Paul comes into the courtroom and talked to Jack in the corner. He told Jack he found evidence—everything he hoped for and more. Jack urged him to get John's attention immediately, but Paul told him they needed to wait until Lynne arrived. Meanwhile, John was cross-examining Diane, implying she would like it if Phyllis was out of the way so Jack would be available to be with her. He asked her if she ever purposely antagonized Phyllis, in hopes to steal her husband. Of course, Diane denied it and tried to act appalled, but John didn't let up. He went on to question why she would stay in an environment where she was clearly not welcome, especially when there was violent behavior directed at her. She tried to say it was for Kyle's sake; to be closer to Jack, but John was on a roll, and kept on with the questioning. He asked her if she owned a red wig, once used to successfully disguise herself as Phyllis. She stuttered and said she couldn't remember. He then asked her if it was true that the disguise was so good that she fooled a professional private investigator. Before letting her answer, he stated, "It was you on the tape, wasn't it?" She immediately denied it, saying it was ridiculous, because she had a broken leg. And, she said she had no use for paint thinner. In the background, Lynne stepped in and sat next to Jack.
John continued with the cross-examination, and asked Diane about the sleeping pill. As requested, she nervously named the drug and how many milligrams it was. At that point, Paul got John's attention and John approached the bench. He asked if they could show a videotape of the store next to the paint store, which shares a parking lot with them. The judge agreed, suspended Diane's cross examination, and asked Weber to come back up. Diane limped back to go sit next to Jack, and when she saw Lynne sitting in her seat, Jack said, "I guess you'll have to find another place to sit!" Diane looked shocked and confused.
John opened up the examination by asking Weber a few background questions about the paint thinner evidence before showing the video. He asked if the woman had similar height, build, and skin tone as Phyllis, and Weber told him yes. He also asked if the most signature feature about the woman was her red hair, and Weber replied "yes." He then told him the video was made at the same time and date as the incriminating one, and to watch what happens next. They showed the video, which was the woman walking out in the parking lot. While she was walked to her car, she accidentally stumbles, and the first thing she does is grab the top of her head to adjust the wig. Diane looked very nervous, and Paul turned around and looked at her. Triumphantly, John asked Weber, "Would you say the woman was wearing a wig'?"
John then went on to say the woman was obviously a brunette, and asked why a redhead dye her hair brown only to wear a red wig to go buy paint thinner to commit arson? Then he asked if Weber could think of a reason why a brunette would wear a red wig, and he answered perfectly, saying "to disguise herself as another person." Richards turned around and looked at Diane like she was crazy and asked if the attorneys could approach the bench.
Scared, Diane tried to get up and leave, and Jack looked at her and told her to stick around, the fun was just starting. Paul also got up and stepped in her way so she couldn't go and she started to cry. The judge ordered Diane to come back and get back up on the witness stand for further questioning. After that, John showed no mercy with Diane. He asked her about the sleeping pill, and asked her if she would be surprised to hear they had proof from the doctor there was no trace of it in her system? When she tried to deny it, he launched into the cast being a fraud, and asked if she would be surprised if he had proof from the doctor saying to stop wearing the cast two weeks preceding the fire? Then he dropped the bomb and stated it was she on the video, wasn't it? At that point she broke down and started crying and the judge warned her that perhaps she should just be quiet and get an attorney before saying another word to incriminate herself.
John didn't let up, and asked one more question: why was there a paint thinner stain in the trunk of her car that matched the paint thinner Phyllis supposedly used? Diane snapped, saying the whole thing was a set up by Phyllis, that she hadn't done anything wrong. She went on a rampage, saying that Jack belonged with her, their son needed his father, and no one could love Jack the way she does. Again, the judge interrupted her, telling her she may want to just go ahead and be quiet. Richards stood up and asked if they could declare a mistrial and to drop all charges against Phyllis, and the judge granted it. A quick shot at Isabella showed she looked saddened by what happened, but nowhere near as sad as Diane looked. She just kept crying and crying, saying how much she loved Jack and that she was not a criminal!
