It all went down at the luxurious surprise 50th birthday party Kemsley threw for her hubby, PK, complete with roulette tables and caviar on a boat for 100 guests.
Kemsley cornered Arroyave after piecing together bits of gossip Lisa Vanderpump previously spilled to her. Days prior Arroyave held a "spa day" at her home for the women and was offended when Kemsley balked at her bartender for serving her champagne in a wine glass.
In an earlier episode this season, Kemsley and Arroyave battled over Kemsley standing Arroyave up for drinks.
"To be honest with you, I really like you, I feel like you and I get along well, and then I heard a few things Lisa Vanderpump told me," Kemsley admitted to Arroyave.
John Mellencamp's daughter tried chalking it up to the two being "a little bit different" – but the feud took a turn for the worse when Vanderpump and Kyle Richards interrupted.
"I really am somebody who will just let it go," a reserved Arroyave said to Kemsley.
Vanderpump then chimed in: "You obviously do care because it upsets you."
When Arroyave admitted she felt like she was being spoken down to, Kemsley exploded. "The fact that I know a wine glass other than a champagne glass is etiquette. Sorry I know it," she said.
Richards suddenly tried standing up for Arroyave but was cut off by Kemsley.
"Are you her mouthpiece? Are you her spokesperson? So why are you chiming in and speaking for her?" Kemsley asked Richards.
Then Kemsley blew up at Arroyave.
"It's actually insulting! You're actually flat out not only exaggerating, but you're lying! You're making shit up!" Kemsley yelled.
Arroyave vowed she "never" lies, and Kemsley responded, "You are psycho."
Still, Arroyave tried making amends. "Are we fine? Let's just get over it."
The two ended up forcing a hug – but not before Kemsley told Arroyave how she really feels.
"Sweetie, I'm not going to get over it if you keep acting like this little bitch," said PK's wife. "You're a little bit too high-strung. For crying out loud, it's a glass!"
Meanwhile, Erika Girardi and Kemsley formed a bond after Girardi cooled Kemsley's nerves before she sang in front of everyone at the party with Boy George.
"It's really amazing to have Erika next to me," Kemsley admitted to the camera. "Her support is the only thing that's getting me through."
Also in the episode, Lisa Rinna stressed over a busy work schedule and her husband Harry Hamlin promising her daughters a new puppy.
"You want to add a puppy into the mix? Do you want to kill me?" Rinna whined.
The housewives drama likely doesn't stop there. A sneak peak of next week's episode shows Vanderpump and Kemsley making Richards cry.
The Real Housewives of Beverly Hills airs every Tuesday at 9 p.m. EST.
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