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Hank has decided to tie up all his loose ends at the University (read: Jackie, Jill, and Felicia) so that he can concentrate his energy on Karen.
First up is Jackie. Hank asks her to come to his office hours and tries to break the news to her. She doesn't take it well - she's 23, a student, and a "sex worker" - obviously, it's not a good combination for a breakup with your teacher. She's hurt and bitter, but still offers a goodbye blow job, which is promptly interrupted by Dean Koons who is horrified! She jokes that Hank had offered her an A, but quickly recants, compliments Dean Koons and leaves the premises. On her way out, she implies that things are definitely not over between her and Hank. Strike one.
Next at bat is Jill. Hanks takes her to a swanky restaurant to break up with her, even though they're not officially dating. When Hank only gets to start his break up speech with "Here's the thing...", Jill spots her ex boyfriend across the restaurant. This guy is the "egg waster," the guy with whom she wasted all her reproductively formidable years, when he had no interested in marriage and the baby carriage and all that jazz. But, to her horror, Jill sees that he's currently with a girl with a giant diamond engagement ring. Hank comes to the rescue in this mortifying situation: he walks up to the ex's table, and pretends to be one of his ex-lovers, informing him about testing positive for STDs. The presumed fiance stormed off as Jill watches in delight. Hank is a hero, and he's definitely going to have a harder time trying to breakup with Jill now. Strike two.
Finally, Hank pays Felicia a visit and informs her that he's quitting (both the University and her). She is quite irritable about being rejected by him, but shoos him off as she has another gentleman caller arriving. Hank almost walked out of the house free and clear, with one successful break up under his belt, until he sees that Felicia's "meeting" is with David Wilder, a poor-man's version of Hank Moody, according to Hank. Hank can't let her sleep with this guy. He actually makes it out the door, and into his car, before he comes back in to break up Wilder's sexy "foreplay" talk, kissing Felicia and literally sweeping her off her feet to carry her to the bedroom. Strike three.
And to round out Hank's failing personal life, he gets into another fight with Becca at home. She solicits him to go out for ice cream, but it was only a guise to get him out of the house, so he wouldn't catch her half naked friends using her bedroom for sex. Hank can't believe Becca would allow her friends to use her like that and Becca storms out, crying that she's only following his example.
Runkle, on the other hand, is very successful at what he sets out to do. Sue is distressed because one of her top clients, Peter Fonda, is threatening to leave for another agency. They pay him a visit out on the beach and Fonda offers to stay with Sue if Charlie can fight him and win. While Charlie doesn't win the fight per se, neither does Peter Fonda. It ends up being a bunch of old guys rolling around in the sand, complaining of pain, but Fonda agrees to stay with Sue. Later that evening, Sue and Charlie toast their success with some champagne, porn, and cocaine.