Beginning in 1999, May Adams, an officer of Halifax Corporation (Halifax) (plaintiff), fraudulently indorsed Halifax checks totaling $15.4 million to herself from Halifax’s account at First Union National Bank (First Union) (defendant). Adams stamped the checks with the Halifax president’s signature, made them payable to herself, and deposited them into her accounts at Wachovia Bank (Wachovia) (defendant). Adams deposited these checks in amounts ranging from $5,000 to $150,000 weekly or even daily. Wachovia employees took notice of Adams because of the large checks, but accepted the checks drawn on Halifax’s account despite knowing that Adams’ salary was only $1,000 per pay period and that these transactions could be indicative of fraud. Halifax filed suit against First Union and Wachovia. The trial court granted First Union’s motion for summary judgment. Halifax appealed, and the Supreme Court of Virginia affirmed. While the appeal had been pending, Halifax had filed a motion for judgment against Wachovia and First Union in trial court, claiming that (1) the defendants were liable for the embezzled funds and (2) based on Gina Chin & Associates, Inc. v. First Union Bank, 500 S.E.2d 516 (Va. 1998), Uniform Commercial Code (UCC) § 3-406 supported an affirmative cause of action for a depository bank’s negligence under circumstances where an instrument had been forged. Wachovia moved for summary judgment. The trial court granted the motion, concluding that no affirmative cause of action existed under § 3-406. Halifax appealed.