The son-in-law needs to select that someone else can claim his spouse. This is asked in the interview questions in the "My Info" section.
TurboTax allowed it because you told Turbotax that she and her husband was allowing you. to claim her.
The son-in-law needs to amend his return. Have him pay close attention to the part where the program asks if someone else can claim the spouse.
He will need to mail his 1040X and you will need to mail your return claiming your daughter.
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