Honolulu’s $2.85M settlement with Gerard Puana resolves all claims

The city’s $2.85 million settlement of a civil lawsuit with Gerard Puana, a victim in the Kealoha corruption scandal, is the final case of its kind filed by Puana against the city, officials say.

“This settlement settles all remaining claims by Mr. Puana against the city and all people related to the city,” Ian Scheuring, the mayor’s deputy communications director, said Thursday.

He added that Puana’s civil suit named ex-Police Chief Louis Kealoha and his wife, ex-prosecutor Katherine Kea­loha, as well as former Honolulu police officer “Bobby” Minh-Hung Nguyen and the City and County of Honolulu.

To finalize the Puana case against the city, the City Council is required to vote to approve the settlement agreement.

Brannagan Mukaisu, a City Council spokesperson, said the panel has yet to receive information about the settlement, and no Council meeting had been scheduled to address the matter. The full City Council is expected to hold its next regular meeting Feb. 22.

The settlement, announced Wednesday in federal court, followed the 2019 federal case involving public corruption and conspiracy of Louis and Katherine Kealoha, which included the framing of Puana, Katherine Kealoha’s uncle, for the alleged 2013 theft of the Kealohas’ mailbox, following a financial dispute with the Puana family.

An initial lawsuit was filed in 2016 by Gerard Puana, alleging that he was wrongfully arrested, incarcerated and maliciously prosecuted in a pair of criminal cases in 2011 and 2013 as a means to thwart efforts by Puana to recover money he believed Katherine Kealoha had swindled from him and his mother, Florence Puana.

In December a federal court ruled Puana could sue the city, despite the city’s objections. The plaintiff initially requested $30 million; however, later court rulings drastically reduced that amount.

The Kealohas as well as Nguyen are currently serving time in federal prison.

In connection to the Kea­loha scandal, Scheuring said the city still has outstanding litigation against former city attorney Donna Leong, former Managing Director Roy Amemiya and former Honolulu Police Commission Chair Max Sword. Leong, Amemiya and Sword are accused of conspiring to defraud the government by paying ex-Police Chief Kea­loha $250,000 to voluntarily leave the Honolulu Police Department in 2017, and not clearing that agreement with the City Council.

“But as far as litigation where Louis and Katherine are defendants, that’s it,” Scheuring added.

Typically, the city’s Corporation Counsel — with an operating budget of approximately $12.2 million in 2022 — handles the city’s legal matters, particularly with regard to litigation and settlement agreements. In the past year the Corporation Counsel has handled an assortment of such agreements — usually noncriminal civil and tort claims — which often allege personal injury or property damage caused by the city.

According to documents obtained by this newspaper, those settlement agreements included seeing the Council in June approve a payment of $989,341.26 to Honolulu- based Coastal Construction Co. Inc., a subcontractor for Kahauiki Village Development LLC, which constructs and later manages housing for low-income and homeless people, for reimbursement of expenses incurred in late 2020 while working to repair and refurbish 22 existing affordable rental units inside vacant, city-owned public-housing sites on Oahu. The work done, the plaintiff’s complaint stated, was based on the belief that the city would offer “affordable housing credits” and “community benefit credits” to Kahauiki Village Development in return for the improvements.

Likewise, in November the city paid Gary Gill — a former Honolulu City Council chair and current Honolulu Rate Commission member — $109,424.69 after a section of road and a retaining wall on the 4100 block of Round Top Drive collapsed onto his property in December 2021. The collapse caused a mix of concrete, dirt, rubble and trees to crash into Gill’s home, severely damaging the residence. No injuries to people or animals occurred during that incident, city documents state.