Dr. Thompson's Office:
Diane goes to see Dr. Thompson. They discuss her new life in Milan but Diane declines to comment on the current circumstances with Kyle's biological father. Dr. Thompson is paged and leaves the office to see a patient. Diane uses this time to sneak a peek at Phyllis' file and finds out that Phyllis cannot have children. She realizes that Jack's paternity of Kyle really does change everything for all involved.
Phyllis comes to Jack's office content in the assurance that Diane should be well on her way to Milan by now. Phyllis tells Jack that they can't go on like they have been; something has to change. She tells Jack that she is considering the merit of her and Jack raising Kyle together.
Victor is still at Julia's. He has decided to help concerning the take-over of her company. After some reminiscing, Julia flashes back to a pleasant Christmas memory from years gone by (circa 1980). Julia comments that she doesn't think Victor is the kind of person that could work side by side with his wife in business. Victor decides that he will have to stay in town to deal with Julia's business matter. He calls Nikki to cancel their dinner plans.
The Jabot Boardroom:
Ashley tells Brad about Jack's paternity of Diane's child. Ashley also expresses her concern about Phyllis. Ashley threatens to help Phyllis get rid of Diane, but Brad cautions her to slow down before rushing to action. Later Jack and Phyllis come in and announce that they have worked things out. Phyllis tells Ashley not to be concerned at her earlier actions, as she was simply feeling strained.
Nick and Cassie attend a father-daughter dance at school. Cassie's friends ask Nick if he will dance with them too. After the dance, Cassie indicates that it is mommy's fault that daddy can't come home. Nick tells Cassie that it isn't Sharon's fault and asks her to be nicer to her mom.
Raul comes to the coffee shop looking for Brittany. Diego arrives late to work. When he arrives his forehead is bleeding. Diego informs Sharon and Raul that there was a scuffle at the rooming house where he lives, and that he had to do something. Sharon insists that he go to the emergency room. Raul goes along. When they return later, Diego has one stitch. Sharon comments that Diego's living arrangements seem a little sketchy. Diego replies that he doesn't have many options. Later over coffee, Raul tells Diego that it is time for him to leave Genoa City. At another table, Sharon's mom mentions that they are all lucky to have Diego there.
Katherine visits Nikki at the ranch. She tells Nikki that she is distracted by Mackenzie's heartache over her break-up with Billy. Nikki tells Katherine of the growing relationship between her and Victor, and of the dinner planned that evening at the Private Dining Room. Subsequently, Victor calls and cancels dinner saying that he has to go out of town on business, and that he will call when he gets back. Nikki is frustrated both at Victor's cancellation and of her own growing feelings for him. Katherine assures her that Victor is a hands-on businessman, that this is to be expected, and that his personally calling to cancel dinner is a good sign that things are well.
Neil and Isaac discuss how when the search helicopters return they will have covered every possible location where Malcolm could be. Alex overhears and blasts them for giving up. She won't, ever! Isaac assures Neil that what happened to Malcolm was an accident. Neil understands why she needs to lash out. Isaac mentions that before the accident Isaac asked about the injuries to Malcolm's hands. Alex thinks he's trying t look for a reason other than him for Malcolm's death. Nothing else could have set him off other than Neil. She flashes back to her last talk with Mal and realizes that they did have an argument about Neil. She didn't think much of it then but sees that Mal was upset that she wasn't more frustrated regarding her situation with Neil.
Brad and Ashley discuss Phyllis and Jack's current problems. They bump into Nate and Olivia. Nate is looking forward to Malcolm's homecoming tomorrow. Olivia mentions how she hasn't heard from Malcolm in weeks. She's tried several times to contact Mal but to no avail. They haven't even heard from Neil. Ash and Brad think that's strange. Ash encourages her to try again.
Nikki, depressed over her canceled dinner plans with Vic does some work. Victoria returns home. Nikki is happy to see her and asks about Malcolm. They still haven't found him and worries that Neil will blame himself for his brother's death. Victoria refuses to give up hope. She's not sure how much longer she can go without telling Olivia and Nate. Nikki thinks it's up to Neil to make that call. Nikki tells Victoria not to get her hopes up too high about her and her father reuniting too much. They've both changed a lot. After everything Victoria went through this past year she realized that they all must reevaluate their priorities. Nikki understands but doesn't' want to get ahead of herself.
