Michael frantically races against time to stop Dr. Lantry from operating on Chase, which could leave Chase paralyzed for life. Angela then sets a court date to have Chase declared legally incompetent to manage Falcon Crest. Chase regains some feeling in his legs, and through physical therapy, begins to recover. At the hearing, just as the judge appears ready to rule in Angela's favor, Chase hobbles in on crutches, and the judge denies her petition. While Julia is declared not to be criminally insane, jail inmates continually torment her. At the Gioberti's house, Maggie convinces Michael to take a staff position at the hospital, but is shocked when he tells her he's the executor of Jacqueline's estate.

As Dr. Lantry nears death, Chase realizes that he may lose his only opportunity to see Angela behind bars. Lance boldly threatens Angela and Melissa with blackmail, and at the same time, Angela works with Philip to admit Julia into a mental institution. Terry slithers her way into Michael's heart, while Angela blackmails her for devotion. Vince Caproni, bitter about Linda's marriage to Cole, tells Linda that Angela's cruelty to migrant workers caused Linda's mother's death. Angela forces Terry to spy on the Giobertis, or else Angela will reveal Terry's seedy past. Chase discovers a clause in his grandfather's will that gives him the legal right to oust Angela from Falcon Crest.

Chase fights a vicious public battle against Richard Channing, who is trying to build a racetrack that could destroy the wine industry, however, the final decision rests with the valley residents who are about to vote after the men's muckraking campaigns. Angela vows that she will not allow Chase to run Falcon Crest without her and thwarts his efforts to obtain the accounting records. Vince Caproni becomes seriously ill after Lance threatens him over Joseph's paternity suit. Angela makes a fiery attack on her nephew to strip him of his Falcon Crest powers. Meanwhile, Terry moves in with Michael, despite the Giobertis' warning that she is treacherous.

Richard has won the election to build his racetrack while Chase is madly driven to stop him, which results in an explosive disaster. In the mental institution, Julia becomes hysterical when Richard malevolently tells her Melissa's baby is his, thus pushing her into a catatonic state. Angela promises Lance that they will be kicked out of Falcon Crest if they lose Joseph's custody suit to Cole. However, when Melissa is grilled on Lance's affair with Terry while giving her deposition to Cole's attorney, she explodes and admits that their marriage is a farce. Angela attempts to stop Chase's plans to market a line of champagne by buying up the grape harvest he needs.

Michael Ranson must face his fears from a dark past and perform surgery on Sheriff Robbins to save his life. In the operating room, Michael is unable to perform the surgery and later confesses to Terry about the guilt he's felt ever since his wife died. The floodgates open as Michael tells Terry how his wife was in an accident and died when Michael had attempted to operate on her. Meanwhile, Terry spies on Maggie for Angela and at the same time, makes plans to marry Michael. A cartel gangster attacks Richard Channing while Angela plans to crush Chase with the help of Calvin Kleeger, the Falcon Crest wine distributor. Kleeger informs Chase that with Angela out of Falcon Crest, he will no longer serve as distributor unless Chase offers the winery as collateral.

Melissa and Lance resort to blackmail when Joseph's custody case goes to court. After enticing Cole into assaulting him in front of a witness, Lance shows up in court badly bruised claiming that Cole had beaten him. After hearing the corroborating story of the blackmailed witness, the judge dismisses Cole and Linda's suit. At the Gioberti's house, Maggie and Chase realize that Jacqueline's relationship with Johann Riebmann and Henri Denault made her a war criminal. Maggie decides not to submit her article to The New Globe, but Emma surprisingly turns out to be just as conniving as Angela when she has the story printed on the front page behind Maggie and Richard's backs. Richard fears for his life when Spheeris calls to convey the cartel's displeasure about the story.

Angela plans to bargain with the Giobertis for control of Falcon Crest; in return, Melissa must give Cole custody of Joseph. Melissa is at first horrified at the thought of giving up her baby for a piece of land, but later reconsiders the offer. Terry follows Angela's orders when she pits Michael against Chase, and Richard is at the mercy of the cartel's gangsters in opening his racetrack. Meanwhile, Maggie's article uncovering Jacqueline Perrault's crimes cuts through the valley with a razor's edge.

Death looms over Melissa after her argument with Linda culminates in a fatal car accident. Lance spends the night with Terry while Melissa has a miscarriage at the hospital. Lance is overcome with shame and tries to apologize to Angela, but she is unforgiving. At the hospital, Melissa informs Angela that she refuses to give up Joseph and wants the signed agreement returned. Philip proposes to Angela but she is preoccupied with driving Terry out of Tuscany with the hope that Lance will then act more like a husband to Melissa. Richard and Pamela's relationship extends past their work, but she fears he will be killed after defying the cartel.

When the cartel begins to carry out its plans to make a public spectacle of Richard's assassination at the grand opening of the racetrack, Richard, making a switch with the bomb, causes the cartel to explode its own limousine. Eager to please Angela, Lance promises that he and Melissa will produce a grandchild. Melissa learns, however, that she can no longer have children because of injuries sustained from the car accident. While the Giobertis believe that Michael and Terry are traveling to Mexico, they are surprised when the two announce their marriage. At Falcon Crest, Angela agrees to marry Philip. As detectives discover Julia's hideout, Lucas discovers Julia's true identity and murderous acts as she heads for Tuscany. Meanwhile, Lance secretly executes his plan for power using The Globe as his tool.

As Angela's wedding day draws near, Julia prepares to murder her mother. The wedding ceremony begins as Julia, dressed in a nun's habit, heads towards the church. Chase notices her, but Julia manages to lock him in a closet. As he feverishly tries to work his way out, Julia misses her chance to shoot Angela and leaves for Falcon Crest and the wedding reception. As the reception begins, Julia, hiding upstairs, crouches at the railing and aims her gun at Angela. The sound of sirens distracts Angela, and she moves out of range. As Julia realizes she's lost her chance, Joseph comes to her. Chase bursts in with the police, warning Angela that Julia intends to kill her. Cole dashes upstairs to check on Joseph, but it is too late: Julia has taken the child hostage.