Quote Originally Posted by Cody View Post
I think that Terry is the first one to add the comma before the quote. In grade school I was taught to use the comma as shown above.
You were taught to use the comma because normally the quotation is a direct object and therefore part of the same sentence. For example:

RIGHT - He said, "My name is Bob."
WRONG - He said. "My name is Bob."

In this case the sentence beginning with "he said" is only complete with the quotation, so you link the two with a comma. The same rule applies if the positions are inverted:

RIGHT - "My name is Bob," he said.
WRONG - "My name is Bob." He said.

However, in the example you gave, the description of the brother laughing is complete without the quotation. The "he said" part is implied. Consider this:

RIGHT - Bill punched the numbers into his computer. "Yep, that's correct," he said.
ALSO RIGHT - Bill punched the numbers into his computer. "Yep, that's correct."
WRONG - Bill punched the numbers into his computer, "Yep, that's correct."

RIGHT - Joe replied, "Oh yeah? Watch me." He climbed onto the diving board and jumped.
ALSO RIGHT - "Oh yeah? Watch me." Joe climbed onto the diving board and jumped.
WRONG - "Oh yeah? Watch me," Joe climbed onto the diving board and jumped.

You see how in each example, the two sentences aren't linked in any way? Because of that, it's not correct to use a comma. Similarly, there's no direct grammatical correlation between the dialogue and non-dialogue parts in your sentence, so it's wrong to use the comma.