i pet sit and lost the dog but owner..?

ok heres my situation. I'm a pet sitter and have been doing it for quite sometime, I have never lost a dog until last night. I was sleeping due to a severe migraine and vommitting and the dog went missing around 7:30 pm of last night. My sister was getting ready to leave with her boyfriend and shut the door, as she was shutting the door the poodle im pet sitting for runs out from my porch into the bushes. Next thing you know the poodle is running around my whole neighborhood and almost all the kids from my neighborhood are chasing him but no luck. I looked for him today and contacted the owner while she was away. She is taking care of the dog because the original owner of the dog has dimensia and is in a home. The poodle does have dog tags of where he belongs but the address on the tag is where the mother who has dimensia used to live. So I contacted the police, filed reports, called animal friends, animal control, etc and filed reports. I even was offering people a reward to pay for out of my pocket if the dog is found. Now, this is where it gets weird. The new owners husband came over to help look but just drove around alittle and left. He never called me nor did she. I called them and said I filed reports, she cuts me off and says the dogs been found. NOTE: SHE NEVER CALLED ME I HAD TO CALL HER AND ASK IF DOG HAS BEEN FOUND. So she just said I'll have to call you back but the police found him and my husband will pick him up. Note: she never told me he'd be over my home to pick the dogs food, toys, blankets, etc. So I call the police department where she said the dog was found or taken to. They said there was no poodle found here unless it wasn't reported but he said its rare for that not to happen. So I call her and say I called the police and they never found the dog. she never answered me nor her husband. I left them messages saying to call me back asap. My question is…do you think they will try to sue me because I lost the dog? I mean she filled my survey out saying hes not hyper, hes calm, and etc. We didn't make any contract in writing saying I'm not responsible if I lose him or anything but I mean why else would she say she found him if the police said nobody brought a dog in or picked it up there?!?! She's also pushing me off the phone alot and same with her husband. I mean I don't understand I have never lost a dog like this and worked for kennels and I mean they sometimes lose dogs. I'm worried she's going to go to a small claims court and file for neglience and then get money off me. I dont have pet insurance b/c I need to find a place that covers me and the clients pets. Also, the dogs leash is very big like a collie's leash. I think its a little weird for a poodle who weighs only 15 pounds to be wearing that. I don't understand this poodle was fine and next thing you know hes gone! Also, her sister works for a groom shop and was the one who referred me to her. I just hope she doesnt tell her and make me look bad b/c i have a good reputation for pet sitting and don't want her groom shop or her to ruin me over this. SOMEONE HELP ME! I've been sick over trying to find this dog, I barely slept or ate…

Keep notes of everything that you have done in this case. Note the time and content of phone calls with the owner and how the conversation ended. Also note who you called to report the missing dog and when you reported it. If she does sue in small claims court you need to show that you were not negligent and the owner refused to work with you to recover the dog. The courts consider dogs to be personal property and only award the winners of suits the replacement cost of the dog. If this dog is from champion stock the owners will be required to prove it. otherwise the court will assume it to be pet quality and you will have to buy them a new dog. If I was in your shoes I would get a list of prices from breeders of pet quality dogs to bring to court. The judge will use that to determine the value of the dog.
Your story sounds like the new owners don't want to find the dog. There isn't much you can do but wait for the owners to contact you with any demands. Keep looking for the dog and keep records of your efforts. Look in the old owners neighborhood. The dog might be trying to return home.