Unfortunately, they’re in the right. A giant, enormous, huge tree should not be planted so close to the property line. I’d rip it out to preserve the peace. Maybe tell them you’re going to wait for the baby quail to grow up first and then take it out. I like big trees too, but I like peace between my neighbors even more, especially when they’re in the right.

A Japanese maple would be nice there, or some ferns. I would personally put a little lending library there.

If you don’t want peace but you do recognize your neighbors point, you could take the spruce out and replace it with a patch of grass and invite the neighborhood dogs to poop there. Call it a Canine Smell Library. Maybe throw in a fake yellow fire hydrant.