of trespassing unlawfully on private property.
I hope all goes well. Please keep us informed.