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.
Angela jeopardizes Chases recovery by telling him about his mother's death. After Maggie confronts Angela, Angela declares that it's time to go for the jugular. When Angela learns that Dr. Lantry augments his income by illegally selling pills, she uses this information to blackmail the doctor into signing an affidavit about Chase's incompetence to manage Falcon Crest. As Lance helps his grandmother in her scheme, his wife, Melissa, is turning to Richard for affection. Back at Falcon Crest, baby Joseph is rushed to the hospital after swallowing the pills that Lance had procured for Angela's blackmail scheme. With hatred and fear in her eyes, Melissa coldly accuses Lance of trying to destroy her baby.
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.
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.
While Chase returns to Falcon Crest, Angela orders Lance to make his homecoming difficult. Lance, in an attempt to undermine the Giobertis, sends home Chase's crew and sabotages one of the vats. As the Giobertis attempt to do all the work themselves, a drainage lid breaks loose, spilling thousands of gallons of wine. After controlling the leak, Chase collapses from exhaustion. At Julia's trial, Philip motions to have Julia placed under psychiatric observation, but before the judge can rule, Julia pleads guilty on all counts. The Channings and Giobertis sit stunned, but Melissa sits smugly, knowing her mission has been accomplished by convincing Julia to lash out against Angela through her prison sentence. Alarmed, Philip warns Angela that Julia could receive the death penalty.
Melissa helps push Julia closer to the gas chamber as she faces sentencing for two murders. As the judge prepares to pronounce sentence, Julia announces she'd rather die than spend her life in prison. The judge, however, sentences her to life behind bars. Michael Ranson accuses Dr. Lantry of malpractice, but Lantry tells Angela he will implicate her if she doesn't stop Michael. Meanwhile, Richard Channing spins a malicious web using Emma to lure Maggie to work for his newspaper as a feature writer while he fights Chase by delaying the reading of Jacqueline's will. Philip returns the original contract to Melissa that Angela had forced her to sign that would have given the Agretti harvest to Falcon Crest.
Julia enters prison where she meets up with a tough matron who has a personal vendetta against the Channings, while Angela works to get her sentence commuted. After making love, Melissa offers the Agretti harvest to Richard, which he eagerly accepts in order to keep it from Angela. In Jacqueline's will, she has left fifty million dollars to be split between Chase and his brother, but, only if after one year, Chase believes Richard to be trustworthy. This reveals the motive for Richard's brotherly actions. Jacqueline also leaves Angela a hotel suite key with instructions that Philip must accompany her there. Jacqueline has the last laugh when Angela finds an unmade bed with a note from Jacqueline stating that she and Philip made love at that very spot.
Julia breaks down to beg Angela for protection against the ruthless inmates and prison matron who are out to kill her. Angela pays the matron off to make things easier on Julia. Maggie uncovers evidence that Dr. Lantry's paychecks are supplemented by a mysterious and handsome additional income. Dr. Lantry is feeling the heat from Chase and Michael's investigation into his competency and ethics as a doctor. Afraid of being implicated by Lantry, Angela threatens Dr. Hooks into dropping any inquiries. Maggie's sister, Terry Hartford, discovers that Maggie has become wealthy and heads for Falcon Crest.
Angela desperately protects herself when she discovers that Chase and Michael's investigation into Dr. Lantry's underhanded past points to her. After Angela reveals to Lance that Melissa and Richard Channing are having an affair, Lance, boiling with anger, sets out to find them. Melissa covers by telling Lance that she's trying to maintain Richard as an ally, while Richard has his eyes set on Pamela. Linda's father refuses to acknowledge Cole as part of his family, while the newlyweds start a custody battle for baby Joseph with Melissa and Lance. Maggie's sister Terry seeks her fortune in Tuscany Valley by manipulating her way into the Gioberti's home.
