Jake realizes that he accidentally burned the shop down. He flies into a rage and trashes Jo's apartment. She throws him out. He later breaks up with her for failing to trust him. Alison tags along when Billy travels to a beautiful hotel to interview the reclusive owner. The man's daughter gropes Billy under the table during dinner. Michael accuses Jane of infidelity. He shows up at Jane's favorite supermarket to spite her, so she rams her cart into him and dumps spaghetti sauce on his head. Kimberly breaks down during a court hearing and admits her affair with Michael. Matt tells his friend Katya that he is gay, and learns that she has a five-year-old daughter.

Billy and Alison cannot get Jake and Jo back together. Amanda forces Jake to work with Jo on a photo shoot, where they bicker. The Mancinis' divorce is finalized. Michael fears that Jane is stealing his friends, so he throws a party at the beach house. Jane goes drinking with Alison and Jo; then sleeps with her lawyer, Robert. Kimberly is irritated when a drunken Michael flirts with every woman at the party. Sydney passes out drunk and spends the night on Michael and Kimberly's couch. Jake tries to invite himself to Amanda's apartment, but she slaps him. Katya asks Matt to marry her so that she and her daughter Nikki won't be deported.

Jane throws Sydney out, but Amanda leases her an apartment in the building. Alison travels to a ranch to make a presentation to millionaire computer exec Steve McMillan, but it does not go as planned. Matt decides to marry Katya. Michael sleeps with Sydney while Kimberly is out of town at a conference.

Amanda's father offers Jake a high-paying job at his car restoration business. He refuses, but changes his mind after sleeping with Amanda. Jo is devastated by the news, but cheers up when Steve asks her on a date. Sydney prevents Michael from breaking up with her by threatening to expose their affair. Jane decides to take things slowly with Robert.

Sydney gets a waitress job at Shooters. Kimberly catches Michael in bed with Sydney. She tells Jane, who rejects Sydney. Kimberly moves out when Michael refuses to leave the beach house. A drunken Michael interrupts Jane's dinner with Robert's parents. Matt gets a date, but is distracted when Katya and an ailing Nikki have to move into his apartment to fool an immigration official. Alison is jealous of Steve's relationship with Jo.

Michael convinces Kimberly to have dinner with him. When she rejects his marriage proposal, he becomes very drunk. Kimberly changes her mind during the drive home, but Michael loses control of the car during their celebratory kiss. The car flips off an embankment, leaving Michael paralyzed and Kimberly in a coma. Michael blames Syd for the accident. The police suspect that Michael was driving under the influence. He pleads with Matt to change the results of his blood alcohol test. One of Sydney's co-workers takes her to a party. She makes a date with a director, unaware that he is under the impression that she is a hooker. Jo gives Alison the cold shoulder, and warns her that she is on the verge of destroying her relationship with Billy.

Michael learns that Kimberly has died. He is transferred to a rehab hospital, but manages to convince Jane to take him in. Robert is enraged by this development. Billy breaks up with Alison and moves in with Jake. Sydney becomes a prostitute in an attempt to pay her bills. Jo doesn't believe Syd's story about becoming a highly paid model, but Syd refuses to open up to her. Lauren threatens Sydney after Syd storms out on a client with an affinity for ""toys."" Katya leaves Nikki with Matt as she returns to Russia to care for her ailing mother.

Billy manages to sneak out of Amanda's apartment without detection. Alison asks him for a reconciliation, but he turns her down. Matt promises Nikki a Christmas party. Billy and Jake look for a tree for the courtyard, and end up running into Jo and Alison. Billy tries to fly home for Christmas, but can't get a flight. He plays Santa at Nikki's party. Alison finds him sneaking a present into her stocking during the night. They apologize and renew their relationship. A temporary nurse prompts Michael to reflect on his behavior. He apologizes to Jane and Robert. Sydney goes to confession and gives up hooking. Nikki returns to Russia.

Billy tells Amanda that he and Alison are back together. Amanda responds by removing Alison from the Microcomp account because she was romantically involved with the client. Amanda moves forward with her plans to evict Jake, but Jo refuses to testify against him. Amanda relents when she needs Jake's help with a plumbing problem. Palmer confesses his guilt to Amanda and skips town. She goes back to Jake. Jo goes to her ten-year high school reunion and runs into Reed, an old boyfriend who has just been released from prison. He later turns up at her apartment. Michael has a breakthrough at a physical therapy session, and regains the use of his legs. Sydney is busted for prostitution. Michael bails her out and agrees to keep quiet if she helps him break up Jane and Robert.

Alison complains to the brass about Amanda's mistreatment of her. After the FBI shows up with questions about her father's disappearance, Amanda is ordered to take a vacation. She heads to Hawaii with Jake, but returns because she fears that Alison is after her job. She goes to Billy and threatens to expose their one-night stand unless he gets Alison to back off. He refuses to cave in, although Alison ends up apologizing to Amanda anyway. Sydney sets up a hooker with an unknowing Robert during a business trip. Jane receives a videotape of the two together and breaks up with Robert. Reed and Jo sleep together. He later decides to start a charter boat service.