kevin rivera and amber diaz started arguing after their daughter 's party .
miss diaz 's grandfather , nicolas diaz , 81 , allegedly intervened with knife .
he ` stabbed mr rivera in the chest ' ; fled the scene after sunday 's killing .
victim rushed to hospital with stab wound , where he was declared dead .
diaz turned himself in to police in brooklyn , new york , monday morning .
has been charged with manslaughter , while baby girl is now in custody .