Lexi finally launches her plan to break up Ryan and Megan by persuading Megan to propose marriage to Kyle first in hopes that he will panic and leave in a huff as he did with his other former girlfriends. Dr. Ilene Schulman, the chief resident at Whilshire Hospital and an old foe of both Michael and Peter, returns and threatens both of them as they vow to fight her ruthless, tightfisted corporate policy at the hospital of denying people medical treatment for their lack of insurance. When Ilene discovers Eve's background, Eve's friend, Jackie, decides to take matters into her own hands. Amanda, now reconciled with Kyle, can't balance finances regarding her current and future homes, and starts to turn a cold shoulder towards Eve. Also, Jane moves out of Melrose to get away from Michael and she moves into his vacant beach front house and throws a housewarming party for some of the Melrose residents.