child dependant and tax exemption

What is the name of your state? Texas

My husband and his ex-wife were divorced in 1988. The divorce decree stipulates the ex-wife the custodial parent and the right to claim their daughter for tax purposes until the daughter is 18. At 16 the daughter moved in with us permanently (she is now 18). My husband told his ex-wife we intended to claim the daughter on our 2002 taxes because she lived with us full time, we provided 100% of her support and we are paying 100% of college expenses. The ex-wife agreed. I recently submitted our 2002 tax information and it was rejected because the ex-wife and her husband claimed the daughter. Who has the legal right to take the exemption?
Thanks.

If the decree says 'the mother', they do, unless you go to court & have a judge change the decree. If it says 'the custodial parent', you might be able to convince the IRS to give you the exemption, based on you having sole physical custody.