"Look sweetie, I got you a chainsaw for your birthday!"
"Oh, it's wonderful! But, I'm mad at you, so I'm going to cut off my arm and then sue you for damages because you were the one who gave me the instrument with which to do so."
This is disgusting. I hope she has to pay for that baby all by herself, especially if they can produce evidence that she used medical equipment to inseminate herself, or store the sperm. Wouldn't have been necessary though, she could have done it by hand that very night, though taking it to the lab at work would have been much more reliable.
I'm all for women's rights, and making daddy pay 50/50 for a mistake, but if you intentionally mislead someone into thinking you can't get pregnant, whether by telling them you're on birth control, refusing to engage in actions that can result in pregnancy, or even saying you're sterile, that's most definitely fraud. (I agree about the theft part, they just need to extend the gift bit to the kid she made from it.)