After a bitter argument with Angela regarding plans for him to marry Melissa Agretti, the wine empire heiress, Lance leaves in a fury. After he nearly runs over a girl, he falls in love with her and decides to move to San Francisco to be close to the girl. However, when Angela attempts to stop him, Lance succumbs and leaves the love of his life. In an old room that Jason had walled up, Chase finds some writings, which lead him to believe that Angela may have been involved in crippling a girl forty years ago. Confronted with the evidence, Angela turns the tables on Chase, playing a small excerpt of a recording that leaves Chase believing that his father hated him.

Angela, angry that Lance is working for his grandfather's newspaper in San Francisco and determined that he will marry Melissa Agretti (Ana-Alicia), plans to destroy Melissa's budding romance with Cole. Chase and Maggie, concerned about Emma's instability, persuade Julia to take her sister to a local psychiatric clinic. When Angela finds out, she tells Julia the truth about Emma killing Uncle Jason, which turns Julia against Chase and Maggie. At the same time, Chase uses his influence as a county supervisor to discover the real cause of his father's death.

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.

Angela resists Chase's claims to half ownership of Falcon Crest. Lance, already bitter over the prospect of sharing his inheritance with Melissa, gladly accepts the assignment of keeping Chase off the vineyard property. Richard Channing, illegitimate son of Angela's late husband, prepares to take control of The Globe as the new chairman of the board, while Angela looks for a way to block him. The newspaper is only a small part of the vast portfolio called ""The Company,"" held by Henri Denault, Richard's mentor and stepfather. Adopted at a young age, the desire to finally learn his mother's identity has motivated Richard to make the move to California and take over The Globe. When Cole shows up at the Agretti's demanding that Melissa acknowledge that she is carrying Cole's child and not Lance's, Carlo punches him in the face. After Gus dies in a gas explosion, Chase threatens Angela with an affidavit accusing her of complicity in Gus's death. He then forces Angela to agree in sharing the

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.

When pressured by Richard to sell his winery holdings, Carlo spits in Richard's face, then confronts Angela about Lance's abusiveness toward Melissa and vows that Angela will never get Carlo's land through his daughter's marriage to Lance. Chase wants to distribute Falcon Crest's wine in Canada through a distributor other than Kleeger, which gets a big discount on their wine. Angela secretly owns Kleeger, and she charges Lance with keeping Chase from finding out. To counter Chase's efforts on the County Board of Supervisors to break her monopoly on the valley's water and distribute it to other growers, Angela claims her water is tainted. In turn, Chase orders another test of Falcon Crest's water supply that shows it not to be tainted. Cole gets into a fight with Carlo, who later telephones to apologize to Cole and invite him over to see Melissa. Not knowing that Carlo has leveled a pistol to his own head, Cole arrives to discover Carlo's body and becomes the prime suspect in Carlo's mu

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.

At the Tuscany Valley Cemetery, a funeral is in progress that will drastically affect the lives of everyone at Falcon Crest. After admitting to the murder of Carlo Agretti, Julia pulls out a gun, critically wounds Chase and fatally wounds his mother Jacqueline. At Jacqueline's funeral, Chase's cousin, Dr. Michael Ranson, appears for the first time and is taken into the Gioberti household. At the prison, Julia fights Angie's attempts to help prove her innocence, believing prison is better than living under Angela's tyrannical control. Lance feverishly pursues Melissa, who is horrified that his mother murdered her father and who vows never to forgive any of the Channings. Back at the hospital, Chase finally comes out of his coma, only to discover that the bullet lodged in his spine has left him paralyzed.

After their baby's accident, Melissa and Lance agree to a truce, and Lance and Angela are soon thrilled when Melissa announces she's pregnant. Carrying out Angela's plan, Dr. Lantry informs Maggie and Michael that the bullet in Chase's spine has caused an infection, and that he may have to operate. Later, Lantry discreetly injects drugs into Chase's I.V. During this, Richard becomes guilt-ridden when he learns from Philip that Jacqueline was dying of cancer and stepped in front of Richard to spare her son from the gunfire. Richard and Melissa then plan to gain Julia's trust to manipultate her to avenge the deaths of their parents. Meanwhile, Maggie begs Michael to face his fears and take over Chase's case. That night, Dr. Lantry triumphantly announces to Angela that Chase has a raging fever and could die whenever she wants. Angela is horrified, but Lantry coolly informs her that it's too late and reminds her she's an accomplice to murder.