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The first question is who owns the fence?
If it belongs to your MIL the neighbor can be held liable for the damage. She may also trim the trees that are encroaching on her property.
If the fence belongs to the neighbor it is theirs and do not need to do anything with it. Unless you contact the city. The city can put pressure on them to repair as it may be a code violation or failure to maintain property. Of course if the neighbor finds out that it was your MIL that reported them then relations will sour further.
I would first try and approach the neighbor neighborly first. See if you can come to some type of an agreement.
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