Michael takes Megan back after learning that she has returned to the streets. A woman sues Sydney after she is injured by a display at the boutique. Kyle's plans to force Taylor from their partnership are squashed when Sydney accidentally tells Peter that she slept with Kyle. Alison is confined to bed due to complications in her pregnancy. She gets caught up on all the gossip as she overhears arguments in the courtyard. She hears Taylor tell Kyle that Peter was her brother-in-law. Although Jake feels Alison should mind her own business, he shares this detail with Amanda when she tries to blame herself for the failed marriage. Amanda has Craig drive her to Peter's house to confront the couple. She forces Peter to realize that Taylor's appearance in the apartment building was no coincidence. Matt finds it impossible to cope with Chelsea's rebellious behavior. She runs away after overhearing Matt agree to leave her with his mother.

Amanda is not seriously injured, but loses the baby. Kyle refuses to acknowledge that the child was his, and leaves Peter to break the news. Eve vanishes, and her parole officer warns Peter that she could be arrested unless she resurfaces. Eve stays on the boat of her former cellmate, Jackie. They plan to sail away to Mexico, but Jackie tips off Peter, who convinces Eve to return home. Kyle decides to run away to Boston. Peter discovers that Kyle is not sterile. He has Amanda flown to the airport in a chopper so that she can stop Kyle from leaving. Peter and Jane see the tapes of Michael with Audrey. Jane dumps him again, and buys the beach house with a loan from her father. Peter takes pity on his partner and lets him keep his job. Lexi learns that Ryan has been engaged three times. She pressures Megan to propose in the hopes of exploiting Ryan's fear of commitment.