Vic makes reservations at a hotel. Julia returns with the papers Vic asked for. He asks her to dinner and she gratefully accepts. She jokes that he isn't as controlling as he was when they were married. She was so young and he was older and set in his ways. She asks about his kids and she expresses her sympathy over Ryan's death and Nick's marital problems. She asks about his love life. She asks about Nikki and how much she liked her. When asked about anyone close to him now he remains quiet. Later she thanks him for his surprise visit and plans to see him tomorrow. She almost asks him something but changes her mind. Afterwards Vic stares at the ring he bought for Nikki.
Raul suggests to his brother to leave town. Raul thinks Diego has stayed in town for him and doesn't want his brother staying in a risky part of town just to keep an eye on him. Diego assures him that his injury was a fluke. He has wondered if he should stay in town as he does have some loose ends in California. He reveals to Raul that he and his girlfriend broke up. She dumped him because he wasn't ready to commit after he lost his job. He's still hung up on her. Raul asks if Diego is ready to settle down now. He encourages his big brother to make the first move and contact her. Diego calls looking for Carol but when a guy answers he just hangs up.
Cassie and Nick return after the dance. They had a great time. Cassie asks to be alone with her mom. She apologizes to Sharon for being mean to her. She won't blame Sharon anymore. Cassie explains that Nick explained everything to her. Sharon later thanks Nick for clearing things up with Cassie. It means a lot to her. Later Cassie suggests that they should hire Diego to replace their ranch hand that's leaving. Nick will clear it with Nikki but thinks it's a good idea Nick runs it by Diego. He's very interested. Raul is happy his brother might be staying after all.
Paul & Isabella's:
Paul returns home with flowers to apologize for not being at the doctor's office as planned. She shows him the sonogram of their baby. He's very touched.
In Kenya, Alex accused Neil and Isaac of giving up hope and vowed she would not leave Africa until Malcolm was found. They assured her that every square inch between the camp and the falls had been covered, and Neil told her there would be no more helicopter searches. Alex asked Neil if Newman Enterprises would continue to help her, insisting that Malcolm could have gotten out of the water but was too injured to reach camp. Neil finally admitted the truth to her, telling her that as the bridge came down, Isaac saw a large wooden beam strike Malcolm in the head.
At Crimson Lights, Olivia tried to call Neil again, leaving a message on his voice mail. She expressed her frustration about Malcolm's silence to Michael Baldwin. She said that Nate was so disappointed about not hearing from his father that he'd convinced himself Malcolm was coming home that day. When Michael assured her that Malcolm was a loving father and would probably come through at the "eleventh hour," she said she hoped so, or Nate would be crushed. She told him that Malcolm's silence reminded her of when he went to see Dru in Europe, and though she would not try to come between Malcolm and her son again, it would break her heart if Malcolm hurt Nate as he did then.
In Lake Forest, Victor and Julia met with Maxwell Hollister, who refused Victor's offer to buy all the stock in Julia's company with an added ten percent. Hollister said the stock was not for sale. Before Hollister could leave, Victor told him the consequences of his refusal to do business. Victor promised to create a similar business division at Newman Enterprises, put Julia in charge of it, attack Hollister's company at its weak spots, and run him out of business. Thwarted, Hollister signed Victor's purchase agreement and left. Julia thanked Victor for saving the company that meant so much to her. When Victor told her he needed to get back to Genoa City, she asked, "So soon?" and they embraced.
After a morning jog, Victoria stopped by Sharon's house to see her. She explained Malcolm's accident and was assured of Sharon's silence until Neil had more news. They then discussed Sharon and Nick's situation. Victoria told Sharon the entire family supported them and she would not interfere again, understanding that they needed to work out their problems on their own. Sharon thanked her and told her things were better after Nick made Cassie see that the separation wasn't all Sharon's fault. When Victoria emphasized how Nick's actions proved he was a good person, Sharon told her she knew that and had never stopped loving Nick in spite of the difficulties they were having. She told Victoria that the loss of her child was under different circumstances than Victoria had experienced, and Sharon had to deal with things her own way.