Meanwhile at the airport, Traci decided to go to the ladies room before getting on the plane. J.T. showed up, and when Colleen saw him, she ran into her arms. After she stepped back, she told him she didn't understand why he was there, and he apologized for being a jerk. He told her he never meant to hurt her; he just couldn't stand to see her in juvie, but definitely didn't want her to go back to New York. They looked around to see if the coast was clear, and then quickly headed for J.T.'s car.
Dru and Olivia were talking about the Ashley-Brad situation—Dru wanted to know what happened when Ashley confessed. When Olivia told her he didn't know yet, Dru told her she was about to take matters into her own hands, and began putting her coat on. Olivia stopped her, telling her he had just left there and had been away on business. Dru told her it was a sign that he came straight from the airport to talk with her, and agreed to slow down. Olivia assured her Ashley was going to tell him the truth soon.
Brad came home expressing to Ashley how upset he was about Colleen leaving. He noticed she was nervous, and she admitted to having something to tell him. She tried her best to tell him, and managed to get out that it was regarding Abby's biological father, and that she should have told him a long time ago. He looked concerned and assured her no one could ever take her away from them, and she told him that wasn't it. At that inopportune moment, the doorbell rang, and while he wanted to ignore it, she told him to just answer it and get it over with.
Much to Brad's surprise, he opened the door to find a nervous-looking Colleen and J.T. Colleen ran into his arms and while he hugged her, he asked where Traci was. Neither he nor Ashley were very pleased when they learned she just ditched Traci, but Colleen was adamant, saying she was not going back to New York, and that was final. That comment didn't sit well with Brad, who began yelling at both of them. J.T. insisted he cared about Colleen, and wished they would just take the time to listen to what they ad to say. Brad wasn't interested in listening and reminded J.T. of how devastated Colleen was when he dumped her. Colleen jumped in, saying none of this was about J.T., it was about her being able to make a decision about where she lives. She also told Brad she felt closer than ever with Brad and didn't want to lose that.
Brad told her this latest stunt has only made matters worse, and said he was going to call Traci to let her know what was going on. Right then, the phone rang—Traci—frantic that she couldn't find Colleen. When he told her Colleen was there, she told Brad she was on her way, and not to let Colleen out of his sight.
With Diane still sitting on the stand looking shell shocked, the Abbott family all thanked John Silva, Paul and Lynne for their hard work in getting Phyllis off. Phyllis, who still looked stunned and disbelieving, also thanked everyone for saving her life. Richards approached Diane, telling her he trusted she heard the judge's advice, and by the way, don't plan on leaving town. He also sternly told her he plans to go after her for perjury and obstruction of justice among other charges.
After everyone else left, Phyllis decided to go talk to Diane, who was still sitting up on the stand. After a few scathing remarks to her, Phyllis dropped the bomb that Jack was simply using her and it sickened him to have to touch her. She also imagined punching Diane several times in the face, but restrained herself into just using words to hurt her. To keep on twisting the knife, she told her that after this was all over with and she was prosecuted, she and Jack would likely get full custody of Kyle. After calling her a stupid deluded moron, she told Diane she was leaving now to go make love to her husband over and over and to get on with her life. Oh, and by the way, she said, you're going to look cute in that orange jumpsuit.
Once they got home, Phyllis just couldn't stop crying. She looked around their bedroom, appreciating all of the little things she owned and was allowed to touch. When she started to talk about her experience in jail, Jack tried to stop her, but she told him she was having trouble shaking the feeling that her life was over. They said some very loving words to each other before and ended the night with passion.
J.T. and Colleen nervously waited for their fate to be decided. Colleen told J.T. she felt Brad ratted her out to Traci, and he pointed out that she would've found out anyway. She told him he could leave if he wanted to, but he told her he wasn't going to let someone's mother run him off. In the other room, Ashley and Brad were discussing the situation. Brad asked what Colleen was thinking and Ashley replied that she was desperate. She also went on to say she didn't agree with Traci's controlling approach to the situation. Brad interrupted her by asking what was going on with Abby's biological father, and Ashley told him too much was happening right now, and she would tell him about it later. He asked if she was having second thoughts about discussing it, and she denied it. Colleen and J.T. came into the room, raising the emotion and stress level all over again. Brad told J.T. it was time he went home, and Colleen threatened to go back to juvie rather than go with her mother to New York.
