Morgan

*658 MEMORANDUM AND ORDER *

The surrender of a judgment may constitute consideration recoverable as compensatory damages. See Sentinel Ins. Co. v. First Ins. Co. of Haw., 76 Hawai'i 277 , 875 P.2d 894, 913 (1994); Earth Elements, Inc. v. Nat’l Am. Ins. Co. of Cal., 41 Cal.App.4th 110 , 48 Cal.Rptr.2d 399, 402 (1996). Therefore, the district court erred in dismissing the Morgans’ claim that they are entitled to reimbursement for the $30,096.64 judgment they surrendered to Dimiceli as part of their settlement of Dimiceli’s claims. On remand, the court must consider whether the Morgans established that this element of their settlement with Dimiceli was reasonable and in good faith, such that it “may then be utilized as presumptive evidence of the breaching insurer’s liability.” Sentinel, 875 P.2d at 913 .

The district court did not err in dismissing the Morgans’ claims for other damages. At trial, the Morgans failed to prove the attorneys’ fees they sought were necessary and reasonably related to the defense of the covered claims, as required by Hawai'i law. See Keller v. La Rissa, Inc., 60 Haw. 1 , 586 P.2d 1017, 1021 (1978); Sharp v. Hui Wahine, Inc., 49 Haw. 241 , 413 P.2d 242,…