After Nikki told Nick about the situation with Malcolm, the two of them worried about the toll his accident would take on Victoria so soon after Ryan's death. Nikki told Nick she'd be keeping a close eye on Victoria but said she was more concerned about his and Sharon's problems. Nick then told his mother how Diego had helped him and Sharon resolve the misunderstanding with Cassie. When Nikki heard about Diego's help, she agreed to interview Diego for the position in the Newman stables. After talking to Diego and assessing his knowledge of horses, Nikki decided to give Diego the job and let him live in the tack house. As Nick gave Diego a tour of his new home, Victoria came in and introduced herself. After Diego left to work his shift at Crimson Lights, Victoria commented that he must be very industrious to have two jobs. Nick told her Diego could handle it. Victoria expressed reservations about whether Diego should be working at the Newman ranch.
Lauren was preparing for a breakfast meeting at Gina's when Mary Williams unexpectedly joined her. Mary expressed her misgivings about Paul's relationship with Isabella, saying that they both knew what kind of woman Isabella was, and insisting Paul was only with her because she was carrying his child. Mary said that since Lauren was so self-centered and calculating that she must also think Paul's relationship with Isabella was doomed, or Lauren wouldn't have been pursuing him. Lauren laughed and said she never thought she'd see the day when Mary would dislike another woman so much that she'd rather see Paul with Lauren. She then asked Mary to leave so she could prepare for her meeting.
Paul surprised Isabella with breakfast, then told her he would like to attend birthing classes with her. She seemed reluctant at first, admitting that being pregnant, lying on the floor in a leotard, and breathing heavily was not a flattering way for him to see her. He said that didn't matter to him because she was carrying his child. He told her he only wanted a happy, healthy baby. Isabella wondered if his mother would ever accept her as part of Paul's life and whether Mary would be a good grandmother. Paul told her that he believed Mary would come around, but he warned Isabella not to push her. They were interrupted by a phone call from Mary asking Isabella to join her for lunch at Mary's house.
Victor and Julia talked about the past. He wondered what her thoughts were of their time together. She confirmed the fact that he was domineering and always in control of any relationship that he entered. They hugged and even kissed -- then he bid her goodbye. She seemed sad to see him leave.
Alex and Neil entered the tent, Alex screaming that she didn't believe that a bridge had killed Malcolm -- she couldn't accept the possibility. Neil comforted her and she eventually gave in to the truth. They agreed that the search should be ended and family should be told. They made plans to go back to America. First, Alex wanted to be alone for a minute. She lay down on the bed and remembered her last loving time with Malcolm. Tears filled her eyes. . . .
Victoria made no bones about her skepticism about Diego and his motives in taking a job at the stables. Knowing what she did about his involvement in Sharon and Nick's marriage, she just wasn't totally trusting yet. She went to the coffee house and called Diego on the carpet about it too.
Lauren paid Paul a visit and was a little disappointed to get the "I hope that we can always be friends" speech. She got over it though, and asked Paul if his mom knew about his living arrangements with Isabella. He insisted that she did know, and Lauren was very surprised given Mary's behavior earlier. She shared Mary's attempt to get Lauren to help her scheme against Isabella and told Paul that she told Mary that she was on her own in that department. Lauren had a meeting to attend, so Paul checked on his schedule and took off.
At Mary's house, Isabella offered a cake that she baked for dessert. Mary admitted that she didn't invite her there for lunch -- she had an idea for Isabella. A home for unwed mothers would be a great environment for her and her baby. Isabella didn't take it very well and argued that Paul would never let her go to a place like that. Mary was sure that Paul would not stick around with a woman like her for long at all. As Isabella headed for the door, Paul walked in wondering if he were too late for lunch. . .
Nikki and Katherine talked about making dinner plans for Victor. They decided on an exciting menu and atmosphere that would lead to who knows what. Nikki brought an intriguing invitation to put on Victor's desk at the office.
Nikki was happy to find Victor in his office, saying she could now issue her dinner invitation to him in person. Having made all the arrangements for a wonderful evening for the two of them aboard Katherine's yacht, she was disappointed when Victor seemed distracted. She questioned whether he even wanted to have dinner with her at all. When he reassured her, she asked what was on his mind, but Victor declined to discuss it, saying he would see her at dinner later. Nikki left his office looking less enthusiastic about the night she'd planned.