The doorbell rang, and Traci came in, demanding to know where Colleen was, because she had a cab waiting outside to take them back to the airport. Trying to stop her hysteria, Brad told her he'd like to talk with her alone. She started raving about putting J.T. in jail, and Brad immediately put a stop to it. He ordered Traci upstairs and Ashley to keep a sharp eye on Colleen. After complying, Traci told him to talk fast. She told him as far as she was concerned, J.T. kidnapped Colleen, and how she thought he followed them to the airport. Brad told Traci that Colleen was just not going to cooperate with them; that was the reality of the situation. He said he didn't want her back in juvie, nor did he feel boarding school was a good idea. That really made Traci even more angry, and reminded him that Colleen was completely out of control. He told her he felt that was the problem—all they were trying to do was control Colleen, rather than giving her the tools to make better choices. With that, Traci exclaimed she thought Brad was calling her a bad mother. Brad told her if anyone had dropped the ball in parenting, it was him, and that he wanted another chance. He told her since it didn't work out with Colleen living with John, he wanted Colleen to stay and live with him and Ashley.
Downstairs, Colleen approached Ashley and told her she was sorry for all of the problems she was causing, and she didn't know where else to go. Ashley told her she didn't agree with Colleen's actions, but was glad that Colleen came to their home. She also offered Colleen some advice: that she had to be smart when dealing with people who had authority over her. She told her acting wild and doing her own thing was only going to make any situation a worse one. Colleen told her she would be miserable without J.T. and that she loved him. Ashley looked over at J.T. and he looked very uncomfortable.
Olivia went to visit Neil and found him putting up a Christmas tree with lights. Neil talked with her about attending a company holiday party and voiced a little bit of concern about it because of the possibility of there being alcohol there. He further expressed interest in spending time with Lily, and when Olivia asked if that included Dru as well, he didn't really deny it. She asked if Dru had given him an answer about moving in, and although she hadn't Neil was hoping they would move in soon. He told her he wanted to make sure he wasn't alone over the holidays, because he had heard the first holiday without drinking was the toughest. He just wanted to be with his family. With that, Olivia asked what was going on with Wesley. After thinking a moment, he thought it would be a good idea to distract Wes from Dru and Lily...and Olivia was the perfect person to do so.
Wesley stopped by Olivia's apartment with a surprise for Dru and Lily. He presented them with two round-trip plane tickets to Paris for two weeks. Lily was absolutely beside herself with happiness, but Dru clearly was not. In fact, she dismissed Lily so she and Wes could talk alone. Once Lily was out of earshot, Dru snapped on him, telling him he should have cleared this with her first. Although she said she would love to spend the holidays in Paris, it wasn't a good time for Lily to go. While he argued it was only temporary, Dru argued back that Lily was finally beginning to adjust to Genoa City, and didn't want to do anything to jeopardize that. He explained he felt it would be good for Lily to go somewhere where she felt so happy, which prompted her to accuse him of wanting to be a hero. He asked her if she felt Neil's approach was better, and she said yes. When he asked her if the real reason she didn't want to go to Paris was because of Neil, she didn't answer.
Sharon went to the hospital to see Diego and ask him what he told Cassie. He said that he hadn't told her anything, but she did have a lot of questions about what was going on between her parents. Sharon said as nicely as she could that she wanted Diego to steer clear of her family while they were trying to put their lives back together. She said she didn't mean to sound harsh, but Diego assured her that she only sounded concerned. He would do nothing to make things worse for her family. As Sharon was leaving, Diego told her that he hoped she had a good holiday.
At Newman Enterprises, Nick and Victoria met in Victor's office after being summoned there by their father. In the few minutes they had alone, Victoria told Nick she knew he'd gone to see Diego and she wanted him to leave Diego alone. Nick said he just wanted Diego to stay away from Cassie. Victoria said she'd tried to see Cassie, because she was concerned about her, but since Cassie wasn't home, she and Sharon had enjoyed a civil talk. She urged Nick to do something healing with his family over the holidays, like a sleigh ride or something. Nick then told her that he'd wanted to move home at least until the new year, but Sharon had made him see how devastating it would be to the kids if he came home and then left again. Victoria said that was mature of Sharon. She then told Nick that if Diego was the only thing keeping him and Sharon apart, he needed to get over it. The two of them hadn't even seen each other for weeks.
