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Present: Hassell, C.J., Kinser and Lemons, JJ., and Carrico and Russell, S.JJ. HALIFAX CORPORATION v. Record No. 032444 OPINION BY SENIOR JUSTICE HARRY L. CARRICO November 5, 2004

WACHOVIA BANK FROM THE CIRCUIT COURT OF FAIRFAX COUNTY Leslie M. Alden, Judge Introduction In the period from August 1995 to February 1999, Mary K. Adams embezzled approximately $15.4 million while serving as comptroller for companies that are now known as Halifax Corporation (Halifax).1 Adams accomplished the embezzlement by

writing more than 300 checks on Halifax's account with Signet Bank and its successor, First Union National Bank (collectively, First Union). Adams used a stamp bearing the

facsimile signature of Halifax's president and, in her own handwriting, made the checks payable to herself, to companies she had formed, or to cash. She deposited the checks in

several accounts she maintained with Central Fidelity Bank and its successor, Wachovia Bank (collectively, Wachovia), receiving cash from some of the checks.

Halifax Corporation is a Virginia corporation and is successor-in-interest to a former wholly owned subsidiary, Halifax Technology Services Company, previously known as CMS Automation, Inc. Hereinafter, we will refer to the three entities collectively as Halifax.

1

Procedural Background Upon discovery of the embezzlement, Halifax brought an action against First Union as the drawee bank and Wachovia as the depositary bank. (Halifax I.) The trial court granted Halifax then took a

summary judgment in favor of First Union.

nonsuit of the action against Wachovia and appealed to this Court from the order dismissing First Union. We affirmed the

dismissal, holding that Halifax's claim was barred pursuant to Code

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