Paul was furious to learn that his mother had advised Isabella to check into a home for unwed mothers. He told Mary that he was not with Isabella just because of the baby. Mary said that might be true now, but any relationship her son hoped to have with Isabella was doomed because of the kind of person Isabella was. Isabella asked Paul if they could leave. Mary tried to stop them, but Paul escorted Isabella from the house. They went to his office, where Isabella expressed how much his mother's words had hurt her, as she'd hoped Mary was reaching out to her. Paul assured her that she was not the first woman in his life that Mary had issues with. He placed his hands on her stomach, reminding her that stress was not good for her or "our little baby." As far as he was concerned, while Mary's support would be nice, it was not essential.
At Crimson Lights, John Abbott was happy to be sharing lunch with Colleen. He told her he'd been worried about her mood since the choking incident with Abby. He believed that she was a hero and should feel good about what had happened, no matter what Brad had said to her. Colleen, feeling even more guilty when Troy showed up at the coffeehouse, explained that she wasn't mad at Brad; she felt like she'd almost let a tragedy happen. Troy became uneasy as he saw that Colleen seemed to be confiding in her grandfather, and he told J.T. he wished he hadn't sold Colleen the pot. J.T. was delighted to get this kind of information about Billy Abbott's niece. Later, at Walnut Grove, when J.T. tried to talk to Colleen, she questioned his motives, saying he'd never given her the time of day before. J.T. revealed that they would be crossing paths a lot, as he'd gotten the male lead in the school play and she was working on the tech crew. Colleen was stricken when J.T. suggested they could smoke pot together sometime after rehearsal. J.T. laughed and said her reaction was fascinating.
At Jabot's lab, Ashley declined a lunch invitation from Brad because she had a meeting to go to as the chairperson of the campaign to raise breast cancer awareness. They talked about using Colleen to babysit again. When Ashley tried to reassure Brad about his negative reaction to Colleen on the night Abby choked, John interrupted them. He told them that Brad's reaction was still bothering Colleen quite a lot. Ashley pointed out that letting Colleen babysit again would show they trusted her. She later reminded Brad what a turnaround Colleen had made, from being the girl who only a few months before had been smoking pot and getting expelled from school.
Phyllis bragged to Michael in his office about the success of her scheme to get Diane out of town. Michael told her he didn't approve of any of it. When he said that Phyllis and Diane were more alike than Phyllis realized, Phyllis said one reason she was glad Diane was gone was because her presence was hurting Michael and Phyllis's friendship. When Michael asked how Jack had reacted to Diane leaving, Phyllis told him Jack didn't know, and she regretted deceiving her husband. Michael expressed his belief that Jack was to blame for not telling her sooner about Diane and Kyle.
While they talked, Diane showed up at the law firm. When she realized Phyllis was with Michael, she told Chantal she'd wait in Alex's office, as she wasn't ready to cross paths with Diane yet. After Phyllis kissed Michael good-bye and got on the elevator, Diane emerged to surprise Michael. While he said he was glad she hadn't broken the law and left the country, he admitted he'd been somewhat happy thinking this whole mess was behind them. He said he didn't enjoy being in the middle of "war games" with her and Phyllis. Diane freaked out when Michael said he couldn't represent her at the hearing later. He called and arranged for her to meet with another attorney who was an expert in family law. Though Diane thanked him, she obviously felt hurt and betrayed by Michael, leaving his office without revealing to him the information she'd learned from Dr. Thompson's files about Phyllis's inability to have a child.
John Silva stressed to Jack the importance of Jack and Phyllis presenting a united front in court and appearing to be ideal parents. He reminded Jack they'd be coming under a lot of scrutiny when they tried to take custody of Kyle from Diane. John was concerned that they'd received no response from Diane's attorney, but Jack said he knew Diane was still in town. John felt uncomfortable about the surveillance Jack was keeping on Diane, as he said Michael could have a field day with that in court. Jack assured him everything would be fine on all fronts and told him he'd make sure the men trailing Diane were discreet. After John left, a perky Phyllis arrived to take Jack to lunch. She promised Jack she could handle whatever happened in the courtroom. Before they could leave, Jack got a visit from one of the men tailing Diane. Phyllis was checking her Email on Jack's computer when she realized Jack was asking the detective who'd been to visit Diane in her hotel suite. When the detective told him Michael Baldwin had been there, and "this lady here, of course--your wife," Phyllis nervously sank down in Jack's desk chair with a trapped look on her face.