Annual report pursuant to Section 13 and 15(d)

Commitments, Contingencies and Other Liabilities

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Commitments, Contingencies and Other Liabilities
12 Months Ended
Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments, Contingencies and Other Liabilities
Commitments, Contingencies and Other Liabilities
 
Contractual Obligations
 
Future minimum lease payments under scheduled operating leases, which are primarily for buildings and equipment, having initial or remaining noncancelable terms in excess of one year are as follows (in thousands):
 
Year Ended December 31:
 
2018
$
3,957

2019
3,781

2020
2,832

2021
2,814

2022
2,841

Thereafter
22,625

Minimum lease commitments
$
38,850


 
Rent expense for noncancelable operating leases for real property and equipment was $3,798,000, $3,768,000 and $3,383,000 for the years ended December 31, 2017, 2016 and 2015, respectively. Various lease arrangements contain options to extend terms and are subject to escalation clauses.
 



Legal

The Company was named as a defendant in multiple putative class actions consolidated in U.S. District Court (Northern District of West Virginia) on behalf of purported class(es) or persons who claim to have received telemarketing calls in violation of various state and federal laws. The actions were brought by plaintiffs seeking monetary damages on behalf of all plaintiffs who received telemarketing calls made by a Monitronics Authorized Dealer, or any Authorized Dealer's lead generator or sub- dealer. In the second quarter of 2017, the Company and the plaintiffs agreed to settle this litigation for $28,000,000 ("the Settlement Amount"). The Company is actively seeking to recover the Settlement Amount under its insurance policies. The settlement agreement remains subject to court approval and the court's entry of a final order dismissing the actions. In the third quarter of 2017, the Company paid $5,000,000 of the Settlement Amount pursuant to the settlement agreement with the plaintiffs.

In addition to the above, the Company is also involved in litigation and similar claims incidental to the conduct of its business, including from time to time, contractual disputes, claims related to alleged security system failures and claims related to alleged violations of the U.S. Telephone Consumer Protection Act. Matters that are probable of unfavorable outcome to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, management's estimate of the outcomes of such matters and experience in contesting, litigating and settling similar matters.  In management's opinion, none of the pending actions are likely to have a material adverse impact on the Company's financial position or results of operations.  The Company accrues and expenses legal fees related to loss contingency matters as incurred.