Kirsten nervously prepares a magnificent birthday party for her widowed father, Caleb Nichol (recurring guest star Alan Dale), an extremely successful and driven businessman for whom Kirsten works. She is devastated when, rather than being proud of her hard work while he was out of the country, Caleb berates and demotes her for making deals without his approval. The situation worsens when Sandy, whom Caleb has never liked, reveals that Kirsten wants to quit and begin a simpler life away from Newport Beach with Sandy, Seth and Ryan. Caleb's gorgeous 25-year-old girlfriend, Gabrielle (Nichole Hiltz), trapped by her businesslike relationship with the much older Caleb, flirts with a conflicted Ryan at his job.
Meanwhile, since being shot in the arm, Luke has become attentive and polite, puzzling Marissa and everyone around him. He apologizes to Marissa and promises to be a better boyfriend if she takes him back, which she does. And furious that she has to give up her glamorous lifestyle because of Jimmy's financial failure, Julie demands a divorce from the distraught Jimmy
Despite being angry with Kirsten, who is hurt by Sandy's premature action, Caleb goes to his well-attended birthday party, along with Gabrielle. Marissa and Luke are there together, and shallow Summer has manipulated Seth into inviting her so she can hunt for rich young bachelors. Jimmy stuns Julie by arriving unexpectedly and desperately asking wealthy Caleb for a job. Caleb refuses--until conniving Julie uses her wiles to make him reconsider hiring her husband. Later, Sandy confronts Caleb and convinces him to reconcile with Kirsten and keep her on staff.
Gabrielle finds depressed Ryan hiding from Marissa in his guesthouse and aggressively seduces him. After Marissa witnesses the shocking scene, she makes a serious decision and goes home with Luke to have sex for the first time. Later, she tells Ryan that it is too late for him to try to date her.
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