Railroaded by Angela, Dr. Lantry is jailed, but now he poses a bigger threat to the wine baroness who fears he will turn the state's evidence against her in court, implicating her in the attempted murder of Chase. Philip arranges Lantry's bail and plans to have him sent out of the county, but Chase and Michael are determined to prove that Lantry is allied with Angela. Angela investigates Terry's dark past with plans of using her to destroy the Gioberti family. After discovering that Terry had been a prostitute in New York, Angela uses this fact to force her into stopping Cole's custody suit. Meanwhile, Terry, scheming to gain wealth, plans to overtly flirt with the men of Falcon Crest. At the same time Richard is incensed to learn that the cartel demands 100 percent control of his racetrack and will stop at nothing to get it.
Lance betrays Angela by revealing to Chase where Dr. Lantry is hiding. Chase accuses Angela of having arranged Lantry's bail and tells her that he found out from Lance. Angela denies everything but can barely control her fury over Lance's betrayal. Chase locates Lantry, who confesses that Angela had blackmailed him into signing the affidavit concerning Chase's incompetency. Before Chase can stop him, Lantry injects himself with a lethal dose of morphine. When Osborne's dead body is found on Richard's property, this not only further tarnishes his already scandalous reputation, but poses a threat to Richard's own life. Meanwhile, Michael warns Richard that his inheritance is in jeopardy, and Philip is exposed as the publisher's business associate.
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 loses control over her wicked power game when Philip intervenes and forces her to sell the Agretti harvest to him. Richard is nearly run down by a hit man as the cartel becomes even more determined to take over his racetrack. When Maggie interviews Sister Jeanette, an old acquaintance of Chase's mother, she overhears the startling news that Jacqueline had an affair with the head of the Nazi Gestapo in Paris, Johann Riebmann. When Cole returns home to find Melissa waiting for him seductively posed in his bed, he throws her out, but not before Linda enters, who witnesses the ugly scene.
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.
Terry's dark, sordid past is exposed to Michael when Angela goes to extravagant lengths to run her out of Tuscany Valley. Angela pays Kate Mars, a former call girl buddy of Terry, to tell Michael the truth about Terry's past. Angela also exposes Philip's past indiscretions, producing a cuff link she found by the bed in the hotel room where Jacqueline claimed to have slept with Philip. Phillip denies everything and quits, fed up with Angela's manipulation. Chase seeks out another wine distributor and discovers that Calvin Kleeger served as a front for Angela. At the mental hospital, Julia, disguised as a janitor, escapes and starts hitchhiking her way back to Falcon Crest. Maggie discovers that the horrifying cause of her dizzy spells and headaches is a brain tumor. When Richard refuses to give the cartel control of his racetrack, hit men kidnap Pamela and force her to choose between loyalty to Richard and her life. Meanwhile, Lance stalks Richard, seeking revenge for his mother's menta
The New Globe publishes news of Julia's escape, while Julia steals a wallet and buys a wig from a waitress at a roadside coffee shop. Melissa pays a heavy price for trading her son for power. Chase meets with Philip to determine how serious Angela is about trading Joseph for half of Falcon Crest. When Philip produces Angela's custody contract, Chase is appalled, but is pleased to know that he can pry Joseph out of Angela's clutches. Melissa begs Angela to call off the deal with Chase, but Angela tells her that it's too late. As Chase and Cole come to take her child, Melissa is overwhelmed by guilt. Later, Chase gets an anonymous tip that Richard bribed a county geologist to approve construction of the racetrack. At the cartel's behest, Pamela plants bugs in Richard's office and home. Terry remorsefully suffers the backlash from her sordid past, but surprisingly, Michael still asks her to stay in Tuscany. Julia uses her disguise to slip past a police checkpoint, then assumes the identit
Lance flies into a rage when he hears that Melissa sold Joseph to Angela for her half of Falcon Crest. Angela later warns Lance that he must mend things with Melissa since she is now Pamela's heir and if he doesn't, he'll be left penniless. Richard finds the bugs planted by Pamela, leading him to believe the cartel is closing in on him. Angela ignites a romance with Carter St. John, which makes Philip jealous. Maggie is running out of time as her tumor rapidly grows and must decide between risky surgery and radiation treatment. Her eyesight soon starts to fail, and Michael warns that if they don't operate on Maggie soon, her loss of sight could be irreversible. However, questions about Michael's surgical abilities still linger. Claiming she is afraid for her safety, Julia has Lucas teach her how to shoot a gun.
