Case Name: Anthony COSTELLO, Rudolph Costello and Robert Dunn, Plaintiffs-Appellants, Cross-Appellees, v. TOWN OF FAIRFIELD, Jacquelyn C. Durrell, Edward T. Patterson, Defendants-Appellees, Cross-Appellants
Court: United States Court of Appeals for the Second Circuit
Jurisdiction: United States
Decision Date: 1987-02-12
Citations: 811 F.2d 782
Docket Number: Nos. 392, 393, Dockets 86-7632, 86-7654
Parties: Anthony COSTELLO, Rudolph Costello and Robert Dunn, Plaintiffs-Appellants, Cross-Appellees, v. TOWN OF FAIRFIELD, Jacquelyn C. Durrell, Edward T. Patterson, Defendants-Appellees, Cross-Appellants.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 811
Pages: 782–787

Head Matter:
Anthony COSTELLO, Rudolph Costello and Robert Dunn, Plaintiffs-Appellants, Cross-Appellees, v. TOWN OF FAIRFIELD, Jacquelyn C. Durrell, Edward T. Patterson, Defendants-Appellees, Cross-Appellants.
Nos. 392, 393, Dockets 86-7632, 86-7654.
United States Court of Appeals, Second Circuit.
Argued Nov. 20, 1986.
Decided Feb. 12, 1987.
Gary A. Mastronardi, Bridgeport, Conn. (Linderman & Mastronardi, Bridgeport, Ct.), for plaintiffs-appellants, cross-appellees.
Donal C. Collimore, Fairfield, Conn., for defendants-appellees, cross-appellants.
Before TIMBERS, VAN GRAAFEILAND, PIERCE, Circuit Judges.

Opinion:
PIERCE, Circuit Judge:
In August 1984, appellees Durrell and Patterson, in their capacity as representatives of appellee Town of Fairfield, entered into a collective bargaining agreement with the International Brotherhood of Police Officers, the labor union which represented the appellants. The terms of the contract applied retroactively over the two year period from July 1, 1983 through June 30, 1985 and provided for an eleven percent increase in two increments: six and one-half percent from July 1,1983 to December 31, 1984 and four and one-half percent from January 1, 1985 through June 30, 1985. When the contract was signed, appellants were still employed and were employees eligible for benefits under the collective bargaining agreement.
In September 1984, appellants retired and received'a retirement benefit under the Fairfield Police and Firemen's Retirement System based on a percentage of their "basic annual salary." "Basic annual salary" is defined as "annual base salary, including annual longevity pay, which a member is receiving, or which he is entitled to receive, at the time of his retirement." In January 1985, when the additional four and one-half percent increase became effective, appellants requested that the Town of Fairfield increase their retirement benefits accordingly. The Town informed appellants that the increment did not apply to them.
In January 1985, appellants commenced this section 1983 action alleging, inter alia, that the appellees, acting under color of state law, arbitrarily and capriciously deprived them of a property right guaranteed by the fourteenth amendment by denying them an increase in their retirement benefits pursuant to the wage increase secured by the collective bargaining agreement. Appellees counterclaimed alleging that appellants' claim against them constituted vexatious litigation. Appellees moved to dismiss and appellants cross-moved for summary judgment. Finding that plaintiffs' claim failed to allege a constitutional deprivation, the district court granted appellees' motion to dismiss for failure to state a claim for relief under section 1983 and denied appellants' cross-motion for summary judgment. Thereafter, the dis trict court granted appellants' motion for reconsideration and then affirmed its earlier ruling, holding that the basis for appellants' claims is grounded in a breach of contract and not a denial of due process.
When reviewing the dismissal of a complaint pursuant to Fed.R.Civ.P. 12(b)(6), we may uphold the dismissal only when proof of the facts alleged in the complaint clearly would not support the plaintiff's claim for relief. Dwyer v. Regan, 777 F.2d 825, 828-29 (2d Cir.1985) (citations omitted), modified, 793 F.2d 457 (1986). Moreover, we must accept as true the material allegations in the complaint. Id. We have applied these principles quite strictly in cases involving civil rights violations. Id.; Washington v. James, 782 F.2d 1134, 1138 (2d Cir.1986); Owens v. Haas, 601 F.2d 1242, 1247 (2d Cir.), cert. denied, 444 U.S. 980, 100 S.Ct. 483, 62 L.Ed.2d 407 (1979). However, even assuming that appellants are entitled to increased retirement benefits because of the wage increase in the collective bargaining agreement, we do not believe that appellants have satisfied the requirements of a cause of action under section 1983.
