To be fair, we don't know if this is the truth. Has Wag responded with their side of the story?
Dog died. Wag wanted them to sign an NDA or Wag wouldn't pay for anything.
The only correct response from Wag was to pay everything (again, we're talking about a couple of thousand maximum) no questions asked and apologize profusely.
Even from a purely soulless financial standpoint, that's the only correct response.