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July 1, 1992

PIONEER BANK AND TRUST COMPANY, formerly known as PIONEER TRUST & SAVINGS BANK, not personally but solely as Trustee under Trust Agreement dated December 8, 1956 and as Trust No. 10940; PHYLLIS PANIJEL and MURIEL VELEN, Plaintiffs,

The opinion of the court was delivered by: JAMES B. MORAN

 Plaintiffs brought an action for breach of contract under the Federal Deposit Insurance Act, 12 U.S.C. § 1811 et seq., as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), against the defendant Resolution Trust Corporation, as receiver of Great American Savings & Loan Association (RTC). The RTC now moves to dismiss plaintiffs' claim, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted. For the reasons below, we deny defendant's motion.


 Plaintiffs are the trustee and the two beneficiaries of an Illinois land trust. In 1963, the trust leased property to Oak Park Savings & Loan Association (Great American Savings & Loan Association (Great American). The lease provided that the tenant was obligated, among other things, to pay a monthly rent and to make all "necessary repairs, renewals, and replacements, interior and exterior, structural and nonstructural" (cplt. at 3) during the 99-year term of the lease.

  Great American was declared insolvent and the RTC was appointed receiver. *fn2" On April 5, 1991, the RTC repudiated the lease, pursuant to 12 U.S.C. § 1821(e)(1). *fn3" There is no dispute as to the validity of the RTC's repudiation.

 Plaintiffs claim that prior to being placed in receivership, Great American defaulted on its lease obligations to keep the property in good repair and to prevent waste and deterioration. The costs of making the necessary repairs are, according to plaintiffs, $ 226,215.00 (rehabilitation costs). These costs are alleged to have accrued prior to RTC's appointment as receiver. After the repudiation, plaintiffs submitted a claim to the RTC for recovery of, among other things, unpaid rent and the rehabilitation costs. The RTC paid plaintiffs' claim for unpaid rent, but on August 9, 1991, disallowed the claim for the rehabilitation costs. Unresolved is whether the applicable sections of the FIRREA justify the RTC's denial of payment for the rehabilitation costs.


 The parties agree that this action is governed by the FIRREA. However, they disagree on the applicable section. Plaintiffs claim that section 1821(e)(3) (section 3) permits recovery for rehabilitation costs because they are direct compensatory damages which accrued prior to the RTC's repudiation. *fn4" Defendant argues that section 1821(e)(4) (section 4), governing leases, precludes recovery of damages other than unpaid rent. *fn5"

 Plaintiffs maintain that section 3 controls general contract repudiation damages unless section 4 applies. They note that section 4 excludes only damages for the "disaffirmance or repudiation" of a lease. Thus, according to plaintiffs, because the rehabilitation costs are not damages that arose as a result of the repudiation of the lease, section 3 controls. *fn6" Plaintiffs' reasoning, while compelling to this point, ignores the fact that section 3 (just like section 4) is limited to damages "for the disaffirmance or repudiation of any contract." Thus, applying plaintiffs' reasoning to its logical end, neither section 3 nor section 4 has much to say about the controversy. *fn7"

 Defendant claims that section 4 "specifically and unambiguously limits the type of damages which may be recovered by the lessor" from a receiver (dfts. motion at 2). As discussed above, this characterization does not recognize that section 4 addresses only damages resulting from the repudiation itself. Section 4 must be read consistently with section 3. Section 3 allows for direct compensatory damages fixed as of a certain date, while making it clear that other (arguably indirect) damages will not be permitted. Thus, section 3 limits the liability of a receiver who repudiates a contract by preventing recovery of future, accelerated or punitive damages. Section 4 evinces the same concerns in the special context of leases. *fn8"

 The cases that address section 1821(e) bear out this interpretation. See First Nat'l Bank v. Unisys Finance Corp., 779 F. Supp. 85, 87 (N.D. Ill. 1991) (future rent recovery is not allowed. "When RTC repudiated the lease on August 23, 1990, it had performed all of its lease obligations up to that point. Had RTC been in default at the time it exercised its power to disaffirm the lease, the security agreement would have provided for payment of any arrearage"); Bayshore Executive Plaza Partnership v. Federal Deposit Ins. Corp., 750 F. Supp. 507, 510 (S.D. Fla. 1990), aff'd 943 F.2d 1290 (11th Cir. 1991) (" 12 U.S.C. § 1821(e)(4)(A) precludes both the recovery of that which has not accrued prior to the date of repudiation or the date the repudiation becomes effective and the recovery of any damages under any acceleration clause or other penalty provision in the lease") (emphasis added).

 "In determining a statute's meaning, the court must not emphasize a single provision but should 'look to the provisions of the whole law, and to its object and policy.'" First Nat'l Bank, 779 F. Supp. at 87, quoting Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 221, 91 L. Ed. 2d 174 , 106 S. Ct. 2485 (1986). Also, both parties agree that we should interpret the provisions at issue consistently with other provisions in the statute. Section 1821(d)(2)(H) is a provision of the statute that should also be read consistently with sections 3 and 4. Section 1821(d)(2)(H) provides:

The Corporation, as conservator or receiver, shall pay all valid obligations of the insured depository institution in accordance with the prescriptions and limitations of this chapter.

 12 U.S.C. § 1821(d)(2)(H). This provision requires the RTC to pay valid obligations of Great American, unless those obligations are ...

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