To state a claim under section 1983, a complaint must allege that the defendant deprived plaintiff of a right secured by the Constitution or laws of the United States and that such deprivation was committed by persons acting under color of state law. Gomez v. Toledo, 446 U.S. 635, 640, 100 S.Ct. 1920, 1923, 64 L.Ed.2d 572 (1980); Dwyer, 777 F.2d at 828. Where, as here, the right alleged to have been denied is protected by the fourteenth amendment, the plaintiffs must establish that the deprivation was without due process of law. Gendalia v. Gioffre, 606 F.Supp. 363, 366 (S.D.N.Y.1985).
We reject appellants' argument that Basciano v. Herkimer, 605 F.2d 605 (2d Cir.1978), cert. denied, 442 U.S. 929, 99 S.Ct. 2858, 61 L.Ed.2d 296 (1979), is dispositive of the issue in this case. In Basciano, we held that an interest in disability retirement benefits is protected by due process. In that case, however, the plaintiff alleged that the City's procedure to determine whether he was entitled to any disability retirement benefits, a procedure plaintiff had exhausted, deprived him of due process. Unlike Basciano, appellants here have not been denied their basic retirement benefits. Appellants have been receiving their pensions and merely dispute the lack of an increase they claim is due them under the collective bargaining agreement. Indeed, before undertaking to determine if there is an entitlement to an increase herein, there first should be a resolution of the dispute concerning whether the claimed increase is due. Clearly, it is the interpretation of a contract term that is at issue here and the appellants have pursued this contract dispute in the district court under the guise of a due process violation. A contract dispute, however, does not give rise to a cause of action under section 1983. Braden v. Texas A & M University System, 636 F.2d 90, 92-93 (5th Cir.1981); Waltentas v. Lipper, 636 F.Supp. 331, 335 (S.D.N.Y.1986); Gendalia, 606 F.Supp. at 366 (citations omitted).
Even if we were to consider the increased benefits an entitlement, we find no denial of due process because adequate post-deprivation remedies were available to appellants. See Hudson v. Palmer, 468 U.S. 517, 531, 104 S.Ct. 3194, 3202, 82 L.Ed.2d 393 (1984); Parratt v. Taylor, 451 U.S. 527, 544, 101 S.Ct. 1908, 1916, 68 L.Ed.2d 420 (1981), overruled on other grounds, Daniels v. Williams, 474 U.S. 327, 106 S.Ct. 662, 88 L.Ed.2d 662 (1986). Appellants did not avail themselves of the grievance procedure established in the collective bargaining agreement. Under this procedure appellants may have been able to pursue their claim for additional benefits at progressive levels, culminating in binding arbitration by the Connecticut State Board of Mediation and Arbitration. At this time, we reject appellants' argument that the grievance procedure is an ineffective post-deprivation remedy. The grievance procedure outlined in the collective bargaining agreement sets forth a multi-step process designed to address disputes arising be tween the Union, or any employee, with the Town of Fairfield relating to the collective bargaining agreement. Indeed, the grievance section of the collective bargaining agreement states that disputes "concerning wages" should be resolved in accordance with the grievance procedure. Since appellants' underlying claims are directly linked to the wage increase set forth in the collective bargaining agreement, the logical starting point for appellants to proceed with their claims is the grievance process. Cf. School Administrators Association of New Haven v. Dow, 200 Conn. 376, 382, 511 A.2d 1012, 1015 (1986) ("as a matter of state law, parties to a Collective Bargaining Agreement must attempt to exhaust the exclusive grievance and arbitration procedures established in their agreement before resorting to Court").
Finally, we agree with the determination of the district court ordering summary judgment in favor of the retirees with respect to the cross-appeal. As the district court noted, the appellants had a plausible contract claim; a claim of vexatious litigation cannot stand, when, as here, a bona fide dispute exists.
Accordingly, the judgment of the district court is affirmed.