When the company misleads, it should be held responsible. General contract law is that ambiguity in the terms of a contract is held against the person who created the contract. In this case, the company.
This lady isn't convincing enough about what she knew and didn't know. You don't know anything about the ambiguity of terms she signed nor what she said she was told, just like me. I'm suspicious because of the mother-daughter 'agreement'. Her explanation doesn't ring true. Your impulse is to go after the cell company outright because of your housemate's Sprint problem.