David and Alyssa returned home from a drive in their brand-new Maserati to find Xara intimately clinging to James' arm.

"What?" David exclaimed, approaching the pair. He confronted James, "How dare you? You've been sponging off the Callahans, and now that Thea's away, you're fooling around with another woman?"

Turning to Xara, he added, "And you! How could you do this? He's your cousin-in-law!"

Xara, surprised by David's unexpected return, quickly released James and hung her head. "D-David, it's not what you think."

"What is it then?" David's voice rose. "What were you two doing? If we hadn't arrived, you'd have been naked on the sofa!"

James, equally surprised, remained silent. Alyssa, sitting on the sofa, scowled. "Xara, how shameless! You seemed so poised, so self-respecting. To go after your cousin-in-lawand James of all people?"

Xara stammered, speechless. Looking pleadingly at James, she urged, "James, explain."

James replied calmly, "The truth will speak for itself."

David spat, "James, you're dead meat. I'm telling Thea. She'll divorce you." He had hated James since his words at the family meeting had jeopardized Thea's position and threatened the family's shareholdings if Lex reclaimed them.

James remained indifferent. Thea, he knew, would judge fairly.

Seeing the time, James announced, "I'm going grocery shopping," and left.

Xara attempted another explanation, but David and Alyssa remained unconvinced. Secretly, Xara welcomed the news; she had wanted James to divorce Thea so she could pursue him openly.

Meanwhile, Thea had been occupied all day at the company: a press conference, reviewing business matters as the newly appointed chairman, and preparing documents for a Trade City Center application. Exhausted, she arrived home at eight o'clock, unaware of the events that transpired. Noticing the tense atmosphere, she asked, "What's wrong?"

Gladys, prompted by David's account of James and Xara's encounter, replied coldly, "Ask him." Gladys, while wanting Thea to divorce James, hadn't anticipated Xara as the catalyst. Xara, her brother's daughter, was family. The irony was striking.

Thea glanced at James. David, exaggerating considerably, recounted seeing them "making out" on the sofa, their clothes almost off.

Xara was furious, correcting, "David, don't lie! I was only hugging his arm."

Thea's face darkened. She had witnessed the encounter herself last night, but hadn't expected such blatant behavior in their home.