[Aliantha]

I reckon if she's your sis-in-law you can go talk to her yourself. Who knows, it might even help the relationship if you get together and have a proper talk about it. Maybe then you'll understand her better and her you. From what i can tell, there's a shitload of grey area in your problem, and the only way you'll ever know what the deal is, is if you have a talk to her yourself.

My sis-in-law had an issue with me that I was blissfully unaware of until my brother told me about it. We had a talk and she explained her position and I explained mine and it turned out that neither of us was a bitch after all. We just had a misunderstanding.

I reckon you've got a good chance of a very similar outcome.