@TheCM
Some people are just like that. You could stoop to her level and bait her into dong something horrible because she has to do it first or you can choose to ignore the behavior and know she has a problem. It's not you. Personally, i would choose the latter. Be thankful you aren't that way and use the time to do something fun with your kids. Also, by ignoring her, you are teaching the kids a valuable lesson about like. Change what you can and ignore what you can't.

Best wishes in dealing with her.