Entertainment Weekly interviewed Kerr Smith from Life Unexpected and this is what he had to say about the “sleepover”.

When does Ryan find out that Cate slept with Baze? I thought that’d come up in the first episode.
We’re gonna let Cate deal with that internally for a little while. That happens mid-season. Her world falls apart mid-season and then the second half of the season is about her repairing that world.