The Duel at Tony Stark's Mansion was a confrontation between Tony Stark and James Rhodes, the latter using the Mark II suit to prevent his best friend from hurting any of the civilians observing them.
Despite Ivan Vanko having been put in prison for his crimes, the response to another man using the Arc Reactor technology was immediate, with Senator Stern giving interviews on WHiH World News could Stark's failure. While on his private jet returning to the United States of America, Stark made dinner for Pepper Potts as they discussed the aftermath of the attack.
While at his home he was visited by James Rhodes, who came to berate Stark about the military's wish to take his suits. However, Rhodes realized how unwell Stark was and assisted him by changing the Arc Reactor Palladium core. Rhodes tried to convince Stark that he did not have to do his journey alone although Stark still remained skeptical.
Tony Stark, dying from palladium poisoning caused by his Arc Reactor, asked his new secretary Natalie Rushman what she would do if it was her last birthday party. Rushman answered that she would do whatever she wanted with whomever she wanted.
Tony Stark decided to attend what could very well be his last ever birthday party and quickly got himself very drunk, putting on his Iron Man Armor and partying with the many other guests who had come to celebrate. At one point he invited Natalie Rushman to wear one of his gauntlets and fire it at an ice sculpture, taking great pleasure in the destruction before joining the other guests and drinking more alcohol shots to get himself even further drunk and even harder to keep in control.
While wearing the Iron Man armor and indulged in many dangerous activities, such as using his repulsor blasts to destroy a watermelon, Stark was watched by Pepper Potts who attempted to make him stop, being advised by James Rhodes that this was a terrible time to be acting so foolishly. Despite Potts taking the microphone away from Stark and trying to tell the guests that it was time to go home, Stark would not listen to reason and instead insisted that his party keep going as he continued to reckless as he used his Iron Man Suit to entertain his drunk guests within his Malibu Mansion.
Rhodes donned Stark's Iron Man: Mark II armor and ordered the guests out of the room before demanding that Stark get out of the suit. Rhodes asked Stark to stop and remove the armor but Stark refuses and both of them face up to the training room where they do personal combat. Stark and Rhodes both throw a piece disc portions at each other, then face off at a bar of Stark's, then Rhodes tells Stark to lose the metal suit. Stark refuses and the two friends face the beating to each other, but then released each other back to the party where Stark leaves the unconscious Rhodes and then frightened civilians but Rhodes recovered and raises the repulsor ray hand to Stark and he does the same and the repulsor rays are fired and when hitting each other, an explosion is generated. With Stark out of the fight, Rhodes then delivered the armor to the United States Air Force while Stark could only look on.
Tony Stark took the Iron Man Armor and flew to Randy's Donuts in California, buying himself a box of Donuts and enjoying them in the middle of the donut sign above the shop. Stark was found by Nick Fury at the place where he and Black Widow, dropping her disguise as "Natalie Rushman", gave Stark a temporary cure to his palladium poisoning.
James Rhodes then took the Mark II and presented it to the government, which in turn presented it to Justin Hammer to arm it and make it the War Machine suit. However, Ivan Vanko tried to use the suit, along with several other robots, to kill Stark in the Battle at Stark Expo.