After Lisa recovers from her illness, she tells Claire that she has just had Michael's baby and that she should divorce him. Claire refuses. Michael also refuses to divorce Claire to marry Lisa.
Michael would soon find himself in trouble at the hospital, and it would ironically be due to another medical case involving the Steiner family. Diane Steiner's grandmother becomes ill, and Michael is supposed to treat her, but he panics, believing Mother Steiner to be the "ghost" of his late, beloved grandmother, and he flees. Mother Steiner dies. Later that day, Michael is arrested for drunk driving. Following an inquest, Dr. Shea's medical license is suspended for six months, and he is ordered to sign an affidavit acknowledging that he is the father of Lisa's baby and promising to provide child support. Lisa shows the signed affidavit to Claire, who quickly divorces Michael.
Michael tries to woo Claire again to improve his chances of being reinstated at the hospital once he gets his license back. Strangely, Claire actually agrees to remarry Michael, until she overhears a conversation in which Michael tells a lawyer that he only wants to marry Claire to get back his hospital position. Then he'll dump her and run off with Nurse Karen Adams, his new paramour. A furious Claire works herself into a drunken stupor and stabs Michael with a letter opener. Bob and Tom find Claire lying on top of Michael. As soon as Michael recovers, he goes to David and threatens to press criminal charges against Claire unless he is reinstated. David reluctantly agrees to Michael's demands to avoid public scandal.
Sandy returns from the sanitarium and is upset to find out that Penny is the new mother figure in her son Jimmy's life. Sandy and Bob demand custody of Jimmy from Penny and Roy on the grounds that Jimmy should be with his real mother, Sandy.
The whole custody battles resolves itself in a bizarre way. Bob, who is seeking reinstatement at the hospital, attends a lab demonstration and is blinded in an explosion. Sandy, distressed by the loss of Jimmy and the accident that has befallen Bob, runs away from home. The irony is that on that very day, Roy decides that he and Penny should return Jimmy to Sandy and Bob.
Roy and Penny get their marriage annulled and Penny leaves Oakdale for New York in June. Bob, in the meantime, is disturbed that Sandy isn't there for him in his time of need and files for a divorce on the grounds of desertion.
Tom, now a college student, becomes further estranged from his family. He is angered by Lisa's deceits involving her baby, whom she has named Charles, or Chuckie, and refuses to have anything more to do with her.
Tom's college roommate, Hank Barton, gets him hooked on speed and other narcotics and puts him up to robbing pharmacy stores in order to feed their drug habit.
Dan and Susan Stewart are carrying on a secret marriage. Both are attracted to the glamorous idea of being a husband-and-wife medical team. But the two try to hide their marriage from everybody by living in separate homes, Susan in an apartment and Dan at his parents' house. Soon Susan, much to her dismay, becomes pregnant and the truth of Dan and Susan's living arrangement comes to light when Susan becomes ill and loses the baby. David is angered by Dan's lies about his marriage to Susan and throws him out of the house.