Who is wrong and who is right and what should I do?

Well my mother has had a dog named moonshine for well over a year and has spoiled him to death. He is the type of dog that is temper mental and doesn't like children. He use to be totally against my niece ashley and has bit her twice already and recently he has gotten use to her and they try to keep them away from each other, but yesterday he ended up biting her on the chin and her father got angry but her mother did nothing to watch Ashley or even get on to her for playing too close to Mooshine and playing too loudly. Well Ashley's dad came and was going to hurt the dog and my mother and father steped in the way and said some things and now he has forbidden my mother from ever seeing her granddaughter again. Not at her house or at theirs. Everyone says that my mother chooses her dog over everyone else but the fact is that when everyone leaves at night or I leave on the weekend he is all that she has left. I honestly don't know what to do about the situation. Everyone is at odds with each other, my mother, me, and my father against my sister, and my brother in law. What should we do to resolve this, and who is really in the wrong for it?