Lines or no lines, the city is to be held responsible if neither one of you had a stop sign. Once someone found out about the accident they probably hurried to get the sign back up to prevent a lawsuit.
Unfortunately that's how municipality government usually works, nothing pertaining to safety gets acknowledged until an accident occurs.
I'd definitely put this one on the municipality. It wasn't the woman's fault if there wasn't a stop sign there.
In the town where I work, we even go so far as cutting back limbs and other foliage near signs for sight distance issues. If we didn't, we'd get sued.