"At least you aren't using your desk as a bed today, Baldwin," Jack says as he walks into Michael's office. Michael is busy researching law, but allows Jack to spout off anyway. Jack warns that if you are going to take on Victor Newman, you have to know your stuff. Jack wants to be brought up to date on where they are right now. Michael calls Diane. I am coming right over, he tells her. Is it okay if I bring your friend, Jack Abbott? RYAN tells Nina that they cannot just sit around wringing their hands over Phillip; they have to do something before it is too late. Nina wonders why he is suddenly so panic-stricken. He tells her about the visit from Phillip's teacher. Nina is shocked to hear that Phillip is doing so poorly at school; he hasn't given her any indication that he is having problems. "Now do you understand why I am in such a panic?" Ryan asks. Just as Nina wonders what they can do, Phillip comes into the room. He wants to know what Ryan is doing there. Ryan tells him that he is worried about him. Phillip tells his father that he doesn't want to be there; he wants to be with "her," so go back to her. "We don't need you here," he says. "Just leave us alone; leave me alone!" Phillip runs back to his room. What are we going to do? Nina asks. Ryan says that he has an idea. He says that Jill planted the seed, but it is his decision to move back in so that he can be with Phillip full time. He says that it isn't about caving in to Phillip's wishes and it isn't reconciliation. Nina agrees and says she will make up the spare room while he goes home to pack. VERONICA is hard at work when the manager of the restaurant comes over and pinches her bottom. He wants her to go out with him tonight and have some fun, but she tells him that she is busy. He says that a lot of girls would see it as an opportunity to get ahead. Just then, a customer asks him for a cup of coffee. As he leaves, he tells Veronica to think about it; it is only a matter of time---tick, tick, tick.
NIKKI comes down the stairs and sees Miguel preparing to leave the house. She begins teasing him about going to see his ladylove, but Miguel doesn't see any humor. He asks if she has a problem with him going out with Veronica. Nikki says that she doesn't have a problem with that, but she does have a problem that he is still angry that they didn't give Veronica a job. Miguel says that after all that he has done over the years for this family, they would not want him to bring her to the ranch. Nikki replies that she will never understand why he can't see her side after all that happened. Miguel tells her that Veronica isn't Sara, so get over it!
TONY arrives at the ranch to visit Sharon and share some good news with her. Just then, Cassie sails out of the kitchen and into his arms. Hey, Peanut! Now I can tell both of you my good news. He has given Grace a ring; now they are officially engaged! Cassie is excited by the news. This is what she always wanted! Grace and Tony are perfect together. Now they can have their own baby. Sharon tells her that she has to run; Chuck just called before Tony arrived and he is ready for her. Who is Chuck? Tony asks. Excitedly, Cassie explains that Chuck is in charge of the stables and he is going to fit her for a saddle so she can ride this summer.
When Cassie is leaving for the stables, she kisses Sharon and tells her that she loves her. Tony guesses that things are going well for her and Cassie, but he is more interested in her reaction to his news. Sharon admits that she feels a little possessive about him since they were such good friends and confidants while she and Nick were separated. She admits that there were times when she was tempted and had to take care; he admits the same for her. But, she adds, our near miss was just that; however, he says that you never know about the future.
GRACE puts the ring on her finger just before Nick comes into her office. When she hands him some papers, she makes sure that he sees the ring. So you are engaged again, he remarks. To Tony again? She wonders if he isn't going to offer congratulations. Half-heartedly, he tells her that she has his congratulations if that is what she wants, but he has a hard time picturing her with someone like that guy---he can see her doing a lot better than Tony Viscardi! What are you talking about? Grace asks. Nick says that she interacts with a lot of sharp people on a daily basis. She never knows when she will meet someone here who will change her life. "Are you talking from experience?" Grace asks. Nick doesn't understand, so she points out that he has been saying that he married too young. Nick says that he and Sharon are a completely different story; she knows how much he loves Sharon. Grace says that Tony is a wonderful man who loves her with all his heart. They have tons of chemistry together. "Okay," Nick says before he walks out of the office. "I wish you and your mechanic all the best. See ya'." Left alone, Grace plays with her ring. "Why, Nick Newman, I think you are jealous. Mission accomplished!" She says with a smirk.