At that point, Victor joined them. Victoria was brusque with him, saying if it was about business, they needed to get to it, because she had another appointment. Victor said it was about the Newman Enterprises holiday party. He wanted both of them to attend, and he wanted Nick to bring Sharon and the kids. Nick said that he would bring the kids, and he'd ask Sharon, but he couldn't make any promises. He then left. Victoria told her father she wouldn't be attending the party. He reminded her that as a division head, she needed to be there to meet her employees' families as well as present a united front on behalf of the family. Victoria said that appearances were all that mattered to him, and her father told her that she wasn't listening. Victoria drew a parallel between that and how he never listened to her. She said that as long as Diego wasn't welcome, she would not be attending. Victor said Diego could not come. Victoria agreed, saying she wouldn't do that to Nick and Sharon. She then wished Victor a merry Christmas, since they probably wouldn't be seeing each other over the holidays. After she walked out, her eyes filled with tears, and Victor sat alone, brooding in his office.
Drucilla was annoyed that Wes had bought tickets to Paris without consulting her. After he asked if her reluctance to leave Genoa City was less about Lily spending time with Neil than it was about her spending time with her ex-husband, Dru convinced him that she was only thinking of Lily. She finally agreed to go to Paris with him, and take Lily, but only until the new year. That way Lily could ring in the new year with her father. When Wes tried to push the idea of the two of them getting married while they were in France, Dru adamantly refused.
Neil tried to talk Olivia into providing a distraction for Wes over the holidays, while Neil took advantage of the chance to bond with Lily and Dru. Olivia flatly refused, saying she had no interest in Wes, nor did she think Dru would appreciate her interference. Neil said that he firmly intended to make inroads with both his ex-wife and his daughter, and he didn't consider Wes real competition. But Olivia might actually enjoy spending time with Wes, since they were both doctors and might have a lot to talk about. Olivia disagreed, and said that in any case, she had a friend who might need her. When Neil speculated that the friend was Brad, Olivia refused to say. Neil then admitted that he had another reason for his request. He didn't want to be alone on the holidays, since this would be his first one in recovery. While Olivia appreciated that, she still did not intend to spend time with Wes.
Ashley left to get Abby and pick up takeout food from Gina's, telling J.T. and Colleen to stay put and not make things worse. After she left, Colleen told J.T. how devastated she'd been when he'd lied to her, and how he'd turned her life around by showing up at the airport. Now no one could ever say that he didn't care about her. J.T. looked into her eyes and resisted his urge to kiss her, not wanting to make things worse with her family.
Traci and Brad continued to fight about what was best for Colleen. Traci finally admitted that she felt like what was missing from Colleen's life was her mother, and part of the reason she'd wanted to take their daughter back to New York was to be closer to her. She felt like a failure. Brad assured Traci that she was not a failure. He'd been the one who was absent from their daughter's life, but if Traci would only give him another chance, he would help Colleen turn things around. The two of them went downstairs and told Colleen she could stay in Genoa City, but she'd be living with Brad and Ashley, if Ashley said it was okay, and she would have to abide by their rules. While Traci took Colleen to pick up her things from the airport and her grandfather's house, Brad had a stern talk with J.T. He said he knew J.T. intended to ignore Colleen's family's wishes that he would just stay away from her. But he asked J.T. to at least stay away from her for two weeks, to give Colleen a chance to settle in and adjust to her new living arrangement. J.T. agreed with that and left the Carlton house.
Olivia and Ashley were both picking up takeout food from Gina's when they ran into each other. Upon hearing Ash tell Gina that she was doing great, Olivia said it was obvious that Ashley hadn't told Brad the truth about Abby yet. Ashley finally had her fill of Olivia. She told her that Brad hadn't wanted to tell her about the near-intimacy between Olivia and him that had taken place while she herself was so sick because it was meaningless to him. Olivia needed to stop letting Drucilla fill her head with fantasies that once Brad learned the truth, he'd come running into Olivia's waiting arms. She then mocked her former best friend, saying, "Poor Olivia. Waiting. And waiting. And waiting." Olivia, who had earlier asked about Colleen, snapped that Brad did still, in fact, lean on her for support. In fact, the way she'd known about his concerns regarding Colleen was because he had come to see her on his way back from the airport, seeking friendship and support, which she would always give him. But she didn't suppose Ashley would understand that, as Olivia was so "meaningless" to Brad. As the two women glared at each other, Gina brought their food and told them that it was on the house, and they should remember "peace on earth." Olivia stomped out, while Ashley looked upset and hurt.
