Chase begins to make inquiries into the circumstances surrounding his father's death. Angela, in an attempt to foil Chase, has Philip mislead Chase into believing he might inherit Falcon Crest. However, Chase doesn't fall for her trickery. Following a party at the Giobertis, Cole's friend is killed in an auto accident after Cole refuses to drive him home. Angela attempts to force Lance to marry Melissa, who instead has become deeply involved with Cole. However, when Melissa learns she is pregnant, she tells no one.

Pressured by Angela, Lance proposes to Melissa Agretti with the consolation in mind that they dislike one another and that he knows Melissa will reject his proposal. When she surprisingly accepts his offer, Lance is forced to go through with the ceremony. Melissa has her own cunning reasons for marrying Lance, aside from her father and Angela's scheme to merge Falcon Crest with the Agretti Vineyards. When Cole fumes about the arrangement, Melissa assures him that her marriage to Lance won't interfere with their relationship. Another wedding almost takes place as Vicky and Mario decide to elope, but they change their minds at the last minute. Lance discovers that Melissa is pregnant.

In his new role on the Tuscany Valley County Board of Supervisors, Chase meets resistance in his efforts to break Angela's grip on county water supplies. When Melissa tells Carlo about her ambitions to control Falcon Crest, Carlo informs his daughter that she faces a powerful rival in Richard Channing, who is rumored to have ties to the C.I.A. and the British Parliament. Richard shows his ruthlessness by firing The Globe's longtime editor-in-chief, Herb Talmadge, who was only a year from retirement and a pension. After Angela tells Richard that he looks nothing like his father Douglas, Richard explodes after she leaves, vowing to ruin her.

Angela threatens Nick Hogan not to vote with Chase against her at the county supervisor meeting. If Nick votes to redistribute Falcon Crest's water to other vineyards, Angela warns that she won't be buying the $17,000 worth of pipes she was going to buy from him. Nick casts his decisive vote with Chase, and Angela warns Chase that he will come to regret his moment of glory. Emma disappears, secretly giving Chase the voting proxy to her twenty percent share of The Globe before she leaves -- the same proxy Angela hoped would give her control of the newspaper's board of directors. Richard prints a sensational article suggesting Cole murdered Carlo Agretti. When Richard asks Melissa to sell her the Agretti house, she suspects that Richard could have had a hand in her father's death. Cole is arrested for Carlo's murder after Cole's fingerprints are found on the statuette used to kill Carlo.

Against Maggie's wishes, Cole moves in with his new lover, Katherine Demery. Richard finds out and plasters The Globe with clandestine photographs of Cole and Katherine kissing. Jacqueline Perrault, Chase's mother, arrives from Zurich for a surprise visit and gives Chase money for Cole's legal defense, but Richard uses his contacts in Zurich to force Jacqueline to leave town. Angela buys up expensive stock in The Globe and continues tracking Emma to get her proxy. Lori demands that Lance come out in the open about their relationship. Lance is defiant when Melissa confronts him about his late night trysts. After a sudden complication in Melissa's pregnancy confines her to bed, however, Angela pressures Lance to spend more time with his wife.

Doctors give Melissa's premature baby, Joseph, who suffers from a host of health problems, a twenty percent chance of survival. Richard uses a lucrative job offer to entice Tony into securing Julia's agreement to sell off her interests in Falcon Crest and The New Globe. However, the plan backfires and Julia is devastated; Tony realizes Richard's job offer wasn't real. When Cole goes on the run to avoid facing trial for the murder of Carlo Agretti, Melissa agrees to a second autopsy of her father's body hoping it will help clear Cole. The autopsy reveals that the killer must have been right-handed, whereas Cole is left-handed, and the charges are therefore dropped.

Vicky talks Cole into informing their parents that Cole is the father of Melissa's baby, but the opportunity never comes up. Phillip has a romantic dinner with Amanda Croft, a beautiful woman in her fifties. There is chemistry between them, but Amanda is suspicious of Phillip's relationship with Angela. When Darryl seduces Maggie into a passionate kiss at his Malibu home, Maggie panics and flies back home to Chase. Just as Angela has nearly bought up enough New Globe stock to control the company, Richard announces he is going to issue two million dollars more of stock, which is a strategy that Angela and Phillip hadn't foreseen. However, Angela and Phillip secretly arrange for a Wall Street banker named Kenderson to approach the unwitting Richard. Kenderson proposes to underwrite the new stock issue thereby delaying the offer long enough for Angela to get control of the newspaper. Meanwhile, Chase's mother, Jacqueline, has researched Angela's business dealings in Europe and provides Ch