Story related, cannot be missed. You'll have to fight against a certain friend here. Tis pretty easy, the enemy takes up at least a few spaces on the grid, so you should have a hard time. Make sure your at or around lvl 15 at least (this is what I was at and didn't have any prob, no deaths, no items used and I didn't have that hack golem either).
It's easiest to have Reiger and the front, followed by Karin and behind her, Atsuma. Have Reiger use Barrier, and Karin and Atsuma will take little damage.