If there were hotels, there were no hotels. That is not a question of who pays.
But, if there were hotels, an 18-hour delay enroute will almost certainly be held to be a delay in a SCC case and by DOT.
Presuming the MIL got herself a hotel room and her travel insurance didn't cover it, I would submit the receipt to AS for reimbursement (not funny money) and make it politely but firmly clear that you will report it to DOT if not reimbursed within 10 days. Just make sure you follow through if she doesn't get her money.
If there was no room, this is all an academic issue.