Before you all start jumping to conclusions consider a number of things:

*type of seat: i know that on some airlines have certain types of premium cabin seats that are not designed for people traveling with a lap child. could this be the case with the various types of envoy seats?
*international lap child fees/taxes - knowing that there is a charge for lap children on international flights, could there have been an issue with regards to this since it would change the fare by which the lap children price is figured from (since it would be going from 10% of a coach fare to 10% of an envoy fare due to the change in cabins)?
*are you not getting the full story from the niece about what was said, what occured, etc.? as we all know there are always multiple sides to the stories posted on here.