Papillons are sneaky little devils, the worst thing you can do is to underestimate their intelligence and capability of thinking. Obviously, he knows he can get away with murder with your stepmom, and that is why he yaps all the time when he is with her. If you are firmer or don't reinforce his yapping, that would explain why he doesn't bark when he's around you.
I would suggest learning more about the Papillon breed, so you can get an idea of what you're dealing with. They are extremely intelligent and will get away with whatever they can. My feeling is that the reason this little dog is misbehaving so much is because he's had no discipline from your step-mom. It doesn't sound like anyone has taken the time to train him, and he's likely just misbehaving out of boredom. Papillons are energetic little dogs and when they're bored, they're going to cause trouble. When she's talking to people with yappy dogs, my friend always says "a busy dog can't yap" and she is so right. If you keep his attention on you or something else, he won't be able to bark.
But.... since you seem to despise him, I can't be too sure that you will even get past the "pseudo-love" part of it. he most likely will never fall for it.
My Papillon can read people's intentions like a book. If they aren't wild about him, he takes the same approach to them. If I want to give him a bath, and don't even say anything when I go to pick him up (NOTHING is different than when I just pick him up for a cuddle) he hangs his head and grumbles. I imagine it is because I have reservations, something is very subtly different about me or my body language that signals to him that I'm not just going to pick him up and give him a smooch. If he can read those differences, I have NO doubt that he could tell the difference between masked hatred and actual fondness. And, to be perfectly honest, if you hate the dog so much you should stay away from it until you can have an open mind about training it. Trying to train it now will only lead to your immense frustration and a very fearful dog.
If you ever do need help understanding the dog I'd be happy to assist you, as my Pap sounds a bit similar. If I just let him run amok, he'd be yapping, biting and soiling the house all day long. But with fair, consistent and firm leadership, he is a really cool little dog and a lot of fun to be around.
Edit: Didn't see Zoom's last post, but I am the one with the Papillon that is still not reliably house trained. It is not because my dog is dumb, but rather because he is so tiny and the house is so huge. If he makes a mistake in the house, it's my fault for not taking him out sooner and preventing it. Blaming the dog does nothing.