My question involves defamation in the state of: California
My family and I have been a resident of house for almost 20 years. My neighbor has recently accused my younger son of vandalizing their vehicle one early morning by throwing eggs. They claimed that this is not only the 1st time but the 2nd time it has happened and chose not to confront my son during the time it happened, but later on in the afternoon.
My neighbor also claimed that they have a witness who lives on the same street as us, that she clearly saw my son do this. They tried to get my son to wash the vehicle but my son denied everything and refused. The neighbors threatened to call the police and they did.
When the officers arrived, they told us that the neighbors DID NOT want to file a police report, but only wanted the cars washed. Since they claimed that she saw my son vandalize her vehicle, as well as the witness, my son was given the following options, either A) wash their car whether he DID commit the act or not, and this will be dropped, or B) fight this and he will be locked up for the night, and then there will be a police report.
I was frustrated and was positive my son did not commit the act as he was still sleeping in the house at that time. I did not want to see my son being locked up for the night for something he didnt do. He had no choice but to go clean the neighbors car in front of the whole neighborhood and other neighbors and officers. He never once admitted the accusations. He told the officers that he DID NOT do it but he will clean the car to drop it.
My wife and I are both really bothered by what happened and feel injustice for what happened. The whole neighborhood now looks at us differently. We have been living here for almost 20 years with no problems whereas the accusing neighbor has only been living at their house for maybe 6 years. The "witness" is a friend of the accusing neighbor as they do hang out at each others' house from time to time.
1 week later, I saw the accusing neighbor speak to OTHER neighbors about the situation while constantly pointing at my house during their conversation. They are obviously spreading the lies and false accusations of my son to other neighbors.
My wife and I are not looking to seek any legal damages, we just want this to stop and clear our names.
Are there any legal actions that we can take with the information that I have?
EDIT: If your wondering WHY my neighbors might have any vendetta towards my family in causing this false accusation is because 2 years ago, my youngest son(same one of being accused), and my neighbor's son were teasing each other as they rode their bikes on the street. One would shout "im going to shoot you" while holding a water gun, while the other would shout "shut up". This went back and forth and forth and I just considered it child play since no one actually got hurt or acted violently. They were just being boys. 1 day the neighbor's friend came over to my property while I was unloading my car from groceries telling me that my son has been picking on my neighbors child and if he doesn't stop, there will be trouble. He claims that he doesnt want trouble, but if nothing changes, there will be trouble. From that point on, there has been tension between us and we've stayed out of their way.

