This section contains the nature of the case and procedural background.

D and Halifax Corporation entered into a 'Service Contract' under which Halifax agreed to provide the City with a specified computerized system to manage its police department records. The contract recognized that Halifax had 'engaged P to meet certain of its requirements and responsibilities under the terms of this Contract,' and D insisted that Halifax 'not change its subcontractor during the performance of this Contract . . . without the written approval of D.' Halifax submitted product for testing, and it failed twice. D terminated the contract. D had paid Halifax all invoices that Halifax had submitted, and Halifax submitted no further invoices and raised no objection to D's termination of the contract. P sued D for breach. D moved for dismissal in that P was not an intended third-party beneficiary entitled to sue under the contract between D and Halifax. The court found as a matter of law that P was a third-party beneficiary entitled to sue under the contract between D and Halifax. The jury returned a verdict of over $2.2 million plus prejudgment interest for P. The court reduced P's damage award to approximately $1.6 million and limited the award of prejudgment interest so that it applied to only $507,000 of the award. D appealed.

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