Yup, this MIL of yours is a huge part of why things are the way they are...
I don't know about telling her you don't respect her... I would take the high road and just tell her "this is the way it is" and exit the conversation
Don't hang up on her, this will antagonize your wife.. your wife does NOT want to hear that you are being rude to her mother.. that's not gonig to help you...
I know MIL is rude, but you just have to stay out of that... you don't have to cooperate or HELP her, just control yourself so you aren't rude.. if she complains just nod and offer an "I'm sorry you feel that way" and keep on with your business...
"I'm sorry you feel that way" is a good catch all comment to any of her complaints... Then just tell her you have another call on the line and tell her good bye
Good call on not telling your wife the info she wants.. don't give her ANY info... keep her on the defensive... start showing up at events her and OM are at to throw them off...
You have the idea... just make this nonsense affair of hers a miserable headache... they WILL Fight if you keep giving them something to fight about
