No longer burdened by her home and all of its expenses, Grace is filled with a new energy and vitality. Selling her home represents a new chapter in Grace's life, one that she is now eager to embrace. But all of her new found joy comes crashing down when Olivia reveals that the buyer has pulled out of the sale. It turns out that Grace's home has a lien on it due to a second mortgage she and her ex-husband took out. And having taken the home in the divorce, the lien is now solely Grace's problem. Olivia offers to speak to Grace's divorce lawyer to see if they can resolve the matter. Garce then reveals that in order to have a more amicable divorce, Grace and her ex-husband Dan didn't retain lawyers and did all the paperwork on their own. Having already agreed to the terms, it seems Grace is going to be left with few options.
Meanwhile, fresh off his first date with Shelly, Eric tells Jack that he and Shelly are breaking up and that she and their daughter are moving to Seattle. While Jack initially encourages Eric to follow Shelly, he eventually relents, acknowledging that the move is perhaps in the best interests of Eric, Shelly, and the baby. Still in shock, Eric exhibits a new level of maturity and accepts that Shelly is leaving. Later, Eric and Shelly share a tearful embrace as she and the baby say farewell.
Later in the day Olivia stops in at the library to check on Grace. Grace has been trying in vain to contact her ex-husband. Worried that Grace may be giving up, Olivia convinces her that they need to go and confront Dan in person. Upon arriving at Dan's home, both Grace and Olivia are taken back by the size and grandeur of the house. When a younger woman answers the door Grace assumes that Dan, trying to avoid her, gave her the wrong address. Grace starts to apologize, but as she does, the young woman corrects her, saying she and 'Danny' live together and have "been together for ages."
Looking for direction in her own life, Justine is spending more time with her old friend Cecilia. Cecilia brings Justine along with her to visit her boyfriend at the local Naval base. While on base Cecilia introduces Justine to Luke, a young and newly retired Navy Seal. Luke is very handsome, but he is also very shy and distant. Cecilia explains that Luke was on active duty for a long time and has "seen too much." She assures Justine that he's a nice guy but that he still needs time to assimilate back into normal life.
Back at Dan's home, Olivia patiently waits in the living room while Grace has a heated argument with her ex-husband. In the end, Grace storms out of the home and demands that Olivia take her back to Cedar Cove. When Olivia asks what happened, Grace, still fuming form the confrontation, says that since she signed off on the divorce and settlement she's stuck. Olivia fires back saying she can represent Grace in court. But Grace, obviously angry at herself, wants nothing more to do with the situation and just wants to go home. In Cedar Cove Jack finds Eric sitting in the living room starring at his meager wages for the day. Recognizing his son's predicament, Jack offers to help Eric go back to school. Jack's offer comes with the condition that Eric goes easier on himself and focus on being a good father and student. Relived and excited, Eric jumps at the opportunity and agrees to finish school. But this opportunity is not the only one Eric must consider.
Later in the day Warren Saget makes Eric a very tempting offer. Having seen Eric's affable personality and sales skills at Moon's, Warren offers Eric an associate job with Saget Development. When Jack learns of the offer he is less than thrilled. With Warren's dubious reputation and questionable business practices, Jack fears that working for Warren could do Eric more harm than good. Jack implores Eric to look beyond his immediate financial concerns and focus on the longer-term goal of finishing school. Eric relents and begrudgingly informs Warren of his decision. Warren makes one final pitch to convince Eric, but for the moment, he decides to accept Eric's decision and wishes him luck.
Later that day, Justine runs into Luke at the Captain's Galley. Justine again tries to talk to him but another bar patron interrupts, insisting on buying Luke a shot. The man, another Vet, explains that Luke is a hero, having saved an entire platoon during the war. One shot turns into several and soon Luke is drunk and becoming a nuisance. Unsure what to do Justine calls Cecilia for help. Cecilia and her husband Ian arrive and pull Luke from the bar. As Ian maneuvers him into a car Luke make as mumbled apology to "Caroline." Ian has no idea who "Caroline" is, but the more pressing concern is that Luke cannot return to base in his current condition. Hoping to help, Justine offers to let him sleep off his stupor at her mom's house.
The next day, as Jack and Olivia are enjoying a cup of coffee, a hung over Luke finally awakens. Justine enters the room and explains how a few shots ended with Luke passed out on the couch. As if he couldn't be any more uncomfortable, Olivia mentions his tour in Afghanistan. An awkward silence follows before Luke makes a hasty exit. Justine tries to offer him a ride but he refuses and bolts from the home. In his haste, Luke forgets to grab his jacket. When Justine picks up the jacket, a letter to "Caroline" falls out of a pocket.
After her confrontation with Dan, Grace seems to have lost some of her fire and gumption. Her change in attitude does not go unnoticed and Cliff feels compelled to say something. Olivia is also concerned, especially since she is convinced that Grace has a solid case against her ex-husband. After some tough love from both Olivia and Cliff Grace finally relents and hands her divorce papers to Olivia to prepare for a new lawsuit against Dan.
After his sudden departure from her house, Justine knows she has to talk to Luke. She first asks Ian and Cecilia if they know where she can find him but they haven't seen him. Ian suggests that after his drunken incident, Luke's probably trying to skip town. Justine races to the docks where she finally catches up with him. Justine hands over the jacket and the letter. She also confesses to Luke that she read the letter. Justine apologizes, saying that she hoped by reading it that she could find a way to help. But she also said that she's glad she read the letter because now she knows why he came back to Cedar Cove.