How to deal with difficult neighbor/tween relationship issues

Hi All. Please be kind as I’ve posted on reddit before and people were kind of nasty. I’m hoping this sub is better.I have a really tight knit culdesac/street. Everyone hangs out. Everyone’s kids play. We have block parties etc. We’ve been here for about 4 years and the last year or so, a specific neighbor and her tween daughter have created so much drama I’m not sure how to handle it.For backstory, two of my neighbors are related. So their children are cousins. This neighbor, I’ll call her Lucy, has a daughter named (fake name) Suzy. Suzy is closer to my daughter’s age but her cousin next door is a couple of years younger. Despite that, Suzy has been close with her cousin and my daughter plays with both of them. The two related neighbors group up together and are close abs best friends. Lucy had a rough child hood and her cousins family raised her.We have had issues before with Suzy lying. She tells my daughter one thing or is nasty to my daughter (telling other kids not to play with her). But then after a few weeks, she’s obsessed with my daughter and only wants to play with her. A few times she’s told my daughter something concerning and when i was talking to Lucy and mentioned it Lucy is in total denial. Her daughter is perfect. She’d never say that. My daughter must be lying, she says. Her next door neighbor cousin, is not this way and her kids aren’t either but they also are more of the type to ignore and avoid confrontation.My short term fix for this is to encourage my daughter to have play dates with school friends but this still doesn’t always work because the neighbors constantly get together and the kids are all expected to play. On winter breaks other neighbors bug me to let my other kids play and my tween daughter either is welcomed by Suzy and the girls, or sits at home left out. My daughter has expressed that she feels Lucy doesn’t like her and to be honest, i can see why. Lucy often acts resentful when Suzy wants to be with my daughter because Lucy kind of pushes Suzy to be besties with her cousin. I’m not sure why. Possibly because Lucy is best friends with the Mom who is also her cousin by marriage. My daughter is a good kid. Polite, responsible, etc. So I can only think that maybe Lucy is resentful of the times my daughter has honestly spoken to me about the issues she’s had previously with Suzy.This Christmas Eve i got a text from Lucy very upset. Her daughter, Suzy, told her she got to move our Elf with my daughter when they were playing here. For reference, our tweens are almost 12. My daughter hasn’t believed in Santa since last year so she’s helped with the elf and Santa and it has been a lot of fun. Suzy told my daughter last year that she didn’t believe but was scared to tell her Mom because her Mom gets upset and cries when she mentioned possibly not believing anymore. And when i told Lucy last year she said my daughter was lying and Suzy would never say that. Anyway, i was an idiot and thought maybe this year her daughter finally just didn’t believe since she will nearly be a teen this summer.Lucy was irate. I told her i felt awful and the girls approached me together all excited to move the elf after my younger two were sleeping. I let her because, i honestly didn’t think tweens/near teens still believed and they were so happy and excited. Lucy said she had been crying all day and basically implied that my daughter ruined her Christmas Eve. To top it off, Suzy lied and told her Mom she didn’t want to move the elf or touch it. Lied and said she still believes. I told Lucy i heard her daughter say she didn’t believe. I saw her daughter touch the elf HAPPILY and create a fun scenario for the younger two with my daughter. Nope. Lucy doesn’t believe it. She’s so sad Christmas is ruined.So far, I’ve essentially avoided her. I apologized but other than that, i don’t know what to do. This keeps happening! And i want to continue being in our tight knit community but wonder if this is bad for my tween??What do i do? Try and talk it out with Lucy or ignore her and try to distance myself? via /r/Parenting http://ift.tt/2pEx1Ig