Michael convinces Chase to let him operate on Maggie's tumor, which has already taken her sight and may take her life. Michael enlists his former lover, anesthesiologist Lillian Heller, for helping with Maggie's operation. Lillian is a houseguest, which arouses Terry's jealousy. As Maggie is wheeled into the operating room, Chase wonders if he will ever see his wife again. At Falcon Crest, Angela urges Lance to reconcile with Melissa in order to produce a true heir to Falcon Crest. However, when Lance begs Melissa to give their marriage a second chance, she sees through his insincerity and coldly reminds him that she is the sole beneficiary to Falcon Crest and has no intention of sharing her empire with him. Philip adds to his winery staff by hiring away Angela's best people. Meanwhile, Pamela carries out Spheeris's orders to help destroy Richard, while Richard is preoccupied with trying to win over Chase to obtain his inheritance for the completion of the racetrack.
Just as Michael and Dr. Heller remove the last of Maggie's tumor, her heart stops. Working quickly, Michael and Dr. Heller manage to get a weak pulse, but Maggie is left in a coma. As Michael humbly admits that Maggie's fate is up to God, Angela prays for Maggie, Julia and Falcon Crest, and reunites with Philip, whom she believes she will be able to trust again some day. Meanwhile, Richard is crazed when he learns that Chase has turned over Jacqueline's fifty million dollar trust fund to St. Martha's convent in Paris at a time when Richard desperately needs the money. On top of this, the cartel's plot against Richard threatens Pamela's life. After Pamela is abducted by the cartel, Richard realizes that though he may have retained control of the racetrack, the cartel has the one thing he cares most about: Pamela.
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.
Emma and Lance discover Julia hiding out at the springhouse with her hostage Joseph. Terry receives a disturbing letter, dredging up more of her sordid past and forcing her to lie to Michael again. As Angela reads a letter that Julia had sent her while in college, she regrets having been too busy with her business career to spend time with Julia. In the springhouse, Julia agrees to release Joseph if Angela is brought to her. The police surround the house as Angela enters in exchange for Joseph. Angela admits to Julia that she has failed her as a mother and finally says what Julia has been waiting to hear, that she loves her. As Julia breaks down and hands Angela the gun, the deputy prematurely opens fire, igniting a kerosene lamp and setting the house on fire. Braving the flames, Lance and Chase dash into the house. Chase pulls Angela to safety, but Lance is knocked out by a falling beam and must be rescued from the fire. As the springhouse erupts in flames, Angela watches helplessly,
At the charred springhouse, the coroner, after inspecting a ring and bone fragments, positively identifies the remains as Julia's. In a note to Lance, Julia's last request is to have her ashes scattered in Italy. Angela asks the Channing and Gioberti families to travel to Italy in hopes that Julia's death can somehow reunite them. Richard is heartened to learn that Pamela may be alive in Europe. Melissa informs Lance that when he returns from Italy, she will have already moved out of Falcon Crest. Angela discovers that Melissa has filed for a divorce and is unable to have children. As everyone prepares to leave, Melissa pays one of the workers to stage an accident at the winery so that Cole will have to stay behind with her. As Chase inspects the airplane, he fails to recognize one of the cartel's men posing as a mechanic. As Angela, Philip, Lance, Emma, Richard, Maggie, Michael, Terry, Linda and Joseph take off in the plane with Chase as the pilot, the emergency buzzer sounds indicati