Nicholas tried to talk Sharon into coming to the Newman Enterprises Christmas Party with him and the kids. She balked and argued that people would look at them and talk. He promised to stay with her and help support her. The kids would love Santa and it would be fun. Cassie came downstairs wondering what they were talking about it. She was intrigued with the idea and Sharon decided to go along with it. Maybe, maybe this time things could be different. . .
Victoria and Diego readied him to be discharged from the hospital. He told her that he should stay home and she should go to the party. She insisted that she wouldn't go without him. He toyed with the idea of going with her, but they both decided that it wouldn't be a good idea.
At the ranch, Victor brooded about not having his family at the party. He was heartbroken, but wouldn't back down on his stand with Victoria. Nikki tried to make him feel better and reminded him that Christmas was a time for miracles. Their marriage was a miracle and, who knows, maybe more miracles were in store.
Neil had asked Dru to come over so that they could make a breakfast date to talk about plans for Christmas. She wanted to go ahead and get it over with -- she dropped the bomb about their trip to Paris. He tried to talk her out of it and blamed Wesley for making things difficult, but backed down without showing his true level of disappointment. After she left, he dressed for the Newman Christmas Party and found a bottle of Scotch when he looked on the shelf for his Christmas tree top. He brought it out and talked to it. He knew that he would be lonely during the holidays, but the bottle would not be a good friend to him. He was adamant as he put on his jacket and left, "I can make it without you!"
Olivia found out about Paris from Lily when she returned home with supper. Lily was very excited and took off for the mall to buy gifts for her friends. Dru returned home and Olivia braced her up about leaving Neil behind. She reminded her sister that he was recovering and this could be a problem for him. She admitted that it wasn't any of her business, but she encouraged Dru to think long and hard about changing her plans.
Ashley returned home with Abby thinking about what Olivia had said. She entered the house and Brad met her at the door. She asked about Colleen and Traci and J.T. and Brad told her what they had decided -- if it was alright with her. She was very agreeable and supportive. He was thankful and loving in return. She was concerned about when they would return home -- they had something important to talk about and didn't want to get interrupted. He agreed that they had better wait until the next day. . .
Colleen was almost ready to leave her Grandad's house with her mother. She wanted to apologize first and let her mom know that she loved her and understood what it must have been like when she was gone at the airport. Traci cried and reminded her daughter that everything she had done was for her best interest. She was using her adult experience to help her daughter avoid serious problems. Colleen told her mom that she wanted to do whatever she could to make her mom trust her once again.
J.T. found Brittany at the coffeehouse and filled her in on the events of the day. He thanked her for helping him realize that he had feelings for Colleen and admitted that he wanted to protect her. He took off quickly when she asked if his feelings were like those of a sibling or more like love. He did tell her "Merry Christmas Princess", before he left.
When Victoria and Diego returned to their motel room, Victoria apologized for not having a Christmas tree, but Diego was more concerned about her estrangement from her family. He urged her to go to the company party, but she said she wasn't going without him, and since his going would upset her family, she had no intention of capitulating to her father's wishes. Diego said that in that case, they should have dinner with his parents. Victoria worried that he needed to rest, since he was just out of the hospital, but he said it would be good for them to go out for a while.
At the Newman Enterprises holiday party, Cassie seemed depressed about her parents, and Nikki worried to Nick that Victoria's absence was upsetting Victor far more than he showed. In fact, she might have to take matters into her own hands. Later, she called Victoria on her cell phone and told her how upset Victor was. Victoria said she was sorry, but she and Diego had already made plans to spend the evening with his family. They then met Diego's parents at Gina's. Gina had prepared a festive Cuban meal for them, including Cuban flags. Diego's parents and Victoria were getting along so well that his father even brought out a family photo album to share with her. Victoria enjoyed looking at it, but then was overcome by emotion over thoughts of her own family and her estrangement from them. Diego comforted her, but she said she was having a better time with his family at Gina's than she'd be having at the Newman party.
