Grotto Mermaid
The Grotto Meramid, whose name is Kaia, is a mini boss found in a hidden room in the Basement Dungeon. The party is attacked by her if they turn off the power generator next to the pond where she resides. She will use water magic, as well as melee attacks using her tail, which can be disabled by attacking the tail enough to KO it.
After winning the fight, it will be revealed that she is actually friendly and the fight was due to a misunderstanding. She explains the pond connects to the ocean via underground tunnels, and she was just hanging out here to look at the nice lights Claire had put up. As an apology for attacking, she will give the party a 
Mermaid Wand.
If returning to the cave later in the game, she will still be there and have the cave covered in red solo cups, seemingly now using it as a party locale.
Bestiary Description
Mona's Notes: Kaia is a water elemental, coloquially known as a mermaid. (You only fought her due to a misunderstanding, but we'll log her here anyway.)
This was a fearsome foe for the time, with decent stats and the ability to cast Bubble. She lacks any major weaknesses, but damaging her tail first reduces her offensive capabilities.