Shawn, Gus and Whip head to see the psychic who tells them that Bob was desperately in love with a woman named PENNY – the same woman the psychic lied and told Bob he'd have a future with.
Shawn, Gus, Juliet and Lassiter head to Penny's apartment to get the scoop. They are immediately disturbed to discover that Penny is an in-home performance artist – meaning, people literally pay to come watch her "live" in her apartment. She calls it, "life imitating art." It turns out, Bob was a frequent spectator of Penny's performance art show. Penny tells them the last time she saw Bob was when he left the show and got into a black Impala and took off, but she didn't know where. Shawn determines that whoever picked Bob up in that car was the last person to see him alive.
Meanwhile, Woody and Grace discover Bob had a mixture of spray paint and muriatic acid built up under his fingernails. Woody calls Shawn to tell him. This new information leads the guys to a painted mural a couple blocks from the accident.
Shawn sees a symbol on the mural that he recognizes: the same stamp that Whip places in the books he sells at his shop. From this, they believe that it was Whip who picked Bob up in his Impala, brought him to the mural and killed him. They believe he committed the murder so that he could go down in true crime history; however his plan was ruined when Bob's death was ruled an accident. They immediately head to Whip's house and discover Whip dead in his garage with a plastic bag with Bob's earlobe inside and a note thanking Shawn and Gus for securing his "rightful place in the annals of murder history".
Shawn discovers a message on his phone from Whip from one hour before he was killed. He hears something suspicious within the message and decides to head back to the bookstore garage, the scene of Whip's death, to reinvestigate. They find Whip's surveillance room and decide to watch the old surveillance videos taken in his shop that Whip had been watching leading up to his death. On the footage they see the same woman in every shot reading from a different book in the store. In the same room, there's also a small stack of books. Shawn realizes that the same stack of books sitting on the desk in front of him are the same 5 books the woman was seen reading in the surveillance footage. Inside the books, Shawn notices that a small piece of each book has been carefully ripped out.
At the same time Shawn and Gus discover the ripped pages, Woody plucks a tiny capsule from Whip's esophagus. Within the capsule lie the missing ripped out pieces from the five different books. Shawn knows that Whip was onto something and that he found this woman to be suspicious. It turns out that this woman in the surveillance footage was doing all of her research to commit the perfect murder in front of Whip's bookshop and figured out that Whip would be the perfect person to pin it on. Shawn takes a closer look at the woman and realizes she is actually Grace.
Shawn immediately tries to get a hold of Woody to break the news that his former lover and colleague is a murderer. However, Grace prevents him from answering it and takes the evidence that Woody found in Whip's esophagus and throws it away. Woody, confused by this, asks her why she would do such a thing. Grace then reveals her true colors. She threatens Woody with a gun, and Woody demands an explanation as to why she is doing all of this. Grace laments that she hasn't been able to get a job in criminal pathology and has been stuck in the less glamorous world of a mortician since graduation. Woody then figures it out that Grace was after his job and sliced Bob's ear on purpose to make it look like Woody messed up the autopsy. She wanted the SBPD to reopen the case so that she could prove Woody's incontinence and in turn steal his job. But Whip was on to her plan; he set Grace up by swallowing the capsule, so that when the coroner found them and had the pieces DNA tested, he would discover it was actually Grace that killed him. Grace tells Woody that Whip has given her no choice but to kill Woody so that she can go through with destroying the evidence that would put her away for life. Woody is shocked and scared and practically begging for his life. But thankfully, Juliet arrives just in time with the SBPD in tow. They save Woody and arrest Grace. The next day, Vick tells Woody that his job is secure and that her decision to hire Grace on the case was ill advised.