At the party, Victor thanked Nick for talking Sharon into bringing the children with him. Nick said his father really hadn't left him much choice, but he was glad they could be there. Later, Neil talked to Victor, who commiserated with him about the fact that his daughter would be away at Christmas. Neil said there was somewhere he needed to go. Victor then brooded about Victoria's absence, even telling Nikki that he thought he'd lost his daughter for good.
Nick overheard some women sympathizing with an uncomfortable Sharon about her separation from Nick. He hurried to Sharon's side and pulled her away from the others. When she asked why he'd done that, Nick admitted that he thought she might need rescuing. Sharon thanked him as Cassie, who'd overheard the whole thing, smiled to see her parents getting along. Later the three of them listened to Nicholas tell Santa Claus that the only thing he wanted for Christmas was for his father to come home. Nick went to get his son and hold him, while Sharon and Cassie looked on with sadness.
After Dru and Olivia argued about the effect Dru and Lily's planned trip to Paris with Wesley might have on Neil, they rushed to his apartment to see if he'd started drinking again. Dru thought Olivia was making too much of it, but then they saw the bottle of scotch sitting on his table. Not knowing that it was an old bottle Neil had found while looking for his Christmas tree topper, and had not taken a drink from, they assumed the worst. They then went to the Newman Enterprises holiday party to find him. Victor told the women that Neil had already come and gone, and he seemed upset by the idea that he wouldn't be spending the holidays with his daughter.
Neil went to the Olive Tree to find Serena. The bartender told him that she'd left town weeks ago. Neil said he was afraid of that. The two men then agreed that Christmas was not altogether happy for either of them--in Neil's case, because Lily and Dru were going away. The bartender poured Neil a shot of expensive scotch and handed it to him. Neil didn't drink it, but at that moment Drucilla and Olivia burst in and thought he was drinking. While Olivia tried to offer emotional support, Dru began yelling at him, telling him that she couldn't believe he was in that horrible place drinking again. Neil finally got a word in edgewise, telling the women that he hadn't had a drop all night. Even though the shot had been poured for him, he had no intention of drinking. He'd come to find Serena. When Dru insulted his former drinking buddy, Neil rushed to her defense, saying Serena was a good person who'd helped him a lot. He then said he was going home and left the bar while Dru and Olivia looked somewhat ashamed of themselves for distrusting him.
Brittany and Raul were going to the homeless shelter to serve a holiday meal. When Brit admitted that the last few months had been miserable for her, and she wished she could attend a few parties and see some of her friends who were home from college, Raul sympathetically told her to go out. He would cover for her at the shelter. Brittany started to call Ned and make an excuse for not being there, then she hung up the phone. She said that not only would Ned not buy her excuse, but she was better off just doing her community service. Raul was proud of her for making the right decision. Later, at the shelter, Brittany was halfheartedly slopping food on plates while Raul cheerfully talked to the homeless people. Ned came and pulled Brittany off the serving line to talk to her.
Katherine told Mac how happy she was to have her home from college for longer than a weekend. As the two prepared to go to the homeless shelter with Esther, who'd made healthy snacks for the shelter's clients, Larry came in. Katherine invited him to go with them, but he declined, saying it seemed like a family thing. Mac agreed and said that was why he should go--they were all family. Larry was touched, and agreed to play Santa Claus. Katherine sent them ahead of her because she wanted to see Jill. When Jill came downstairs, thinking they were all gone, Katherine chided her for moping around for the past few weeks, telling her she thought it was because she missed Larry. Jill rolled her eyes and denied it, but as the two women exchanged their usual caustic comments, it was obvious Katherine was genuinely worried about Jill's mood. Jill finally agreed to go to the shelter with her. Once there, Jill was touched by a man who told her that she reminded him of his deceased wife, who had also been beautiful. Larry watched Jill move among the people at the shelter, dispensing coffee and enjoying the feeling that helping others was giving her. He sent a little girl to Jill with a gift from Santa. Jill, not knowing that it was Larry, was hesitant to thank him, but Katherine told her that she should. When Jill turned away from Katherine to glance at Santa, Katherine gave Larry a thumbs-up sign.