From the Super Mario Wiki
Inexplicably appearing behind the medicine cabinet of Mario and Luigi's apartment, where she claims to be looking at the expiration date of Mario and Luigi's toothpaste, Nicole tells them about the clog in her sink. Deciding to show-off their plumbing skills to Nicole, Mario and Luigi attempt to fix a nearby, clogged sink for her, only to end up spraying Nicole in the face with filthy water.
Apologizing to Nicole, Luigi proceeds to guide her over to the apartment furnace to dry off, unfortunately, this furnace backfires, spraying Nicole with smoke. Luigi and Mario, frantically apologizing to Nicole, guide her to a nearby chair, accidentally causing her to step on a cake on the way.
Matters are made worse when Nicole sits on the chair, which has a pie on it; getting off the chair, Nicole proceeds to have a large amount of garbage dumped on her from a nearby garbage disposal.
As Mario and Luigi continually apologize to Nicole, who, oddly, says everything is alright; Nicole goes on to explain to the confused Mario and Luigi that she was going to go to a "sloppy party", a party where the filthiest attendant wins a prize. All of the adversity that had been occurring to Nicole was actually helping her, as it saved her the trouble of buying a costume. Now knowing this, Mario and Luigi proceed making her more and more filthy by smearing cake on her.