When the Harrison household is infected with lice, Diane tries to take charge leaving Kate feeling bulldozed. Jackie and Kate work together to try to prove a point to Diane, but their plan back fires and the lice problem worsens. Meanwhile, Pete plays mediator between Warren and Bert, who are fighting over custody of a teddy bear.

Pete, Kate, Diane and Jackie wake up Christmas morning hung-over and the house in complete disaster. They try to piece together the events of last night's Christmas Eve festivities while also trying to save Christmas for the kids.