LOL, no car phone or alternate reality needed--nor did SK go off to make a cup of coffee and forget. 
Go back and read the entire passage again. Eddie was referring to the woman in the picture that Dev recovered: his previous wife, aka the "miserable scolding backbiting ****". In the middle of the conversation, Eddie gets sidetracked and talks about his daughter and how she was hit by a car, "like a dog in the street." It wasn't the driver that he said was talking-- it was (again) "that miserable ****"-- his wife. Eddie blamed the little girl's death on her because she was "yakking on the phone instead of watching her." I think the wording makes it pretty clear that it wasn't the driver who was talking on the phone. Which makes sense, given that it took place in the 50's.
Go back and read the entire passage again. Eddie was referring to the woman in the picture that Dev recovered: his previous wife, aka the "miserable scolding backbiting ****". In the middle of the conversation, Eddie gets sidetracked and talks about his daughter and how she was hit by a car, "like a dog in the street." It wasn't the driver that he said was talking-- it was (again) "that miserable ****"-- his wife. Eddie blamed the little girl's death on her because she was "yakking on the phone instead of watching her." I think the wording makes it pretty clear that it wasn't the driver who was talking on the phone. Which makes sense, given that it took place in the 50's.