MIGUEL arrives at the restaurant and sneaks up behind Veronica. When he puts his hands on her, she swirls around ready to fight. He wonders if she is okay, but she says that it was just a hard day at work. The manager watches them from across the room. They sit to talk, but before long, the manager tells her to get up and wait on the tables.
DIANE admits Jack and Michael to the apartment, noting that they both arrived in one piece. Michael tells her that her friend has a huge chip on his shoulder, but Jack says that all he wants is for Diane to get what she deserves. "I am not sure that Baldwin packs the gear to pull this off!" Diane says that she believes in Michael. Michael says that he is an unknown quantity and that is the reason why he is the best attorney for Diane. He says that Jack could hire any number of high-powered attorneys, but they would have anywhere from 10 to 20 cases going at one time. Victor's attorneys would know exactly who they were and what their strategies would be. "I am an unknown quantity," he says. "They won't know what to expect from me. While they are picking themselves up off the floor and dusting their selves off, we will be out the door and they will never know what hit them?" Jack still doesn't looks satisfied. Michael tells Diane that when Victor arrives, she should just sit back and look confident; he will do all the talking. Jack tells him that he doesn't know Victor Newman and what he is capable of. It isn't good to get over-confident. Michael says the puts his confidence in the law. Jack decides he had better leave before Victor arrives.
JILL is standing by the window staring out at Phillip's grave when Katherine walks in. "Jill, do you think that by delving into the past you will recreate it? I pity you. You are still a young, attractive, vibrant woman; you can have a full life of you. Yet here you are living with a woman you detest, staring out at the grave of a man who has been dead for twenty years, obsessed over what could have been.
Later, Esther brings in some herbal tea. Jill says that Katherine still doesn't get it. It is because of her that she has never been happy except for those few days when Phillip loved her. She says that Phillip did love her but he came to a tragic death. Later, her own son could not live with what had been taken away from him and he died a tragic death. Katherine says that she tried to make that right; in the end, she gave him back the Chancellor name. Jill said it was too little too late. Katherine says that this subject is closed. "I know the pain you feel; I feel it too, but no good will result from opening this subject up." She admits that when she picked Phillip up from the airport, she was drunk, but she never meant to kill Phillip. Living was her punishment for surviving while Phillip died. She begs Jill to leave the past alone and let Phillip rest in peace. Jill says that sometimes the past becomes the present. She doesn't know what she is talking about, but when she does, Katherine will be the first to know. After Jill leaves the room, Katherine says, "You are up to something, Jill. What are you after?"
DIANE opens the door to Victor and invites him in. Victor tells her that she looks wonderful and he really means that. You wanted to talk? He asks. Michael enters the room and said that he would do all the talking. Who are you? Victor asks. I am Michael Baldwin, Diane's attorney. Pleased to meet you, sir. Victor wants to know what is going on here and Diane says that it is best to let her attorney explain. Michael says that he has spent a lot of time with Diane, listening to her account of this whole bizarre situation. "Diane was a happily married woman who did nothing wrong. Suddenly she is totally devastated and all her happiness turns to unhappiness. Can you even imagine what that must have been like for her? Do you even care?"
"Don't even suggest that I did not care for Diane; I still do. But remember this, my marriage to Diane was short-lived, but I mean to compensate her for that." Michael asks, "You are going to compensate her for all the trust he had in you---for all the love she had? This wasn't some kind of business arrangement. You can't come in and compensate someone after you have destroyed their life. We regard this offer as totally unexceptable."
Slowly Victor walks up to Michael and says, "Listen to me, you punk. I know what you are up to. You heard the name Newman and saw dollar signs in your eyes. You thought you would take advantage of this situation for your personal promotion and financial gain." This has nothing to do with me, Michael says. It is about getting Diane what she deserves. Don't take me for a fool! Victor says. "I would never take you for a fool, sir. But if you are honest, you will acknowledge that Diane went into this marriage thinking that it was going to be a long and prosperous relationship. That is, until you totally ripped her world apart. However, and here is the capper, Diane is legally still very much Mrs. Victor Newman! How about that one?"