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The police may not get involved in a civil matter. IT depends on their view as to whether there is criminality. Police departments differ.
On the civil side.......you cannot claim full ownership just because you pay off the loan in full without the consent of the co-owner. If there were a lawsuit, the employer would clearly win.
...........it has nothing to do with the job. The other "person" is a co-owner. Suppose you were a co-owner with a friend and he/she paid off the loan and cut you out? The same case is here......especially (but not limited to) cases where the co-owner cut off contributed money for the purchase. If there was a consensual buy out of one's share....different result. THis is well established contract law.
If she agreed to the buyout and to sign over her 1/2 share....let her sue and defend with the agreement. It will be a she said/she said case without a writing. If you sue...it will be costly.
Are you saying I should let them file a lawsuit first and then hire someone to defend my daughter, will that be less costly for us?
I would take that position to start. Maybe she won't sue your daughter at all, and reconsider signing over title. If not...then you have to start a suit, but it is a losing proposition. Sorry. Co-ownership gives the other woman rights despite your paying off the loan.........it's apples and oranges as they say.