Florence Puana, the grandmother of Police Chief Louis Kealoha’s wife, testified in state court Friday that she was devastated when a reverse mortgage on her home handled by her granddaughter had not been paid off as promised.
After taking the witness stand against granddaughter Katherine Kealoha in a civil trial that also includes Puana’s son and Kealoha’s uncle Gerard Puana, the 95-year-old grandmother said she had trusted Kealoha, whom she described as very smart and said, "I loved her."
The Puanas are suing Kealoha, a deputy city prosecutor, over $148,000 from a reverse mortgage Kealoha arranged on her grandmother’s Maunalani Heights home and $70,000 the uncle claims he gave his niece to invest and for safekeeping.
Before getting into the details of the reverse mortgage, the Puanas’ lawyer asked Kealoha’s grandmother questions pertaining to her personal history.
Florence Puana told the jurors that she was born in Makawao, Maui, in 1919 and went to school to the eighth grade.
She previously testified in another legal proceeding that she then went to work in the pineapple fields and cannery.
Puana said she met her husband in a church choir and that after they married, they moved to Oahu in June 1941. She said later that year she watched Japanese warplanes attack Pearl Harbor from her sister’s house in St. Louis Heights.
After raising nine children, Puana said she worked the next 32 years as a housekeeper at Star of the Sea Catholic Church. She said her job included doing the laundry, ironing, cleaning and sometimes cooking for the priests. She said she also did volunteer work that involved visiting patients at Maunalani Hospital.
Puana said Kealoha proposed the reverse mortgage on the Maunalani Heights home as a way to help Gerard get a condominium.
"She said that she would get the reverse mortgage on my home and she would purchase the condominium. And then she would consolidate her debt" by using the remainder of the money to refinance the mortgage on her own home, Puana said.
In return, Puana said Kealoha told her "she would pay off the reverse mortgage in three to six months."
The reverse mortgage went through, and Kealoha did use some of the money to purchase the condominium. That was in 2009.
In 2012 Puana said she was devastated when she received a notice that her $534,596 reverse mortgage was not paid off and had grown to $678,000.
She said every time she had asked her granddaughter about the reverse mortgage, Kealoha assured her that it was paid off.
"I believed her and we all trusted her, ’cause she was such a wonderful person. And I never, never dreamt that she would do that," Puana said.
Puana said Kealoha broke off ties to her after she confronted her granddaughter about the reverse mortgage.
In 2013, Puana said, she sold her home to pay off the reverse mortgage to "have a little money for my children" because she and her husband promised themselves that before they were gone, they would sell the home and divide the money among their nine children.
Kealoha’s lawyers are scheduled to cross-examine Puana on Tuesday.
Gerard Puana had testified earlier that because Kealoha promised that she and her husband were going to pay off the reverse mortgage, he was making payments to his niece for the condominium.
Kealoha had testified that she spent the money left over from the condominium purchase because she had fronted her own money for the down payment and rent on the unit when the reverse mortgage took longer than expected. She said she never promised to pay back the reverse mortgage. She said her uncle had promised to pay $1,640 per month on the reverse mortgage and an additional $1,333.67 per month for the maintenance fees on the condominium and to pay her back the money he owed her.
