How can I convince my DM that my diplomacy will work on his characters?

So I’m playing D&D 3.5e with a small group, and my character, a smooth talker whose main ability is diplomacy, was trying to convince one of the DM’s characters to come and help him with a quest to gain fame in the village. But when I rolled diplomacy he said it didn’t work on his characters because they weren’t NPCs.

I showed him that in the book that all characters played by the DM, even ones that are unique and part of the group, are considered NPCs, yet he refused to acknowledge this, claiming it was an insult to call characters he worked hard on NPCs. I have tried showing him that NPC is defined as Non-Player Character, but he still doesn’t acknowledge it, saying that his characters aren’t NPCs.

King, commoners, merchants, and shop keeps are NPCs, but characters he’s put a lot of work into and given their own sheets aren’t, in his perspective. There are GM-controlled characters who follow the group, but if a character is going to stick around (such as a scholar I hired) he makes a sheet for them and considers them a PC.

I’ve tried reasoning with him many times over this matter but nothing has worked. He’s used diplomacy on my characters multiple times, and refuses to acknowledge that he did. (Each time it was explicitly stated as diplomacy, I had to roll Sense Motive in response, and if I failed my character had to slowly start to agree with whatever the person who was attempting diplomacy was saying.)

Is there a way around this? Something else I can use besides trying to chat RP it? Or a way to convince him that it would work on his characters?

He is a co-DM, the other DM agrees with me, but we are barely ever able too get them both together in RP at the same time, due to different preferences of play (in person, and through chat). Besides the two DMs and myself there are two other players.