A man dressed in black approaches a house, breaks in, and is greeted by the owner, who knows him. The owner, Rob Sherman, tells the would-be burglar to start taking stuff as part of an insurance scam they've agreed to. However, Sherman pulls out two guns, kills the thief with one, and shoots his wife with the other gun when she comes down to investigate. He then wipes off his fingerprints and puts the gun in the burglar's hand and fires one more shot into the doorsill, then calls the police.
The next day Stottlemeyer and Disher investigate and call in Monk, although Disher thinks it's an open-and-shut case. Natalie has to take Julie and her new boyfriend Tim with them since she was going to drop them at school. Monk realizes that the burglar, Dewey Jordan, has clean shoes and wonders why he wiped his feet before coming in. Sherman is concerned about clean feet so no one walks on his expensive rug. Monk goes upstairs and notices the bedroom phone is unplugged, and the box Sherman claims to have taken his gun out is closed and latched. Sherman claimed his wife went downstairs to turn up the heat but didn't wear her slippers.
Outside, Sherman notices Tim and Julie outside and notices Julie is wearing a t-shirt with a photo of them taken at the Bay City pier. The others come outside and Monk wonders why Sherman only fired one shot into the thief instead of shooting repeatedly. Back at headquarters, Monk explains his theory that the whole thing was a set-up, but they keep getting interrupted by a witness to a knife fight, Rita, who pokes holes in the theory. Monk thinks he's seen Sherman and Dewey together somewhere but can't figure out where, and can't come up with a motive for the murder. Sherman has only had one arrest, for a traffic violation. Monk realizes Sherman was in court at the same time Dewey was.
At school Julie and her friend are oohing over guys when a cute boy, Clay, comes over to ask Julie to tutor him in Spanish. Meanwhile, Monk and Natalie go to the funeral where Sherman is burying his wife since he won't take Adrian's calls. After a mishap with the ashes of the deceased, Sherman arrives and Monk points out that he met Dewey in court. However, Sherman claims that it's probably where Dewey saw him and decided to target him for burglary. Sherman leaves with his secretary Ashley.
That night Julie is working with Clay who is clearly interested n Julie. Natalie hustles him out and outside, Clay calls Allison and says that he'll be "reeling" Julie in… and Allison is sleeping with Sherman.
Julie gets word that Clay wants to ask her to a party and Natalie is shocked. Natalie wonders why Julie is breaking up with Tim and burning up his stuff, including the t-shirt. The next day, Monk and Natalie go to Dewey's apartment and Monk notices an air grille with new screws. Natalie is more concerned about Julie's new boyfriend as Monk finds a gun hidden in the vent. Monk wonders why Dewey didn't take that gun, and notes the bullets don't find the gun on Dewey's body. Natalie wants Monk to talk to Julie and he finally gives in. He goes up to Julie's room and stumbles through a birds & bees speech for the benefit of Natalie listening in, then tries to get out. Julie has some serious questions for him and he finally breaks down and talks about his feelings for Trudy.
Disher is following up on Monk's theory and thinks he's found video of Dewey and Sherman meeting at the courthouse. Natalie and Monk are picking up dry cleaning when they spot Clay kissing a girl. Natalie confronts him and Clay reveals that he was paid by someone who claimed to be Natalie's sister to date Julie. Monk recognizes the pay envelope from Sherman's house and the description fits Allison's descriptions.
Monk and Natalie go to Bay City Pier and spot Tim running a booth. Tim is glad to hear Julie is breaking up with Clay, and they spot Sherman and Monk follows him. Natalie explains to Tim that Dewey was at the pier and met with Sherman to discuss their plan. Julie and Tim were there the same day and they got their t-shirt photo taken together, and Sherman and Dewey were in the background. Sherman saw it and had his girlfriend hire Clay to get Julie to break up with him so she'd get rid of the t-shirt. Stottlemeyer is getting a search warrant to check the photo booth copies.
Meanwhile, Monk follows Sherman but gets stranded in a dodge'em car ride long enough for Sherman to get to the photo booth and steal the copies. Monk chases after him to the pier where they struggle over the water. Sherman tosses the photos into the water but Tim leaps into the water and rescues them. Stottlemeyer and Disher haul him away while Julie and Tim get back together. Julie gives Monk a kiss on the cheek and the detective is eager to wipe it off even though Natalie insists he shouldn't.